Supreme Court of India
MRS. ZAKIYA BEGUM & ORS.versusMRS. SHANAZ ALI & ORS.
- Citation
- 2010 INSC 488
- Decided
- 9 August 2010
- Disposal
- Dismissed
- Bench
- G S SINGHVI
Holding
The Karnataka Rent Act, 1999 does not apply to the eviction proceeding, and the Small Causes Court lacked jurisdiction; the appeal is dismissed.
Summary
The landlords, Mrs. Zakiya Begum and others, let a premises to the tenants, Mrs. Shanaz Ali and others, at a monthly rent of Rs. 4,000. The landlords filed an eviction suit under the Karnataka Rent Control Act, 1961, but while the suit was pending the Karnataka Rent Act, 1999 came into force, repealing the 1961 Act. The tenants argued that the 1999 Act did not apply because the rent exceeded Rs. 3,500, and the Small Causes Court held that it had no jurisdiction to try the eviction. On appeal, the High Court dismissed the landlords' revision, and the Supreme Court examined the savings provisions of Section 70 of the 1999 Act, the exemption in Section 2(3)(e), and the definition of deemed rent under Section 6. The Court held that the 1999 Act does not apply to premises where the deemed or standard rent exceeds Rs. 3,500 on the commencement date, and that the agreed rent of Rs. 4,000 is the deemed rent, so the eviction proceeding remains governed by the 1961 Act and the Small Causes Court lacked jurisdiction. Consequently, the appeal was dismissed.
Issues considered
- Whether the Karnataka Rent Act, 1999 applies to eviction proceedings initiated under the Karnataka Rent Control Act, 1961 when the agreed rent exceeds Rs. 3,500 per month.
- Whether the Small Causes Court had jurisdiction to entertain the eviction petition after the 1999 Act came into force.
Legislation cited
- Karnataka Rent Act, 1999s. 2(3)(e), s. 6, s. 7, s. 70, s. 9
- Karnataka Rent Control Act, 1961s. 21(1)(f), s. 21(1)(h)
Subjects
Rent controlEvictionKarnataka Rent Act 1999Karnataka Rent Control Act 1961Deemed rentStandard rentJurisdictionRepeal and savingsStatutory interpretation
Judgment
[2010] 9 S.C.R. 692
A MRS. ZAKIYA BEGUM & ORS.
v.
MRS. SHANAZ ALI & ORS.
(Civil Appeal No. 6397 of 2010)
AUGUST 9, 2010
8
[G.S. SINGHVI AND ASOK KUMAR GANGULY, JJ.]
Rent Control and Eviction:
C Karnataka Rent Act, 1999 - ss. 6, 7, 2(3)(e) and 70 -
Premises let out at a monthly rent of Rs.40001- - Eviction
proceedings initiated under the 1961 Act-Applicability of the
1999 Act - Held: The 1999 Act is not applicable to the
eviction proceedings initiated under the 1961 Act - Tenant
paying deemed rent or standard rent above Rs.35001- for the
0 tenanted premises on the day of commencement of the 1999
Act is outside the purview of the Act - Landlord and tenant
entered into an agreement prior to the commencement of the
1999 Act, that agreed rent of the premises would be Rs. 4, 0001
- - Thus, there is no need to fix standard rent and the agreed
E rent is the deemed rent - Order of Court of Small Causes as
upheld by High Court that since monthly rent of premises
exceeded Rs. 35001-, the 1999 Act was not applicable and
thus, the said court had no jurisdiction and the eviction
petition was not maintainable, is upheld - Karnataka Rent
F Control Act, 1961 - Interpretation of Statutes - Explanation
to a Section - Construction of
The appellants owned certain property. They let out
the said premises on a monthly rent of Rs. 4000/- to the
G respondents Thereafter, the appellants filed an eviction
petition against the respondents u/s. 21 (1 )(h) and (f) of
the Karnataka Rent Control Act, 1961. The respondents-
tenants filed an interim application before the Court of
Small Causes. It was contended that during the pendency
H 692
ZAKIYA BEGUM & ORS. v. SHANAZ ALI & ORS. 693
of the eviction proceedings, the Karnataka Rent Act, A
1999 repealed the 1961 Act and the eviction proceeding
would be dealt with under the 1999 Act; that the 1999 Rent
Act was not applicable to premises where the monthly
rental exceeded Rs. 3500/-., and as such the eviction
proceedings were not maintainable in respect of the B
premises under the 1999 Rent Act, thus, the Court of Small
Causes had no jurisdiction to try the sai.d eviction
proceedings and the petition was not maintainable. The
appellants amended the eviction proceeding in
accordance with the 1999 Act. The Court of Small Causes c
allowed the interim application. The appellants
challenged the said order. The High Court dismissed the
revision petition. Therefore, the appellants-landlord filed
the instant appeal.
