Holding

The Rent Controller does not have jurisdiction to decide questions of title; its power is limited to fixing fair rent, and civil courts retain authority over title matters.

Summary

The Life Insurance Corporation of India (LIC) acquired two properties on Mount Road, Madras, which had been leased to India Automobiles. LIC applied to the Rent Controller for fixation of fair rent, but the tenants argued that the lease covered only vacant land and that the superstructures they built belonged to them, invoking the Madras City Tenants' Protection Act and claiming the Rent Controller lacked jurisdiction. The Rent Controller accepted the tenants' claim for one property and fixed fair rent for the other; the Court of Small Causes upheld these decisions. LIC later sued for arrears of rent based on the fair rent, and the Madras High Court initially ruled in its favour, but on appeal the decree for the first property was vacated, holding the lease valid and the Rent Controller without jurisdiction to fix rent for vacant land. The Supreme Court examined whether LIC owned only the land (not the buildings) and whether the earlier rent‑control orders could be treated as res judicata. It held that the Rent Controller’s jurisdiction is limited to fixing fair rent and does not extend to deciding questions of title; such title disputes remain within the civil courts’ domain. Consequently, the High Court’s decision was affirmed and the appeal dismissed.

Issues considered

Whether the LIC was the vendee only of vacant land and had no title to the superstructures on the premises.
Whether the order of the Court of Small Causes fixing fair rent and its jurisdiction can be ignored as a nullity or res judicata.
Whether the Tamil Nadu Buildings Lease and Rent Control Act confers jurisdiction on the Rent Controller to decide questions of title.

Legislation cited

Code of Civil Procedures. 11, s. 97(3)
Madras City Tenants' Protection Act
Tamil Nadu Buildings (Lease and Rent Control) Act, 1960s. 10(2)(vii), s. 19, s. 4
Transfer of Property Act, 1882s. 5

Subjects

rent controlfair rentjurisdictiontitle disputeres judicatacivil courtTamil Nadu Rent Control Actlandlord-tenantleasesuperstructureLICarrears of rent

Judgment

LIFE INSURANCE CORPORATION OF INDIA
A
v.
INDIA AUTOMOBILES AND CO. AND ORS.

AUGUST 1, 1990

[S. RANGANATHAN AND K.N. SAIKIA, JJ.] B

Tamil Nadu Buildings Lease and Rent Control Act-Sections 4,
JO( I), 10(2)(vii) and 19-Whether Rent Controller had jurisdiction to
decide question of title.

Two separate properties bearing Door Nos. 2 and 3 admeasuring
41 grounds and 2005 sq. ft., which originally formed part of an extent c
of land, situate at Mount Road, Madras belonged to several co-owners,
who leased out the same to the Respondent, by two separate lease-deeds
(Ex. P-1 and P-2}-item 1 and 2 in the Schedule A to the plaint. The
property contained in Door No. 2 which comprised an area of 4 grounds
and 151 sq. ft, with certain buildings was given on rent for Rs.150 p.m., D
whereas the property contained in Door No. 3 which also had some
buildings thereon was let out for Rs.200 p.m.

The owners sold the properties to the United India Life Assurance
Co. and the New Guardian of India Life Insurance Co. Ltd. in July 1953.
In 1956, the Life Insurance Corporation of India, the appellant stepped E
into the shoes of the said companies. The appellant moved two applica-
tions before the Rent Controller for fixation of a 'fair rent' for each of·
the premises; In respect of the property in Door No. 2, the rent claimed
was Rs.2,399 ftl3 while in respect of the other, the rent claimed was
Rs.3266/50p. The tenants claimed that, under both the lease deeds,
what had been leased out to them was only a vacant land and since the F
. superstructure had been built by them, they were entitled to relief
. under the Madras City Tenants' Protection Act. It was further con-
&,· tended that the Rent Controller had no jurisdiction to fix a fair rent.
The Rent Controller accepted the contention of the tenant so far as item
No. 1 (property at Door No. 2) was concerned but with regard to the
second property (Door No. 3), he fixed the fair rent at Rs.1451 p.m. G
There were then two appeals to the Court of Small Causes. The
Small Causes Court came to the conclusion that the buildings on the
land leased vide P-1 had also been conveyed to the appellant and that
the LI C was entitled to seek fixation of fair ren~ in respect of this pre-
mises also. However the order of the Rent Controller in regard to the H

545
546 SUPREME COURT REPORTS I1990] 3 S.C.R.

A
other property in Door No. 3 was upheld. However, in certain earlier
proceedings for rixation of fair rent etc., it had been held by the Rent .
Controller that item No. (Door No. 2) belonged to the LIC, but his order
of eviction had been set aside by the appellate court on some other
ground. The Court of Small Causes did not treat that decision as res
judicata. The tenants being aggrieved by the order of the Court of Small
B Causes filed revision petitions but they were dismissed on 20.11.1968.

The appellant thereupon filed Civil Suit against the tenants-
respondents for recovery of arrears of rent together with interests etc. - 'l··
on the basis of the fair rent rixed. The respondents-tenants also filed a
chil suit claiming protection under the Madras City Tenants' Protec-
tion Act but this suit and further appeals therefrom were dismissed. In
c the suit for recovery of rent filed by the appellant, the tenants con-
tended that since the subject mattter of the lease under Ex. P-1 was only
a vacant site, the Rent Controller had no jurisdiction to rix the fair rent '•
in respect thereof and that, therefore, the claim in the suit for arrears of
rent, based on the Rent Controller's order in respect of the premises
D covered by Ex. P-1 had to fail. The trial Judge in the High Court came
to the conclusion that Ex. P-1 did not, in law, create a valid lease
between the co-owners and the tenants. He further held that the super-
structure constructed on the land had been conveyed to the vendee
under the sale deed dated 30.7.1953 and thus vested in LIC. On this
reasoning the High Court held that the Rent Controllet had jurisdiction ;.;_.
E to rix the fair rent in respect of the premises. The tenants filed an
appepJ. The appellate Bench conrmned the decree in respect of Item 2
but as regards Item No. 1, the Appellate Bench vacated the decree
passed by the trial Court. It held that there was a valid lease between
the owners and the tenants under Exts. P-1 and P-2. The appellant
Bench held that the Rent Controller had no jurisdiction to entertain the ~
F application for rixation of fair rent in respect of the property which was
only a vacant piece ofland. Thus, the Court held that the LIC could not ..&

maintain the suit for recovery of rent based on the order made by the
statutory tribunal under the Rent Control Act. The tenants' appeal was
accordingly partly allowed.

G LIC came up in appeal to this Court against the said order, after
obtaining special leave.

Two questions arose for determination by this Court viz., (l) Was
the LIC the vendee only of a vacant land with no title to the buildings
standing on the site in Item I, and (2) It it open for the tenants to
--
H contend that the order of the Court of Small Causes in the earlier rent
L.J.C. v. INDIA AUTOMOBILES 547

control proceedings deciding to the contrary, and fixing the fair rent of
-~- A
item I could be completely ignored as an order passed totally without
jurisdiction though it bad become final between the parties?

