Holding

An appellate or revisional court may stay execution of an eviction decree on terms that include a higher rent, provided the amount is reasonable and not excessive; the High Court’s condition was reasonable, so the appeal was dismissed.

Summary

The State of Maharashtra, as landlord, obtained a decree of ejectment against M/s Super Max International, the tenant, under sections 13(3)(a) and 13(1)(g) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, on grounds of tax defaults and the landlord's bona‑fide need. The High Court stayed execution of the decree on the condition that the tenant deposit Rs 5,40,000 per month, a sum higher than the contractual rent of about Rs 5,236. The tenant appealed to the Supreme Court. The Court examined whether an appellate or revisional court may stay an eviction decree on terms that require payment of a higher rent, the reasonableness of the amount fixed, and the effect if the decree were later set aside. It held that such a stay is permissible provided the condition is reasonable and not punitive; the High Court’s figure, based on the Stamp Duty Ready Reckoner, was reasonable. Consequently, the appeal was dismissed.

Issues considered

The appellate/revisional court’s power to stay execution of an eviction decree under the Bombay Rent Act on conditions that require payment of rent higher than the contractual rate.
Whether the condition imposed by the High Court (deposit of Rs 5,40,000 per month) is legally permissible and reasonable.
The effect on the parties if the eviction decree is later set aside, particularly the restitution of excess rent paid.

Legislation cited

Bombay Rents, Hotel and Lodging House Rates Control Act, 1947s. 13(1)(g), s. 13(3)(a), s. 5(10), s. 5(11)
Maharashtra Rent Control Act, 1999
Transfer of Property Act, 1882

Subjects

rent controlevictionstay of executionhigher rent conditionBombay Rent Actlandlord‑tenant relationshipstatutory tenantstandard rent

Judgment

[2009) 13 (ADDL.) S.C.R. 801

~=} THE STATE OF MAHARASHTRA & ANR. A
v.
M/S. SUPER MAX INTERNATIONAL PVT. LTD. & ORS.
(Civil Appeal No. 5835 of 2009)
AUGUST 27, 2009
B
[B.N. AGRAWAL, G.S. SINGHVI AND AFTAB ALAM, JJ.]
......_
Rent Control - Bombay Rents, Hotel and Lodging House
Rates Control Act, 1947 - ss.13(3)(a) and 13(1)(g) - Suit for
ejectment of appellant-tenant - Decreed - Revision petition c
- High Court passed interim order staying execution of
"decree subject, however, to the condition that appellant would
deposit monthly rent at a rate higher than the contractual rent
..... from the date of decree - Condition on which stay granted -
Challenged - Held: In an appeal/revision preferred by tenant D
_. .Ji(
against order/decree of eviction passed under the Rent Act,
it is open to appellate/revisional Court to stay execution of the
order/decree on terms, including a .direction to pay monthly
rent at a rate higher than contractual rent - However, in fixing
the amount subject to payment of which execution of order/ E
decree is stayed, Courts to exercise restraint and not fix any
excessive, fanciful or punitive amount - On facts, High Court
fixed the amount with reference to Stamp Duty Ready
- >-- Reckoner and hence, its reasonableness cannot be doubted
- However,· in case eviction decree set aside, status quo ante F
would be restored and ·appellant would be entitled to get back
all amounts that he \:\'BS made to pay in excess of the
contractual rent - Interim order - Legality of.

Appellant was in occupation of a building floor on a
monthly rent of about Rs.5,000/-. The Trial Court and G
·i Appellate Court decreed suit for ejectment of appellant on
grounds of (i) default in payment of taxes and water
charges and (ii) reasonable and bona fide need of the
landlords (Respondents 1 to 3) for their own use and
801 H
802 SUPREME COURT REPORTS [2009] 13 (ADDL.) S.C.R.

A occupation, i.e under section 13(3)(a) and 13(1)g) of the +--
Bombay Rents, Hotel and Lodging House Rates Control
Act, 1947. The appellant filed revision petition before High
Court challenging the order of ejectment. The High Court
stayed execution of decree subject, however, to the
B condition that appellant would deposit an amount of Rs.
5,40,000/- as monthly rent commencing from date of
decree passed by Trial Court. Aggrieved by the condition,
the appellant filed the present appeal.

The question which arose for consideration in the
c present appeal is whether in an appeal or revision
preferred by a tenant against a order or decree of eviction
-
passed under the Rent Act, it is open to the appellate or
the revisional Court to stay the execution of the order or
the decree on terms, including a direction to pay monthly ~
D rent at a rate higher than the contractual rent. ....'
)( '\

Dismissing the appeal, the Court

HELD: 1.1. There is a need for a more balanced and ""'"
objective approach to the relationship between the
E
. landlord and tenant. This is not to say that the Court
should lean in favour of the landlord but merely that there
is no longer any room for the assumption that all tenants,
as a class, are in dire circumstances and in desperate ~-
need of the Court's protection under all circumstances.
F [Para 43] [832-G-H; 833-A-B]
,
1.2. The interim order of the High Court asking the
appellant to deposit Rs.5,40,000/- from the date of the
decree as condition for stay of the execution of the decree
G of ejectment has to be seen as one single package. The
appellant may or may not accept the order as a whole. )--.
But it is not open to it to accept the order in so far as it
stays the execution of the decree and to question the
condition attached to it. In an appeal or revision, stay of
H
STATE OF MAHARASHTRA & ANR. v. SUPER MAX 803
INTERNATIONAL PVT. LTD.
,..., )--
execution of the decree(s) passed by the court(s) below A
cannot be Clsked for as of right. While admitting the
appeal or revision, it is perfectly open to the ~ourt, to
decline to grant any stay or to grant stay subject to some
reasonable condition. In case stay is not granted or in
case the order of stay remains inoperative for failure to B
satisfy the condition subject to which it is granted, the
tenant-in-revision will not have the protection of any of
~ the provisions under the Rent Act and in all likelihood
would be evicted before the revision is finally decided. In
the event the revision is allowed later on, the tenant's c
remedy would be only by way of restitution. [Para 44]
(833-C-F]

-4
1.3. In an appeal or revision preferred by a tenant
against a order or decree of an eviction passed under the
~ _Jr Rent Act, it is open to the appellate or the revisional Court D
to stay the execution of the order or the decree on terms,
including a direction to pay monthly rent at a rate higher
than the contractual rent. In fixing the amount subject to
payment of which the execution of the order/ decree is
stayed, the Court would exercise restraint and would not E
fix any excessive, fanciful or punitive amount. In the case
in hand, the High Court fixed the amount of Rs. 5,40,000/
- t- - per month with reference to the Stamp Duty Ready
Reckoner and hence, its reasonableness cannot be
doubted. [Paras 46 and 47] (835-8-E] F

1.4. As regards the other question as to what would
be the position if the tenant's appeal/revision is allowed
and the eviction decree is set aside, in that event,
naturally, the status quo ante would be restored and the
G
.._.. tenant would be entitled to get back all the amounts that
he was made to pay in excess of the contractual rent.
That being the position, the amount fixed by the court
over and above the contractual monthly rent, ordinarily,
should not be directed to be paid to the landlord during
H
804 SUPREME COURT REPORTS [2009] 13 (ADDL.) S.C.R.

A the pendency of the appeal/revision. The deposited
amount, along with the accrued interest, should only be
paid afte~ the final disposal to either side depending upon
the result of the case. In case for some reason the Court
finds it just and expedient that the amount fixed by it
B should go to the landlord even while the matter is
pending, it must be careful to direct payment to the
landlord on terms so that in case the final decision goes
in favour of the tenant the payment should be made to
him without any undue delay or complications. [Para 48]
c (835-E-H; . 836-A] ,

Damadilal & Ors. vs. Parashram & Ors., (1976) 4 SCC
855; Gian Devi Anand VS. Jeevan Kumar (1985) 2 sec 683;
Mani Subrat Jain vs. Raja Ram Vohra, (1980) 1 SCC 1; H.
Shiva Rao vs. Cecilia Pereira (1987) 1 SCC 258 and Di/ip
D vs. Mohd. Azizu/ Haq & Anr., (2000) 3 SCC 6.07,
distinguished.

