DR. K. MADANversusKRISHNAWATI (SMT.) AND ANOTHER

A                          DR. K. MADAN
                                  v.
                  KRISHNA WAT! (SMT.) AND ANOTHER

                             NOVEMBER 6, 1996

B                [A.M. AHMADI, CJ, SUJATA V. MANOHAR
                         AND B.N. K!RPAL, JJ.]

          Rent Control and Eviction' Delhi Rent Control Act 1958.· S.14(l)(k)
  and S.14(11)-Premises on lease by Government/Development Authority/
  Municipal Corporation-User of residential premises by tenant for
C commercial purpose, contrary to terms of lease-Held, where authorities
  require stoppage of mis-user, continued misuser cannot be permitted on
  payment of compensation under Section 14(11) and controller would be
  justified in passing eviction order-On facts, tenant directed to stop the
   misuse and to pay damages till stoppage of misuser.

D        The residential premises in question had been allotted to G by
   the Government and after the death of G, his wife, the Respondent
   became the owner of the said premises. G had given the premises on
   rent to the appellant, a doctor, wbo was using the premises for
   purposes of both residence and clinic but had subsequently shifted
E her residence to another place where she had constructed her own
   house but continued to retain a portion of the ground floor premises
   for purposes of her clinic. The submission of the Respondent was that
   the premises in question was residential and as the appellant had
   shifted to her new accommodation, the continued user of the premises
   by the appellant only as a clinic was against the terms of the lease
F given by the Government. The Addi. Rent Controller held that the
 . ground u/s. 14(1 )(k) was made out and issued notice u/s. 14(11) of the
   Act to the Land and Development Office. On the basis uf the evidence
   led by the parties and written statement filed by the Deputy Land
   and Development Officer, the Addi. Rent Controller came to the
   conclusion that the appellant had been misusing the premises by
   running her clinic and the misuser/breach of the conditions of the
   lease could not be condoned permanently by the Office of Land and
   Development Officer (LDO). The appellant was directed to stop the
    mis-user within two months from the date of the order to avoid
   eviction. Also damages for mis-user was levied by the LDO and the
H appellant was directed to pay the same within two months from the
                                       516
                    K. MADAN v. KRISHNA WATI                       517


date of the order including damages for mis-user of the period A
subsequent to 1.4.1989 till its stoppage. The Rent Control Tribunal
and the Hon'ble High Court affirmed the finding of the Addi. Rent
Controller.

     Disposing of the appeal, this Court
                                                                          B
      HELD : 1.1. The finding of the Trib'unal after taking into
consideration the evidence on record, and in particular, the written
statement of the Land and Development Officer as well as the
statement of the witnesses before the Additional Rent Controller, was
that the appellant was using the premises in a manner contrary to
the terms of the lease between the landlady and the Land and C
Development Office. [523 BJ

      1.2. Where the premises are used in a manner contrary to any
condition imposed on the landlord by the Government or Delhi
Development Authority or Municipal Corporation of Delhi, then the D
landlord would be entitled to recovery of possession under Section
14(1 )(k) of the Act. [525 FG]

      1.3. The alternative to an order of recovery of possession under
Section 14(1) (k) is to pass an order under Sub-Section (11) of Section
14 of the Act whereby the tenant is directed to comply with the           E
conditions imposed on the landlord by the authorities referred to in
clause (k) of the proviso to Section 14(1), namely to stop the misuser
of the premises in question. [525-H]

      1.4. Sub-section (11) of Section 14 gives option to the Controller
to pass an order whereby recovery of possession may not be directed F
but directing in.stead the payment of an amount by way of
compensation. Thus Sub-section (11) of Section 14 enables the
Controller to give another opportunity to the tenant to avoid an order
of eviction. Where the authority concerned requires stoppage of mis-
user then an order to that effect has to be passed, but where the G
authority merely demands compensation for mis-user and does not
require the stoppage of mis-user then only in such a case would the
Controller be justified in passing an order for payment of
compensation alone. [525-G, 526-D-E]

     1.5.   Continued wrongful user cannot be permitted by levying H
    518                     SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.


