Holding

The tenant re‑enters under the original tenancy, rent remains at the earlier rate unless revised under Section 5, and the tenant’s right to seek re‑entry is subject to a three‑year limitation under Article 137 of the Limitation Act, not Rule 23.

Summary

The landlord sought possession of two shop premises to demolish and reconstruct them under Section 12 of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960. After the landlord completed the work, he offered the rebuilt premises back to the tenants at a higher rent, but the tenants filed execution petitions to enforce the landlord’s undertaking to let them re‑enter. The lower court dismissed the petitions on a six‑month limitation ground, but the High Court allowed the tenants’ revision petitions, holding the applications were within the limitation period and that the landlord could only claim fair rent under the Act. The Supreme Court held that on re‑entry the tenant occupies the premises under the original tenancy; rent remains at the pre‑vacancy rate unless revised under Section 5, and the landlord cannot condition re‑entry on a higher rent. The tenant’s right to seek re‑entry is governed by Article 137 of the Limitation Act (three‑year period), not by Rule 23 of the 1961 Rules. Consequently, the landlord’s claim for a new tenancy and higher rent was rejected and the appeals were dismissed.

Issues considered

Whether a new tenancy is created when the landlord offers the reconstructed premises back to the tenant, permitting the landlord to fix a fresh rent
What is the applicable limitation period for a tenant’s application to enforce the landlord’s undertaking under Section 12 – Rule 23 of the 1961 Rules or Article 137 of the Limitation Act, 1963

Legislation cited

Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960s. 10, s. 12, s. 13, s. 4, s. 5, s. 6
Limitation Act, 1963s. Article 137
Transfer of Property Act, 1882s. 106

Subjects

rent controlevictionreconstructiontenancylimitation periodfair rentstatutory interpretationheadings and titlesAndhra Pradesh Buildings Act

Judgment

A RAICHURMATHAM PRABHAKAR AND ANR.
V.

RAW ATMAL DUGAR

APRIL 12, 2004

B [R.C. LAHOTI AND ASHOK BHAN, JJ.]

Rent Control and Eviction:

Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960:
c
Sections 12 and 5-Recovery of tenancy premises by landlord for repair,
alteration, addition or for reconstruction-Tenant's re-entry into possession-
Effect of-Held: Tenant re-enters into possession under the original tenancy
on same terms and conditions on which he was occupying the building before
D handing over the possession to landlord-Tenants' obligation to make payment
of rent which remain suspended for the period of non-occupation is revived
as before-However, if the premises is altered, added or improved, revision
of rent is permissible but landlord cannot insist on revision of rent as a
condition precedent to re-entry by tenant.

E Section 12(1) and (2)-Andhra Pradesh Buildings (Lease, Rent and
Eviction) Control Rules, 1961-Rule 23-0rder of Controller directing tenant
to deliver possession of building to landlord-Tenant exercising his right of
re-entry seeking enforcement of Controller's order-Nature of such
application and limitation for-Held: Tenant's application for re-entry is not
an application for execution of any order in his favour, hence does not come
F under Rule 23 but would be governed by Article 137-Limitation period is
three years from the date specified by Controller-If no time is appointed by
Controller, tenant must exercise his right to recover possession within
reasonable time-Tenant who allows time to lapse or fails to avail the offer
given by landlord within reasonable time, would not be allowed relief by
G Control/er despite application being within limitation-limitation Act, 1963-
Article 13 7.

Construction of Statutes-Internal aids-Heading of section or title-
Reliance upon-Held: Heading or title have a limited role-Jn case of conflict
between plain language of the provision and the meaning of heading or title,
H 1130
.. I

R. PRABHAKAR v. R. DUGAR 1131

latter would no/ con/rot the meaning clearly and plainly discernible from the A
language of the provision.

Appellant-landlord required tenancy premises for immediate
purpose of demclition for erecting new building. He initiated proceedings
for recovery under clause (b) of section 12(1) of the Andhra Pradesh
Buildings (Lease, Rent and Eviction) Control Act, 1960. Rent Controller B
directed tenant to put landlord in possession of the premises. Tenants filed
appeals which were dismissed. Tenants then delivered the possession to
the landlord and landlord gave an undertaking that on completion of the
wotk the premises will be offered to the tenants. Reconstruction work was
completed. Appellants offered the rebuilt premises for lease at higher rent C
as the size of the premises was increased. Tenants filed execution petitions
for enforcement of the undertaking given by the landlord. Executing Court
dismissed the petitions on the ground of limitation as they were not filed
within six months from the date of the appellate order. Tenants filed
revision petitions. High Court allowed the revision petitions holding that
the applications were filed within limitation and directed the landlord to D
restore possession to the tenants leaving it open to them to claim fair rent
from the tenants. Hence the present appeals.