Dismissing the appeal, this Court,

HELD: There are clear indications in the Act and rules that the B
Rent Controller does not have the jurisdiction to decide questions of
title. In a proceeding under the Act, whether it be for fixation of fair
rent or eviction, the tenant may raise several objections. He may, inter
alia, take the point that the opposite party is not the landlord. [56IC-D]

All that the Rent Controller has to do is to satisfy himself that the
person seeking eviction or fixation of fair rent is a 'landlord' who has, c
prima facie, the right to receive the rent of the property in question.
That the Rent Controller's jurisdiction on this issue is limited is clear
from the proviso to Section 10(1) of the Act. [56 IF-G]

The extensive jurisdiction conferred on civil courts under Section D
9 of the Code of Civil Procedure should not be curtailed without a
specific statutory warrant or except on some clear principle. There is
nothing in the Tamil Nadu Rent Control Act which, in any way, takes
away, or narrows down, the civil court's jurisdiction as, for example 1
_JO there is in the Delhi Rent Control Act (Section 50). [569G-H]
E
Section 4 of the Rent Control Act provides only a machinery for

- fixation of fair rent in respect of certain premises. It is the quantum of
fair tent that arises for determination by the Rent Controller. There is
no doubt that, since an application for this purpose cannot lie except at
the instance of a landlord or a tenant, the Rent Controller has to deal
with this incidentally but this is not one of the direct issues before the F
Rent Controller. If and only if, this relationship exists between the
parties, the Rent Controller steps in for a limited purpose-to deter-
mine what the fair rent is-and then fades out of the picture. Where a
fair rent is fixed by a Controller, the Rent Control Act does not provide
for a· machinery for recovery of the amount. The amount has to be
recovered by the landlord only by recourse to a civil court. This gives an G
indication that the determination of the relationship that gives rise to
the application is also not conclusive. This is indeed made clear by the
provisions relating to eviction. [570B-E]

If the civil court in the instant case, had come to the conclusion
that there is a realtionship of a landlord and a tenant, and that the LIC H
548 SUPREME COURT REPORTS [ 1990] 3 S.C.R.

was entitled to recover the rent from the tenants, it will have to pass a
A decree in favonr of the LIC on the basis of the fair rent fixed by the Rent · '"!
Controller. It will not be open to the civil court to re-determine the rent
payable by the tenant to the landlord because that is a matter squarely
and exclusively within the jurisdiction of the Rent Controller and,
therefore, impliedly excluded from the purview of the civil court.
B But his decision is not final on the issue that opens up his jurisdic-
tion and cannot preclude an owner from contending, in a civil court,
that he should not be asked to pay rent for his own property to some
one else. [570F-H]

There is no reason to hold that contract between a person with
himself and others is invalid. [57 IA]
c
Krishnamurthy v. Parthasarathy, AIR 1949 Mad. 780; Manibhai
Hathibhai v. Arbuthnot, AIR 1947 Born. 413; Rai Brij Raj v. Shaw,
[1951] SCR 145 at 147, 150; Official Trustee v. Sachindranath, [1969] 3
SCR 92 & 99 pp. Antulay v. Nayak, [1988] 2 SCC 602 at 649, 677 and
D °/00; Trideshwar Dayal v. Maheshwar Dayal, (1989] 2 SCA LE 1436 at
1437; Shiv Chander Kapoor v. Amar Bose, [1990] l SCC 234 paras 22
and 23; Palaniappa Chettiar and Ors. v. Vairavan Chettiar, [1963J 76
L.W. 21; Palaniappa Chettiar v. Babu Sahib alias Sheik Mytheen Sahib
and Ors., ]1964] 77 LW 551; Salay Mohamed Sait etc. v. Jaffer
Mohamed Sail's Memorial Dispensary Charity and Ors., Jl969] I
E Andhra Weekly Reporter (S.C. 16); Bhagwan Dayal v. Reoti Devi,
[ 1962] 3 SCR 440; Desika Charyulu v. State of Andhra Pradesh and

-
Anr., AIR 1964 SC 807; Dhulabhai v. State, [1968] 3 SCR 662; Mathura
Prasad Bajoo Jaiswal and Ors. v. Dossibai N.B. Jeejeebhoy, [1070] 3
SCR 830; Jeeth Kaur and Ors. v. Smt. P. Rondalamma and Anr., AIR
1983 A.P. 219 and State of Tamil Nadu v. Ramalinga Samigal Madam
F and Ors., [ 1985] 4 SCC IO.

CIVIL APPELLATE JURISDICTION: Civil Appeal No 1514
of 1979.

G From the Judgment and Order dated 17.6.1977 of the Madras
High Court in O.S.A. 62 of 1973.

T.S. Krishnamurthy Iyer, M.J. Paul and Kailash Vasudev for the
Appellant.

H K. Parasaran, P.O. Sharma, T.K. Seshadri and K. Swami for the
Respondents.
L.l.C. v. INDIA AUTOMOBILES [RANGANATHAN, J.] 549

The Judgment of the Court was delivered by
A

RANGANATHAN, J. A very interesting question comes up for
consideration in this appeal. The qustion to be ultimately decided falls
within a very narrow compass but it is necessary to set out the facts
leading to the present appeal at some length.
B
The property, which is the subject matter of the present dispute,
originally formed part of an extent of land situated on Mount Road,
~- Madras, bearing door Nos. 2 and 3 and measuring 41 grounds and 2005
sq. ft. It belonged to several co-owners. These co-owners had leased
out the properties under two lease deeds in favour of M/s. India Auto-
mobiles, which was then the sole proprietary concern of one of
themselves, Ganshyamdas Girdhardas (G.G.), but was converted sub- c
sequently, in 1961, into a partnership concern of G.G. and his four
sons. The firm and its partners are hereinafter compendiously referred
to as 'the tenants'. The first lease (Ext. P-1) was dated 22.9.1947 and
related to Door No. 2 (Item No. I in Schedule A to the plaint). This
was a property comprising of an area of 4 grounds and 151 square feet D
with certain buildings thereon. The rent for the premises was Rs.150
per month. The second lease deed (Ext. P-2), dated 3.10.1947, relat-
ing to Door No. 3 (Item 2 in Schedule A to the plaint) covered an area
of 8700 sq. ft. and some building thereon. The rent as per lease deed
was Rs.200 per month.
E
On 30. 7.1953, all the co-owners of the property (including G.G.)
sold the property to the United India Life Assurance Company and the
New Guardian of India Life Insurance Company Ltd. In 1956, the Life
Insurance Corporation of India (LIC) stepped into the shoes of these
two insurance companies and became the owner of the property.

On 20.7.65, the LIC moved two applications (being HRC Nos.
3310 and 3311 of 1965) in the court of the Rent Controller (Sri
A. Varadarajan who later became a Judge of t!Je this Court) for fu'a-
tion of a "fair rent" for each of the premises. The fair rent claimed was
computed at Rs.2,399.03 per month in respect of item No. 1 as against
the rent of Rs.150 p.m. fixed under the lease deed. In respect of item 2 G
the fair rent claimed was Rs.3266.50 as against Rs.200 p.m. payable
under the lease deed. The defendants (G.G. and his sons) filed their
objections to the above applications. They claimed that, under both
the lease deeds, what had been leased ·out to them was only a vacant
land and that the superstructure had been built by them. They
claimed, therefore, that they were entitled to relief under the Madras H
550 SUPREME COURT REPORTS [ 1990] 3 S.C.R.

City Tenants' Protection Act and that the Rent Controller Court had
A
no jurisdiction to fix a fair rent.

The Rent Controller accepted the above argument so far as item
I was concerned. So far as item 2 was concerned, it appears that, at the
time of the hearing, it was conceded before the Rent Controller that
R the respondents were tenants of the entire properties covered by the
lease deed and that they had not constructed any of the premises
thereupon. In view of this the Rent Controller dismissed H.R.C. 3310/ ~.
65 relating to item No. I and, in H.R.C. 3311/65, fixed the fair rent in )-
respect of item no. 2 at Rs.1451 p.m. The order of the Rent Controller
was dated 9.3.1966.
c There were appeals to the Court of Small Causes. In respect of
item No. I, in H.R.A. 534/66, the Court, on a perusal of the sale deed
dated 30.7.53 filed by the UC before it, came to the conclusion that '"·
the buildings on the land leased under Ex. P-1 had also been conveyed
to the UC and that the LIC was entitled to seek fixation of fair rent in
o respect of this premises also. The fair rent fixed by the Rent Controller
at Rs.994 p.m. was upheld. The order of the Rent Controller in respect
of item 2 was also upheld. It may be mentioned here that, even in
certain earlier proceedings for fixation of fair rent and eviction
(H.R.C. 867n3 and H.R.C. 2557/64), it had been held by the Rent
Controller that item No. I (door No. 2) belonged to the LIC but his ~.
E order of eviction had been set aside by the appellate court on some
other ground. In the circumstances, the Court of Small Causes, in the
appeals now being referred to (H.R.A. 534/66), did not treat the
earlier decision as res judicata but came independently to the same
conclusion that item No. I belonged to the LIC. This was on 19th
April, 1967. The tenants filed revision petitions against the order of
F the Court of Small Causes but these were dismissed on 20.11.1968.