Atma Ram Properties (P) Ltd. v. Fe<lera/ Motors (P) Ltd.,
(2005) 1 SCC 705 and Satyawati Sharma v. Union of India
E & Anr., (2008) 5 sec 287, relied on.
Niyas Ahmad Khan v. Mahmood Rahmat Ullah Khan,
(2008) 7 sec 539, held inapplicable.
Malpe Vishwanath Acharya & Ors. v. State of
F Maharashtra & Anr., (1998) 2 SCC 1; Ganpat Ladha vs.
Shashi Kant Vishnu Shinde, (1978) 2 SCC 573; Anand Nivas
(Private) Ltd. v. Anandji Kalyanji Pedhi (1964) 4 SCR 892;
Jagdish Chander Chatterjee v. Sri Kishan (1973) 1 SCR 850;
Parubai Manila/ Brahmin v. Baldevdas Zaverbhai Tapodhan
G (1964) 5 Guj LR 563; v. Dhanapal Chettiarv. Yesodai Ammal
(1980) 1 SCR 334 and Joginder Pal v. Naval Kishore Behal ,_.,
(2002) 5 sec 397, referred to.
Case Law Reference:
H (2005) 1 sec 105 relied on Para 5
STATE OF MAHARASHTRA & ANR. v. SUPER MAX 805
INTERNATIONAL PVT. LTD.
,#_ t (2008) 1 sec 539 held inapplicable Para 5 A

(1998) 2 sec 1 referred to Para 15

(1976) 4 sec 855 dis ting IJ ished Para 17

(1978) 2 sec 573 referred to Para 17 B
(1985) 2 sec 683 distinguished Para 17

-~ (1980) 1 sec 1 distinguished Para 17

(1987) 1 sec 258 distinguished Para 17
c
(2000) 3 sec 607 distinguished Para 17

(1964) 4 SCR 892 referred to Para 19

(1973) 1 SCR 850 referred to Para 19

(1964) 5 Guj LR 563 referred to Para 23 D
- ~

(1980) 1 SCR 334 referred to Para 25
. (2008) 5sec 281 relied on Para 39

(2002) 5 sec 397 referreJ to Para 40 E
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
5835 of 2009.
- ·t
From the Judgment & Order dated 14.10.2008 of the High
Court of Judicature at Bombay in Civil Application No. 47 of F
2008 in Civil Revision Application No. 78 of 2007.

U.U. Lalit, Sanjay V. Kharde, Chinmoy Khaladkar, Asha
Gopalan Nair for the Appellants.

Mukul Rohtagi, S.K. Srivastav, Shekhar Gupta, Diksha Rai, G
,.-i Balraj Dewan for the Respondents.

The Judgment of the Court was delivered by

H
806 SUPREME COURT REPORTS [2009) 13 (ADDL.) S.C.R.

A AFTAB ALAM, J. 1. Leave granted. -f ...

2. The Government of Maharashtra, the appellant before
us, is in occupation of an area of 9000 sq. ft. (11,050 sq. ft. as
per the affidavit-in-reply filed by the appellant) comprising the
B sixth floor of a building on a monthly rental of Rs. 5236.58/-,
besides water charges at the rate of Rs. 515.35/- per month.
The suit premises, used for housing the office of the Registrar
Co-operative Societies is situate at Fort, opposite ·GPO, (near ~-
C.S.T. Railway Station) in the heart of the city of Mumbai. The
appellant is in occupation of the suit premises since 1966. At
c that time the building belonged to the Maharaja of Travancore.
Respondents 1 to 3 purchased it under a deed of assignment
dated May 5, 1982 and stepped into the shoes of the landlord.

3. The appellant suffered a decree of ejectment passed
D by the Court of Small Causes on June 30, 2003 in RAE & R
~ -
Suit No. 1233/3730 of 1986 on grounds of (i) default in payment
of taxes and water charges as stipulated under section 13(3)(a)
and (ii) reasonable and bona fide need of the landlords,
respondents 1 to 3 for their own use and occupation in terms
E of section 13(1)(g) of the Bombay Rents, Hotel and Lodging
House Rates Control Act, 1947 ('the Bombay Rent Act' or 'the
Act' hereinafter). Its appeal (No. 752/2003) against the decree
was dismissed by the Division Bench of the Small Causes
Court by judgment and order dated April 28, 2005. -+--
F 4. The appellant initially filed a writ petition [W.P. (C)
No.7361 of 2005] seeking to challenge the orders of ejectment.
The Bombay High Court declined to entertain it on the ground
that the appellant had a remedy available to it under the Act
itself. It, accordingly, disposed of the writ petition by order dated
G March 15, 2007 leaving it open to the appellant to file a civil
revision application as provided under section 35F(2) of the Act. )---~

The appellant then moved the High Court in Civil Revision
Application No.78 of 2007 challengiag the orders of its
ejectment. The High Court admitted the Civil Revision on
H December 10, 2007 and issued rule on interim relief regarding
STATE OF MAHARASHTRA & ANR. v. SUPER MAX 807
INTERNATIONAL PVT. LTD. [AFTAB ALAM, J.]
,.._ ,. stay of execution of the decree. Later on, after hearing the A
parties the Court stayed the execution of the decree by order
dated October 14, 2008 subject, however, to the condition that
the appellant would deposit a sum of Rs. 5,40,000/- every month
commencing from the date of the decree passed by the trial
court. The Court directed that the amount in arrears should be B
deposited by January 10, 2009 and from that date the future
deposits for every month should be made by the tenth of the
-~ next succeeding mqnth. The Court, however, did not allow the
landlords to take away the money but further directed that the
deposits would be ad-hoc and subject to further order in the c
revision or in any other appropriate~roceeding. It also directed
the office to invest the amount(s), in case deposited by the
appellant, in a nationalized bank, initially for a period of one year
and then for further periods of one year each. The appellant
finds the condition on which stay is granted highly onerous. But
D
..k the respondents maintain that the Court has been very liberal
with the appellant and the amount of monthly deposit fixed by
the court is far less than the current market rent in that area.

5. Of late, orders are coming to this Court where, in cases
arising from ejectment proceedings, the High Courts, with a E
view to strike a balance between the competing interests of the
landlord and the tenant, pass interim orders asking the tenant
to pay to the landlord or deposit in court, as monthly rent, certain
- t sum fixed by it (that, according to the High Court, should be the
reasonable market rent for the tenanted premises), far in F
excess of the existing monthly rent. In this case, while it was at
the threshold, it was stated before this Court that two of its
Division Bench decisions, one in Atma Ram Properties (P) Ltd.
vs. Federal Motors (P) Ltd, (2005) 1 SCC 705 and the other
in Niyas Ahmad Khan vs. Mahmood Rahmat Ullah Khan, G
(2008) 7 sec 539 had taken conflicting views on the
, -o{
correctness of such orders passed by the High Court. The case
was, accordingly, directed to be placed before a three-Judge
Bench and that is how it came to be heard before us.
H
808 SUPREME COURT REPORTS [2009] 13 (ADDL.) S.C.R.

A 6. It may be stated at the outset that just a little scrutiny -( _,..,
revealed that there was no conflict between Atma Ram
Properties and Niyas Ahmad Khan. In Atma Ram Properties
the tenant, having lost before the Rent Controller preferred an
appeal before the Rent Control Tribunal. The Tribunal stayed
B the tenant's eviction but subject to the condition that he would
deposit in Court Rs.15,000/- per month, in addition to the
contractual rent that might be paid directly to the landlord. The
deposits made in the Court were not permitted to be withdrawn -1 -
by any of the parties until the appeal was finally decided. The
c tenant challenged the condition attached to the stay order
before the High Court in a f)etition filed under Article 227 of the
Constitution of India. The High Court allowed the writ petition
and set aside the condition imposed by the Tribunal. The effect
of the order of the High Court was that during the pendency of
the appeal before the Tribunal the tenant would continue to
D
remain in occupation of the suit premises "on payment of an ,t. ·-
amount equivalent to the contractual rate of rent". Against the
High Court order the landlord came to this Court in appeal. This
Court allowed the appeal, set aside the High Court order and
restored the order passed by the Tribunal.
E
7. In Niyas Ahmed Khan, the position was quite different.
The landlord's application for eviction of the tenant on grounds
of personal necessity was turned down by the prescribed
authority. The order of the prescribed authority was confirmed +-
F by the appellate authority. The landlord challenged the orders
passed by the two authorities under the Rent Control Act in a
writ petition filed before the Allahabad High Court and while
admitting the writ petition the Court gave an interim direction
to the tenant to pay rent at the rate of Rs. 12,050/- per month
G (in place of the contractual monthly rent of Rs. 150/-). The Court
further directed that if the rent fixed by it was not paid for two
·consecutive months the landlord could evict the tenant by }-- "
coercive means taking the aid of police. In appeal by the tenant,
this Court naturally frowned upon the interim order passed by
the High Court and in paragraph 10 of the decision observed
H
STATE OF MAHARASHTRA & ANR. v. SUPER M~ 809
INTERNATIONAL PVT. LTD. [AFTAB ALAM, J.]