Dismis5ing the appeals, the Court

HELD: 1.1 Under the Andhra Pradesh Buildings (Lease, Rent and E
Eviction) Control Act, 1960 when the tenant re-enters into possession, he
does so under the original tenancy which stands statutorily protected under
the Act and he has not been evicted nor held liable to be evicted. lnspite
of the building having been repaired, altered, added to or re-erected, the
tenant shall re-enter to occupy the premises on the same terms and F
conditions on which he was occupying the building on the date on which
he delivered possession to the landlord, pursuant to the order of the
Controller. The rent for the period between the date of delivery of
possession by tenant to landlord and the date of tenant's re-entry shall
remain suspended because during that period it was not the tenant but
the landlord who was in possession of the building. On the tenant's re- G
entry into possession of the building, his obligation to pay the same rent
which he was paying on the date of delivery of possession by him to the
landlord, shall stand revived. If the law permits a revision of rent or
fixation of standard rent afresh, the landlord would be at liberty to invoke
that provision and revise the rent but the revision cannot be insisted on H
1132 SUPREME COURT REPORTS [2004] 3 S.C.R.

A by the landlord as a condition preceder.t to re-entry by the tenant.
Therefore, in the instant case, landlord was not justified i!I offering the
premises to the tenants for re-entry by qualifying the offer for payment
of a higher rate of rent. 11141-G-H; 1142-A-DI

Kondeti Suryanarayana and Ors. v. Pinninti Seshagiri Rao, 119951 2
B Andh. L.T. 100, disapproved.

Kondeti Swyanarayana and Ors. v. Pinninti Seshagiri Rao, [20001
Supreme Court 70, relied on.

1.2. When the premises are just repaired or only essential repairs
C are carried out and the µremises remain the same, one can understand
and assume that the rent appointed for the premises either by agreement
or as fair rent has already taken care of the obligation of the landlord of
maintaining the premises in good and habitable condition. In such cases,
it may not be necessary to revise the rate of rent. However, when the
D premises h&ve been added to, improved, altered or rebuilt consequent upon
the satisfaction of the Controller having been arrived at in that regard, it
would be unreasonable, arbitrary and capricious to keep the such premises
tied down to the old rate of rent which was being paid for premises in
dilapidated condition or not worthy of human habitation. Such a provision
would be liable to be struck down as unconstitutional.
E [1143-G-H; 1144-A-B[

1.3. Sub-section (1) of section 12 contemplates delivery of possession
by the tenant to the landlord for repairs, alterations, additions, demolition,
and reconstruction. A reconstruction carried out pursuant to order of
Controller made under Section 12(1) is included within the meaning of
F the expression 'addition, improvement or alteration' which seems to have
been used in wider sense. In the cases covered by Section 12, Section 5 is
available for fixation of fair rent by way of revision over the rate of rent
paid previously, consistently with the principles laid down in the proviso
to sub-Section (1) of Section 5 on an addition, improvement or alteration
G having been carried out. Such cases are excepted from the prohibition of
"on further increase.' [1144-F-G; 1145-DI

2.1. Where the tenant fails to deliver possession on or before the
specified date to the landlord, the landlord may execute the Controller's
order directing the tenant to deliver the possession of the building to the
H landlord before a specified date under Section 12(1), by filing an execution
R. PRABHAKAR v. R. DUGAR 1133
petition which will be governed by Rule 23 of the. Andhra Pradesh A
Buildings (Lease, Rent and Eviction) Control Rules, 1961 and hence, has
to be filed within a period of six months from the date of the order. The
application is by landlord who is a decree-holder having an executable
order in his favour. 11145-H; 1146-AI

2.2. Sub-section (2) of section 12 of the Act does not contemplate an B
order for re-entry by tenant into possession being made by the Controller.
A tenant exercising his right of re-entry is neither a decree-holder nor
seeking execution of any order in his favour; he is seeking enforcement of
a solemn undertaking given by the landlord but for which the Controller
would not have made an order for delivery of possession under sub-section C
(I) of Section 12 of the Act. The tenant's application is not an application
for execution and hence does not attract applicability of Rule 23. It would
be governed by Article 137 of the Limitation Act, 1963, it being an
application for which no period of limitation is provided elsewhere and
the period of three years would begin to run when the right to apply
accrues. The right to apply will accrue on the date specified by the D
Controller under sub-section (2) in this behalf. However, the tenant must
exercise his right to recover possession within the time appointed by the
Controller for the purpose or if no such time is appointed then within a
reasonable time, failing which the right of the tenant to seek restoration
of possession would be lost. The tenant who has allowed the time appointed
by the Controller to lapse or failed to avail the offer made by landlord E
within a reasonable time need not be allowed relief by the Controller in
spite of his application being within limitation under Article 137 of the
Limitation Act. The limitation of three years is the outer limit of time
available to tenant seeking recovery of possession when the landlord has
defaulted. 11145-F; 1146-A-C; 1146-E-Gl F
2.2 In the instant case, the application filed by the tenant for
enforcing the right of re-entry pursuant to the undertaking given by the
landlord, whether incorporated in the order of the Controller or not, is
not barred by limitation. High Court has rightly allowed the revision
petitions holding the application filed by the tenant to be within limitation G
and that it was open to the landlord to take necessary steps for claiming
fair rent. Landlord would be entitled to claim fair rent as is permitted by
law and till then the tenant would be liable to pay the rent at the same
rate at which it was being paid earlier. 11146-H; 1147-A-Bl

K.S. Hanumantharayappa v. A.N. Vittal Rao, (1987) I ALT 474; K. H
I

\

1134 SUPREME COURT REPORTS [2004] 3 S.C.R.

A Manik Rao and Ors. v. Smt. M. Bikshapamma and Anr., (1987) 2 ALT 15
and Navin Chandra v. Smt. Prema Bai Pilli, (1992) (3) ALT 181, disapproved

Mukri Gopa/an v. Cheppilat Puthanpuravi/ Aboobacker, 1199515 SCC
5, relied on.