A penalty but if the authorities do not require the stoppage of
    misuser but merely ask for payment or compensation, then in such a
    case, an order of eviction or for stoppage of premises need not be
    passed and it will be sufficient if compensation is required to he paid.
                                                                  [526-F-GJ

B        Faqir Chand v. Shri Ram Rattan Bhanot, [1973) I SCC 572 and
    Curewell (India) Ltd. v. Sahib Singh, [1993) Supp I SCC 507, relied on.

         1.6. Observations to the effect that as long as the penalty is
    continued to be paid, deviation to user could be permitted made in
    Punjab National Bank's case is not in consonance with the decision
C   of carger Bench in Faqir Chand's case. [526-FJ

         Punjab National Bank v. A/jun Dev Arora, [1986) 4 SCC 660 and
    Faqir Chand v. Shri Ram Rattan Bhanot, [1973] I SCC 572, referred to.

          2.1. In the instant case the payment of misuse charges would
D only amount to temporary regularisation of the earlier mis-user. The
    Land and Development Officer clearly insisted on the stoppage of
    mis-user. This being so, the question of the Controller requiring
    payment of pen~lty or compensation and permitting continued mis-
    user would not be in accordance with law. [527-B]
E
         2.2. The appellant is allowed two months' time to comply with
    the order dated 19.4.1994 of the Addi. Rent Controller. [527-C]

            CIVIL APPELLATE JURISDICTION: Civil Appeal No. 14195 of
    1996.
F
          From the Judgment and Order dated 28.8.95 of the Delhi High
    Court in S.A.O. No. 8 of 1995.

            R.K. Jain. (Manoj Goel) for A.R. Sharma, Adv. with him for the
G Appellant.
            Ms. Indra Sawhney and V.K. Verma for the Union of India.

            Arun Jaitley, Rajeev Sharma and T.C. Sharma for the Respondents.

H           The Judgment of the Court was delivered by :
               K.1v'ADAN v. KRISHNA WAT! [KJRPAL, J.]                    519


      KIRPAL, J. Leave granted.                                                 A

      This is an appeal by the appellant-tenant in which the challenge is to
an order which had been passed under Section 14(1) (k) of the Delhi Rent
Control Act, 1958 (hereinafter referred to as 'the Act').

      The appellant is a lady Doctor and in the year 1963, she took the         B
ground floor of House No. l-Il/91, Lajpat Nagar, New Delhi from one
Gyan Chand Shingari at a monthly rent or Rs. 175 p.m. According to the
appellant, this rent was first raised to Rs. 265 p.m. in the year 1968 and
then to Rs. 300 p.m. in the year 1970.

       In August, 1974 the aforesaid Gyan Chand Shingari died and his           C
widow, the respondent herein, became the owner of the property and the
appellant attorned to her. According to the appellant, the premises were
taken on rent by her for residential-cum-commercial purposes. She was
residing in the said premises and was also running a clinic. According to
the respondent, however, the premises were given on rent only for residence.    D

      In the year 1974, the appellant constructed her own residential house
in East ofkailash, New Delhi and, soon thereafter she shifted her residence
to the new house but continued to retain the 'premises in dispute where she
maintained her clinic. It appears that possession of some of the portion of
the ground floor, which had been in the occupation of the appellant, was        E
taken back by the respondent but the appellant continued to be the tenant
of two rooms with a common use of latrine and front varandah on the
ground floor of the aforesaid house.

      On 17 .5 .1978 the respondent filed an eviction petition against the
appellant before the Rent Controller being Suit No. 134 of 1978 under           F
Section 14(l)(k) and (h) of the Act. By judgment dated 13.9.1985, the
Additional Rent controller, Delhi came to the conclusion that the eviction
of ground floor under Section 14(1)(c) of the Act had not been made out.
Eviction orders were, however, passed on the ground under Section 14( I )(h)
namely that the appellant had acquired vacant possession of a residence         G
inasmuch as she had constructed her own house in East of Kailash. The
Additional Rent Controller further held that the ground under Section
14(1 )(k) of the Act had been made out inasmuch as the appellant was
using the premises as a clinic which was contrary to the terms and conditions
imposed by the Land and Development Office on the respondent land-
lady, The case of the respondent was that the premises in question were         H
                            SUPREME COURT REPORTS [ 1996] SUPP. 8 S.C.R.
    520