After the Civil Revision Petitions by the tenant were dismissed,
the UC filed C.S. 64/1969 on the original side of the Madras High
Court against the tenants for recovery of arrears of rent on the basis of
the fair rents fixed, which were computed at Rs.98,250.97 in respect of
G the two items of property. Further interest at the rate of 12% thereon
from date of plaint to the date of decree and at 6% thereafter till the
date of realisation was also claimed.

It may be mentioned here that the tenant filed C.S. 87 of 1972
claiming protection under the Madras City Tenants' Protection Act
H but this suit and further appeals therefrom have been dismissed. Turn-
L.I.C. v. INDIA AUTOMOBILES [RANGANATHAN. J.] 551

ing now to C.S. No. 54 of 1969 (which was disposed of along with C.S. A
If
No. 87 of 72 by a common judgment dated 23.10.1972), the contention
urged on behalf of the tenants was that, since the subject matter of the
lease under Ex. P-1 was only a vacant site, the Rent Controller had no
jurisdiction to fix the fair rent in respect thereof and that, therefore,
the claim in the suit for arrears of rent, based on the Rent Controller's
B
order in respect of the premises covered bv Ex. P-1 had to fail. The
Court addressed itself to this question. It came to the conclusion that
-'{ Ex. P-1 did not, in law, create a valid lease between the co-owners and
the tenants. After referring to the terms of the sale deed (Ex. P-3), the
superstructure constructed on the land was held to have been con-
veyed to the vendee under the sale deed dated 30.7 .1953 and to have
thus vested in the LIC. The Rent Controller was, therefore, held to c
have had jurisdiction to fix the fair rent in respect of the premises. It
.....- ;was, therefore, held that the plantiff's claim in the suit should succeed .
' The suit was decreed accordingly.

The tenants filed an appeal being O.S.A. No. 62 of 1973. The
D
Appellate Bench confirmed the decree in respect of item No. 2 subject
to cerfain modifications which are not here relevant. However, so far
as item No. 1 was concerned, the Appellate Bench vacated the decree
passed by the trial court. It held that there was a valid lease between
the quondam owners and the tenants under Exts. P-1 & P-2. Having
-~ regard to the express recitals in Ex. P-3, the Appellate Bench held that
it was impossible to hold that the bui!dings, which admittedly belonged E
to the defendants and had been constructed by them on the vacant land
taken on lease under Ex. P-1, ever were or could be the subject matter

...
of the sale under Ex. P-3. In view of this finding, it was held that the
Rent Controller had no jurisdiction to entertain the apphcation for
fixation of fair rent in respect of the property which was only a vacant
F
~ piece of land. In consequence, it was held, the LIC could not maintain
the suit for recovery of rent based on the order made by the statutory
tribunal under the Rent Control Act and claim the difference between
the so called fair rent and the contract rent. The claim of tile LIC for
recovery of Rs.39,224.71, as arrears of rent, in respect of item 1 was
thus held to be not maintainable. O.S.A. 62 of 1973 was, therefore,
allowed to that extent. The present appeal, by Spedal Leave granted G
on 3.7.1979, is from the order of the Division Bench rejecting the
__,....,_ appellant's claim for arrears of rent in respect of item No. 1 of the
property set out in Schedule A to the plaint based on the difference
between the fair rent fixed by the Rent Controller and the rent payable
therefor under Ex. P-1.
H
552 SUPREME COURT REPORTS [ 1990] 3 S.C.R.

The questions to be decided in this appeal. on the above facts,
A boil down to these: (1) Was the LIC the vendee only of a vacant piece
of land with no title to the buildings standing on the site in item 1? (2)
It is open for the tenants to contend that the order of-the Court of
Small Causes in the earlier rent control proceedings deciding to the
contrary and fixing the fair rent of item 1 at Rs.994 p.m. should be
B completely ignored as an order passed totally without jurisdiction,
although it has L·~comc iim:l as berw •. o:!l the pa. ties? Two interesting
aspects may be pointed out in regard to these two questions. The first
is that if either question is answered in the negative, the other will not
arise for consideration and the appeal will have to be allowed. But an
affirmative answer to either question will necessitate an answer to the
other. The second is that, though the claim in issue before us is only a
C money claim for arrears of rent, any decision given by us, based, as it
will have to be, on the issue whether the LIC owns the superstructure
or not and whether the tenants are the lessees only of vacant land or of
both land and buildings, will have repurcussions not only on the claim
in this suit (which by now has accummulated to more than Rs.3 lakhs)
o but also on any other proceedings by way of ejectment or otherwise
which the LIC may have in contemplation against the tenants. The
decision in this appeal will, therefore, be of great moment for the
L.l.C.

So far as the first question is concerned, we have no doubt that
E the Division Bench of the High Court has come to the correct conclu-
sion. In our view, the conclusion of the learned Single Judge that the
lease Ex. P-1, executed by the co-owners of the property in favour of
one of them, was invalid, was erroneous. S.5 of the Tmasfer of Pro-
perty Act, 1882, clearly envisages transfers of property by a person to
"one or more living persons or to himself, or to himself and one or
F more other living persons". Whatever may be the position, in spite of
this provision, in respect of a purported transfer by a person to himself
alone (which is very often the position in the case of trusts)-which
was considered by the House of Lords in Rye v. Rye, [1962] A.C. 496,
there is no reason to hold that a contract between a person with him-
self and others is invalid. The Division Bench, we think, has rightly
G distinguished the decisions in Girish Chanara v. Srinath, (3 C.L.J. 141)
and Rye v.Rye, [1962] A.C. 496. The observations of Lord Denning,
extracted by the learned Judges, are quite apposite to the situation in
the present case.

Once this objection is out of the way, the question is whether the
H construction put upon the leased Jana by the lessees formed part of the
L.l.C. v. INDIA AUTOMOBILES [RANGANATIIAN, J.] 553

,._ property conveyed to the L.I.C. Sri Parasaran pointed out that they
A
did not and drew our attention to subsequent correspondence between
the parties to show that even the L.I.C. had not claimed at any stage
any rent in respect of the superstructures (apart from the contractual
rent, which was in respect of the land) and that both parties have all
along been proceeding on the footing that the superstructure on item 1
belonged to the lessees. This apppears to _be correct but it cannot be B
conlusive of the rights of the parties. We have therefore gone carefully
~--into the terms of Ex. P. 1 and Ex. P-3. They clearly make out that the
superstructures put up by the lessee under Ex. P-1 were not included in
the property conveyed under the terms of Ex. P-3 and that, whatever
may be the rights of the LIC to evict the tenant with liberty to demolish
the superstructure on the termination of the lease, it had no property
in the superstructure so long as the lease subsisted. We, therefore,
c
answer the first question posed by us in the affirmative.
;.---
This brings us, then, to the second, the really crucial, question
posed earlier viz. whether, despite the above conclusion, we are pre-
cluded, by principles of, or analogous to, res judicata, from going D
behind fhe findings to the contrary given in the earlier rent control
proceedings by the Court of Small Causes which have become final on
the dismissal of the C.R.P. filed th.ereagains.t

