Supreme Court of India

AJAI AGRAWAL AND ORS.versusHAR GOVIND PRASAD SINGHAL AND ORS.

Citation: 2005 INSC 548
Decided: 8 November 2005
Disposal: Appeal(s) allowed
Bench: ASHOK BHAN

Holding

Reliance on the landlord’s uncorroborated evidence of an oral agreement for periodic rent enhancement is unreasonable, and in the absence of proper proof the tenant is entitled to the protection of Section 20(4) with rent fixed at Rs 200 per month.

Summary

The appellants, legal heirs of a tenant, challenged a suit for recovery of arrears and eviction filed by the landlord who claimed periodic rent enhancements to Rs 200 and Rs 400 per month after the tenant carried out improvements. The lower courts had accepted the landlord's oral agreement for such enhancements based solely on his uncorroborated testimony, rejecting the tenant's claim that rent was only Rs 100 per month. The Supreme Court examined whether an oral agreement for rent enhancement is permissible under Section 16(10) of the Uttar Pradesh Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 and whether the tenant could invoke the protection of Section 20(4) after depositing arrears. It held that reliance on the landlord’s uncorroborated evidence was unreasonable and, in the absence of any written or other proof, the tenant’s case of a maximum rent of Rs 100 per month was accepted. Consequently, the tenant was entitled to the bar of eviction under Section 20(4) and the rent was fixed at Rs 200 per month, with the landlord’s suit dismissed.

Issues considered

Whether an oral agreement for periodic rent enhancement is valid under Section 16(10) of the Uttar Pradesh Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972.
Whether the landlord can rely solely on uncorroborated evidence to establish such an agreement.
Whether the tenant is entitled to the protection of Section 20(4) of the Act after depositing arrears at the rate of Rs 100 per month.
Whether Section 6 of the Act applies where the improvements were made by the tenant and not the landlord.

Legislation cited

Uttar Pradesh Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972s. 16(10), s. 20(4), s. 6

Subjects

rent controlevictionperiodic rent enhancementoral agreementSection 20(4) protectionlandlord-tenant disputeevidence

Judgment

AJA! AGRA WAL AND ORS. A
v.
HAR GOVIND PRASAD SING HAL AND ORS.

NOVEMBER 8, 2005

[ASH OK BHAN AND ALTAMAS KABIR, JJ.] B

,,
Rent Control and Eviction:

Uttar Pradesh Urban Buildings (Regulation of Letting, Rent and
Eviction) Act, J972-Sections 6, J6 (IO) and 20(4)_.:._Tenancy-Jmprovement C
in the tenanted premises-By tenant-Enhancement of rent by landiord to Rs.
JOO per month-Notice by landlord demanding rent in view of periodical
enhancement to Rs. 200 and 400-Arrears of rent at the rate of Rs. JOO paid
by the tenant-Suit demanding arrears at the rate of Rs. 200 and Rs. 400 and
eviction-No documentary evidence proving periodical enhancement-Courts D
below relying on uncorroborated evidence of landlord decreed the suit-On
appeal, held : Eviction not justified-Reliance on uncorroborated evidence
of landlord alone regarding periodical enhancement of rent unreasonable-
Jn absence of evidence regarding periodical enhancement, tenant's case of
enhancement at the rate of Rs. I 00 accepted-Hence in view of arrears
having been paid at the rate of Rs. JOO, tenant entitled to protection of E
Section 20(4)-Landlord having served notice for enhancement of rent after
the improvement in the premises, enhancement of rent at the rate of Rs. 200
not unreasonable.

Father of the appellants was granted tenancy of the premises in question
by respondent-landlord. The request of tenant to renovate the premises was F
not agreed to by the landlord and he asked the tenant to get it repaired.
Landlord enhanced the rent to Rs. 100 per month in view of improvement of
the premises. As per the tenant, he could not repair the same till 1989, and
therefore the landlord had agreed to receive the rent at the rate of Rs. 75 per
month instead of Rs. 100. However, after the renovation, the tenants paid the G
rent at the rate of Rs.I 00.