Dismissing the appeal, the Court D
HELD: 1.1. It is very clear from Section 70 of the
Karnataka Rent Act, 1999 that unless proceedings
initiated under Karnataka Rent Control Act, 1961 has
reached the stage of execution of a decree, 1961 Act will E
have no application to other eviction proceedings which
are pending , prior to the exe~ution stage, on the date of
coming into effect of the 19~:; Act. [Para 12] [697-B-C]
1.2. The Karnataka Rent Act, 1999 is a socio-economic
F
legislative measure and ·is designed to give protection to
certain classes of tenants. A tenant who is paying
deemed rent or standard rent above Rs.3500/- in respect
of his tenanted premises on the day of commencement
of the new Act is outside the purview of the Act. [Para 23]
[703-E-F] G
1.3. Under Section 6 of the 1999 Act, rent payable in
respect to the premises is the rent agreed between the
landlord and tenant as enhanced in the manner provided
in the Third Schedule or the standard rent as specified H
694 SUPREME COURT REPORTS [2010] 9 S.C.R.
A under section 7 and revised under section 9 of the Act.
A perusal of the explanation to section 2(3)(e) would
show that the deemed rent refers to sections 7 and 9 of
1999 Rent Act. [Para 24, 26] [703-G; 704-C]
1.4. In the instant case, the agreed rent is Rs.4,0001-
8
which comes within the definition of section 6(1)(a) and
the said agreement was admittedly entered into between
the appellants and respondents prior to the
commencement of the 1999 Rent Act. In a case where
C there is an admitted agreed rent, the question of fixation
of standard rent does not arise. [Paras 27 and 28] [704-
C-D]
1.5. An explanation to a Section should normally be
read to "harmonise with and clear up any ambiguity in
D the main Section" and normally not to widen its ambit.
[Para 29] [704-E]
Bihta Co-operative Development and Cane Marketing
Union Ltd., and Anr. vs. Bank of Bihar and others AIR 1967
E SC 389; Mis. Ob/um Electrical Industries Pvt. Ltd.,
Hyderabad vs. Collector of Customs, Bombay AIR 1997 SC
3467, relied on.
1.6. In the instant case, the agreed rent is the deemed
rent since there is no dispute about the quantum of
F agreed rent before the coming into force of the Act. Thus,
there is no error in the reasoning of the High Court.
[Paras 30 and 31] [704-G]
Case Law Reference:
G AIR 1967 SC 389 Relied on. Para 29
AIR 1997 SC 3467 Relied on.
Para 29
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
H 6397 of 2010.
ZAKIYA BEGUM & ORS. v. SHANAZ ALI & ORS. 695
'
From the Judgment & Order dated 12.11.2007 of the High A
Court of Karnataka at Bangalore in H.R.R.P. No. 60 of 2007.
Pukhrambam Ramesh Kumar for the Appellants.
Madhusmita Bora, Balalji Srinivasan for the Respondents.
B
The Judgment of the Court was delivered by
GANGULY, J. 1. Leave granted.
2. In this appeal the judgment and order dated 12.11.2007
of a learned Single Judge of the High Court of Karnataka in C
revisional jurisdiction in H.R.R.P. No. 60 of 2007, under Section
46 (1) of the Karnataka Rent Act, 1999 has been impugned.
3. The revisional petition was filed by Mrs. Zakiya Begum
and two others assailing the order dated 18.1.2007, passed o
by the Learned XVth Additional Small Causes Judge, Mayo Hall
Unit, Bangalore on I.A. No. 8/2006 filed by the tenants,
respondents herein.
4. The material facts are that the appellants are the
landlords of the property bearing No. 28/1, Robertson Road, E
Frazer Town, Bangalore - 5, measuring 43 feet North, South
37 feet 9 inches, East 25 feet ar·'.i West 25 feet, the property
included 6 feet wide passage leaving from Robertson Road into
the scheduled premises (herein after referred to as the said
'premises'). The appellants became the owner of the scheduled F
premises by virtue of a Gift Deed dated 30.3.2000 executed
by the husband of appellant No. 1 and th~ father of appellants
No. 2 and 3.