Sri T.S. Krishnamurthy Iyer, learned counsel for the appellant,
submitted that the Courts now are precluded from going behind the E
findings of the Court of Small Causes in the earlier proceedings. He
conceded that no legal consequenes can flow from a totally void order
(see, Kiran Singh v. Chaman Paswan, [1955] S.C.R. 117@ 121). He
also conceded that there may be a difference in principle betWeen a
civil court and a court of limited jurisdiction. While the former has an
inherent jurisdiction to decide a question raised about its own jurisdic- F.
tion and such a decision cannot be challenged in another court after it
has become final: (See: Bhatia Cooperative Society Ltd. v. Patel, [1953]
S.C.R. 185 and Nageswara v. Canesa, AIR 1942 Mad. 675), the latter
is strictly confined to the terms of the statute creating it. But, he
submitted, even the decision of a Tribunal or a Court of limited juris-
diction cannot be called in question so long as it acts within the scope G
of the jurisdiction conferred on it by the relevant statutes. He, there-
fore, invited us to peruse the provisions of the Tainil Nadu Buildings
{Lease and Rent Control) Act, 1960 {hereinafter referred to as the
Rent Control Act). Under the said Act, he pointed out, a petition for
fixation of fair rent under S. 4 could be filed by either a landlord ora
tenant: (Raval & Co. v. Ramachandran, [1974] 1 SCC 424). This is H
554 SUPREME COURT REPORTS [ 1990] 3 S.C.R.

what the LIC purported to do when it filed H.R.C. Nos. 3310 and ~
A 3311/64. When a petition under S. 4 is filed, the Rent Controller, on
the language of S. 4 has to decide: ( 1) whether the applicant is a tenant
in, or landlord of, the building and (2) what the fair rent of the pre-
mises should be in accordance with the provisions of the Act. In the
present case both the points had been put in issue. The respondents
B denied that the L.I.C. was the landlord or they the tenants in respect
of the property. They claimed to be the owner of the superstructure and
admitted tenancy only in respect of the site. The Kent Controller and, ~
on appeal, the Court of Small·Causes were therefore, called upbn to
give their decision on this question which was completely within their
statutory jurisdiction and this decision certainly constitutes res judicata
between the parties: see also, Explanation VIII to S. 11 of the Code of
c Civil Procedure. At any rate, it is not open to one of the parties to
contend that the decsion given by the Court of Small Causes, which has
become final between the parties, is a total nullity which can be comp-~ ~
letely ignored. It was, therefore, not open to the High Court to enter-
tain a collateral attack on the validity of binding nature or correctness
D of the order of the Court of Small Causes and to consider and determine
afresh the issue as to whether the L.l.C. is the owner af the premises as
claimed or not.

In support of his contention, counsel referred to Krishnamurthy
v. Parthasarathy, AIR 1949 Madras 780 reversing the decision in the A.
E same case reported in AIR 1949 Madras 387. The appellant landlord
had filed an evicton petition under the Rent Control Act without
giving notice under s. lll(h) of the Transferof Property Act (which, in
those days, was considered to be a condition precedent even to the
filing of an eviction petition under the Rent Control Act) and obtained .ii
an order of eviction. In these proceedings no contention had been t
F raised by the tenant on the non-issue of the notice under the Transfer A
of Property Act. An appeal by the tenant also failed but here again the
above point was not taken. Thereafter the tenant filed a suit for a
declaration that the order of the Rent Controller was ultra vires in that
no notice to quit had been given as required by law. This plea was
upheld by the learned Single Judge but was rejected in appeal. The
G Division Bench observed:-

" ..... We agree with the learned Judge that this Court can
entertain a suit to set aside an order of the Rent Controller
if the Rent Controller exceeded the powers conferred on
him. A Court or tribunal can, however, be said to have no
H jurisdiction to entertain a suit or application only if it has
•
L.I.C. v. INDIA AUTOMOBILES IRANGANATHAN, J.] 555

no jurisdiction with regard to the subject-matter of the suit
A
or application ..... But even these rules are subject to the
qualification that, if the jurisdiction of the Court depends
upon the ascertainment of facts and the Court, upon the
facts found, holds that it has jurisdiction, then the decree of
that Court cannot be ignored or set aside in collateral
proceedings." B

After reference to certain other decisions of the Court, it was
observed:-

"If a lessor brings a suit for eviction, he is to prove the
existence of a lease, the relationship of lessor and lessee
between himself and the defendant and the determination c
of the lease. If he fails to prove this, the plaint is not
returned because the suit is one which the Court has no
jurisdiction to entertain; but the suit is dismissed as reveal-
ing no cause of action ..... In a suit by a landlord against
his .tenant for eviction, the determination of the tenancy is o
merely one of the constituents of the cause of action that
the landlord has to prove against his tenant in order to
succeed in the suit. We are of opinion that a tenant can
waive notice to quit; but even if he cannot, notice has not
to be proved as a condition precedent to the institution of
the suit ..... Mr. Srinivasa Ayyangar concedes that if a E
landlord filed a suit in ejectment and failed to say that the
tenancy had been determined, the Court would dismiss the
suit and not return the plaint. In the same way, the Rent
Controller would have to dismiss the application if it were
not alleged in the affidavit that notice had been given or if
it found, upon hearing the parties and considering the F
evidence, that notice had not been given. It would follow
from this, therefore, that if notice to quit was necessary it
would be merely one of the issues to be decided by the
Rent Controller and would not in any way affect his juris-
diction to entertain the application. That being so, if the
Rent Controller did not decide that question properly, the G
matter would have to be raised in appeal to the Court of
Small Causes and would give this Court no jurisdiction to
entertain a suit by the defeated party; for such a suit would
be barred by S. 12( 4) of the Act.

Again, in Manibhai Hathibhai v. Arbuthnot, AIR 1947 Bom. 413 H
556 SUPREME COURT REPORTS ll99o] 3 S.C.R.

a writ petition was filed to challenge the validity of an order pa;sed by
A the Rent Controller on the ground that the circumstances for the invo-
cation of S. 13(b) of the Bombay Rent, Hotel Rates and Lodging
House Rates (Control) Act, 1944 had not been fulfilled. It is sufficient
for our present purposes to extract the observations in paragraph 16 <•f

B
the judgment:-
...
-
"16. It was sought to be argued on behalf of the petitioners
that the respondent had no jurisdiction to determine the
question as to whether the premises were at one time let
.. out as a whole and then let out in parts as was sought to be
contended by the applicants ....• Tue jurisdiction. of the
Rent Controller, (xxx) is a statutory jurisdiction which is
c . vested in the Rent Controller by the terms of the Act itself.
A regular tribun..i is established by the Act which functions
in those cases where the standard rent of the premises as
.
laid down in S. 3 of the Act exceeds Rs.80 per month. Tue
tribunal owes its existence to the Act and not to any act of
D ( ~ · the parties, and it has, therefore, jurisdiction to determine
what are the cases which fall within its jurisdiction. If there
is any dispute which. arises between the parties as to
whether the particular application falls within the jurisdic-
tion of the tribunal, it is the tribunal which is competent to
decide that dispute and determine whether the particular
E matter falls within its jurisdiction. If the tribunal decided it
wrongly, there is an appeal provided against its decision. It .
cannot, therefore, be contended, as the petitioners have
done, that the respondent has no jurisdiction to determine
the question as to whether the premises were at one time
let out as a whole and then let out in parts as contended by
· the applicants.".

Shri Iyer submits that the appellants' case here is on a stronger footing
than in the two decisions cited above because here, in the earlier
proceedings before the Rent controller and the Court of Small Causes,
a specific point had been taken that the tenant was only a tenant of the
G land and not of the premises (which belonged to him) and that this
contention had been specifically over-ruled by the appellate court after
----.. a consideration of the relevant material. Sri Krishnamoorthy Iyer also
.·contended that even if it may· be an arguable question as to whether
the decision in the earlier petitions constitutes res judicata or not and l:
may plausibly be argued that it does not constitute res judicct~, tb
H question for our consideration really is whether the order pa"ed in tll'!
L.l.C. v. INDIA AUTOMOBILES [RANGANATI-!AN, J.] 557

earlier eviction petition can be treated as a nullity being passed by a
court totally without jurisdicticin. He submitted that if the tenants had A
filed a suit for declaration that the order passed in the earlier proceed··
ings as a nullity that would have been bound to fail. Shri Iyer also
relied on certain observations of this Court in the decisions reported as
Rai Brij Rajv. Shaw, ]1951] SCR 145 @147, 150; Official Tru~teev.
Sachindranath, [19691 3 SCR 92 @pp. 99, 100; Antulay v. Nayak, B
_ [ 1988] 2 SCC 602 at pp. 649, 677 and 700; Trideshwar Dayal v.
Maheshwar Dayal, [1989] 2 SCALE 1436 at p. 1437 and Shiv Chander
Kapoorv.AmarBose, [1990] 1SCC234,paras22and23.