Landlords gave notice demanding rent since October, 1988. It demanded
rent at the rate of Rs. 200 per month from April 1989 and from January 1990
at the rate of Rs. 400 per month. Tenants denied such enhancement. They
tendered the arrears of rent at the rate of Rs. 100, but the same was refused H
21
22 SUPREME COURT REPORTS (2005] SUPP. 5 S.C.R.

A by the landlord. Landlords filed suit for recovery of arrears of rent at the
rate of Rs.200 from February 1989 and at the rate of Rs.400 from January
1990 and for eviction of the tenant. Trial Court decreed the suit. The Revision
Petition of the tenant was dismissed. by Appellate Court. In Writ Petition,
tenants contended that in absence of any written agreement, the provisions of
B Section 16(10) of Uttar Pradesh Urban Buildings (Regulation of Letting, Rent
and Eviction) Act, 1972 did not provide for enhancement of rent by an oral
agreement; that the alleged agreement to enhance the rents periodically by
the landlord was not made out from the materials on record; and that the
Courts below had erred in relying on the uncorroborated evidence of the
landlord. Single Judge of the High Court affirmed the findings of the courts
C below, holding that notwithstanding deposit of arrears at the rate of Rs.JOO,
by the tenants were not entitled to the benefit of Section 20(4) of the Act. The
Review Petition against the order of Single Judge was also dismissed. Hence
the present appeals. Appellants, pursuant to interim direction of this Court
had deposited monthly rents in favour of the landlord at the rate of Rs.400
D permonth.
· Allowing the appeals, the Court

HELD: J. The reliance placed by the courts below on the uncorroborated
evidence of the landlord alone, in arriving at a conclusion that the parties
had, in fact, agreed to periodical enhancement of the monthly rent for the
E shop room in question is unreasonable. There is no other evidence of the
alleged agreement between the parties, much less written agreement.
Therefore, It cannot be said that the presumptive rent Indicated In Section
16(10) of Uttar Pradesh Urban Buildings (Regulation of Letting, Rent and
Eviction) Act, 1972 contemplated fixation of such rent subject to any
F agreement In writing or to any subsequent determination of the standard rent
after formal Inquiry under Section 9, which has been correctly held by the
High Court not to be applicable to the facts or the Instant case.
128-F; 26-G-H; 27-AI

2. In the absence of any proper evidence regarding the purported
G agreement for perlodlcal enhancement of the rents, It becomes difficult to
accept the story of such agreed enhancement as made out on behalf of the
landlord or Its appllcatlon to the provisions of Section 20 (4) of the Act. Since
there Is no such evidence on record, except for the uncorroborated statement
or the landlord, the 1tory or the appellant1-tenant that the partlel had a1reed
H to the Increase of the monthly rent upto a maximum of Rl.100 per month and
AJAI AGRAWAL v. HAR GO VIND PRASAD SINGHAL 23
that too after the renovation had been effected to the shop room and a shutter A
.had been fixed therein is accepted. If such be the case, the appellants would
also be entitled to the protection of Section 20 (4), since the rents admitted to
be in arrears at the rate of Rs.JOO per month had been duly deposited by the
tenant within the time prescribed under such provision of the Act.
(29-C-El B
Rakesh Wadhawan and Ors. v. Jagdamba Industrial Corporation and
Ors., 1200215 SCC 440; Ashok Kumar and Ors. v. Rishi Ram and Ors., (20021
5 SCC 641; Mam Chand Pal v. Shanti Agarwal (Smt.) (2002] 3 SCC 49 and
Sudershan Devi and Anr. v. Sushi/a Devi and Anr., (1999f 8 SCC 31, referred
to.
c
3. It is doubtful whether the effect of Section 6 of the Act can be said to
enure to the benefit of the landlords, since the improvements of the tenanted
premises had been effected not by the landlord but by the tenant himself. Section
6, in fact, permits the landlord upon improvemen~ made, to give a notice In
writing to the tenant within three months· from the date of completion of the D
improvement regarding enhancement of the monthly rent by an amount not
exceeding one per cent of the actual cost of such improvement. Undoubtedly,
the ·landlord had served notice on the tenant regarding enhancement of the
monthly rents and demanded payment thereof at the rate of Rs.200 per month
from the date when, in fact, the repairs had been effected. It was not
unreasonable for the landlord to enhance the monthly rent to Rs.200 per month E
- for the shop in question since improvements had been made therein.
(28-G; 29-F-G)