B V. Dhanapal Chettiar v. Yesodia Amma/, AIR (1979) SC 1745, referred
to.

3. It is permissible to assign the Heading or Title of a section a limited
role to play in the construction of statutes. They may be taken as very
broad and general indicators of the nature of the subject-matter dealt with
C thereunder. The Heading or Title may also be taken as a condensed name
assigned to indicate collectively the characteristics of the subject-matter
dealt with by the enactment"llnderneath; though the name would always
be brief having its own limitations. In case of conOict between the plain
language of the provision and the meaning of the Heading or Title, the
D Headiug or Title would not control the meaning which is clearly and
plainly dis~ernible from the language of the provision thereunder.
11140-G-H; 1141-Aj .,..

Principles of Statutory Interpretation by Justice G.P. Singh, Ninth
Edition, 2004, pp. 152, 155, relied on.
E CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 2152-2153
of 1999.
From the Judgment and Order dated 16.10.98 of the Andhra Pradesh
High Court in C.R.P. Nos. 2051 and 2052 of 1989.
F Mrs. D.V. Padma Priya for the Appellants.
M.L. Lahoty, Paban K. Sharma, Sushi! Kumar Jain and Ms. Pratibha
Jain for the Respondent.
The Judgment of the Court was delivered by
R.C. LAHOTI, J. There are two cases relating to two premises, both
G being part of the same building, owned by the same owners but held on
tenancy by two tenants. The two premises are described as Door Nos.11-45-
60 and I 1-45-60/A situated at Thavvavari Street of Vijayawada. The tenants
in the two premises were holding each at a monthly rent of Rs.250 under the
appellant-landlords. For convenience sake we would refer to the parties only
H as 'landlord' and 'tenant'.
I

~

R. PRABHAKAR v. R. DUGAR [LAHOTI, J.] 1135

The landlord initiated proceedings for recovery of possession over the A
tenancy premises alleging that the same were required bona fide by the
landlord for the immediate purpose of demolishing and such demolition was
to be made for the purpose of erecting new building on the site of the
building sought to be demolished, a ground contemplated under Clause (b)
of sub-Section (!) of Section 12 of the A.P. Buildings (Lease, Rent and
Eviction) Control Act, 1960 (hereinafter 'the Act', for short). The landlord B
was successful in both the proceedings and vide the order dated 21.2.1986,
the Rent Controller directed the two tenants to put the landlord in possession
of the tenancy premises within one month from the date of the order. The
tenants preferred appeals which were dismissed on 5.2.1987. The time
appointed for compliance by the tenants was extended by one month. The C
tenants delivered possession over their respective shops to the landlord on
5.3.1987. The landlord gave an undertaking to the effect that on completion
of the work of repairs and alteration etc. in the building the same will be
offered to the tenants.

The work was completed by the landlord within six months. On 3.9.1987, D
the landlord sent an offer to each .of the two tenants to occupy the rebuilt
premises subject to payment of Rs. 2400 p.m. by each of the two tenants. The
area of the two shops in question before renovation was 27 ft. x 11 ft. = 297
sq. ft. each. It appears that the building continues to be non-residential as
before but it has undergone structural alterations of far-reaching character. It E
is clear from the description of premises contained in the offer in writing
made by the landlord on 03.09.87, relevant parts whereof read as under:

"You are aware that in my building D.No.11-45-60/A in Tavvavari
Street, Vijayawada- I, in front of the Room (which was leased to you
previously), a new shop room measuring about 11 x 12 feet has been p
constructed with the concrete Pillers, RRC roofing and iron shutter
facing the northern side, The previous room which is now situated
inside of this newly constructed shop room, is completely altered by
removing the wooden door, window, walls, middle piller, arches, and
partition walls, and by putting new iron beams (guarders) in the place
of partition walls and by constructing new walls, by removing wooden G
beams (guarders) in their places, by carrying out new cement planting
to all walls, and raising height of the ground floor to one foot and
putting new cuddappha stone slab flooring. All these rooms including
newly constructed front shop room are being completely altered
constructed with new additional constructions in order to make one H
I

~-

1136 SUPREME COURT REPORTS [2004] 3 S.C.R.

A big shop measuring about 40 x 11 feet with decent appearance as
suitable for the offices, or wholesale shops. xxx

I offer this newly constructed shop/hall (with iron shutter)
measuring about 40 x 11 feet (including newly constructed front shop
room) to you for lease for the rent of Rs. 2400/(Rupees two thousand
B four hundred only) per month, and this rent is according to the market
rate of the rents prevailing in this important business area."

