Holding

Under the Haryana Urban (Control of Rent and Eviction) Act, 1973, the Controller must calculate arrears of rent, interest and application costs, and the interpretation in Rakesh Wadhawan v. Jagdamba Industrial Corporation is the correct law, overruling the earlier decisions.

Summary

The landlord sought eviction of the tenant under Section 13(2)(i) of the Haryana Urban (Control of Rent and Eviction) Act, 1973 for non‑payment of rent. The High Court ordered eviction, but the Supreme Court, on special leave, set aside that order and remitted the matter to the Rent Controller to apply the law laid down in Rakesh Wadhawan v. Jagdamba Industrial Corporation. In a review petition, the tenant challenged the applicability of the Rakesh Wadhawan interpretation, arguing that it was based on the Punjab Act and that earlier Supreme Court decisions (Mis. Rubber House and Rajinder Kumar Joshi) were not considered. The Court held that the plain language of the Haryana Act obliges the Controller to calculate arrears of rent, interest and application costs, and that the Rakesh Wadhawan interpretation correctly applies to the Haryana statute. The earlier decisions were overruled, and the petition was dismissed.

Issues considered

Whether the interpretation of Section 13(2)(i) given in Rakesh Wadhawan (under the Punjab Act) is applicable to the Haryana Urban (Control of Rent and Eviction) Act, 1973.
Whether the earlier Supreme Court judgments in Mis. Rubber House and Rajinder Kumar Joshi affect the law laid down in Rakesh Wadhawan.
What is the extent of the Rent Controller's duty to calculate arrears of rent, interest and costs under the Haryana Act.

Legislation cited

Haryana Urban (Control of Rent and Eviction) Act, 1973s. 13(2)(i)

Subjects

rent controlevictionlandlord-tenantSection 13(2)(i)controller assessmentsummary enquirystatutory interpretationreview petition

Judgment

VINODKUMAR A
v.
PREMLATA

AUGUST 19, 2003

[R.C. LAHOTI, SHIVARAJ V. PATIL AND BRIJESH KUMAR, JJ.] B

Rent Control and Eviction:

Haryana Urban (Control of Rent and Eviction) Act, 1973-Section
l 3(2)(i)-Defau/t in payment of rent-Eviction-By Courts below-Supreme C
Court sent back the case to rent controller for hearing afresh in accordance
with law laid down in Rakesh Wadhawan 's case-Review petition-
Challenging correctness of law in Rakesh Wadhawan's case on the ground
that the earlier decisions not brought to the notice of Court while deciding
the case and that Wadhawan 's case being under Punjab Act was not applicable D
to the case under Haryana Act-Held, Rakesh Wadhawan 's case correctly
lays down the law-The interpretation in that case applies for interpreting
the provision under Haryana Act-East Punjab Urban Rent and Restriction
Act, 1949-Section 13(2j(i).

Proceedings for eviction were initiated under Section 13(2)(i) ofHaryana E
Urban (Control of Rent and Eviction) Act, 1973 which was decided by the
Courts below in favour of the landlord on finding that the tenant had not paid
the rent due, in respect of the rented premises. In appeal by special leave this
Court set aside the judgments of High Court and the authorities below and
directed the case to be sent back to Rent Controller for hearing and deciding F
afresh in accordance with the law laid down in Rakesh Wadhawan and Ors. v.
Jagdamba Industrial Corporation and Ors., [2002) S SCC 440, wherein it
was held that the expression "assessed by the Controller" as occurring in
the proviso to Section 13(2)(i) of the Act qualifies all the three things~ i.e. (i)
the arrears of rent, (ii) interest at 6% per annum on such arrears, and (iii)
the cost of application, which are included in the preceding part of the G
sentence; and that order of the Rent Controller making an assessment !!hall,
in the scheme of the section, be an interim or provisional order which would
be based on a summary enquiry leading to the formation of a prima facie
opinion based on the consideration of relevant material brought on record by
the parties, which may consist of the documents, affidavits and pleadings which
803 H
804 SUPREME COURT REPORTS [2003) SUPP. 2 S.C.R.

A would enable the Controller to make a provisional and yet judicial assessment,
and place it on record by way of an order to satisfy the spirit of the proviso.