Shri K. Parasaran, appearing for the respondents, sought to sup-
port the High Court's judgment on various grounds. He contended
that, even if the arguments on behalf of the appellant were to be c
accepted, the appellants were not entitled to succeed, for the following
reason. He drew our attention to the reference in the 1967 order of the
Court of Small Causes to H.R.C. 867 /63, an earlier petition filed by
the L.I.C. The Court had said:
D
"7. The Corporation had formerly filed a petition H.R.C.
867 /1963 in respect of these t":o buildings for fixation of
fair rent. In that petition the tel/ant disputed the title of the
Corporation in respect of the buildings. So, the Corpora-
tion immediately filed an application H.R.C. 2557 /64 for
eviction on the ground of wilful denial of title. The petition E
for fixation of fair rent was dismissed by the learned First
Additional Rent Controller on the ground that the lease
has been taken under two separate deeds and that a single
petition was not maintainable. In the other petition he
ordered eviction on the ground that the denial was not
bona fide. He gave an express finding that the building No. F
2. Mount Road belongs to the Corporation. In the appeal
the appellate court set aside the order of eviction on the
ground that there was no denial of title prior to the institu-
tion of the petition. Of course, the finding in that case that
the building belongs to the Corporation cannot operate as
res judicata because the tenant had no opportunity to file an G
appeal against that finding since the application for eviction
had ultimately been dismissed. On this point I find that the
_._.,. building belongs to the petitioner."
(Emphasis added)

He submitted that the Court erred in thinking that no further proceed- H
558 SUPREME COURT REPORTS [1990] 3 S.C.R.

ings had been taken in the earlier matter. The fact was that a Civil
A Revision Petition (C.R.P. 1839/66) had been filed against the order of
the appellate court (ll.R.A. 1162/64). The C.R.P. had been allowed
and the matter remitted back for fresh disposal. When the matter came
back to the Court of Small Causes, the learned Judge, in his order
dated 9.4.69, went into the issue at length and came to the concusion
B that the superstructure belonged to Indian Automobiles and had not
been conveyed to the L.I.C He held, therefore, that the claim by India
Automobiles in the eviction petition of title to the superstructure
would amount to a denial of title but that the denial was bona fide. He,
therefore, allowed the appeal and set aside the order of eviction passed
against the tenants. Sri Parasaran, therefore, submitted that the ques-
tion of title had already been decided in these earlier proceedings
c which we shall briefly refer to as the 'first set of proceedings'. If at all,
he says, it was this decision that constituted res judicata and the Court
of Small Causes, in H.R.A. 534/66 arising out of H.R.A. 3310/64
(which we shall refer to as the 'second set of proceedings') could not
have considered the issue again or taken a different view.
D
Sri Parasaran also sought to explain the reasons why the respon-
dents did not prefer any appeal or revision from the order of the Court
of Small Causes in H.R.A. 534/66 He submitted that the law then
prevalent in Tamil N adu as laid down in the decisions of the Madras
High Court in Palaniappa Chettiar and Others v. Vairavan Chettiar,
E [ 1963) 76 L. W. 21 and Palaniappa Chettiar v. Babu Sahib alias Sheik
Mytheen Sahib and Others, [1964] 77 L.W. 551, was that the Rent
Control Act would apply even in cases where the landlord had leased
out only a vacant site and the tenant had put up his own construction
thereon. It was only in Salay Mohamed Sait etc. v. !after Mohamed
Sail's Memorial Dispensary Charity and Others, [ 1969] 1 Andhra
F Weekely Reporter (S.C.) 16, that this view was disapproved. At that
stage, therefore, the respondents could not have hoped to succeed
even if their stand that they were the owners of the superstructure had
been accepted.

We do not think that these contentions have any force. So far as
G the first contention is concerned, it may be pointed out, hrstly, that an
answer to it is furnished by the terms of S. 19 of the Act (set out a little
later) which does not contain a reference to S. 4. The application
under S. 4 could not, therefore, have been summarily rejected even
assuming that the question of title could be said to have been substan-
tially in issue and decided in the previous proceedings. Secondly, the
H order now relied upon was passed in April 1969 and was not in exist-
L.l.C. v. INDIA AUTOMOBILES IRANGANATIIAN, J.] 559

ence when the Court of Small Cm1ses passed its order in the second set
A
of proceedings. Thirdly, even assumine the argument of learned
counsel to be correct, all that can be said is that, in the second set of
proceedings, the tenants could have contended that it was not open to
the Court of Small Causes to go into the question of title in view of the
decision in the first set of proceedings. But no such plea was taken
before it with the result that the court discussed the matter and arrived B·
at a decision. In deciding whether the decision constitutes res judicata
or not, we are not entitled to go into the correctness of that decision.
Right or wrong, the second decision has become final and the same
issue, says the appellant, cannot be gone into again. Lastly, the 1969
decision of the Court of Small Causes was only concerned with the
question whether there was denial of the L.I.C.'s title by the tenants
and, if so, whether it was bona fide. It was only this limited aspect- c
eviction on the ground of non-bona fide denial of title-that was under
consideration of the Court under S. 10(2)(vii) of the Act read with the
proviso to S. JO( I) and the Court's observations on the question of
title were one on a collateral issue. We do not, therefore, think that
the 1969 decision can be an effective answer to the appellant's conten- D
tion based on the 1967 decision. The second argument, explaining why
the respondents did not challenge the 1967 order in further appeal or
revision, is also of no avail in considering the issue raised by the
counsel for the appellant.

But we think Sri •Parasaran is right in the third contention urged E
by him before us which goes to the root of the matter. His argument is
that a Rent Controller and, on appeal from him, the Court of Small
Causes, is not competent to go into a question of title to immovable
property and that a civil court cannot be barred from examining a
claim of title merely because the question may have had to be con-
sidered by the Rent tribunals as a collateral issue in deciding certain F
applications before them. He contended that it is a basic proposition,
well-settled by authority, that a tribunal of limited jurisdiction like the
Rent Controller (this expression will, hereinafter, also include a Court
of Small Causes disposing of an appeal from him) cannot be clothed
with jurisdiction to decide far-reaching questions of title to immovable
property. This, he said, is a proposition that is borne out on general G
principles as well as on the provisions of the Rent Control Act. Taking

•
up the provisions of the Act, he referred us to the provisions of Ss.10
and 19 which read thus:

S. 10(1)-Eviction of tenants. A tenant shall not be evicted
whether in execution of a decree or otherwise except in H
560 SUPREME COURT REPORTS [ 1990) 3 S.C.R.

accordance with the provisions of this section or sections 14
A ~ffi: ~

Provided that nothing contained in the said sections
shall apply to a tenant whose landlord is the Government:

B Provided further that where the tenant denies the
title of the landlord or claims right of permanent tenancy,
the Controller shall decide whether the denial or claim is
bona fide and if he records a finding to that effect, the -........
landlord shall be entitled to sue for eviction of the tenant
in a Civil Court and the Court may pass a decree for evic-
tion on any of the grounds.mentioned in the said sections,
c notwithstanding that the Court finds that such denial does
not involve forfeiture of the lease or that the claim is
unfounded.

S. 19-Decisions which have become final not to be
D reopened-Any application under section 3-A or section
12, and any application under sub-section (2) or sub-
section (3) or sub-section (3-A) of section JO or under
sections 14, 15 or 16, shall be summarily rejected by the
authorized officer or the Controller, as the case may be.
if such application raises between the same parties or bet-
E ween parties under whom they or any of them claim. sub-
stantially the same issues as have been finally decided or
as purport to have been finally decided in a former
proceeding-

(i) under this Act, or
F
(ii) under any other law from time to time in force
before the date of the commencement of this Act and relat-
ing to matters dealt with in this Act.