.. 4. Since rent at the rate of Rs.200 per month is accepted, the appellants-
tenant will henceforth from the month of November 2005 pay to the
respondents-landlord the monthly rents for the shop room at Rs.200 per month. F
The appellants-tenant will not lay any claim for re-imbursement of any excess
amount that has been deposited on account of the monthly rents at the enhanced
rate of Rs.400 per month. The acceptance of the monthly rent to be Rs.200
per month is subject to future enhancement In accordance with law.
130-B-CJ G
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 3294-329S of
200S.
From the Judgment and Order dated S.9.2003 of the Uttaranchal High
Court at Nainital in W.P. No. 40S3(MS)/2001·New Number, (W.P. No. 36462(M/
S)/99·01d Number) and Final Order dated 4. 12.2003 In R.P. No. 9082/2003 in H '
24 SUPREME COURT REPORTS (2005] SUPP. 5 S.C.R.

A W.P. No. 4053(M/S)/200 I-New Number (W.P. No. 36462(M/S)/99-0ld Number).

Nidhesh Gupta and Mrs. S. Janani for the Appellants.
Dinesh Dwivedi, M.K. Garg, Manish Shanker and Lokesh Kumar for the
·~
Respondents.

B The Judgment of the Court was delivered by
ALT AMAS KABIR, J. The appellants are the legal heirs of the
respondent-tenant and the respondents are the landlord-plaintiffs.

One Jagdish Prasad, the father of the appellants in these two appeals
was granted a tenancy of a shop room situated at Mohalla Bhoop Singh,
C Kasba Jaspur, Distrtrict Nainital by the Respondents-plaintiffs at an agreed
rent of Rs.600 per year. Since the shop room was in a dilapidated condition,
the tenant requested the landlord to get the shop renovated and to fix a
shutter in the shop but the landlord did not agree to such a proposal and
asked the tenant to get the shop repaired at his own costs and consequently
D increased the rent to Rs.1,200 per year. It is the case of the tenant that at the
relevant time the tenant fell ill and could neither repair the shop nor fix the
shutter as agreed till the year 1989 but the landlord insisted on payment of
the increased rent at the rate of Rs.1,200 per year since 1986. According to
the tenant, the increased rent was to be paid for the improvement in the shop
room but since the repair work could not be done till 1989, the landlords
E agreed to receive rent at the rate of Rs.75 per month instead of RS.100 per
month. However, once the shop was renovated and the shutter was fixed, the·
tenant paid the rents at the enhanced rate of Rs.1,200 per year.
On 21.5.1992, the landlord-respondents gave notice stating that the rent
had not been paid from the month of October 1988 and demanded rent at the
F rate of Rs.200 per month from 1.4.1989 and thereafter at the rate of Rs.400 per
month from 1.1.1990. The tenant duly replied to the said notice on 20.6.1992
denying that any such enhancement had been agreed to by him and also
indicated that the rents had not been paid as the landlord had himself refused
to accept the same. The tenants thereupon tendered the rent of Rs.4,950 to
G the landlord by money order at the rate of Rs. I 00 per month, including house
tax, since October, 1988. The landlord, however, refused to accept the same.
On 24.4.1996, the landlord-respondents filed a suit for recovery of arrears of
rent amounting to Rs.14,500 and for eviction of the tenant from the tenanted
premises. The amount claimed by the landlord-respondents towards arrears
of rent was calculated on the basis that that the monthly rents were in arrears
;H at the rate of Rs.200 per month from February, 1989 and at the rate of Rs.400
AJAIAGRAWALv. HARGOVINDPRASADSINGHAL[ALTAMAS KABIR,J.] 25

per month from January 1990. The court of Small Causes (Senior Division), A
Nainital, decreed the suit upon accepting the case made out by the landlord-
plaintiffs regarding the purported agreement for enhancement of the rents at
the enhanced rate.