In Review Petition the petitioner questioned the correctness of the law
laid down in Rakesh Wadhawan's case on the ground that two earlier decisions
of this Court i.e. Mis. Rubber House v. Mis. Excelsior Needle Industries Pvt.
B Ltd., (1989) 2 SCC 413 and Rajinder Kumar Joshi v. Veena' Rani, (1990) 4
SCC 526 were not brought to the notice of this Court while deciding Rakesh
Wadhawan's case; and that there is a distinction between the provisions of
Punjab Urban Rent and Restriction Act, 1949 and the Haryana Act, as the
phraseology employed in the two acts is different and, therefore, the decision
C in Rakesh Wadhawan's case which is under the Punjab Act has no relevance
and applicability in so far as the provisions of the Haryana Act are concerned.

Dismissing the petition, the Court

HELD: 1. On the plain language of the Haryana Urban (Control of Rent
D and Eviction) Act, 1973, the expression "to be calculated by the Controller"
qualifies both the arrears of rent and interest. The succeeding expression
"such costs of the application" is again qualified by the expression "if any,
as may be allowed by the Controller". Thus the provision itself casts an
obligation on the Controller to calculate and determine by its order (i) the
arrears of rent; (ii) the interest; and (iii) the costs, quantifying the amount
E which should be paid or tendered by the tenant (at that stage) to comply with
the proviso. The words 'calculated' and 'allowed' occurring in the proviso
imply a duty cast on the Controller which has to be discharged judicially. Such
determination will be only for the purpose 'or securing compliance by the tenant
on 'the first date of hearing' succeeding the date of order by the. Controller,
F which order would be based on a summary enquiry and would obviously be
subject to final determination by the Controller at the end of the regular full-
tledged enquiry. Thus it is not correct to say that the provision does not
contemplate an enquiry, nor is it correct to say that such an interpretation
would result in the holding ofa full fledged enquiry on the first date of hearing,
which is not possible. (809-G-H; 810-A, B, Cl
G
2. It is true that the decisions in Mis. Rubber House and Rajinder Kumar
Joshi were not brought to the notice of the Court deciding Rakesh Wadhawan's
case and it would have been better if that would have been done. However, the
present petiti~n has given the Court the opportunity of examining afresh the
merits of the three decisions under consideration and also for making a
H comparative study of the provisions contained in the Punjab Act and the
VINOD KUMAR v. PREM LATA [LAHOTI, J.] 805

Haryana Act insofar as the ground for eviction on account of default in payment A
or tendering the arrears of rent by the tenant is concerned. Mis. Rubber
House's case and Rajinder Kumar Joshi's case do not place a correct
interpretation upon the provisions. The decision in Rakesh Wadhawan 's case
correctly lays down the law and is re-affirmed. The interpretation placed by
this Court in Rakesh Wadhawan's case on Section 13(2)(i) with the proviso B
in the Punjab Act applies for interpreting Section 13(2)(i) and the proviso as
contained in the Haryana Act (811-C-E)

Rakesh Wadhawan and Ors. v. Jagdamba Industrial Corporation and
Ors., [2002) 5 SCC 440, affirmed.

Mis. Rubber House v. Mis. Excelsior Needle Industries Pvt. Ltd. (1989) C
2 SCC 413; Rajinder Kumar Joshi v. Veena Rani [1990) 4 SCC 526, overruled.

CIVIL APPELLATE JURISDICTION : Review Petition (C) No. 436 of2003
in Civil Appeal No. 8444 of2002.

From the Judgment and Order dated 7.2.2002 of the Punjab and Haryana D
High Court in C.R. No. 860 of2002.

R.P. Gupta, Pannanand Gaur and Jamshed Bey for the Petitioner/Appellant.

Prem Malhotra and Rishi Malhotra for the Respondent.
E
The Judgment of the Court was delivered by