as follows: A
h'r
"10. To sum up, in writ petitions by landlords against
rejection of eviction petitions, there is no scope for issue
of any interim directi'on to the tenant to pay higher rent. But
in writ petitions by tenants against grant of eviction, the 8
High Court may, as a condition of stay, direct the tenant
to pay higher rent during the pendency of the writ petition.
This again is subject to two limitations. First, the condition
-~ should be reasonable. Second, there should not be any bar
in the respective State rent control legislation in regard to
such increases in rent. Be that as it may."
c
8. We, thus, find no inconsistency, much less any conflict
in the decisions of this Court in Atma Ram Properties and
-{
Niyas Ahmed Khan. The decision in Niyas Ahmad Khan has
no application to the facts of the present case and it seems to D
be covered by the decision of the Atma Ram Properties.
---
9. However, Mr. U. U. Lalit, Senior Advocate appearing for
the appellant, submitted that the decision in Atma Ram
Properties would apply only to cases under the Delhi Rent E
Control Act and shall have no application to tenancies governed
by the provisions of the Bombay Rent Act. Mr. Lalit submitted
that the Delhi Rent Control Act defined 'tenant' in a way as to
exclude a person against whom a decree of eviction was
~ t passed. Section 2(1) of the Delhi Rent Control Act, 1958 defined
F
tenant as:

"2(1) "tenant" means ............ but does not include, -

.
-
(A) any person against whom an order or decree for
eviction has been made, except where such G
decree or order for eviction is liable to be reopened
~ -1 under the proviso to section 3 of the Delhi Rent
Control (Amendment) Act, 1976 (18 of 1976)."

10. Mr. Lalit submitted that under the Delhi Rent Control
Act a tenant suffering a decree or order of eviction lost the H
810 SUPREME COURT REPORTS [2009] 13 (ADDL.) S.C.R.

A status of 'tenant' and was consequently stripped of all the
-f _..
protection (including, against increase in rent) provided by the
Rent Control Act and in such a case it would be open to the
appellate or the revisional authority to enhance the monthly rent
payable by him as a condition for granting stay of execution of
B the decree or order as held in Atma Ram Properties. This
exclusionary clause in the definition of tenant was a special
feature of the Delhi Rent Act and the Rent Acts of some other
States, e.g. Madhya Pradesh, Rajasthan, etc. But the position
under the Bombay Rent Act was materially different. In the -1 -
c definition of "tenant" in the Bombay Act there was no
exclusionary clause. Moreover, in the Bombay Rent Act there
were a number of provisions creating an express bar against
any enhancement of rent.

11. Learned counsel then took us through various '-
D provisions of the Bombay Rent Act. He referred to section 5(11)
~
defining "tenant" and emphasised that this definition did not
have any exclusionary clause as in section 2(1) of the Delhi Act.
Section 5(11) of the Bombay Rent Act reads as follows:

E "5(11 ). "tenant" means any person by whom or on whose
account rent is payable for any premises and includes,-

(a) such sub-tenants and other persons as have derived
title under a tenant before the 1st day of February 1973;
i--- '
F (aa) any person to whom interest in premises, has been
assigned or transferred as permitted or deemed to be
pe_rmitted, under section 15;

(b) any person remaining after the determination of
G the lease, in possession, with or without the assent
of the landlord, of the premis-es leased to such
person or his predecessor who has derived title )-- '
before the first day of February 1973;

(bb) such licensees as share deemed to be tenants for
H the purposes of this Act by Section 1SA
STATE OF MAHARASHTRA & ANR. v. SUPER MAX 811
INTERNATIONAL PVT. LTD. [AFTAB ALAM, J.]

(bba) the State Government, or as the case may be, the A
.....t- Government allottee, referred to in sub-clause (b)
of clause (1A), deemed to be a tenant, for the
purposes of this Act by Section 158;

(c) (i) in relation to any premises let for residence, when
B
the tenant dies, whether the death has occurred
before or after the commencement of the Bombay
Rents, Hotel and Lodging House Rates Control
- t- (Amendment) Act, 1978, any member of the
tenant's family residing with the tenant at the time
of his death or, in the absence of such member, any
c
heir of the deceased tenant, as may be decided in
default of agreement by the Court;

(ii) in relation to any permission let for the purposes
of education, business, trade or storage, when the D
"> ). tenant dies, whether the death as occurred before
or after the commencement of the said Act, any
member of the tenant's family using the premises
for the purposes of education of carrying on
business, trade or storage in the premises, with the E
tenant at the time of his death, or, in the absence
of such member, any heir of the deceased tenant,
as may be decided in default of agreement by the
court.
- t F
Explanation- The provisions of this clause for transmission
of tenancy, shall not be restricted to the death of the
original tenant, but shall apply, and shall be deemed always
to have applied, even on the death of any subsequent
tenant, who becomes tenant under these provisions on the
death of the last preceding tenant." G

~-1 (emphasis added)

12. He then referred to the definitiqn of "standard rent" as
contained in section 5(10) of the Act. The provision is as under:
H
812 SUPREME COURT REPORTS [2009) 13 (ADDL.) S.C.R.

A "5(10). "standard rent" in relation to any premises means,-.
-1 ....
(a) where the standard rent is fixed by the Court and the
Controller respectiveb; under the Bombay Rent Restriction
Act, 1939, or the Bombay Rents, Hotel Rates and Lodging (
~

House Rates (Control) Act, 1944, such standard rent; or I
B _/'

(b) w~en the standard rent is not so fixed,-

subject to the provisions of section 11,
i -
(i) the rent at which the premises were let on the first day
c of September 1940, or

(ii) where they were not let on the first day of September
1940, the rent at which they were last let before that day,
or
D -,-
(iii) where they were first let after the first day of September ;;( ~-
1940, the rent at which they were first let, or

(iii-a) notwithstanding anything contained in paragraph (iii),
the rent of the premises referred to in sub-section (1-A) of
E section 4 shall, on expiry of the period of five years
mentioned in that sub-section, not exceed the amount
equivalent to the amount of net return of fifteen percent, on
the investment in the land and building and all the
outgoings in respect of such premises; or ·t- '-
F
(iv) on any of the cases specified in section 11, the rent
fixed by the Court."

13. Mr. Lalit submitted that by virtue of section 5(10)(b) the
standard rent under the Bombay Rent Act was attached to the
G premises. It was, therefore, constant and not subject to any
· revision on change in tenancy. In other words even if the
appellant ceased to be a tenant and is thrown out, the
respondents can inpuct another tenant only on the same
"standard rent", that is, Rs.5236.58/- besides water charges at
H

-~.
I

STATE OF MAHARASHTRA & ANR. v. SUPER MAX 813
INTERNATIONAL PVT. LTD. [AFTAB ALAM, J.)
,. . _ ?'"- the rate of Rs.515.35/- per month. He further submitted that A
,, except in circumstances as provided under sections 10
(increase in rent on account of payment of rates, etc); 10A
(increase in rent in respect of premises that were let out on or
before September 1, 1940), 1OB (saving increase in rent under
the previous provisions from the bar of section 7), and 11 B
(increase in rent resulting from 'standard rent' fixed by the court
in certain cases) any increment of rent was expressly barred
-~ under section 7 of the Act.

14. Mr. Lalit submitted that in view of section 5(11) of the
Act the appellant continued to be a tenant within the meaning
c
of the Act notwithstanding the decrees of ejectment passed by
the Small Causes Court. It, therefore, followed that the appellant
enjoyed all the protections provided under the Act and in light
.._,
of the provisions referred to above any direction to pay, as
D
•> • monthly rent, any amount in excess of the standard rent was
contrary to law and unsustainable.