Counsel contended that S. JO makes it clear beyond doubt that the
G Rent Controller is precluded from deciding any issue regarding title to
the property and that, if any such question arises, he should leave it to
be decided by ordinary civil courts in appropriate proceedings. The
procedure to be adopted by him in disposing of the applications before ...
him is a summary one hardly conducive to a satisfactory disposal of
such complicated questions. Under Rule 12(2) he is required to decide
H applications by recording a brief note of the evidence of parties and
L.l.C. v. INDIA AUTOMOBILES IRANGANATHAN, J.] 561

witnesses and decide matters after giving the parties an opportunity to
A
state their case: more or less, in the manner in which a Court of Small
Causes decides cases before it. Indeed, in the Presidency Town, he is
subordinate to the Court of Small Causes which has been notified as
the authority to hear appeals from his o;ders and it is a well settled
proposition that the Court of Small Cause~ is not competent to adjudi-
cate on questions of title. For these reasons, learned counsel submits, B
the decision of the Court of Small. Cause~ in the earlier proceedings
cannot fetter a civil court from adjudicating upon all the issues arising
before it in a civil suit.

We think that this contention is well founded. There are clear
indications in the Act and rules that the Rent Controller does not have
the jurisdiction to decide questions of title. In a proceedings under the c
Act, whether it be for fixation of fair rent or eviction, the tenant may
raise several objections. He may, inter alia, take up the point that the
opposite party is not the "landlord". The definition of "landlord'"
under the Act is very wide and encompasses not only an owner but also
persons "receiving or entitled to receive the rent of the building which D
has been let out or would be entitled to receive the rent of the building
if it were let out to a tenant" in one of several capacities. Denial of title
of the landlord is itself one of the grounds on which eviction can be
sought [S. 10(2)(vii) ].,Sri Krishnamurthy Iyer is, therefore, certainly
right in contending that the Act requires the Rent Controller to con-
sider this issue, among others, while disposing the applications before E
him. But, we think, Sri Parasaran is right in saying that, since the Rent
Controller has no jurisdiction to entertain an application except by a
landlord or a tenant, the question of title to the property is one on
which his very jurisdiction depends. It cannot be described as a matter
that is squarely and directly in issue in these proceedings to which any
finality can be attached, as the Rent Controller, by deciding the issue F
wrongly, cannot clothe himself with jurisdiction where none exists. All
that the Rent Controller has to do is to satisfy himself that the person
seeking eviction or fixation of fair rent is a "landlord" who has, prima
facie,' the right to receive the rents of the property in question. That
the Rent Controller's jurisdiction on this issue is limited is clear from
the proviso to S. 10(1) of the Act. In order to decide whether the G
denial of the landlord's title by the tenant is bona fide, the Rent Con-
troller may have to go into the tenant's contentions on the issue but he
is not to decide the question finally. He has only to see whether the
tenant's denial of the landlord's title is bona fide in the circumstances
of the case. He may reach a conclusion, on the merits, that the land-
lord has title; yet he cannot order eviction if the tenant's action in H
562 SUPREME COURT REPORTS [ 1990) 3 S.C.R.

denying the title was bona fide. Per contra, he may reaoh the conclu-
A
sion on the materials before him that the landlord has no title; yet, it
seems, if he finds that the applicant is otherwise a landlord and that the
grounds on which the tenant's denial was based were not bona fide, he
will have to order eviction. So also, in an application under S. 4, the
jurisdiction of the Rent Controller is to determine a fair or standard
B rent for the premises. He has no doubt to ensure that the person
applying for the fair rent is the tenant or the landlo1d. He has also no
doubt to satisfy himself as to the extent of the premises qua which the
re_lationship of landlord and tenant exists and in respect of which rent
is receivable or payable. For deeiding these issues, he may have no
doubt also to consider the oral and documentary evidence adduced by
the parties. Yet, having regard to the manner in which he is required to
c come to this conclusion and having regard to the fact that at least in
the Presidency Town an appeal from his order goes to the Court of
Small Causes, it is difficult to escape the conclusion that the jurisdic-
tion to be exercised by him is a limited and a prima facie one. It will be
anomalous to hold that where an owner of property seeks to evict his
D tenant under s. 10(2)(vii) but the Rent Controller refuses to pass the
order of eviction-though satisfied about his title-because the tenant
had acted bona fide, it would be open to the owner to seek eviction by
having his title adjudicated upon in a civil court but that the owner
cannot have a similar right in the matter of recovery of rent which is
basically a relief for which he has to approach~ civil court. A question
E of title may be a complex one involving difficult issues. For instance,
the "owner" may claim title under an adoption or a will or a trust deed
or a gift deed and there may be contentious claims among several
persons which it will not be possible for the Rent Controller to decide.
It is important to remember that when an owner files a suit for arrears
of rent, it is open to the tenant, under the general law, to plead that no
F rent is payable in respect of the premises as, indeed, it belongs to him.
The right to raise this issue cannot be taken away without a specific
statutory provision. The terms of s. 11 C.P.C., including Explanation
VIII, are not comprehensive enough to cover the case.

The limited nature of the jurisdiction of a Tribunal like the Rent
G C.ontroller and the Court of Small Causes has been considered in a
number of cases by this Court as well as other courts:

(1) We may start with an early Full Bench decision of the •
Madras High Court: Venkatarama Rao & Ors. v. Musunuru lfenkayya
and Ors., AIR 1954 Madras 788. It arose under the Madras Estate .
H Land Act (I of 1908). In that case, the Revenue Divisional Officer, in
L.J.C. v. INDIA AUTOMOBILES [RANGANATI!AN, J.] 563

certain earlier proceedings, had held that a particular village was not A
an "estate" and this had been confirmed by the District Collector and
the High Court. Later on, the plaintiffs filed suits against the tenants in
possession of holdings in the village for an injunction restraining them
from removing the paddy heaps standing on the suit lands until a due
division was made of the crop and until the rent in kind payable to the
B
plaintiffs was paid by the tcnarts. The tenants wanted to contend in
reply that the village in question was an "estate" within the meaning of
the Act and they had occupancy rights therein. The plaintiffs, how-
ever, objected that this plea was not open to the tenant in view of the
earlier decision of Revenue Divisional Officer. Negativing the plea of
the plaintiffs, the Court pointed out:
c
(8) xxx xxx xxx
If a particular matter is one which does not fall within
the exclusive jurisdiction of the revenue court, then a deci-
sion of a revenue court on such a matter, which might be D
incidentally given by the revenue court, cannot be binding
on the parties in a civil court. One practical test would be to
determine if that particular matter would not be a matter in
respect of which the civil court would have jurisdiction. To
give an obvious instance, suppose in a suit under S. 55 for
the grant of a patta instituted by a person claiming to be the
E
adopted son of the ryot who was a pattadar, the landlord
raises a plea that he is not entitled to the patta because his
adoption is not valid, it may be that the revenue court would
have to summarily go into the question whether the person
suing is or is not the validly adopted son of the previous
ryot. Can it possibly be said that the finding of the revenue
F
court on the issue of adoption is bindng on the parties in a
subsequent suit in a civil court in which the validity of the
adoption might fall to be decided? There can be no doubt
about the answer.

That is because the dispute as to the validity of the
G
adoption is not a dispute in respect of which a revenue
court has exclusive jurisdiction. Such a dispute is a matter
well within the jurisdiction of a civil court. Thereafter, it
cannot be within the exclusive jurisdiction of the Revenue
court, 1nd the decision of such a dispute by~ revenue court
cannot be binding in a civil court.
H
564 SUPREME COURT REPORTS [1990) 3 S.C.R.