The tenants did not reply. On 15.12.1987, the tenants filed two execution
petitions seeking enforcement of the undertaking given by the landlord and
recovery of possession to the tenants from the landlord. By order dated
C 6.1.1989, the executing Court directed the execution petitions to be dismissed
solely on the ground that they were barred by limitation as they were filed
on 15.12.1987 and not within six months from the date of the appellate
orders i.e. 5.2.1987 (as required by Rule 23, quoted hereinafter). The tenants
preferred two revision petitions before the High Court which have been
D disposed of by a common order. The revision petitions have been allowed.
The landlord has been directed to restore possession to the tenants. The High
Court has left it open to the landlord to take necessary steps for claiming fair
rent from the tenants by approaching the Rent C.:mtroller for the purpose.
Feeling aggrieved the landlord has come up in appeals by special leave.

E Two questions arise for decision:-

(I) Whether a new tenancy comes into existence, between the parties,
on possession being restored to the tenant over the newly erected building or
any part thereof, which would entitle the landlord to settle the rent and other
terms of lease afresh?
F
(2) What is the period of limitation for filing an application by the
tenant seeking enforcement of the order of the Rent Controller made under
Section 12 of the Act?

Both the abovesaid issues call for construing the provision enacted in
G Section 12 of the Act.
The Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act
.(
1960 (Act No.15 of 1960) was enacted to replace former two State enactments
namely the Madras Buildings (Lease and Rent) Control Act, 1949 (Madras -
Act XXV of 1949) and the Hyderabad Houses (Rent, Eviction and Lease)
H Control Act, 1954 (Hyderabad Act XX of 1954) which were operating in two
I
~

R.. PRABHAKAR v. R. DUGAR [LAHOTI, J.] 1137
areas of the State namely the Andhra area and Telangana areas respectively. A
It seems that in the predecessor legislation there was no provision similar to
the one contained in Section 12 of the Act of 1960. The Statement of Objects
and Reasons states inter alia that new Act was introducing some important
new provisions and one of them being "to make a provision empowering the
Rent Controller to direct the tenant to hand over possession of a building to B
the landlord to enable him to reconstruct or renovate the old building subject
to certain safeguards". Section 12 of the Act with which we are concerned
reads as under:-

"12. Recovery of possession by landlord for repairs, alterations
or additions or for reconstruction:-
c
(1) Notwithstanding anything in this Act on an application made by
a landlord, the Controller may, if he is satisfied:

(a) that the building is reasonable and bona fide required by the
landlord for carrying out repairs, alterations or additions
which cannot be carried out without the building being D
vacated; or

(b) that the building consists of not more than two floors and is
reasonable and bona fide required by the landlord for the
immediate purpose of demolishing it and such demolition is
to be made for the purpose of erecting a new building on the E
site of the building sought to be demolished,

pass an order directing the tenant to deliver possession of
the building to the landlord before a specified date.

(2) No order for recovery of possession under this Section shall be p
passed unless the landlord gives an undertaking that the building
on completion of the repairs, alterations or additions OJ the new
building on its completion will be offered to the tenant, who
delivered possession in pursuance of an order under sub-section
(I), for his occupation before the expiry of such period as may
be specified by the Controller in this behalf. G.
(3) In case the tenant, to whom the building or the new building, as
the case may be, is offered under sub-section (2) by the landlord
does not want to occupy it the landlord shall give notice of
vacancy in writing to the authorized officer under sub-section
(I) of Section 3. H
r
I

1138 SUPREME COURT REPORTS [2004J 3 S.C.R.

A (4) Nothing in this Section shall entitle the landlord, who has
recovered possession of the building for repairs, alterations or
additions or for reconstruction to convert a residential building
into a non-residential building or a residential building unless
such conversion is pennitted by the Controller at the time of
passing an order under sub-section (I)."
B
In exercise of the power conferred by Section 30 of the Act, rules have
been framed by the Government of Andhra Pradesh, called the Andhra Pradesh
Buildings (Lease, Rent and Eviction) Control Rules, 1961. The relevant part
of Rule 23, with which we are concerned, is extracted and reproduced
C hereunder:-
"23. (l) Every application for the execution of orders passed under
this Act shall be in writing signed and verified by the decree-
holder and filed before the Controller within six months from
the date of the order accompanied by a certified copy of the
order concerned together with the necessary process fee:
D
Provided that an application may be admitted after the specified
period if the applicant satisfied the Controller that he has
sufficient cause for not preferring the application within such
period.
E (2) On receipt of an application for the execution of . order as
provided by sub-rule (I), the Controller shall ascertain whether
all the requirements have been complied, and if they have not
been complied, the Controller may reject the application or may
allow the defect to be remedied within the time to be fixed by
him.
F
(3) & (4) xxx xxx xxx
(5) An order of eviction passed under Sections 10, 12, and 13 shall
be executed by evicting the persons against whom the order was
passed or any other persons bound by the said order and by
G delivering the vacant possession of the building in regard to
which the order was passed either to the person in whose favour
the order was passed or to such person as he may appoint to
take delivery on his behalf.
(6) to (8) xxx xxx xxx"
H The leases of immovable property and the relationship between landlord
R. PRABHAKAR v. R. DUGAR [LAHOTL J.] 1139
and tenant are governed by Chapter V of the Transfer of Property Act, 1882. A
The rights and liabilities of lessor and lessee are stated in Section I 08 of the
T.P. Act which apply subject to the contract or local usage to the contrary.
Under Clause (b) and (c) thereof, not only the lessor is bound on the lessee's
request to put him in possession of the property but there is also an implied
covenant for peaceful possession and enjoyment of the leased property by the B
tenant. So long as the lessee pays the rent reserved by the lease and performs
the obligations cast on him by the contract of lease, he is entitled to hold and
enjoy the property without interruption by anyone including the lessor. Under
Clause (I) the lessee is bound to pay or tender, at the proper time and place,
the premium or rent to the lessor.