15. Before proceeding to examine Mr. Lalit's submissions
we may observe that earlier a three-Judge Bench of this Court
' in Malpe Vishwanath Acharya & Ors. vs. State of Maharashtra E
& Anr., (1998) 2 SCC 1, found and held that the provisions of
the Bombay Rent Act relating to the determination and fixation
of 'standard rent' can no longer be considered to be
.; -t reasonable. The only reason why, despite the finding, the Court
,
did not strike down those provisions was that the Bombay Rent F
Act was to come to an end on March 31, 1998 and the Court
was informed that the State was in the process of enacting a
new Rent Control Act that would be just and fair and would follow
the National Model Law that was circulated by the Central
Government in 1992. After the decision of the Court in Malpe
G
Vishwanath ~charya the Bombay Rent Act was indeed
. -i replaced by the Maharashtra Rent Control Act, 1999 that came
into force with effect from March 31, 2000. But Mr. Rohatgi,
learned Senior counsel appearing for the respondents, strongly
contended that the Maharashtra Rent Control Act completely
H
814 $UPREME COURT REPORTS [2009] 13 (ADDL.) S.C.R.

A belied the hopes expressed by the Court under which it had i.,.,.
refrained from striking down the offending provisions in the
Bombay Rent Act. Mr. Rohatgi submitted that the Maharashtra
Rent Control Act merely·brought about some cosmetic changes
but retained the substance of the earlier Bombay Rent Act.
B Referring to the definition of "standard rent" in section 7(14) of
the Maharashtra Rent Control Act, Mr. Rohatgi submitted that
it merely shifted the date from September 1, 1940 to October
1, 1987 for pegging the standard rent which continued to be -i ~
attached to the premises and was not amenable to any revision
c on change of tenancy.

.16. The issue of reasonableness of the provisions of the
Maharashtra Rent Control Act, 1999 or the Bombay Rent Act
do not arise in this case and, therefore, we refrain from making
any observations in that regard but we do feel that the ....
D reasonableness or otherwise of the provisions of the
.it ~
Maharashtra Rent Control Act may have to be seriously
examined by this Court in an appropriate case.

17. Coming back to the case in hand, Mr. Lalit argued that
E in spite of the decrees of eviction passed by competent courts,
the appellant continued to be a "tenant" within the meaning of
the Bombay Rent Act until, in execution of the decree it was
physically evicted from the suit premises. The tenancy did not
come to end on the passing of the decree but would continue + ..
F as long as the appellant was in actual physical possession of
the suit premises; a priori it enjoyed all the protection under the
Bombay Rent Act and specially those laying down the bar
against any increase in rent. In support of the contention he
relied upon two sets of decisions, one on the issue of heritability
of tenancy under the Rent Acts and the other on the question
G
whether a tenant could be evicted on the basis of a decree
made under the general law in case after the decree was )-- .
passed the rented premises came to be covered by the Rent
Act. The first set comprises three decisions of this Court in (i)
Damadilal & Ors. vs. Parashram & Ors., (1976) 4 SCC 855,
H
STATE OF MAHARASHTRA & ANR. v. SUPER MAX 815
INTERNATIONAL PVT. LTD. [AFTAB ALAM, J.]

(ii) Ganpat Ladha vs. Shashi Kant Vishnu Shinde, (1978) 2 A

-
k ).-

SCC 573 and (iii) Gian Devi Anand vs. Jeevan Kumar(1985)
·~
2 SCC 683. The second set also has three decisions. Those
are (i) Mani Subrat Jain vs. Raja Ram Vohra, (1980) 1 SCC
1, (ii) H. Shiva Rao vs. Cecilia Pereira (1987) 1 SCC·258 and
(iii) Di/ip vs. Mohd. Azizul Haq & Anr., ·(2000) 3 SCC 607. B

18. Dealing with the three decisions in the first set, Mr. Lalit
submitted that Damadilal fully supported his contention. The
"'- ~
decision in Ganpat Ladha took a contrary view but later in Gian
Devi Anand a Constitution Bench overruled Ganpat Ladha and
approved Damadilal thus, reinforcing the submission made on
c
behalf of the appellant.

19. The case of Damadilal arose under the Madhya
..... Pradesh Accommodation Control Act, 1961. The suit premise
was a house in a bazar that was let out to the two defendants D
> )..- (the tenants) for business purposes. The question that arose
in the case was whether on the death of the two tenants during

- the pendency of their second appeal before the High Court, their
respective heirs and legal representatives had the right to get
themselves substituted in place of the original appellants- E
tenants and pursue the reliefs sought for by them. The High
Court permitted substitution and eventually allowed the second
appeal, setting aside the eviction decrees passed by the courts
,, -+ below. The High Court judgment was challenged before this
Court in appeal. One of the grounds on which the High Court F
judgment was assailed by the appellants-landlords was that after
their contractual tenancy was determined the two original
tenants were reduced to the status of statutory tenants having
no heritable interest in the demised premises and on their
death the right to prosecute their appeal did not survive for their
G
heirs and legal representatives. In support of the contention
·~ reliance was placed on two earlier decisions of the Court in
Anand Nivas (Private) Ltd. vs. Anandji Kalyanji Pedhi (1964)
4 SCR 892 (arising under Bombay Rents, Hotel and Lodging
House Rates Control Act, 1947) and Jagdish Chander
H
816 SUPREME COURT REPORTS [2009] 13 (ADDL.) S.C.R.

A Chatterjee vs. Sri Kishan (1973} 1 SCR 850 [arising under the ~ ...
Rajasthan Premises (Control of Rent and Eviction) Act, 1950]. ....I'
A three-Judge Bench, of this Court rejected the contention Jf'•

~
raised on behalf of the appellants. The decision in Damadilal
pointed out that the term 'statutory tenancy' was borrowed from L
B the English Rent Acts and along with the expression certain
legal notions, peculiar to the English Common Law, had also
found their way in some Indian decisions though those concepts
had no basis in the Rent Acts of this country. The Court 1-~
observed that the courts in England had held that a statutory
c tenant had no estate or property in the occupied premises since
he retained possession by virtue of the Rent Act(s) and not as
being entitled to tenancy. It was said that he had only a personal
right to remain in occupation, the statutory right of "irremovability
and nothing more". The position in this country, however, was
quite different. In paragraph 11 of the decision it was observed '-I
D
as follows: ~ ~

"We find it difficult to appreciate how in this country we can
proceed on the basis that a tenant whose contractual ..
tenancy has determined but who is protected against
E eviction by the statute, has no right of property but only a
personal right to remain in occupation, without ascertaining
what his rights are under the statute. The concept of a
....
statutory tenant having no estate or property in the
premises which he occupies is derived from the provisions ~ ....
F of the English Rent Acts. But it is not clear how it can be
assumed that the position is the same in this country
'
without any reference to the provisions of the relevant
statute. Tenancy has its origin in contract. There is no
dispute that a contractual tenant has an estate or property
~

G in the subject- matter of the tenancy, and heritability is an '
incident of the tenancy. It cannot be assumed, however,
that with the determination of the tenancy the estate must ~-·
necessarily disappear and the statute can only preserve
his status of irremovability and not the estate he had in the
premises in his occupation. It is not possible to claim that
H
STATE OF MAHARASHTRA & ANR. v. SUPER MAX 817
INTERNATIONAL PVT. LTD. [AFTAB ALAM, J.]
.,.__ ~ the 'sanctity' of contract cannot be touched by legislation. A
It is therefore necessary to examine the provisions of the
Madhya Pradesh Accommodation Control Act, 1961 to
find out whether the respondents' predecessors-in-interest
retained a heritable interest in the disputed premises even
after the termination of their tenancy" B

20. The decision then went on to examine section 2(i) of
.. ~ the Madhya Pradesh Accommodation Control Act that defined
'tenant' and section 14 that provided for restrictions on
subletting and held that those provisions supported the view
taken by the Court that the statutory tenant retained as much
c
interest in the demised premises as a contractual tenant.