Incidentally it may be pointed out, this decision has been cited with
A
approval by this Court in Bhagwan Dayal v. Reoti Devi, [1962) 3
SCR440. ""'
(2) Desika Charyulu v.State of Andhra Pradesh and another,
AIR 1964 S.C. 807 was a decision under the Madras Estates (Abolition
B and Conversion into Ryotwari) Act, 1948. In that case it was held, on a
construction of section 9( 1) of the Act, that the property in question
being an "inam village" is assumed as a fact on the existence of which
the competence of the Settlement Officer to determine the matters ,,.
within his jurisdiction rests and that, as there are no words in the
statute empowering him to decide finally the former, he cannot confer
jurisdiction on himself by a wrong decision on this preliminary condi-
c tion to his jurisdiction. Any determination by him of this question,
therefore, is (subject to the result of an appeal to the tribunal) binding
on the parties only for the purpose of the proceedings under the Act, ~ '
but no further. The correctness of that finding may be questioned in
any subsequent legal proceeding in the ordinary courts of the land
D where the question might arise for decision. However, if the property
is an inam village, whether the "inam village" is an "inam estate" is,
within his exclusive jurisdiction and in regard to it the jurisdiction of
the Civil Courts is clearly barred.

(3) Dhulabhai v. State, [1968] 3 SCR 662 was concerned with the
E interpretation of the provision in the Madhya Bharat Sales Tax Act '> ..
barring the jurisdiction of civil courts in matters entrusted to the
jurisdiction of the special tribunals created under the Act. It is un-
necessary to refer in detail to this case except to set out a passage from
pages 682-3 where Hidayatullah, C.J., speaking for the Constitution
Bench, reviewed all earlier cases on the subject and enunciated the
F principles emerging therefrom, of which the following are relevant
here: ..I.

"The result of this inquiry into the diverse views expressed
in this Court may be stated as follows·:-

G ( 1) Where the statute gives a finality to the orders of
the special tribunals, the Civil Courts' jurisdiction must
be held to be excluded if there is adequate remedy to do
what the Civil Courts would normally do in a suit. Such
provision, however, does not exclude those cases where the
provisions of the particular Act have not been complied
H with or the statutory tribunal has not acted in conformity
L.I.C. v. INDIA AUTOMOBILES [RANGANATIIAN, J.! 565

with the fundamental principles of judicial procedure. A

(2) Where there is an express bar of the jurisdiction
of the court, an examination of the scheme of the particular
Act to find the adequacy or the sufficiency of the remedies
provided may be relevant but is not decisive to sustain the
jurisdiction of t~e civil court.
B

Where there is no express exclusion the examination
of the remedies and the scheme of the particular Act to find
OJ)t the intendment becomes necessary and the result of the
inquiry may be decisive. In the latter case it is necessary to
see if the statute creates a special right or a liability and c
provides for the determination of the right or liability and
further lays down thai all questiqns about the said right and
I
~-
liability shall be determined by the tribunals so constituted,
'and whether remedies normally associated with actions in
Civil Courts are prescribed by the said statute or not.
D
xxx xxx xxx

(4) In Mathura Prasad Bajoo Jaiswal & Ors. v. Dossibai N.B.
Jeejeebhoy, [ 1970] 3 SCR 830, the appellant had obtained lease of an
open land for construction of buildings. After putting up the buildings,
he applied for determination of standard rent under the Bombay E
Rents, Hotel and Lodging House Rates Control Act, 1947. The appli-
cation was rejected holding that the provisions of the Act did not apply
to open land let for construction. This viewwas confirmed by the High
Court. Sometime thereafter in another case the High Court held that

l the question whether the provisions of the Act applied to any parti-
cular lease must be determined on its terms and a building lease in
respect of an open plot w.s not excluded. from the provisions of the
Act solely because open land may be used for residence or educational
purposes only after a structure is built thereon. Relying upon this
F

judgment, the appellant filed a fresh application for determining the
standard rent. The trial Judge rejected the application holding that
question of the applicability of the Act was res judicata since it had G
been finally decided by the High Court between the same parties in
respect of the same land in the earlier proceeding for fixation of
standard rent. The order was confirmed by the first appellate court
and on fort1er appeal by the High Court. The Supreme Court, how-
ever, reversed the judgment of the High Court. The Court observed:
H
566 SUPREME COURT REPORTS [1990) 3 S.C.R.

A "A question relating to the jurisdiction of a Court
cannot be deemed to have been finally determined by an
erroneous decision of the Court. If by an erroneous
interpretation of the statute the court holds that it has no
jurisdiction, the decision will not, operate as res judicata.
Similarly by an erroneous decision if the Court assumes
B
jurisdiction which it does not possess under the statute, the
decision will not operate as res judicata between the same
parties, whether the cause of action in the subsequent liti-
gation is the same or otherwise."

(5) Gangabai v. Chhabubai, [1982) 1 SCR 1176, related to the
c jurisdiction of the Court of Small Causes. In that case the respondent,
being in need of money, entered into an agreement with the appellant
for a loan of Rs.2,000 and it was simultaneously decided that she I

should execute a nominal document of sale and rent note of her house. •\
These documents were executed on January 7, 1953, but the respon-
dent continued in the possession of the house property throughout.
D The appellant was attempting to enforce the document as a sale deed
by filing suit in the Court of Small Causes for recovery of rent and the
said suits had resulted in decrees. pie respondent thereupon filed a
suit for a declaration that she was and continued to be owner of the
house property, alleging that the documents executed on 7th January,
1953, were never intended to be acted upon. The appellant in defence
E maintained that the sale deed represented a genuine transaction and
ownership of the house property had passed to her. It was pleaded that
the decrees passed by the Court of Small Causes operated as res
judicata barring the respondent from pleading that the sale deed was
merely a nominal transaction. Reliance was also placed on section 92
of the Indian Evidence Act. The High Court held that the sale deed I
F and rent note were sham documents, that the decrees of the Court of j
Small Causes did not operate as res judicata and that section 92 of the
Indian Evidence Act did not preclude the respondent from establish-
ing the true nature of the transaction. The Supreme Court dismissed
the appeal. In regard to this contention it was urged on behalf of the
appellant that the High Court ecred in applying the statutory provi-
G sions of section 11 of the Code of Civil Procedure and that it should
have invoked the general principles of res judicata. It was submitted
that it was necessary to find out whether the Court of Small Causes was
competent to try the two earlier ·suits and docide the issues arising
therein. After referring to various decisions cited on behalf of the
parties, the Court observed:
H
L.I.C: v. INDIA AUTOMOBILES [RANGANATHAN, J.J 567

"It seems to us that when a finding as to title to immovable
A
property is rendered by a Court of Small Causes res
judicata cannot be pleaded as a bar in a subsequent regular
civil suit for the determination or enforcement of any right
or interest in immovable property. In order to operate as res
judicata the finding· must be one disposing of a matter di-
rectly and substantially in issue in the former suit and the B
issue should hlive been heard and finally decided by the
court trying sucb suit. A matter collaterally or incidentally
in issue for the purposes of deciding the matter which is
directly in issue in the case cannot be made the basis of a
plea of res judicata. It has long been held that a question of
title in a Small Cause suit can be regarded as incidental
only to the substantial issue in the suit and cannot operate c
as res judicata in a subsequent suit in which the question of
title is directly raised ..... Our attention has been drawn
to fa.!'Jlanation VIII to section J 1 in the Code of Civil Pro-
cedure recently inserted by the Code of Civil Procedure
(Amendment) Act, 1976. Section 97(3) of the Amendment D
Act declares that the new provision applies to pending
suits, proceeding, appeals and applications. In our opinion
the Explanation can be of no assistance, because it
operates only where an issue has been heard and finally
decided in the earlier suit."
E
(6) We may next refer to Jeeth Kaur and Ors. v. Smt. P.
Kondalamma and another, AIR 1983 AP 219. In that case, the tenant
filed a petition under the relevant Rent Control Act for permision to
deposit rents in court. The landlady denied any relationship of tenant
and landlord between the applicant and herself. This contention was
upheld by the appellate court and the High Court. In a subsequent suit F
filed by the tenants in the civil court as tenants of the suit building, the
landlady contended that the earlier decision operated as res judicata,
but this contention was negatived. The Court observed:
"The main relief sought for by the tenants was for deposit-
ing the rents on the ground that the landlord refused to
receive the same. In order to give that relief, the Rent G
Control Court must first have jurisdiction as it can adjudi-
cate disputes only between a landlord and a tenant. Since
the relationship is denied by the landlord, the Rent Con-
troller had decided that question incidentally. This is not
the main relief for which the application is filed. In fact, it
is not a dispute which is exclusively triable by the Tribunals H
568 SUPREME COURT REPORTS [ 1990] 3 S.C.R.