A residential and according to the terms of the lease given by the government
    the said premises could not be used for any other purposes. A Doctor was
    allowed to use the premises upto 500 square feet as his clinic provided the
    Doctor resided in the said premises. Inasmuch as the appellant had shifted
    from the Lajpat Nagar House to her own house in East ofKailash, therefore,
    the submission was that her continued user of the premises in question
B   only as a clinic was against the terms of the lease. The Additional Rent
    Controller vide his judgment dated 13.9.1985, while disposing of the
    petition on the above two grounds under Sections 14(l)(h) and 14(1)(k)
    of the Act, issued notice under Section 14( 11) of the Act to the Land and
    Development Office.

c        At this stage, it is appropriate to refer to the relevant portion of the
    Act namely; Sections 14(1)(k) and 14(11) of the Act which read as under:

                  "Clause (k) of the proviso to sub-section (I) provides that
                  the Controller may, on an application made to him in the
D                 prescribed manner, make an order for the recovery of
                  possession of the premises on the ground that the tenant has,
                  notwithstanding previous notice, used or dealt with the
                  premises in a manner contrary to any condition imposed on
                  the landlord by the Government or the Delhi Development
                  Authority or the Municipal Corporation of Delhi giving him
E                 a lease of the land on which the premises are constructed.
                  The requirements of clause (k) may be analysed as follows :

          (I)     The user of the premises by the tenant should be contrary to
                  a condition imposed on the landlord by the Government,
                  etc.
F
          (2)     Such user must continue even after a notice to discontinue
                  the same is given by the landlord.

          (3)     The condition which is contravened by the user of the tenant
G                 should be one which is imposed on the landlord by the
                  Government "while giving him a lease of the land on which
                  premises are situate".

                  14( 11 )This subsection provides that no order for the recovery
H                 of possession of any premises shall be made on the ground
               K. MADAN v. KRISHNA WA TI [KJRPAL, J.]                   521


             specified in clause (k) of Section 14(1), ifthe tenant, within     A
             such time as may be specified in this behalf by the Controller,
             complies with the condition imposed on the landlord by any
             of the authorities referred to in that clause or pays to that
             authority such amount by way of compensation as the
             Controller may direct."
                                                                                B
      Pursuant to the issuance of the aforesaid notice by the Additional
Rent Controller under Section 14( 11) of the Act, the Deputy Land and
Development Officer filed a written statement before the Additional Rent
Controller, Delhi. After stating that the property was originally leased to
Gayan Chand and, after his death, the name of the respondent had been
substituted, with regard to dleged mis-use and regularisation, it was stated    C
as follows:

             "That the question of re~ularisation/condoning the breaches
             permanently does not arise. However, the lessor may consider,
             if proper application is made by the lessee with an undertaking    D
             to remove the breaches, within the specified period, and with
             readiness to pay the misuse/additional charges leviable for
             such misuser, that may oe fixed for the period of the breach
             to postpone the right of re-entry till such time the breaches
             are finally removed.
                                                                                E
             That the misuse in the nature of running a doctor clinic cannot
             be allowed, but the area extending to 500 sq. feet is permitted
             in case the doctor is residing in the premises. Terms for the
             temperary regularisation of mis-use charges upto 14.1.1981
             were communicated to the lessee vide this office letter No.
             L. and Do/PS. 11/1830 dt. 3.12.1980 but the terms have not         F
             so far been complied with. In the present case benefit of 500
             sq. feet was not given because lady doctor Madan who is a
             tenant ofthe lessee, was not residing in the premises as noticed
             during inspections from time to time."
                                                                                G
     After filing the aforesaid written statement, the statement of mis-use
charges was also filed before the Additional Rent Controller, Delhi.