5. The appellants inducted the respondents as tenants on G
a monthly rent of Rs.4000/- (Four Thousand Only) per month in
respect of the said premises. The rent was agreed in
accordance with clause 4 of the rent agreement dated
06.11.1997.
H
696 SUPREME COURT REPORTS . [2010) 9 S.C.R.
A 6. On or about 21.3.01 the appellants instituted an eviction
proceeding being H.R.C. No. 10042/2001 against the
respondents under Section 21 (1) (h) and (f) of Karnataka Rent
Control Act, 1961 (herein after "the 1961 Act"), inter alia, on
the grounds of default, subletting, reasonable and bonafide
B requirements and some other grounds.
7. In the said eviction proceeding, the respondents filed
an IA being, IA 8 of 2006, wherein it was contended by the
respondents that during the pendency of the eviction
C proceeding, under Section 21(h)(f) of the 1961 Act, Karnataka
Rent Act 1999 (herein after, "1999 Rent Act") has come into
effect repealing the 1961 Act and it was further contended that
the eviction proceeding will have to be dealt with under the
provisions of the 1999 Rent Act. The appellants also amended
their eviction proceedings in accordance with the 1999 Rent
D Act and the respondents gave their objections to the same.
8. The main objection of the respondents in IA 8 is that
admittedly they are tenants on a monthly rental of Rs.4000/- and
as such the eviction proceeding is not maintainable in respect
E of the premises under the 1999 Rent Act as the same is not
applicable to premises where the monthly rental exceeds
Rs.3500/-. It was, therefore, urged that the Court of Small
Causes has no jurisdiction to try the said eviction proceeding
as the 1999 Rent Act does not apply.
F 9. By an Order dated 18.01.2007 the Court of XVth
Additional Small Causes Judge, inter alia, held that "since the
monthly rent of scheduled premises exceeds Rs.3500/-, hence
the Karnataka Rent Act, 1999 is not applicable and this Court
has no jurisdiction to try the case and the petition is not
G maintainable before this court". Saying so, IA 8 was allowed
by the XVth Additional Judge of the Small Causes Court.
10. That led the appellants to challenge the said order of
the Small Causes Court before the High Court.
H
ZAKIYA BEGUM & ORS. v. SHANAZ ALI & ORS. 697
[ASOK KUMAR GANGULY, J.]
11. It may be noted that neither before the High Court nor A
before this Court the applicability of the 1999 Rent Act, which
came into effect in November 2001, was questioned by the
appellants. Rather acknowledging its applicability to the
pending eviction proceeding the appellant amended the same
in accordance with the 1999 Rent Act. B
12. It is very clear from Section 70 of the 1999 Rent Act
that unless proceedings initiated under the 1961 Act has
reached the stage of execution of a decree, 1961 Act will have
no application to other eviction proceedings which are pending, C
prior to the execution stage, on the date of coming into effect
of the 1999 Rent Act.
13. The provisions of repeal and savings under Section 70
of the 1999 Rent Act, particularly provisions of Section 70(1)
and (2) are set out below: D
'70. Repeal and Savings.- (1) The Karnataka Rent Control
Act, 1961 (Karnataka Act 22 of 1961) is hereby repealed.
(2) Notwithstanding such repeal and subject to the
provisions of section 69,- E
(a) all proceedings in execution of any decree or order
passed under the repealed Act, and pending at the
commencement of this Act, in any Court shall be continued
and disposed off by such Court as if the said enactment F
had not been repealed;
(b) all cases and proceedings other than those referred to
in clause (a) pending at the commencement of this Act
before the Controller, Deputy Commissioner, Divisional G
Commissioner, Court, District Judge or the High Court or
other authoi"ity, as the case may be in respect of the
premises to which this Act applies shall be continued and
disposed off by such Controller, Deputy Commissioner,
Divisional Commissioner, Court, District Judge or the High
H
698 SUPREME COURT REPORTS [2010] 9 S.C.R.
A Court or other authority in accordance with the provisions
of this Act.
(c) all other cases and proceedings pending in respect _of
premises to which this Act does not apply shall as from
the date of commencement of the Act stand abated."
B
14. The learned counsel for the appellants urged that in
view of the provisions of Section 2(3)(e)(i) of the 1999 Rent Act,
the decision of the Small Causes Court is bad in law and
cannot be sustained.
c
15. In order to appreciate these controversies the relevant
Section is set out below.