R.C. LAHOTI, J. Proceedings for eviction were initiated under clause
(i) of sub-section (2) of Section 13 of the Haryana Urban (Control of ,lent &
Eviction) Act, 1973 (hereinafter referred to as the 'Haryana Act' for short) and
culminated in favour of the landlord, directing the tenant to be evicted from F
the premises in his occupation, on the finding that he had not paid or
tendered the rent due from him in respect of the rented premises. The tenant
preferred Appeal by Special Leave. By judgment dated 16.12.2002 this Court
allowed the tenant's appeal, set aside the judgments of the High Court and
the authorities below and directed the case to be sent back to the Controller G
for hearing and decision afresh in accordance with the law laid down by this
Court in Rakesh Wadhawan and Ors. v. Jagdamba Industrial Corporation
and Ors., [2002] 5 SCC 440. This petition for review of the judgment dated
16.12.2002 seeks to question the correctness of the law laid down by this
Court in Rakesh Wadhawan's case.
H
806 SUPRD4E COURT REPORTS [2003] SUPP. 2 S.C.R.
.'
A We have heard the learned counsel for both the parties. The principal
submission, rather the only one, made by the learned senior counsel for the
Review-petitioner is that two earlier decisions of this Court, namely, Mis.
Rubber House v. Mis. Excelsior Needle Industries Pvt. ltd., [ 1989) 2 SCC 413
and Rajinder Kumar Joshi v. Veena Rani, [1990) 4 SCC 526, were not brought
B to the notice of this Court while deciding Rakesh Wadhawan's case and,
therefore, Rakesh Wadhawan 's case does not lay down the correct law. All
the three decisions, namely, the decisions in Rakesh Wadhawan 's case (supra),
Mis .. Rubber House's case (supra) and Rajinder Kumar Joshi's case (supra),
are two-Judges Bench decisions and, therefore, the matter has been placed
for consideration by a three-Judges Bench.
c In Rakesh Wadhawan 's case, the decree for eviction was passed under
Section 13(2)(i) of the East Punjab Urban Rent & Restriction Act, 1949
(hereinafter referred to as 'the Punjab Act' for short). It is, therefore, necessary
to consider the relevant provisions of the two Acts. The same are extracted
and re-produced hereunder:
D
PUNJAB ACT HARYANAACT

S.13. Eviction of tenants.-
S.13. EVICTION OF TENANTS.-
( 1) A tenant in possession of a
( 1) A tenant in possession of a
E building or rented land shall not be
building or a rented land shall not be
evicted therefrom in execution of a
evicted there-from except in
decree passed before or after the
accordance with the provisions of this
commencement of this Act or
Section.
otherwise and whether before or after
F 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
Punjab Urban Rent Restriction Act,
1949 as subsequently amended.
G
(2) A landlord who seeks to evict his 2. A landlord who seeks to evict his
tenant shall apply to the Controller tenant shall apply to the Controller,
for a direction in that behalf. If the for a direction in that behalf. If the
Controller, after giving the tenant a Controller, after giving the tenant a
H reasonable opportunity of showing reasonable opportunity of showing
VIN OD KUMAR v. PREM LAT A [LAHOTI, J. ] 807

cause against the applicant, is cause against the application, is A
satisfied- satisfied -

(i) that the tenant has not paid or (i) that the tenant has not paid or
tendered the rent due by him in respect tendered the rent due from him in
of the building or rented land within respect of the building or rented land
fifteen days after the expiry of the within fifteen days after the expiry of B
time fixed in the agreement of tenancy the time fixed in the agreement of
with his landlord or in the absence of tenancy with his iandlord or in the
any such agreement, by the last day absence of any such agreement, by
of the month next following that for the last day of the month next
which the rent is payable: following that for which the rent is C
payable:

Provided that if the tenant on the first Provided that if the tenant, within a
hearing of the applications for period of fifteen days of the first
ejectment after due service pays or hearing of the application for
tenders the arrears of rent and interest ejectment after due service, pays or D
at 6% per annum on such arrears tenders the arrears of rent and
together with the cost of application interest, to be calculated by the
assessed by the Controller, the tenant Controller, at eight percentum per
shall be deemed to have duly paid or annum on such arrears together with
tendered the rent within the time such costs of the application, if any
aforesaid; as may be allowed by the controller, E
the tenant shall be deemed to have
duly paid or tendered the rent within
the time aforesaid:
x x x
Provided further that the landlord F
shall not be entitled to claim arrears
of rent for a period exceeding three
years immediately preceding the date
of application under the provision of
this Act.
G
.. the Controller may make an order the Controller may make an order
directing the tenant to put the directing the tenant to put the
landlord in possession of the building landlord in possession of the building
or rented land and if tfle Controller is or rented land and if the Controller is
not so satisfied he shall make an order not so satisfied he shall make an order
rejecting the application: rejecting the application: H
808 SUPREME COURT REPORTS [2003] SUPP. 2 S.C.R.