     The parties then led evidence and, by judgment dated 19.4.1994, the
Additional Rent Controller, Delhi came to the conclusion that the appellant
had been misusing the premises by running her clinic and the mis-user/          H
                            SUPREMECOURTREPORTS [1996] SUPP. 8 S.C.R.
    522


A breach of the conditions of the lease could not be condoned permanently
    by the office of Land and Development Office and as such, by the impugned
    order, she was directed to stop the mis-user within two months frcim the
    date of the order in order to avoid eviction against her. The Additional
    Rent Controller, Delhi also estimated the damages for mis-user which
    were levied by the Land and Development Office and the appellant was
B   directed to pay the same within two months from the date of the order
    including damages for mis-user for the period subsequent to 1.4.1989 till
    its stoppage.

          The appellant, thereupon filed an appeal before the Rent Control
    Tribunal, inter a/ia contending that there had been no mis-user of the
C   premises on her part inasmuch as since the inception of the tenancy, she had
    been using the same as her residence as well as clinic. This contention was
    not accepted and it was held by the Tribunal that there was misuse of suit
    premises. It had also been conten~ed on behalf of the appellant before the
    Tribunal that the property in question had become free-hold and, therefore,
    the appellant was not liable to pay mis-use charges. Relying upon the
D   evidence of an officer of the Land and Development Office, the Tribunal
    came to the conclusion that the property in question had not become freehold.
    While dismissing the appeal, the appellant was granted two months time by
    the Tribunal to comply with the directions contained in the order dated
     19.4.1994 passed by the Additional Rent Controller, Delhi.

E
        The appellant then filed an appeal to the High Court of Delhi raising
  the contentions that order under Section 14( I )(k} of the Act should not
  have been passed and secondly, the Government had permitted the
  conversion of the property from lease-hold to free-hold. By order dated
  28.10.1995, the High Court held that with regard to the plea pertaining to
F applicability of Section 14( I )(k) of the Act, the finding of the Additional
  Rent Controller, Delhi and of the Tribunal was a question of fact and no
  question of law arose. With regard to the policy of the Government
  permitting conversion of the property, it was held that the property in
  dispute was admittedly a leasehold property and the owner/landlord was
G not bound to seek conversion under the alleged policy. Hence, this appeal.

          In this appeal the only contention raised was that an order under
    Section 14(1)(k} read with Section 14(11) of the Act ought not to have"
    been passed. It was further submitted while relying upon the decision in
    the case of Punjab National Bank v. Arjun Dev Arora and others, [1986]
H   4 SCC 660 that no order could be passed requiring the closure of the clinic
               K. MADAN v. KRISHNA WA TI [KIRPAL, J.]                    523


as long as penalty for wrongful user in continued to be paid by the tenant.     A

      After taking into consideration the evidence on record and, in
particular, the written statement of the Land and Development Officer as
well as the statement of the witnesses before the Additional Rent Controller,
the Tribunal has found as fact that the appellant was using the premises in
question in a manner which was contrary to the terms of lease between the       B
landlady and the Land and Development Office. It cannot be said that this
conclusion was not warranted. It is contended by Mr. Jain, learned counsel
for the appellant, that as long as the order for payment of compensation to
the Land and Development Office remained, the order for eviction or for
closure of the clinic need not be passed.
                                                                                c
      It is no doubt true that the observations in Punjab National case
(supra) are to the effect that as long as the penalty was paid "the deviation
of user could be permitted", but the attention of the two Judge Bench was
not drawn to the earlier decision of three Judges Bench in the case of
Faqir Chand v. Shri Ram Ratan Bhanot, [1973] I SCC 572. In that case, D
property had been given on lease by the Delhi Development Authority but
the landlords had permitted tenants to use portion of the building for
commercial purposes. The Development Authority issued notice to the
landlords calling upon them to discontinue the use of land for commercial .
purposes, failillj: which cause should be shown as to why the lease should
not be determined and the property re-entered. Thereupon the land-lords E
sought eviction of the tenants under Section 14(1 )(k) of the Act. One of
the contentions which were raised on behalf of the tenants was that the
land-lords were estopped or otherwise prohibited from getting possession
of the property because the land-lords themselves had let-out the property
for commercial purposes. While analysing the provisions of clause (k)
and subsection (11) of Section 14 of the Act, it was observed in Fakir F
Chand case (supra) at page 557 as. under :