"2(3) Nothing contained in this Act shall apply,-
0 (a) xxx
(b) xxx
(c) xxx
E (d) xxx
(e) to any premises, deemed rent on the date of
commencement of this Act or the standard rent of which
exceeds,-
F (i) three thousand five hundred rupees per
month in any area referred to in Part A of the
first schedule; and
(ii) xx>('
G
16. The learned counsel for the appellants submitted that
the non-applicability of the 1999 Rent Act is only on the basis
if in the tenanted premises the deemed rent or the standard
rent exceeds Rs.3500/- on the date of commencement of the
new Act of 1999 Rent Act. It was urged that such standard rent
H
ZAKIYA BEGUM & ORS. v. SHANAZ ALI & ORS. 699
[ASOK KUMAR GANGULY, J.]
is one which is fixed under Section 7 of the Act and it was A
argued that merely because the agreed rent is Rs.4000/- per
month in respect of the schedule premises, the Small Causes
Court should not have allowed the application of the tenant.
17. In order to decide this controversy, the provisions of
8
Sections 6 and 7 of the 1999 Act are to be taken into
consideration. Provision of Sections 6 and relevant provisions
of Section 7 of the said Act are set out below.
"6. Rent payable.- (1) The rent payable in relation to a
premises shall be,- C
(a) the rent agreed to between the landlord and the
tenant as enhanced in the manner provided in the Third
Schedule; or
(b) the standard rent specified under section 7, as revised D
under section 9.
(2) In the case of a tenancy entered into before the
commencement of this Act, the landlord may, by notice in
writing to the tenant within three months from the date of E
such commencement, enhance the rent as specified under
section 7, and the rent so enhanced, shall be payable from
the date of such commencement.
7. Standard rent.- (1) Standard rent in relation to any
F
premises, shall be the rent calculated on the basis of ten
per cent per annum of the aggregate amount of the cost
of construction and the market price of the land comprised
in the premises on the date of commencement of the
construction:
G
Provided that the standard rent calculated as
aforesaid shall be enhanced in the manner provided in the
Third Schedule.
(2) For the purpose of this section,- H
700 SUPREME COURT REPORTS [2010] 9 S.C.R.
A (a) cost of construction shall include cost of
electrical fittings, water pumps, overhead
tanks, storage tank and other water,
sewerage and other fixtures and fittings
affixed in the premises;
B
(b) in case any fixture and fittings referred to in
clause (a) are in common use by more than
one occupant in a building, such proportion
of cost of the fixtures equipment and fittings
shall be included in the cost of construction
c of the premises as bears proportion to the
plinth area of such premises to the plinth
area of that building;
(c) the cost of construction shall be the actual
D amount spent on construction, and in a case
where such amount cannot be ascertained,
such cost shall be determined as per the
scheduled rates of the State Public Works
Department for cost of construction for
E similar construction for the year in which the
premises was constructed;
(d) the market price of the land shall be the price
for which the land was bought as determined
from the deed of sale registered under the
F Registration Act, 1908 (Central Act 16 of
1908), if construction commenced in the year
of registration or the land rates notified by the
State Government or a local authority for the
year in which construction was commenced,
G whichever is higher;
(e) the land comprised in the premises shall be
the plinth area of the building and such of the
vacant land up to fifty per cent, of the plinth
H area as is appurtenant thereto;
ZAKIYA BEGUM & ORS. v. SHANAZ ALI & ORS. 701
[ASOK KUMAR GANGULY, J.]
(f) in a case where a premises forms part of a A
building having more than one premises,
such proportion of price of land forming part
of such building shall be taken to be the
market price of the land comprised in the
premises as is equal to the proportion of the B
plinth area of such premises to the plinth
area of that building;
(g) notwithstanding anything contained in
clauses (c) and (d), the cost of construction C
and the market price of the land comprised
in the premises purchased from or allotted by
the Government or a local authority shall be
the aggregate amount payable to such
Government or the local authority for the
premises: ' D
Provided that the Controller may, for the
purpose of arriving at, the cost of
construction and the market price of the land
comprised in the premises, allow in addition, E
subject to a maximum of thirty per cent of
amount payable to the Government or the
local authority, to the amount so payable for
any expenditure incurred by the landlord or
by the first or any subsequent purchaser or F
allottee for any improvement, addition or
structural alteration in the premises."
18. The Hon'ble High Court did not accept the contention
of the appellants and dismissed the revision petition filed by
the appellants. G
19. We are also inclined to agree with the view taken by
the Hon'ble High Court for the reasons indicated below.