21. The case of Ganpat Ladha arose under the Bombay
.._, Rents, Hotel and Lodging House Rates Control Act, 1947 and
the premises from which the tenant was sought to be evicted D
') ).>-
was a shop let out to him for business purpose. The trial court
and the appellate court decreed the suit on the findings that the
tenant had failed to make payment of the arrears of rent even
after a valid notice of demand was given to him by the landlord
and further that he was not entitled to the protection of section E
12(3)(b) of the Act. The tenant challenged the decrees passed
by the courts below before the High Court in an application

_..., under Article 227 of the Constitution. During the pendency of
the writ petition before the High Court the tenant died and her
son was impleaded in her place to pursue the reliefs prayed F
for in the writ petition. The High Court eventually allowed the
writ petition on the ground that despite the default in payment
of arrears of rent, the trial court could exercise its discretion in
favour of the tenant and decline to pass a decree of eviction.
The matter finally came to this Court in appeal preferred by
G
landlord. A three-Judge Bench of the Court allowed the appeal
,. __..
inter alia holding that after the death of the original tenant her
son could not claim to be a tenant within the meaning of the
Act. The decision in Ganpat Ladha is based entirely on
interpretation of the definition of 'tenant' under the Bombay Rent
H
818 SUPREME COURT REPORTS [2009] 13 (ADDL.) S.C.R.

A Act. The Court noticed section 5(11) defining tenant and ~ -"'
reproduced the section insofar as it was relevant to the case
as follows:

"5. (11) 'tenant' means any person by whom or on whose
account rent is payable for any premises and includes-
B
(a) .....

(b) ..... -+ .
(c) any member of the tenant's family residing with him at
c the time of his death as may be decided in default of
agreement by the Court"

22. The Court held that section 5(11)(c) restricted the
heritability of tenancy only to a member of the tenant's family
.,.._
D who might be residing with him at the time of his death. This in
~
turn implied that heritability of tenancy was confined only to
residential premises and the benefit could not be extended to
business premises. The Court held as follows:

E "This principle underlying the enactment of Section
5(11)(c) also goes to indicate that it is in respect
of residential premises that the protection of that
section is intended to be given. We can appreciate
a provision being made in respect of business .,...._
premises that on the death of a tenant in respect
F
of such premises, any member of the tenant's '
family carrying on business with the tenant in such
premises at the time of his death shall be a tenant
and the protection of the Rent Act shall be available
to him. But we fail to see,what purpose the
G legislature could have had in view in according
protection in respect of business premises to a )- -,

member of the tenant's family residing with him at
the time of his death. The basic postulate of
protection under the Rent Act is that the person who
H is sought to be protected must be in possession of
STATE OF MAHARASHTRA & ANR. v. SUPER MAX 819
INTERNATIONAL PVT. LTD. [AFTAB ALAM, J.]

...._·~ th~ premises and his possession is protected by A
the legislation. But in case of business premises,
a member of the family of tenants residing with him
at the time of his death may not be in possession
of the business premises"
B
23. In Ganpat Ladha this Court approved the decision of
the Gujarat High Court in Parubai Manila/ Brahmin vs.
Baldevdas Zaverbhai Tapodhan (1964) 5 Guj LR 563 and in
.. ~ support of the view taken by it also cited the amendment
introduced by the Gujarat Legislature in section 5(11 )(c) of the
Bombay Rent Act. It needs to be stated here that in Ganpat
c
Ladha the earlier decision in Damadi/al was not brought to the
notice of the Court and the Court did not go into the question
whether a tenant on his death left behind any heritable estate
or interest in the tenanted premises.
""' ).:-
D
/
24. Gian Devi is a decision by a Constitution Bench of five
Judges. The case arose under the Delhi Rent Control Act, 1958
• and the tenanted premises was once again a shop. The
question that the Court framed for its consideration was as
under: E
"To state it more precisely, the question is whether the
heirs of a deceased tenant whose contractual tenancy in
_.....,.. respect of commercial premises has been determined,
are entitled to the same protection against eviction
afforded by the Act of the tenant" F

25. In this case, the Constitution Bench considered both
the earlier decisions in Damadilal and in Ganpat Ladha. It also
considered the earlier seven-Judge Bench decision in V.
Dhanapal Chettiar vs. Yesodai Ammal (1980) 1 SCR 334 G
besides several other decision of the Court. In Gian Devi, as
~--1
in Damadila/, the Court observed that the expression statutory
tenant was used in English Rent Acts and the concept that a
statutory tenant had no estate or interest in the demised
premises was peculiar to the English Law. It had no basis in H
820 SUPREME COURT REPORTS [2009) 13 (ADDL.) S.C.R.

A the provisions of the Rent Acts of the different States of this -f -"
country. Referring to the earlier decision in Damadilal in
paragraph 25 of the judgment the Court observed as follows:

"This Court has very aptly observed in Damadilal case that
it cannot be assumed that with the determination of the
B
tenancy, the estate must necessarily disappear and the
statute can only preserve the status of irremovability and
not the estate he has in the premises in his occupation"
-1 ,.
In the same paragraph, the decision reproduced Section 2(1)
c of the Delhi Rent Control Act that defined tenant both as it
stood prior to and after its amendment by Act 18 of 1976 and
observed as follows:

"It is, therefore, clear from the definition of tenant, whether
in the original Act or in the amended Act, that the tenant ~·
D
within the meaning of the definition of the term in the Act _,..
includes any person continuing in possession after the
termination of his tenancy. It will be seen that the definition ..
~

of tenant in Madhya .Pradesh Accommodation Control
Act, 1961 on which the decision in Damadilal case
E
mainly turns, is similar to the definition of tenant as given
in the Delhi Act in the sense that the tenant under both
the Acts includes for the purpose of Rent Act any person
continuing in possession after the tennination of tenancy."
..,.....~

.. F (emphasis. added)

. In this regard in paragraph 31 of the decision, it observed
as follows:

"The very premise, on the basis of which the argument is
G advanced, is, in our opinion, unsound. The termination of th
contractual tenancy in view of the definition of t
~-
nant in the Act does not bring about any change in the st
tus and legal position of the tenant, unless there a
e contrary provisions in the Act; and, the tenant
H notwithstanding the termination of tenancy does enjoy an
STATE OF MAHARASHTRA & ANR. v. SUPER MAX 821
INTERNATIONAL PVT. LTD. [AFTAB ALAM, J.)

estate or interest in the tenanted premises. This interest A
,._ ~-
or estate which the tenant under the Act despite
termination of the contractual tenancy continues to enjoy
creates a heritable interest in the absence of any provision
to the contrary. We have earlier noticed the decision of this
Court in Damadilal case. This view has been taken by this B
Court in Damadila/ case and in our opinion this decision

. ~
represents the correct position in law. The observations of
this Court in the decision of the seven-Judge Bench in the
case of V. Dhanapal Chettiar vs. Yesodai Ammal which
we have earlier quoted appear to conclude the question." c
In paragraph 33 of the decision the Court expressed its inability
to agree with the observations made by the three-Judge bench
....... in Ganpat Ladha and in paragraph 35 it stated more explicitly
that the view expressed by the Court in Ganpat Ladha and the
observations made therein do not lay down the correct law. D
~

26. In conclusion the Constitution Bench, in paragraph 36
of the decision, held and observed as follows:

"Accordingly, we hold that the Rent Act in question defines
E
a tenant in substance to mean 'a tenant who continues to
remain in possession even after the termination of the
contractual tenancy till a decree for eviction against him
is passed', the tenant even after the determination of the
~ ..... ~
tenancy continues to have an estate or interest in the
F
tenanted premises and the tenancy rights both in respect
of residential premises and commercial premises are
heritable. The heirs of the deceased tenant in the absence
of any provision in the Rent Act to the contrary will step into
the position of the deceased tenant and all the rights and
obligations of the deceased tenant including the protection G
,_ __. afforded to the deceased tenant under the Act will devolve
on the heirs of the deceased tenant. As the protection
afforded by the Rent Act to a tenant after determination of
the tenancy and to his heirs on the death of such tenant is
a creation of the Act for the benefit of the tenants, it is open H
822 SUPREME COURT REPORTS (2009] 13. (ADDL.) S.C.R.