              "The legislarure has clearly taken note of the fact that
              enormous extents of land have been leased by the three
              authorities mentioned in that clause, and has expressed by        G
              means of this clause its anxiety to see that these lands are
              used for the purpose for which they were leased. The policy
              of the Legislature seems to be to put an end to unauthorised
              use of the leased lands rather than merely to enable the
              authorities to get back possession of the leased lands. This
              conclusion is further fortified by a reference to sub-section     H
    524                      SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.



A                (11) of Section 14. The lease is not forfeited merely because
                 the building put upon the leased land is put to an unauthorised
                 use. The tenant is given an opportunity to comply with the
                 conditions imposed on the landlord by any of the authorities
                 referred to in clause (k) of the proviso to sub-section (I). As
                 long as the condition imposed is complied with there is no
B                forfeiture. It even enables the Controller to direct
                 compensation to be paid to the authority except in the presence
                 of the authority. The authority may not be prepared to accept
                 compensation but might insist upon cessation of the
                 unauthorized use. The sub-section does not also say who is
                 to pay the compensation, whether it is the landlord or the
c                tenant. Apparently in awarding compensation the Controller
                 will have to apportion the responsibility for the breach
                 between the lessor and the tenant."

           Dealing with the contention that the landlords were estopped from
    filing or getting any relief under clause (k), it was held that :
D
                 "The anxiety of the Legislature is to prevent unauthorised
                 user rather than protection ofthe tenant or strengthening the
                 hands of Development Authority in effecting forfeiture. The
                 Development Authority can always resort to the terms of the
                 lease. There is no estoppel here because botll the landlord
E                and the tenant knew that the tenancy was not one permitted
                 under the terms of the lease of the land. In any case there can
                 be no estoppel against the statute. It would not benefit the
                 tenant even if it is held that the landlord cannot, under the
                 circumstances, evict him. The landlord will lose his property
                 and the tenant also will lose. He cannot, after the Development
F                Authority takes over the building use it for a commercial
                 purpose."

          Section 14(1) (k) of the Act again came up for consideration before
    this Court in Curewell (India) Ltd. v. Sahib Singh, [1993) Supp. I SCC
G   507. While construing sub-section (11) of Section 14 of the Act, it was
    observed as follows :

                 "This sub-section prevents eviction ifthe tenant has complied
                 with the condition imposed on the landlord by the government.
                 The sub-section also requires the person in possession, namely,
H                the sub-lessee to pay to the authority such amount by way of
                K. MADAN v. KRISHNA WAT! [KIRPAL, J.]                    525

              compensation as the Controller may direct. It is not in dispute    A
              that the original lessee, upon receipt of notice, from the
              government, had in turn issued notice to the sublessee, namely,
              the appellant calling upon him to stop misuser or vacate the
              premises. If the appellant has, as contended by him, stopped
              misuser, he is of course not liable to be evicted by reason of
              the protection given to him under sub-section (11 ).               B
              Nevertheless, for the past misuser, the appellant is liable to
            · pay such charges as are payable in terms of the sub-section.
              The charges under the sub-section are such charges as are
              determined by the Controller. The Controller must, therefore,
              after bearing the parties determine the amount payable by
              the person responsible for the misuser, namely, the appellant      C
              who is the tenant of the original lessee and determine the
              correct amount.

              We are of the view that the appellant is liable to be evicted
              unless he has already stopped or stops immediately the misuser
              of the premises and pays the misuse charges for the period of      D
              misuse. Whether the misuser has stopped, and if so when,
              are questions of facts which do not appear to be clear from
              the pleadings or the impugned judgment and the orders of
              the statutory authorities."

    In the light of the observations of this Court in the cases of Faqir         E
Chand (supra) and Curewell (supra) the relevant provisions may be
examined.