There has developed what is known as the doctrine of suspension of
c
rent based on principles of justice, equity and good conscience. If the lessee
is dispossessed by the lessor from the leased property the obligation of the
lessee to pay rent to the lessor is suspended.

In V. Dhanapal Chettiar v. Yesodia Amma/, AIR (1979) SC 1745, the D
Seven-Judges Bench of this Court examined the impact of Rent Control
Legislations on the provisions of the Transfer of Property Act in the context
of the issue whether for the purpose of seeking an eviction of ten\lnt under
the provisions of the rent control law, it was still necessary for the landlord
to terminate the tenancy by giving a notice under Section I 06 of the T.P. Act.
Certain observations made by this Court during the course of its judgment are E
relevant for our purpose and may be noticed. The State Rent Acts hav~, to'
a very large extent, encroached upon the field of freedom of contract. The
right of re-entry controlled by Sectinn 111 of the T.P. Act is further restricted
and fettered by the provisions of the Rent Restriction Act. In spite of the
contract of lease having expired or terminated, the tenant lessee continues in p
possession under the protective wing of the Rent Restriction Act until the
lessee loses that protection. The lessee is not bound to vacate nor can the
lessor-landlord exercises his right of re-entry unless a ground entitling him
to do so within the meaning of the Rent Act has been made out and established
in a court of law. The landlord-tenant relationship stands snapped and the
tenancy comes to an end only bn a decree or order in that regard being G
passed by a competent court. Thus, the contractual lease may have come to
) an end and the landlord-tenant relationship may have ceased to exist under
the contract or the T.P. Act, yet the same continues to exist for the purpose
of Rent Act.
H
1140 SUPREME COURT REPORTS [2004] 3 S.C.R.

A With this much prefatory statement we proceed to examine the provisions
of the A. P. Act.

The Heading given to Section IO of the Act is - 'Eviction of tenants'.
It confers a protection on the tenant to occupy the tenancy premises by
providing that the tenant shall not be evicted whether in execution of a decree
B or otherwise except in accordance with the provisions of Section I0 or Sections
12 and 13. Sub-section (2) of Section IO enumerates the grounds on the
availability whereof the tenant becomes liable to be evicted. The provision
opens by enacting that a landlord who seeks to evict his tenant shall apply
to the Controller for a direction in that behalf. If the Controller, after hearing
C both the parties, is satisfied of the availability of any one or more of the
grounds specified in sub-section (2) being made out, the Controller shall
make an order directing the tenant to put the landlord in possession of the
building. The Headings given to Sections 12 and 13 speak of 'Recovery of
possession by landlord for repairs, alterations or additions or for reconstruction'
of buildings.
D
The view is now settled that the Headings or Titles pre-fixed to sections
or group of sections can be referred to in construing an Act of the Legislature.
But conflicting opinions have been expressed on the question as to what
weight should be attached to the Headings or Titles. According to one view,
the Headings might be treated as preambles to the provisions following them
E so as to be regarded as giving the key to opening the mind of the draftsman
of the clauses arranged thereunder. According to the other view, resort to
Heading can only be taken when the enacting words are ambiguous. They
cannot control the meaning of plain words but they may explain ambiguities.
(See: Principles of Statutory Interpretation by Justice G.P. Singh, Ninth Edition,
p 2004, pp.152, 155). Jn our opinion, it is permissible to assign the Heading or
Title of a section a limited role to play in the construction of statutes. They
may be taken as very broad and general indicators of the nature of the
subject-matter dealt with thereunder. The Heading or Title may also be taken
as a condensed name assigned to indicate collectively the characteristics of
the subject-matter dealt with by the enactment underneath; though the name
G would always be brief having its own limitations. In case of conflict between
the plain language of the provision and the meaning of the Heading or Title,
the Heading or Title would not control the meaning which is clearly and
plainly discernible from the language of the provision thereunder.