Aggrieved by the judgment and order of the trial court, the tenant filed
a revision petition No.34/ 1996 which was also dismissed by the court of B
Special Judge (CBI)/Addi. District Judge, Nainital on 13.8.1999.

Aggrieved by the aforesaid judgments and orders, the present appellants
who had succeeded to the tenancy as the legal heirs of the tenant filed a Civil
Writ Petition No.36462/99 before the High Court of Allahabad which after the C
creation of the Uttaranchal High Court stood transferred to the High Court
of Uttaranchal and renumbered as Writ Petition No. 4053(M/S)/200 I.

Before the High Court it was sought to be urged on behalf of the
appellants-tenant that in the absence of any written agreement the provisions
of Section 16 (10) of the Uttar Pradesh Urban Buildings (Regulation of Letting, D
Rent and Eviction) Act, 1972 (hereinafter referred to as 'the Act') did not
provide for enhancement of rent by an oral agreement. It was sought to be
urged that the case as made out on behalf of the landlord-respondents
regarding the alleged agreement to enhance the rents periodically was not
borne out by the materials on record and both the trial court and the revisional
court had erred in accepting the said story as made out by the landlord in E
the absence of any written evidence of such agreement alleged to have been
arrived at between the parties.

It was sought to be urged that the courts below had erred in relying
on the uncorroborated evidence of the landlord in arriving at a decision that
such an agreement had been entered into and was subsisting between the F
parties.

A learned single Judge of the Uttaranchal High Court however, affirmed
the findings of the courts below regarding the purported agreement between
the parties for periodical enhancement of rent and concluded that the tenant G
was in arrears in payment of rent, having failed to pay the same at the
enhanced rates. The learned Judge held that notwithstanding the deposit of
Rs.4,950 by the tenant, the tenant would not be entitled to the benefit of
Section 20 (4) of the Act and accordingly dismissed the writ petition.

The writ petitioners thereafter filed a Review Petition No. 9082/2003 H
26 ·SUPREME COURT REPORTS [2005) SUPP. 5 S.C.R.

A which was also dismissed by the learned single Judge of the Uttaranchal High
Court by his order dated 4.12.2003.

These appeals arise out of two Special Leave Petitions. filed by the
appellants challenging both the final orders dated 5.9.2003 and 4.12.2003
passed by the learned single Judge of the Uttaranchal High Court dismissing
B the civil writ petition and the subsequent review petition.
On.hehalf of the appellants it was reiterated that initially it had been
decided that the rent for the shop room would be Rs.600 per year and that
upon repairs being effected to the shop room and the fixing of a shutter the
C rent would be increased to Rs. I00 per month. It was reiterated that since the
landlord had not effected the repairs or fixed the shutter in the shop room the
tenant ultimately was compelled to undertake the work himself though the
landlord claimed the enhanced rent at the rate of Rs. I00 per month after such
repairs and renovation. However, since the tenant had been compelled to
effect the r~pairs and fix the shutter himself and had to bear the expenses for
D the same, the landlord agreed to accept rents at the rate of Rs. 75 per month
and thereafter at the rate. of Rs. I00 per month. It was also urged that the
tenant did not consent to any further increase in the rent and except for the
oral statement of the landlord, there is no other evidence on record to prove
that the tenant had consented to any further increase of the rents. It was
E urged that in the absence of such evidence the findings recorded by the
courts below were based on assumption and were perverse.

It was submitted that in the absence of any documentary evidence as
against the uncorroborated evidence of the la.ndlord alone, all the courts
below, including the High Court at Uttaranchal, had erred in coming to the
F finding that the parties had agreed to periodical enhancement of rent and that
the tenant having failed to pay the rents at the enhanced rates was liable to
be evicted from the tenanted shop room.