under the Act. The dispute has to be decided as incidental
A
to the granting of the main reliefs. The necessary condition
for exercise of jurisdiction by the Rent Controller is the
existence of relationship of landlord and tenant. The rent
authorities have no power to decide a dispute which is not
between a landlord and tenant. Therefore. the decision on
B the question whether the relationship of landlord and
tenant exists is a decision regarding jurisdictional facts and
such a decision is neither conclusive nor final. In such
circumstances, the jurisdiction of the Civil Court to enter-
tain a suit in which the question of jural relationship of the
landlord and tenant arises is not ousted. Since the said
decision is not final it can never operate as res judicata
c between the parties. In fact if we examine the provisions of
the Act, there are only five reliefs that can be granted
under the Rent Control Act. One is fixation of fair rent and
increase thereof under sections 4, 5 and 6; the second is
permission to deposit rents in the court under section 8 (5);
D the third is to order eviction under section 10; the fourth is
to direct recovery of prn;scssion by the landlord for repairs
under section 12; and the fifth is to order restoration of
amenities when they are unjustly withheld, under section
14 of the Act. The rent authorities cannot grant the reliefs
of declaration of occupancy rights.
E
(7) We may lastly refer to the decision of this Court in State of
Tamil Nadu v. Ramalinga Samigal Madam and Ors., [1985] 4 SCC '.O.
In that case the plaintiff-respondent claimed title to the suit land on
the basis of its long and uninterrupted possession since prior to 1938 as
also under an order of assignment of 1938 issued in its favour by the
F Zamindar whereby the right to cultivate in respect of that land was
granted to it subject to the payment of certain amounts. In 1953 the
plaintiff applied for a ryotwari patta in respect of this land after the
abolition of the Estate but the Additional Settlement Officer, by an
order dated 25th June, 1954, took a decision that land was not a ryoti
land but had been registered as a poramboke (village communal land)
G and, therefore, no one was entitled to ryotwari patta in respect of that
land. The plaintiff thereupon filed a suit for a declaration of its title
and right to continue in possesion and enjoyment of the suit land
subject to payment of ryotwari or other cess to be imposed by Govern-
ment without any interference from the Government. The State of
Tamil Nadu resisted the suit on merits by contending that the suit land
H was communal land and that the assignment or grant by the zamindar
L.J.C. v. INDIA AUTOMOBILES IRANGANATHAN, J.] 569

.., in favour of plaintiff was invalid. It also took a technical plea that the A
~ decision of the Additional Settlement Officer that the suit land was
poramboke and not 'ryoti' land was final and the Civil Court's jurisdic-
tion to decide that question was barred under section 64-C of the Tamil
Nadu Estates (Abolition and Conversion into Ryotwari) Act, 1948,
which ran as follows:
B
"64-C. Finality of orders passed under this Act-(!) Any
order passed by the Government or other authority under
this Act in respect of matters. to be determined for the
purposes of this Act shall, subject only to any appeal or
revision provided by or under this Act, be final.

(2) No such order shall be liable to be questioned in any c
court oflaw.

The State Government's plea was rejected by the High Court. Jn
appeal, the State contended before this Court that every refusal of a
ryotwari patta by a Settlement Officer in an inquiry under section 11 D
involves a decision on his part that either the applicant is not a ryot or
the land is not ryoti land; in the instant cases it was the latter and such
decision on the nature or character of the land has been given a finality
under section 64-C which cannot be questioned in a court of law.
Therefore, it was urged that the civil court's jurisdiction to adjudicate
upon the natre or character of the suit lands must be held to have been E
excluded or ousted. After discussing several decisions in regard to the
exclusion of a civil court's jurisdiction as well as the provisions of the
Act, the Court pointed out that the terms of section 64-C alone will not
be decisive on the point of ouster of the civil court's jurisdiction. The
observations made by the Court in paras 13 and 14 have relevance to
the present case and need not be set out here in extenso. F

We are of opinion, in the light of the decided cases referred to
above, that the contention on behalf of the respondents has to be
accepted. We are concerned with the jurisdiction of a civil court. The
extensive jurisdiction conferred on civil courts under s. 9 of the Code
of Civil. Procedure should not be curtailed without a specific statutory G
warrant or except on some clear principle. There is nothing in the
Tamil Nadu Rent Control Act which, in any way, takes away, or
narrows down, the civil court's jurisdiction as, for example, there is in
the Delhi Rent Control Act (s. 50). As to principle, whether we look at
it on the analogy of res judicata or adopt the approach of Sri Iyer as to
whether the order in the earlier proceedings is to be treated as an H
570 SUPREME COURT REPORTS [1990] 3 S.C.R.

order that is null and void or merely one that is valid until set aside, the
A answer has to turn on the true nature and scope of the jurisdiction
conferred on the Rent Controller under the Act. It is possible, we have
to ask ourselves, having regard to the context, scheme and terms of the
legislation, that the statute could have envisaged the Rent Controller
(and the authorities to whom appeal or revision could be preferred
B from his orders) to be final authorities to adjudicate on issues of title
also? The answer, in our opinion, has to be in the negative. Section 4
.. of the Rent Control Act, as already pointed out, provides only a
machinery for fixation of fair rent in respect of certain premises. It is
the quantum of fair rent that arises for determination by the Rent
Controller. There is no doubt that, since an application for this
purpose cannot lie except at the instance of a landlord or a tenant, the
c Rent Controller has to deal with this incidentally but this is not one of
the direct issues before the Rent Controller. If, and only if, this
relationship exists between the parties, the Rent Controller steps in for
a limited purpose-to determine what the fair rent is-and then fades
out of the picture. Where a fair rent is fixed by a Controller, the Rent
D Control Act does not provide for a machinery for recovery of the
amount. The amount has to be recovered by the landlord only by
recourse to a civil court. This gives an inidcation that the determina-
tion of the relationship that gives rise to the application is also not
conclusive. This is indeed made clear by the provisions relating to
eviction. We have already referred to the effect of the provisions of s.
E JO (2)(vii) read with the proviso to S. 10(1) and pointed out how
jurisdiction to decide questions of title is denied to the Rent Controi-
ler. The position cannot be different under S. 4. Having regard to the
much narrower scope of S. 4, it would be anomalous to read a wider
jurisdiction to the Rent Controller thereunder than under S. 10. In our
opinion, on a proper construction of the Rent Control Act, the ques-
F tion on which the jurisdiction of the civil court is excluded is only the
determination as to the fair rent of the premises. If the civil court in
this case had come to the conclusion that there is a relationship of a
landlord and a tenant and that the LIC was entitled to recover the rent
from the tenants, it will have to pass a decree in favour d the LIC on
the basis of the fair rent fixed by the Rent Controller. It will not be
G open to the civil court to re-determine the rent payable by the tenant
to the landlord because that is a matter squarely and exclusively within
the jurisdiction of the Rent Controller and, therefore, implietily ex- . _,,...
cluded from the purview of the civil court. But his decision is not final
on the issue that opens up his jurisdiction and cannot preclude an
owner from contending, in a civil court, that he should not be asked to
H pay rent for his own property to some one else.
L.I.C. v. INDIA AUTOMOBILES (RANGANATIIAN, J.l 571

For the reasons mentioned above, we are of the opinion that the A
High Court reached the correct conclusion and that this appeal has to
fail. The appeal is therefore, dismissed. In the circumstances, how-
ever, we make no order as to costs.

Y. Lal Appeal dismissed. B