In the present case, Sections IO and, 12 and 13 are placed in close
H
R. PRABHAKAR v. R. DUGAR [LAHOTI. J.) 1141

proximity and yet assigned different titles which is suggestive of the legislative A
intent that the subject~matter dealt with under the two headings, differently
named, is different. A comparative reading of Section 10 with Sections 12
and 13 shows that while sub-section (2) of Section I 0 contemplates the
tenant being directed to put the landlord in possession of the buildings
consequent upon a ground for eviction of tenant having been made out and B
the landlord having succeeded in making out a case for eviction of his tenant.
And so, the delivery of possession by tenant to landlord is in effect eviction
of tenant by landlord. The tenancy itself is determined. under Sections 12
and 13 the Controller orders the tenant to deliver possession of the buildings
to the landlord for a specific purpose and according to a calendar of events
which binds the landlord and the tenant both. In other words, under Sections C
12 and 13 the tenant is not evicted; the tenancy does not come to an end; the
lease continues to survive; and yet the tenant ceases to be in actual possession
of the building which is placed in possession of the landlord for a specified
purpose. Under Clause (a) of sub-section (1) of Section 12 the purpose is "for
carrying out repairs, alterations or additions which cannot be carried out D
without the building being vacated". Under Clause (b) of sub-section (I) the
purpose is "the immediate purpose of demolishing it and such demolition is
to be made for the purpose of erecting a new building on the site of the
building sought to be demolished." The provision seeks to achieve a multi-
purpose. The tenant is protected because his tenancy does not come to an end
and his right to re-occupy the building - repaired, altered, added or erected E
- continues to survive. The landlord is benefited because but for the tenant
having been directed to deliver possession to him he could not have carried
out such repairs, etc. or rebuilding. The public interest is served as the buildings
are kept in good and habitable state and new building activity continues to
be carried on. F
Under Section 12, as we have already stated, the lease does not come
to an end, nor the tenancy is terminated, merely on account of possession of
the building having been delivered to the landlord; nor does it come to an end
nor extinguished because the old building has been demolished and a new
building has been erected. The tenant, when he re-enters into possession, G
does so under the original tenancy which stands statutorily protected under
the Act and he has not been evicted nor held liable to be evicted. In spite of
the building having been repaired, altered, added to or re-erected, the tenant
shall re-enter to occupy the premises on the same terms and conditions on
which he was occupying the building on the date on which he delivered H
1142 SUPREME COURT REPORTS (2004] 3 S.C.R.

A possession to the landlord, pursuant to the order of the Controller. The rent
for the period between the date of delivery of possession by tenant to landlord
and the date of tenant's re-entry shall remain suspended because during that
period it was not the tenant but the landlord who was in possession of th~
building. On the tenant's re-entry into possession of the building, his obligation
B to pay the same rent which he was paying on the date of delivery of possession
by him to the landlord, shall stand revived. If the law permits a revision of
rent or fixation of standard rent afresh, the landlord would be at liberty to
invoke that provision and revise the rent consistently with such provisions.
But the revision of rent cannot be insisted on by the landlord as a condition
precedent to re-entry by the tenant.
c
Therefore, the landlord in the present case was not justified in offering
the premises to the tenants for re-entry by qualifying the offer for payment
of a higher rate of rent.

In Kondeti Suryanarayana and Ors. v. Pinninti Seshagiri Rao, (1995)
D 2 Andh. L.T. 100, a learned Single Judge of the High Court of Andhra
Pradesh noticed G.O.M. No.636, G.A.D. dated 29.12.1983 which exempted
newly constructed buildings from the operation of the Act, with effect from
26.10.1983, for a period of I 0 years from the date on which their construction
is completed. The Notification was issued in exercise of the power conferred
E by Section 26 of the Act. In the opinion of the learned Single Judge, inasmuch
as the newly constructed building would remain exempted for a period of JO
years from the operation of the Act, it was not necessary for the landlord to
give an undertaking as contemplated by sub-section (2) of Section 12 of the
Act and the right of re-induction of the tenant remained suspended for a
F period of I 0 years from the date of completion of the construction of building.
This judgment was put. in issue in appeal by special leave before this Court.
A Division Bench of this Court by its judgment dated 04.11.1999 (reported
as Kondeti Suryanarayana and Ors. v. Pinninthi Seshagiri Rao, AIR (2000)
Supreme Court 70 set aside the judgment of the Andhra Pradesh High Court
and held that where a landlord requires a building to be demolished necessarily
G he has to reconstruct the building on the same site of the building and on
reconstruction of new building the tenant has to be allowed to re-enter in the
said premises. If an interpretation, as given by the learned Single Judge of the
Andhra Pradesh High Court, was to be accepted then it would encourage any
unscrupulous landlord to get eviction of tenant on the ground of demolition
H of the building which would be repugnant to the object of the Act, said this
R. PRABHAKAR v. R. DUGAR [LAHOTI. J.) 1143
Court. We may hasten to add that the judgment of the Andhra Pradesh High A
Court reversed by this Court suffered from the fallacy of reading Section 12,
as providing a ground to the landlord for evicting the tenant which it is not.