The submissions made on behalf of the appellants was strongly opposed
on behalf of the landlord-respondents by Mr.Dinesh Dwivedi, learned senior
G advocate, who contended that all the courts below had concurrently come to
the finding regarding the existence of an agreement between the parties for
periodical enhancement of the rents, which ought not 'to be interfered with
by this Court at the final stage of the proceedings. It was also sought to be ·
urged that the presumptlVe rent indicated in Section 16 ( 10) of the Act
contemplated fixation of such rent subject to any agreement In writing between
H
AJAI AGRAW AL v. HAR GOVIND PRASAD SINGHAL [ALTAMAS KABIR, J.) 27
the parties or to any subsequent determination of the standard rent after A
formal inquiry under Section 9. It was sought to be contended that the said
provision would indicate that enhancement of rent could also be done without
any agreement in writing between the parties.

It .was then contended that since the appellants had failed to pay the
rents at the enhanced rate as agreed upon between. the parties, the courts B
below had rightly held the appellants to be in arrears in payment of the
monthly rents and was not, therefore, entitled to the benefit of Section 20 (4)
of the Act which reads as under:-

"20. Bar of suit for eviction of tenant except on specified grounds.
c
(I)
(2)
(3)
(4) In any suit for eviction on the ground mentioned in clause (a) D
of sub-section (2), if at the first hearing of the suit the tenant
unconditionally pays or tenders to the landlord or deposits in
Court the entire amount of rent and damages for use and
occupation of the building due from him (such damages for use
and occupation being calculated at the same rate as rent) together
with interest thereon at the rate of nine per cent per annum and E
the landlord's costs of the suit in respect thereof, after deducting
therefrom any· amount already deposited by the tenant under
sub-section (1) of Section 30, the Court may, in lieu of passing
a decree for eviction on that ground, pass an order relieving the
tenant against his liability for eviction on that ground: F
Provided that nothing in this sub-section shall apply in relation
to a tenant who or any member of whose family has built or has
otherwise acquired in a vacant state, or has got vacated after
acquisition, any residential building in the same city, municipality,
notified area or town area. G
Explanation.-For the purposes of this sub-section-
(a) the expression 'first hearing' means the first date for any step or
proceeding mentioned In the summons served on the defendant;
(b) the expression 'cost of the suit' Includes one-half of the amount
H
28 SUPREME COURT REPORTS [2005] SUPP. 5 S.C.R.

A of counsel's fee taxable for a contested suit."

It was also contended that, in any event, the appellants had not even
deposited the amount of Rs.4,950 accepted by the tenant to be the amount
in arrears of rent, within the time contemplated in Explanation (a) to sub-
section (4) of Section 20 of the Act. It was urged that even if the story of
B periodical enhancement of rents was discarded, the appellants would still not
be entitled to the protection under the aforesaid provision since the admitted
deposit had also been made beyond the time prescribed.

In this regard, the decisions of this Court in the case of Rakesh
U'adhawan & Ors. V. Jagdamba Industrial Corporation & Ors.. [2002) 5 sec
C 440, Ashok Kumar & Ors. v. Rishi Ram and Ors., [2002) 5 SCC 641, Mam
Chand Pal v. Shanti Agarwal (Smt.), [2002) 3 SCC 49 and Sudershan Devi
& Anr. v. Sushi/a Devi & Anr., [1999] 8 SCC 31 were referred to by the parties
for the purpose of interpretation of the expression ''first hearing of the suit"
used in Section 20 (4) of the Act.
D On behalf of the landlord, it was also sought to be urged that, in any
event, the landlord would be entitled to the benefit of Section 6 of the Act
since admittedly improvements had been effected to the tenanted shop.

Mr. Dwivedi submitted that the appellants had not made out any case
E which called for interference by this Court with the findings and orders of the
courts below and the Civil appeals were liable to be dismissed.