       Section I4(1) of the Act gives protection to the tenants from being
evicted from the premises let out to them. Clauses (a) to (I) of the proviso     F
to Section 14 (I) of the Act contain the grounds on which recovery of
possession of the premises can be ordered by the controller. Where the
premises are used in a manner contrary to any condition imposed on the
landlord by the Government or the Delhi Development Authority or
Municipal Corporation of Delhi, then the landlord would be entitled to
recovery of possession under Section I4(1)(k) of the Act. Sub-section            G
( 11) of Section I4, however gives an option to the Controller to pass an
order whereby recovery of possession may not be directed. The alternative
to an order for recovery of possession under Section I 4( I )(k) is to pass an
order under sub-section (I I) of Section I 4 of the Act whereby the tenant
is directed to comply with the conditions imposed on the landlord by the
authorities referred to in clause (k) namely to stop the misuser of the          H
    526                     SUPREMECOURTREPORTS [1996) SUPP. 8 S.C.R.


A premises in question. Sub-section (I I) of Section 14 also uses the words
    "pays to that authority such amount byway of compensation as the Controller
    may direct". Keeping in view the fact that clause (k) of the proviso to
    subsection (I) has been inserted in order that the unauthorised use of the
    leased premises should come to an end, and also bearing in mind that the
    continued unauthorised use would give the principal lessor the right of re-
B   entry after cancellation of the deed, the aforesaid words occurring in sub-
    section (I I) of Section 14 cannot be regarded as giving an option to the
    Controller to direct payment of compensation and to pennit the tenant to
    continue to use the premises in an unauthorised manner. The principal
    lessor may, in a given case, be satisfied, in cases of breach of lease to get
    compensation only and may waive its right of re-entry or cancellation of
C   lease. In such a case the Controller may, instead of ordering eviction under
    Section 14(1 )(k) of the Act, direct payment of compensation as demanded
    by the authorities mentioned in clause (k). Where, however, as in the
    present case compensation is demanded in respect of condoning/removal
    the earlier breach, but the authority insists that the mis-user must cease
    then the Controller has no authority to pass an order under Section 14( 11)
D   or Section 14 (l)(k) of the Act giving a license or liberty of continued
    misuser. Jn other words, sub-section (11) of Section 14 enables the
    Controller to give an another opportunity to the tenant to avoid an order
    of eviction. Where the authority concerned requires stoppage or misuser
    then an order to th.at effect has to be passed, but where the authority
    merely demands compensation for misuser and does not require the stoppage
E   of misuser then only in such a case would the Controller be justified in
    passing an order for payment of compensation alone.

        The observations of this Court in Punjab National Bank's case (supra)
  to the effect that as long as the penalty continued to be paid, deviation to
  user could be permitted, do not appear to be in consonance with the decision
F of the larger Bench in Fakir Chand's case (supra). Continued wrongful
  user cannot be permitted by levying penalty but if the authorities do not
  require the stoppage of misuser, but merely ask for payment of penalty or
  compensation, then in such a case, an order of eviction or for stoppage of
  premises need not be passed and it will be sufficient if compensation is
G required to be paid.

          Coming to the facts of the present case, the Additional Rent Controller
    in order dated 13.9.1985, while issuing notice under Section 14(11) has
    observed that the landlord has placed on record a notice sent by the Land
    and Development Office regarding misuser. In the written statement filed
H   on behalf of the Land and Development Office in response to the notice
                K. MADANv. KRJSHNAWATI[KIRPAL,J.]                           527


issued under Section 14( 11 ), it was stated that the question of regularisation/   A
condoning the breach permanently did not arise. The said reply
contemplates an undertaking being given by the Landlord for removal of
breach otherwise there is a threat of re-entry. The payment of misuse
charges would only amount to temporary regularisation of the earlier misuser
and the Land and Development Office clearly insisted on the stoppage of
the misuser. This being so, the question of the Controller requiring payment        B
of penalty or compensation and permitting continued misuser would not
be in accordance with law.

     For the aforesaid reasons, while upholding the orders of the court
below, we grant the appellant two months time to comply with the order
dated 19.4.1994 of the Additional Rent Controller, Delhi. There will be             C
no order as to costs.

R.D.                                                      Appeal disposed of.