A perusal of Section 12 of the Act shows the order being passed by the
Controller directing the tenant to deliver possession of the building to the
landlord before a specified date, subject to the Controller being satisfied of B
the availability of the ground for making such an order.

An order for recovery of possession under Section 12 cannot be passed
unless the landlord gives an undertaking for offering the building back to the
tenant on the expiry of such period as may be specified by the Controller in
this behalf. If the tenant does not avail the offer still the landlord cannot C
occupy the building. He has to notify the vacancy in writing to the authorized
officer under Section ( 1) of Section 3. The nature of user after reconstruction
must remain the same as it was before, that is to say, a residential building
must continue to be a residential building and a non-residential building must
continue to be a non-residential building on re-erection unless permitted D
otherwise by the Controller. Section 12 empowers the Controller to specify
time or appoint the dates for three purposes: (i) the date by which the tenant
has to deliver possession of the building to the landlord, (ii) the date by
which the landlord has to complete the work, and (iii) the date by which the
landlord shall offer the building to the tenant. The controller can also specify
the date or time before the expiry of which the tenant must give response to· E
the offer made by the landlord. 'Such period as may be specified by the
Controller in this behalf - the expression as employed in sub-section (2) of
Section 12 qualifies all the events within the scope of that provision. Once
these dates have been specified there will be no difficulty of implementation.
F
Having reconstructed the premises totally anew, should the rent remain
static? We can understand the premises being just repaired or only essential
repairs having been carried out by the landlord in discharge of his obligation
to secure peaceful enjoyment and possession of the tenancy premises by the
tenant for the purpose for which the tenancy was created. So long as the
premises remain the same, one can understand and assume that the rent G
appointed for the premises either by agreement or as fair rent has already
taken care of the obligation of the landlord of maintaining the premises in
good and habitable condition. In such cases, it may not be necessary to revise
the rate of rent. However, when the premises have been added to, improved,
altered or rebuilt consequent upon the satisfaction of the Controller having H
1144 SUPREME COURT REPORTS [2004] 3 S.C.R.

A been arrived at in that regard, it will be unreasonable and capricious to keep
the premises tied down to the old rate of rent which was being paid for
premises which were - may be - dilapidated or not worthy of human habitation.
Such a provision, if contained in any Legislation, would be liable to be struck
down as unconstitutional on account of being arbitrary, capricious and
B unreasonable. However, so far as the Act is concerned, care has been taken
by Section 5 thereof which provides as under:-

"5. Increase in fair rent in what cases admissible:-(!) When
the fair rent of a building has been fixed under this Act, no further
increase in such fair rent shall be permissible except in cases where
some addition, improvement or alteration has been carried out at the
c landlord's expense and if the building is then in the occupation of a
tenant, at his request:

Provided that the increase shall be calculated at a rate per annum
not exceeding six per cent of the cost of such addition, improvement
.D or alteration carried out and the fair rent as increased under this sub-
section shall not exceed the fair rent payable under this Act for a
similar building in the same locality with such addition, improvement
or alteration:

Provided further that, any dispute between landlord and the tenant
E in regard to any increase claimed under this sub-section, shall be
decided by the Controller."

Sub-Section (I) of Section 12 contemplates delivery of possession by
the tenant to the landlord for repairs, alterations, additions and demolition
and reconstruction. Out of these four situations, Section 5 permits revision of
F rent in cases of alterations, additions and repairs amounting to improvements.
A reconstruction carried out pursuant to order of Controller made under
Section 12(1) of the Act is included within the meaning of the expression
'addition, improvement or alteration' which, in our opinion, seems to have
been used in wider sense. Jn such cases, it will be permissible to have the rent
fixed consistently with the principles laid down in the proviso to sub-Section
G (1) of Section 5. In the cases covered by Section 12, Section 5 is available
for fixation of fair rent by way of revision over the rate of rent at which it
was being paid previously. The opening part of sub-Section (1) of Section 5
is divisible into two parts, comprehending two situations, as under :

(i) Where the fair rent of a building has been fixed under this Act, no
H
•
I

R. PRABHAKAR v. R. DUGAR (LAHOTI, l.] 1145
further increase in such fair rent shall be permissible; except in cases A
(ii) where some addition, improvement or alteration has been carried
out at the landlord's expense and ifthe building is then in occupation
of a tenant, at his request.

The next following two provisos respectively lay down the formula for B
calculating the revision in rent and confer exclusive jurisdiction on the
Controller to decide the dispute.

Sections 4, 5 and 6 are parts of one scheme. What first clause of sub-
section (1) of Section 5 provides is that the fair rent of a building having
been fixed under Section 4 the same cannot be re-fixed once again. It is the C
rule of one-time fixation of fair rent. This rule does not apply to any case of
addition, improvement or alteration having been carried out as stated in the
later clause. It is an exception to 'one-time fixation of fair rent' rule. In spite
of fair rent of building having been fixed already, the fair rent can be fixed
again as per formula laid down in the proviso on an addition, improvement D
or alteration having been carried out. Such cases are excepted froni the
prohibition of 'no further increase'.