A to the Legislature which provides for such protection to -j _,.

make appropriate provisions in the Act with regard to the
nature and extent of the benefit and protection to be
enjoyed and the manner in which the same is to be
enjoyed. If the Legislature makes any provisiofl in the Act
B limiting or restricting the benefit and the nature of the ~

protection to be enjoyed in a specified manner by any
particular class of heirs of the deceased tenant on any
condition laid down being fulfilled, the benefit of the ~.,.
protection has necessarily to be enjoyed on the fulfillment
c of the condition in the manner and to the extent stipulated
in the Act. The Legislature which by the Rent Act seeks to
confer the benefit on the tenants and to afford protection
against eviction, is perfectly competent to make
appropriate provision regulating the nature of protection
....
D and the manner and extent of enjoyment of such tenancy
rights after the termination of contractual tenancy of the ~
tenant including the rights and the nature of protection of
the heirs on the death of the tenant. Such appropriate
provision maybe made by the Legislature both with regard
to the residential tenancy and commercial tenancy. It is,
E
however, entirely for the Legislature to decide whether the
Legislature will make such provision or not. In the absence
of any provision regulating the right of inheritance, and the
manner and the extent thereof and in the absence of any ~ :i.__JfL
condition being stipulated with regard to the devolution of
F tenancy rights on the heirs on the death of the tenant, the
devolution of tenancy rights must necessarily be in
accordance with the ordinary law of succession."

27. On the basis of the decisions in Damadilal and Gian
G Devi Anand Mr. Lalit strongly contended that when a tenant,
having suffered a decree of eviction, on his death left behind
)-- ....
sufficient protection under the law for his heirs and legal
representatives to step into his, shoes and resist the eviction
sought for by the landlord how can it be that a tenant suffering
H a decree of eviction would himself lose the statutory protection
STATE OF MAHARASHTRA & ANR. v. SUPER MAX 823
INTERNATIONAL PVT. LTD. [AFTAB ALAM, J.]

"'-·~ against increase in rent. The submission is indeed attractive A
but a little scrutiny would show that it is quite misconceived. It
may be recalled that the decision in Damidilal was under the
Madhya Pradesh Accommodation Control Act, 1961 and Gian
Devi Anand under the Delhi Rent Control Act, 1958. In both the
Acts the definition of "tenant" had the qualification that Mr. Lalit B
termed as the exclusionary clause:

4 ._.. "tenant" means ............ but does not include, --

(A) any person against whom an order or decree for
eviction has been made" c
In both the decisions, the definition of "tenant" as appearing in
the Madhya Pradesh and the Delhi Acts respectively were
.J
~ · reproduced. But for some reason, in those two decisions, the
Court did not take any notice of that part of the definition. In the D
~ Constitution Bench decision in Gian Devi Anand, after
reproducing in full the definition of tenant as contained in
section 2(1) of the Delhi Rent Control Act, the Court observed
(at the end of paragraph 25):

"It is therefore, clear from the definition of tenant, whether E
in the original Act or in the amended Act, that the tenant
within the meaning of the definition of the term in the Act
_.,,+ includes any person continuing in possession after the
termination of his tenancy."
F
It is, thus, to be seen that the Court noticed that a person who
continued to be in possession after termination of his
(contractual) tenancy was covered by the definition of tenant but
did not pay any attention to the latter part of the definition that
excluded any person against whom an order or decree of
G
.. _. eviction had been made .

28. Here, it may further be recalled that the decision in
Atma Ram Properties was also under the Delhi Rent Control
Act. Hence, if the submissions of Mr. Lalit are to be accepted
H
824 SUPREME COURT REPORTS [2009] 13 (ADDL.) S.C.R.

A hen it would follow that Atma Ram Properties was wrongly ...,_ ~
decided. But Mr. Lalit himself did not take that position (and
he could not have taken that position!). He only tried to
distinguish the decision in Atma Ram Properties by contending
that it would not apply to a case under the Bombay Rent Act
B because in that Act the definition of "tenant" was materially
different. The distinction sought to be made by the learned
counsel, thus, appears to be unfounded and the submission
seems to be inconsistent. -4 ~

c that 29. But the basic flaw in the submission is that it overlooks
the decisions in Damadilal and Gian Devi Anand were
rendered in a totally different context. In those two decisions the
Court proceeded on the basis that the determination of
contractual tenancy did not extinguish the rights of the tenant.
...,....
Under the Rent Act the tenant continued to retain his estate and
D interests in the demised premises that, after his death, devolved
upon his heirs and legal representatives. Further, in both
""
Damadi/al and Gian Devi Anand the underlying concern of the
Court was to save the heirs and legal representatives of the
deceased tenants from two misfortunes befalling them at the
E same time; one, the death of the bread winner and the other,
the loss of the bread altogether as a consequence of the
closure of business resulting from ejectment from the tenanted
business premises. In Ganpat Ladha a three-Judge Bench of
the Court had held that (under the Bombay Rent Act) the +:i..,. -
F devolution of tenancy could take place only in case of residential
premises and not in case of business premises. Disagreeing
with that view the Constitution Bench in Gian Devi Anand (in
paragraph 34 of the decision) observed as follows:

"The death of the person who happens to be the tenant of
G the commercial premises and who was running the
business out of the income of which the family used to be }...,-._

maintained, is itself a great loss to the members of the
family to whom the death, naturally, comes as a great blow.
Usually, on the death of the person who runs the business
H
STATE OF MAHARASHTRA & ANR. v. SUPER MAX 825
INTERNATIONAL PVT. LTD. [AFTAB ALAM, J.]

and maintains his family out of the income of the business, A
II-. "
the other members of the family who suffer the
bereavement have necessarily to carry on the business for
the maintenance and support of the family, A running
business is indeed a very valuable asset and often a great
source of comfort to the family as the business keeps the B
family going ............. The Legislature could never have
possibly intended that with the death of a tenant of the
~ \'- commerci'al premises, the business carried on by the
tenant, however flourishing it may be and even if the same
constituted the source of livelihood of the members of the c
family, must necessarily come to an end on the death of
the tenant, only because the tenant died after the
contractual tenancy had been terminated. It could never
have been the intention of the Legislature that the entire
-.I
family of a tenant depending upon the business carried on D
>' by the tenant will be completely stranded and the business
carried on for years in the premises which had been let
out to the tenant must stop functioning at the premises
which the heirs of the deceased tenant must necessarily
vacate, as they are afforded no protection under the Act."
E
30. In light of the discussion above we are of the
considered view that the appellant in this case cannot derive
any support from the decisions of this Court in Damadilal and
J ~ Gian Devi Anand.
F
31. Coming now to the second set of decisions, the case
of Mani Subrat Jain arose from an order of the appellant's
eviction in execution of a decree made against him. The
appellant was an advocate and thus belonged to a 'scheduled'
class of tenants whose dwellings enjoyed special protection
G
under the East Punjab Rent Restriction Act, 1949. In a suit filed
.~---f by the respondent-landlord for recovery of possession of the
demised premises the appellant entered into a compromise
and agreed to vacate the premises by a certain date on certain
terms regarding rent etc. The Court passed a consent decree
H
826 SUPREME COURT REPORTS (2009] 13 (ADDL.) S.C.R.

A on the basis of the agreement entered into by the parties. The +~
decree was passed on October 9, 1972. Shortly thereafter the
area of application of the East Punjab Rent Restriction Act,
1949 was extended and with effect from November4, 1992 it
came to apply to Chandigarh (where the rented property was
B situated). The appellant did not vacate the premises as agreed
and the decree was put to execution. The execution court
ordered eviction and the order was affirmed by all the superior
courts till the matter finally reached this Court. Before this Court, --1 ...
the appellant took the stand that the rented premises having
c come under the Rent Control Act he could not be ejected on
the basis of a decree passed earlier. The Court found that the
decision of the case would turn on the question whether or not
the appellant was covered by the definition of tenant under the
Rent Act and observed as follows:
-~·

D "The salvation of the appellant is certain if he be a 'tenant'
~
within the meaning of the Act. His eviction is certain if the
definition 'tenant' does not ensconce him in its amplitude."

32. The Court then, brushing aside the precedents cited
E by the two sides, proceeded to examine the question in light
of section 2(i) (containing the definition of 'tenant') and section
13 (laying down the grounds on which alone a tenant could be
evicted) and reproduced the two provisions as follows:
+~
"2 (i) 'tenant' means any person by whom or on whose
F account rent is payable for a building or rented land and
includes a tenant continuing in possession after the
termination of the tenancy in his favour, but does not
include a person placed in occupation of a building or
rented land by its tenant, unless with the consent in writing
G of the landlord, or a person to whom the collection of rent
or fees in a public market, cart-stand or slaughter house }-
or of rents for shops has been framed out or leased by a
municipal, town or notified area committee.