20. The 1999 Rent Act (Karnataka Act 34 of 2001) was H
702 SUPREME COURT REPORTS [2010] 9 S.C.R.
A brought into existence to remedy problems of urbanisation and
to give protection of this only to certain categories of tenants
and in respect of some kinds of tenanted premises. Before
enacting this law, recommendations of Economic
Administration Reforms Commission and the National
B Commission on Urbanisation were considered.
21. On the recommendations of those two commissions,
this new legislation was brought in to balance the interests of
both the landlord and the tenant and the new law was to provide
C for regulation of rent and eviction in the spirit of modern
economy and it was designed to replace the 1961 Rent Act.
22. From the statement of objects and reasons some of
the features of the 1999 Rent Act are clear. The application of
the Act is restricted to,-
D
(i) to any residential building the Standard rent
of which does not exceed rupees 3,500 per
month in the areas covered by Karnataka
Municipal Corporation Act, 1976 and rupees
2,000 per month in other areas and a
E
commercial building having plinth area of not
exceeding 14 square meter.
(ii) to buildings which are more than 15 years
old.
F
(2) The Rent Deed is required to be in writing
and registered.
(3) Tenancy is made inheritable to a limited
extent.
G
(4) Provision is made,-
(a) for collection of standard rent in relation to the
investment on property and for enhancement
H of rent, and for determination of Standard
ZAKIYA BEGUM & ORS. v. SHANAZ ALI & ORS. 703
[ASOK KUMAR GANGULY, J.]
Rent by Rent Controller; A
(b) for registration of middlemen and estate
agents;
(c) for adjudication of eviction application by
Rent Courts, with only Right of Revision, but B
no appeal;
(d) for immediate eviction of tenants of State or
Central Government Employees, members
of Armed Forces, widows, handicapped c
persons and persons above the age of 65
years under certain circumstances;
(e) to laydown Special Procedure for trial of
cases before the controllers and also the
D
Courts so as to achieve quick disposals and
negotiated settlement.
(f) to impose certain Special obligations on the
landlords and tenants, etc."
E
23. Therefore 1999 Rent Act is a socio-economic
legislative measure and is designed to give protection to certain
classes of tenants. A tenant who is paying deemed rent or
standard rent above Rs.3500/- in respect of his tenanted
premises on the day of commencement of the new Act is
F
outside the purview of the Act.
24. Under Section 6 of the Act, set out hereinabove, rent
payable in respect to the premises is the rent agreed between
the landlord and tenant as enhanced in the manner provided
in the Third Schedule or the standard rent as specified under G
Section 7 and revised under Section 9.
25. Insofar as deemed rent on the date of commencement
of the Act is concerned, the same has been explained under
Explanation to Section 2(3)(e) which is set out below. H
704 SUPREME COURT REPORTS [2010] 9 S.C.R.
A "Explanation.- "Deemed rent on the date of
commencement of this Act" shall be the rent calculated in
the manner provided in section 7, together with revision,
if any, as provided in section 9 and decreased in the case
of premises constructed after the commencement of this
B Act at the same rate as the rate of enhancement stipulated
in the third Schedule to reflect the position on the date of
commencement of this Act"
26. A perusal of the said Explanation would show that the
deemed rent refers to Sections 7 and 9 of 1999 Rent Act.
c
27. In the instant case, the agreed rent is Rs.4000/- which
comes within the definition of Section 6(1 )(a) and the said
agreement was admittedly entered into between the appellants
and respondents prior to the commencement of the 1999 Rent
D Act.
28. In a case where there is an admitted agreed rent, the
question of fixation of .standard rent does not arise.
29. An explanation to a Section should normally be read
E to "harmonise with and clear up any ambiguity in the main
Section" and normally not to widen its ambit. (See Bihta Co-
operative Development and Cane Marketing Union Ltd., and
another vs. Bank of Bihar and others - AIR 1967 SC 389 at
page 393 and Mis. Ob/um Electrical Industries Pvt. Ltd.,
F Hyderabad vs. Collector of Customs, Bombay - Al R 1997 SC
3467 at page 3471 ).
30. In the instant case the agreed rent is the deemed rent
since there is no dispute about the quantum of agreed rent
G before the coming into force of this Act.
31. For the reasons aforesaid, this Court does not find any
error in the reasoning of the High Court and the appeal is
accordingly dismissed. No order as to costs.
H N.J. Appeal dismissed.
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