Now arises for determination the question of limitation for filing of
execution petition by the landlord or by the tenant. Here again, a perusal of
the scheme of Section 12 shows that the provision contemplates passing of E
an order directing the tenant to deliver the possession of the building to the
landlord before a specified date under sub-section (1) of Section 12. Sub-
section (2) does not contemplate an order for re-entry by tenant into possession
being made by the Controller; what the Controller does is to accept the
undertaking given by the landlord without which an order for delivery of
possession by the tenant in favour of the landlord under sub-section (I) shall F
not be passed. The specification of dates by the Controller is dependant on
and consequent to the undertaking given by the landlord as condition precedent
to the passing of the decree. If the landlord does not give the undertaking
contemplated by sub-section (2), there shall be no order for recovery of
possession under sub-section ( 1).
G
Where the tenant fails to deliver possession on or before the specified
date to the landlord, the landlord may execute the order of the Controller by
filing an execution petition which will be governed by Rule 23 and hence
shall have to be filed within a period of six months from the date of the order.
The application is by landlord who is a decree-holder having an executable H
1146 SUPREME COURT REPORTS (2004) 3 S.C.R.

A order in his favour in his hands. A tenant exercising his right of re-entry is
\..
neither a decree-holder nor seeking execution of any order in his favour; he
is seeking enforcement of a solemn undertaking given by the landlord but for i-
which the Controller would not have made an order under sub-section (I) of
Section 12 of the Act. The tenant's application is not an application for
execution and hence does not attract applicability of Rule 23. It would be
B governed by Article 137 of the Limitation Act, 1963; it being an application
for which no period of limitation is provided elsewhere and the period of
three years shall begin to run when the right to apply accrues. The right to
apply will accrue on the date specified by the Controller under sub-section ..
(2) in this behalf. The period of limitation prescribed by Rule 23 may become
c otiose if applied to tenant as the period for completion of building by landlord
-may itself be more than six months and the period of limitation for tenant if
governed by Rule 23 would have already expired by that time. An application
filed before Rent Controller can attract applicability of Limitation Act, 1963
(See Mukri Gopalan v. Cheppilat Puthanpurayil Aboobacker, [1995] 5 SCC
5. There are three single-Judge Bench decisions of Andhra Pradesh High
D Court, namely, K.S. Hanumantharayappa v. A.N. Vittal Rao, (1987) 1 ALT
474, K. Manik Rao and Ors. v. Smt. M Bikshapamma and Anr., (1987) 2
ALT (Notes on Cases) 15 and Navin Chandra v. Smt. Prema Bai Pitti, (1992)
3 ALT 181, taking the view that the limitation for application by tenant
seeking restoration of possession to him is governed by Rule 23. These
E decisions do not lay down the correct law and are overruled.
However, we hasten to add that the tenant must exercise his right to
recover possession within the time appointed by the Controller for the purpose
or if no such time is appointed then within a reasonable time and promptly
on receiving offer from the landlord in that regard failing which the right of
F the tenant to seek restoration of possession shall be lost. The tenant who has
.(
allowed the time appointed by the Controller to lapse or failed to avail the
offer made by landlord within a reasonable time need not be allowed relief
by the Controller in spite of his application being within limitation under
Article 137 of the Limitation Act. The limitation of three years is the outer
limit of time available to tenant seeking recovery of possession when the
G landlord has defaulted.

Hence, in the present case, the application filed by the tenant for
{
enforcing the right of re-entry pursuant to the undertaking given by the .,
landlord, whether incorporated in the order of the Controller or not, cannot
be said to be barred by limitation: It is futile to determine the question of
=
H
R. PRABHAKAR v. R. DUGAR [LAHOTI, J.] 1147

limitation by reference to Rule 23 above said. The High Court has rightly A
·• allowed the revision petitions holding the application filed by the tenant to
be within limitation and rightly held that it was open to the landlord to take
necessary steps for claiming fair rent. However, we clarify that the landlord
shall be entitled to claim fair rent as is permitted by law and till then the
tenant sha!l be liable to pay the rent at the same rate at which it was being B
paid.

Before parting we notice that when the revisions filed by the tenant
were allowed by the High Court on 16.10.1998 it was brought to the notice
of the High Court by the landlord, at the time of pronouncement of the
judgment, that the reconstructed building had already been leased out to C
some other persons, and therefore, the High Court directed the operation of
its judgment to remain stayed for approaching this Court. As to when and in
what circumstances third persons have be~n inducted into possession of re-
built building, are not known as the same are not discernible from the record.
Before giving effect to the order of the High Court, the Controlb shall have
to give notice to such third parties who are presently in possession and they D
shall have to be heard. It is difficult for us to anticipate what these third
persons in possession may have to say and, therefore, we make no observation
on their rights, if any, and leave it open to be detennined by the Controller.

Subject to the above said cautionary observation, the appeals are dismissed.
E
N.J. Appeals dismissed.