H 13. Eviction of tenants- (1) A tenant in possession of a
STATE OF MAHARASHTRA & ANR. v. SUPER MAX 827
INTERNATIONAL PVT. LTD. [AFTAB ALAM, J.]

,.._ -k building or rented land shall not be evicted therefrom in A
execution of a decree passed before or after the
commencement of this Act or otherwise and whether
before or after the termination of the tenancy, except in
accordance with the provisions of this section, or in
pursuance of an order made under Section 13 of the B
Punjab Urban Rent Restriction Act, 1947, as subsequently
amended."
.. ..._ (emphasis in the original)

33. Having thus taken note of the two provisions, the Court c
arrived at the inevitable conclusion as follows:

"The expression 'tenant' includes 'a tenant continuing in
possession after the termination of the tenancy in his
• favour'. It thus includes, by express provision, a quondam D
)' tenant whose nexus with the property is continuance in
possession. Tl}_e fact that a decree or any other process
extinguishes the tenancy under the general law of real
property does not terminate the status of a tenant under
the Act having regard to the carefully drawn inclusive
E
clause."

It, however, appears that the parties entered into yet another
-,
<
.6' ~
agreement while the matter was pending before this Court and
hence, the operative order in the judgment reads as follows:
F
"Krishna Iyer, J.- The judgment having been delivered
counsel for the respondent represented that the
Agreement, which has been made and appendixed to the
,. judgment, be treated as an undertaking mutually between
-/ the parties to the Court. Counsel on both sides have no G
objection to this course and so we record the Agreement
~ >- __.
incorporated in the judgment as an undertaking to the Court
made by the parties in regard to their respective
obligations."

34. Interestingly in Mani Subrat Jain the very first sentence H
828 SUPREME COURT REPORTS [2009] 13 (ADDL.) S.C.R.

A of the judgment gives sufficient indication how the decision is -f..- _..
going to end up. Krishna Iyer, J. writing for the Court in his
inimitably grandiloquent style started the judgmentby referring
to the "Holmesian homily" and thereby making it clear that the
Court would bestow its "humane attention" on the matter not
B through logic but on the basis of "experience". From the start
to the end the Court made clear its intent to stand firmly by the
side of the tenant. We may concede that the tenant who was
also an advocate was entitled to be doubly protected by the ...;I ....
law. We may also try to comprehend the legalese of the debate
c as reflected in the judgment. But we have real problem in
following the message the decision in Mani Subrat Jain gave
to the ordinary man. That to go back on one's solemn word
given to the other side before a Court of law is no sin. On the
contrary one may derive rich dividend before the highest Court
of the land, provided one is a tenant. To, sometimes, divorce
..
D
logic from the law is one thing but to divorce morality altogether ~
from the law is something quite different.

35. The case of H. Shiva Rao v. Cecilia Pereira arose ~

on facts very similar to the case of Mani Subrat Jain (except
E that in this case the decree of eviction was passed on contest
and not on the basis of any agreement between the parties).
Following the earlier decision in Mani Subrat Jain this Court
allowed the tenant's appeal and held that he could not be
evicted in execution of the decree since after the decree was +. . . '
F made the rented premises came under the Karnataka Rent
Control Act as a result of the territorial extension in regard to
the application of the Act. In H. Shiva Rao too the Court's strong
sympathy for the tenant is evident from paragraphs 5 and 7 of
the judgment.
G
36. Dilip vs. Mohd. Azizu/ Haq is the third and the last
decision in the second set of decisions cited by Mr. Lalit. In this ~
case the High Court had taken the view that an appeal preferred
by the tenant against a decree of eviction passed by the trial
court was not covered by the expression "in a suit or proceeding
H
STATE OF MAHARASHTRA & ANR. v. SUPER MAX 829
INTERNATIONAL PVT. LTD. [AFTAB ALAM, J.]

fl. -+ filed and pending against the tenant in any court or before any A
authority" as occurring in clause 13-A of the C.P. and Berar
Letting of Houses Rent Control order, 1949. Clause 13-A of the
order was as follows:

"No decree for eviction shall be passed in a suit or B
proceeding filed and pending against the tenant in any
court or before any authority unless the landlord produces
_. ~ a written permission of the Controller as required by sub-
clause (1) of clause 13"

This Court reversed the High Court decision relying on some c
earlier decisions and holding that an appeal, even though filed
by the tenant, was a continuation of the suit and hence, covered
by the expression used in clause 13-A. The decision in Dilip
also referred to the earlier decision in H. Shiva Rao but this
~
decision does not seem to have any relevance to the case in D
)!'
hand.

37. It is not difficult to distinguish the decisions in Mani
Subrat Jain and H. Shiva Rao from the case in hand. Once
the tenanted premises came under the Rent Act the tenant
E
could only be evicted on the basis of a decree passed under
the Rent Act. But unlike the present appellant, the tenants in
Mani Subrat Jain and H. Shiva Rao had not suffered any
:... ~ decree under the respective Rent Acts.

38. It needs to be stated here that the decisions relied upon F
by Mr. Lalit are undoubtedly binding precedents for the
respective issues decided in those cases but it is not possible
to stretch those decisions in support of the point canvassed by
him. We must also state here that on the basis of the
aforementioned decisions Mr. Lalit was able to build up a G
persuasive argument. But in the larger perspective and with the
.., "-
change in times we find the submissions quite inacceptable.
Here it is important to bear in mind that all the decisions relied
upon by Mr. Lalit, from Damadilal to H. Shiva Rao were
rendered between 1976 to 1986 during the period when, to put H
830 SUPREME COURT REPORTS [2009] 13 (ADDL.) S.C.R.

A it mildly, the Court used to be overly protective of the tenant and -+-- -"'
for good reasons too because that is the apparent thrust of the
Rent Act. The Rent Act was the socio-le9al response tO certain
historical developments, namely, the acute shortage of housing
in the aftermath of the World War, the great influx of refugees
B in a number of States of the Union following the partition of the
country and the massive migration inside the country from rural
areas to t,he urban centres as a result of rapid urbanisation. All
these developments th.at took place almost at the same time -" ...
skewed the law of supply and demand totally in favour of the
c landlord. The need of the hour, therefore, was to protect the
tenant, who would have otherwise been left completely at the
mercy of the landlord. The legislature intervened and brought
in the Rent Act, severely restricting the grounds for
enhancement of rent and for eviction of the tenant from the
rented premises, thus regulating the relationship between the •
D
landlord and the tenant beyond the general law under the :)j
Transfer of Property Act, 1882. In this regard the Court
responded in equal, if not greater measures. But after about
three quarters of a century and three generations later when
things are no longer the same and the urban centres are faced
E
with newer problems, some of those having their origin in the
Rent Act itself, there is the need to take a re-look on the Court's
attitude towards the relationship between the land.lord and the
tenant and to provide for a more level ground· in the judicial
+. 14
arena.
F
39. The way this Court has been looking at the relationship
between the Landlord and the Tenant in the past and the shift
in the Court's approach in recent times have been examined
in some detail in the decision in Satyawati Sharma vs. Union
G of India & Anr., (2008) 5 SCC 287. In that decision one of us
(Singhvi, J.) speaking for the Court referred to a number of
~-·~
earlier decisions of the Court and (in paragraph 12 of the
judgment) observed as follows:

"Before proceeding further we eonsider it necessary to
H
STATE OF MAHARASHTRA & ANR. v. SUPER MAX 831
INTERNATIONAL PVT. LTD. [AFTAB ALAM, J.]

observe that there has been definite shift in the Court's A
~- ~
approach while interpreting the rent control legislations. An
' analysis of the judgments of 1950s to early 1990s would
indicate that in majority of cases the courts heavily leaned
in favour of an interpretation which would benefit the
tenant- Mohinder Kumar vs. State of Haryana 1 , B
Prabhakaran Nair vs. State of T.N. 2 , D.C. Bhatia vs.
Union of lndia 3 and C.N. Rudramurthy vs. K. Barkathul/a
~ ~-
Khan 4 • In these and other cases, the Court consistently
held that the paramount object of every rent control
legislation is to provide safeguards for tenants against c
exploitation by landlords who seek to take undue
advantage of the pressing need for accommodation of a
large number of people looking for a house on rent for
residence or business in the background of acute scarcity
~ thereof. However, a different trend is clearly discernible in
D
~
the later judgments."