On a careful consideration of the submissions made on behalf of the
respective parties, what strikes us as unreasonable is the reliance placed by
the courts below on the uncorroborated evidence of the landlord alone, in
F arriving at a conclusion that the parties had, in fact, agreed to periodical
enhancement of the monthly rent for the shop room in question. There is no
other evidence of the alleged agreement between the parties, much less
written agreement. We are unable, therefore, to appreciate the submissions
made on behalf of the landlord with regard to sub-section (I 0) of Section 16
which, in our view, has been correctly held by the High Court not to be
G applicable to the facts of the instant case. It is even doubtful whether the
effect of Section 6 of the Act can be said to enure to the benefit of the
landlords, since the improvements of the tenanted premises had been effected
not by the landlord but by the tenant himself. For the sake of reference
Section 6 of the Act is reproduced hereinbelow:-
H
AJAIAGRAWAL1•. HARGOVIND PRASADSINGHAL [AL TAMAS KABIR,J.) 29

"6. Effect of improvement on rent.-Notwithstanding anything A
contained in Section 4 or Section 5, but subject to the provisions of
Section 8, where the landlord has, after the commencement of this Act,
either with the consent of the tenant or in pursuance of any requirement
of law, made any improvement in a building , he may by notice in
writing to the tenant given within three months from the date of B
completion of the improvement. enhance the monthly rent of the
building by an amount not exceeding one per cent of the actual cost
of such improvement, with effect from.the said date, and thereupon
the standard rent of that building shall stand enhanced accordingly."

In the absence of any proper evidence regarding the purported agreement C
for periodical enhancement of the rents, it becomes difficult to accept the
story of such agreed enhancement as made out on behalf of the landlord or
its application to the provisions of Section 20 (4) of the Act. Since there is
no such evidence on record, except for the uncorroborated statement of the
landlord, we have no other option but to accept the story of the appellants-
tenant that the parties had agreed to the increase of the monthly rent upto D
a maximum of Rs.100 per month and that too after the renovation had been
effected to the shop room and a shutter had been fixed therein. If such be
the case, the appellants would also be entitled to the protection of Section
20 (4 ), since the rents admitted to be in arrears at the rate of Rs. I 00 per month
had been duly deposited by the tenant within the time prescribed under such E
provision of the Act.

Although, we have arrived at the aforesaid conclusion, an element of
doubt persists in regard to the effect of Section 6 of the Act in its application
to the facts of the instant case where undoubtedly certain improvements had
been made to the tenanted premises. Section 6, in fact, permits the landlord F
upon improvements made, to give a notice in writing to the tenant within three
months from the date of the completion of the improvement regarding
enhancement of the monthly rent by an amount not exceeding one per cent
of the actual cost of such improvement. Undoubtedly, the landlord had served
notice on the tenant regarding enhancement of the monthly rents and
demanded payment thereof at the rate of Rs.200 per month from 1.4.1989 G
when, in fact, the repairs had been effected. In our view, it was not unreasonable
for the landlord to enhance the monthly rents to Rs.200 per month for the
shop in question since improvements had been made therein.

At this stage, it may be indicated that after the filing of the Special H
30 SUPREME COURT REPORTS (2005) SUPP. 5 S.C.R.

A Leave Petitions, the appellants had been directed by Order dated 19.3.2004 to
clear all the arrears in terms of the order of the High Court within a period
of one month and thereafter to continue to pay the rent at the same rate
month by month. It has been submitted on behalf of the appellants that in
compliance with the said direction, the appellants had deposited the monthly
B rents in favour of the landlord at the rate of Rs.400 per month, inclusive of
house tax. Since we are accepting the monthly rent to be Rs.200 per month,
the appellants-tenant will henceforth from the month of November 2005 pay
to the respondents-landlord the monthly rents for the shop room at Rs.200
per month. The appellants-tenant will not lay any claim for re-imbursement of
any excess amount that has been deposited on account of the monthly rents
C at the enhanced rate ofRs.400 per month. The acceptance of the monthly rent
to be Rs.200 per month is subject to future enhancement in accordance with
law.

The appeals are allowed, the impugned judgments of the High Court are
s~t aside and the suit filed by the respondents-landlord is dismissed. There
D will be no order ~s to costs.

K.K.T. Appeals allowed.

Search Indian case law

Ask in plain English, not just keywords. 25,000 AI words free, no card.

Try "rent control"Sign in to search