40. He then referred to some later decisions and (in
paragraph 14 of the judgment) quoted a passage from the
decision in Joginder Pal vs. Naval Kishore Behal (2002) 5
sec 397, to the following effect: E

. . . The courts have to adopt a reasonable and balanced
II

approach while interpreting rent control legislations
starting with an assumption that an equal treatment has
been meted out to both the sections of the society. In F
spite of the overall balance tilting in favour of the tenants,
while interpreting such of the provisions as take care of
the interest of the landlord the court should not hesitate
in leaning in favour of the landlords. Such provisions are
engrafted in rent control legislations to take care of those
G
situations where the landlords too are weak and feeble
~ ~ 1. (1985) 4 sec 221.
2. (1987) 4 sec 238.
3. (1995) 1 sec 104.
4. (1998) 8 sec 275. H
832 SUPREME COURT REPORTS [2009] 13 (ADDL.) S.C.R.

A and feel humble. n
+ ,,,
~
(emphasis in original)

41. Commenting upon the Full Bench decision of the Delhi
High Court that had upheld the Constitutional validity of section ',,....--
8 14(1)(e) of the Delhi Rent Control Act and that came under
challenge in Satyawati Sharma, Singhvi, J. (in paragraph 29
of the judgment) observed as follows:
-f 4.
" ... It is significant to note that the Full Bench did not, at
c all, advert to the question whether the reason/cause which
supplied rationale to the classification continued to subsist
even after lapse of 44 years and whether the tenants of
premises let for non-residential purposes should continue
to avail the benefit of implicit exemption from eviction in
the case of bona fide requirement of the landlord despite '--
D
see-saw change in the housing -scenario in Delhi and
¥
substantial increase in the availability of buildings and
premises which could be let for non -residential or
commercial purposes."
E 42. The decision in Satyawati Sharma then referred to the
doctrine of temporal reasonableness and in paragraph 32
observed as follows:

"It is trite to say that legislation which may be quite .._ •r
F reasonable and rational at the time of its enactment may
with the lapse of time and/or due to change of
circumstances become arbitrary, unreasonable and
violative of the doctrine of equality and even if th~ validity
of such legislation may have been upheld at a given point
of time, the Court may, in subsequent litigation, strike down
G
the same if it is found that the rationale of classification
has become non-existent." -\-- ..,
43. We reaffirm the views expressed in Satyawati Sharma
and emphasise the need for a more balanced and objective .
H
STATE OF MAHARASHTRA & ANR. v. SUPER MAX 833
INTERNATIONAL PVT. LTD. [AFTAB ALAM, J.]

-1.- approach to the relationship between the landlord and tenant. A
'-
This is not to say that the Court should lean in favour of the
landlord but merely that there is no longer any room for the
assumption that all tenants, as a class, are in dire
circumstances and in desperate need of the Court's protection
under all circumstances. (The case of the Qresent appellant who B
is in occupation of an area of 9000 sq. ft. in a building, situate
at Fort, Mumbai on a rental of Rs. 5236.58/-, plus water charges
at the rate of Rs. 515.35/- per month more than amply highlights
' ~
the point)

44. With the perspective thus adjusted all the submissions
c
made by Mr. Lalit on behalf of the appellant have a simple
answer. The interim order of the High Court asking the appellant
to deposit Rs.5, 40,000/- from the date of the decree as
.. condition for stay of the execution of the decree of ejectment
D
has to be seen as one single package. The appellant may or
~
may not accept the order as a whole. But it is not open to it to
accept the order in so far as it stays the execution of the decree
and to question the condition attached to it. In an appeal or
revision, stay of execution of the decree(s) passed by the
court(s) below cannot be asked for as of right. While admitting E
the appeal or revision, it is perfectly open to the court, to decline
to grant any stay or to grant stay subject to some reasonable
condition. In case stay is not granted or in case the order of
stay remains inoperative for failure to satisfy the condition
subject to which it is granted, the tenant-in-revision will not have F
the protection of any of the provisions under the Rent Act relied
upon by Mr. Lalit and in all likelihood would be evicted before
the revision is finally decided. In the event the revision is allowed
later on, the tenant's remedy would be only by way of restitution.
G
45. In Atma Ram Properties the Court viewed the issue
r ~· exactly in the same way (See paragraphs 6, 8 & 9 of the
decision). Further, the decision also answers Mr. Lalit's
submission that the tenancy did not come to end on
the passing of the decree but would continue until the tenant was
H
834 SUPREME COURT REPORTS [2009) 13 (ADDL.) S.C.R.

A actually physically evicted from the premises in execution of the
decree. In Atma Ram Properties the Court framed two issues
+ ,.,
arising for consideration as follows: """'
"This submission raises the following two issues: (i) in
\
respect of premises enjoying the protection of rent control
B
legislation, when does the tenancy terminate; and (ii) up
to what point of time is the tenant liable to pay rent at the
contractual rate and when does he become liable to pay
compensation for use and occupation of the tenancy 1 ..
premises unbound by the contractual rate of rent to the
c landlord?"

The Court answered the first issue as follows:

"We are, therefore, of the opinion that the tenant having
suffered a decree or order for eviction may continue his 4r-
D -

fight before the superior forum but, on the termination of ¥
the proceedings and the decree or order of eviction first
passed having been maintained, the tenancy would stand
terminated with effect from the date of the decree passed
by the lower forum. In the case of premises governed by
E
rent control legislation, the decree of eviction on being
affirmed, would be determinative of the date of termination
of tenancy and the decree of affirmation passed by the
superior forum at any subsequent stage or date, would not,
by reference to the doctrine of merger have the effect of ....
F postponing the date of termination of tenancy. n ,

The second issue was answered as follows:

"With effect from that date (the passing of the decree of
G eviction), the tenant is liable to pay mesne profits or
compensation for use and occupation of the premises at
the same rate at which the landlord would have been able -t· "1
to let out the premises and earn rent if the tenant would
have vacated the premises. The landlord is not bound by
the contractual rate of rent effective for the period preceding
H
STATE OF MAHARASHTRA & ANR. v. SUPER MAX 835
INTERNATIONAL PVT. LTD. [AFTAB ALAM, J.]

the date of the decree." A
fl,
........
(words in parenthesis added)
'
We are in respectful agreement with the decision of the Court
in Atma Ram Properties.
B
46. In light of the discussions made above we hold that in
an appeal or revision preferred by a tenant against a order or
decree of an eviction passed under the Rent Act it is open to
. )-. the appellate or the revisional Court to stay the execution of the
order or the decree on terms, including a direction to pay ,C
monthly rent at a rate higher than the contractual rent. Needless
to say that in fixing the amount subject to payment of which the
execution of the order/ decree is stayed, the Court would
exercise restraint and would not fix any excessive, fanciful or
punitive amount.
" :y 47. In the case in hand, the High Court has fixed the amount
D

of Rs. 5,40,000/- per month with reference to the Stamp Duty
Ready Reckoner and hence, its reasonableness cannot be
doubted. In fairness to Mr. Lalit he did not challenge the fixation
of the amount on that ground. E

48. Before concluding the decision one more question
needs to be addressed: what would be the position if the
tenant's appeal/revision is allowed and the eviction decree is
set aside? In that event, naturally, the status quo ante would F
be restored and the tenant would be entitled to get back all the
amounts that he was made to pay in excess of the contractual
rent. That being the position, the amount fixed by the court over
and above the contractual monthly rent, ordinarily, should not
be directed to be paid to the landlord during the pendency of G
the appeal/revision. The deposited amount, along with the
accrued interest, should only be paid after the final disposal to
·1 either side depending upon the result of the case. In case for
some reason the Court finds it just and expedient that the
amount fixed by it should go to the landlord even while the
H
836 SUPREME COURT REPORTS [2009] 13 (ADDL.) S.'C.R.

A matter is pending, it must be careful to direct payment to the
landlord on terms so· that in case the final decision goes in
favour of the tenant the· payment should be made to him without
any undue delay or complications.

49. In light of the discussions maqe above, we find the
8
order of the High Court just and proper, calling for no
interference by this Court. We find no merit in the appeal. It is,
accordingly, dismissed with costs.

B.B.B. Appeal dismissed.
c
,I

j

t