A Provided that the Controller may given Provided that the Controller may give
the tenant a reasonable time for the tenant a reasonable time for
putting the landlord in possession of putting the landlord in possession of
the building _or rented land and may the building or rented land and may
extend such time so as not to exceed extend such time so as not to exceed
B three months in the aggregate." three months in the aggregate."

The learned senior counsel for the Review-petjtioner tried to draw a
distinction between the provisions.of the Punjab Act and the Haryana Act,
submitting that the phraseology employed in the two Acts is different, and,
C therefore, the decision in Rakesh Wadhawan's case which is under the Punjab
Act has no relevance and applicability insofar as the provisior.s of the
Haryana Act are concerned. We find no merit in the submission so made.
Except for a difference in the manner of constructing the sentences there is .
no substantial difference in effect between the two provisions and the crux
of the issue emerging for decision under the relevant provisions of the two
D Acts remains the same.

In Rakesh Wadhawan 's case, this Court noticed a lacuna in the drafting
of Section 13(2)(i) of the Punjab Act and resolved the same by applying well-
settled principles of statutory interpretation so as to cull out the legislative
intent and then held that the expression -"assessed by the Controller" as
E occurring in the proviso to Section 13(2)(i) of the Act qualifies all the three
things, i.e., (i) the arrears of rent, (ii) interest at 6% per annum on such arrears,
and (iii) the cost of application, which are .included in the preceding part of
the sentence. The order of assessment made by the Controller is not an
assessment of costs alone; it is an assessment of the arrears and interest as
well. The Court further held that such order of the Rent Controller making
F
an assessment shall, in the scheme of the section, be an interim or provisional
order which would be based on a summary enquiry leading to the formation
of a prima facie opinion based on the consideration of relevant material --
brought on record by the parties, which may consist of the documents,
affidavits and pleadings which would enable the Controller to make a
G provisional and yet judicial assessment, and place it on record by way of an
order to satisfy the spirit of the proviso. Having said so, the Court explained
the mechani~m to be followed by the Controller in this regard and the meaning
to be assigned t9 the expression "the first date of hearing" so as to make it
practical and workable. Failing the interpretation adopted by the Court in
H Rakesh Wadhawan's case, the provision under consideration could have run
VINOD KUMAR v. PREM LAT A [LAHOTI, J. ] 809

the risk of being struck down, because it would be unworkable and lead to A
uncertainty. The provision had remained on the statute book for more than
50 years but was creating practical difficulties in its working and applicability
to different sets of facts. Such meaning has been placed on the language of
the proviso to Section 13(2)(i) as would make it workable and sensible and
would least offend the sense of justice. Care has been taken to protect the
interests of both the landlord and the tenant. The interpretation protects the B
landlord from frivolous pleas raised by recalcitrant tenants and at the same
time saves the tenants from undue hardship likely to be caused by
unscrupulous landlords accusing the tenants of such default as may not exist.

In Mis. Rubber House's case (supra), the provisions of the Haryana Act C
came up for the consideration of the Court. Having scrutinized Sectio~
13(2)(i) and the first proviso thereto, the Court held that there is no statutory
duty cast on the Controller even in the first instance to determine and
calculate the arrears of rent and the interest but, on the contrary, the proviso
requires the tenant to pay or tender the actual arrears of rent within 15 days
of the hearing of the application for ejectment after due service. The calculation D
by the Controller is confined only to calculating the interest at 8% per annum
on such arrears together with the cost of the application. The argument
advanced by the learned counsel for the tenant in that case that the proviso
casts a statutory duty on the Controller to calculate and determine the arrears
of rent as well as the interest to be paid by the tenant within a period of 15 E
days of the first hearing of the application for ejectment after due service was
rejected by the Court on the reasoning that such an argument, if accepted,
would result in the Rent Controller holding an enquiry at the first instance
in every case and determining the arrears of rent even on the first date of
hearing which is in the nature of things not possible without any evidence,
nor is contemplated under the scheme of the Act. We find it difficult to agree F
with the above-said reasoning in Mis. Rubber House's case. On the plain
language of the Haryana Act, the expression "to be calculated by the
;
Controller" qualifies both the arrears of rent and interest. The succeeding
expression "such costs of the application" is again qualified by the expression
"if any, as may be allowed by the Controller". Thus the provision itself casts G
an obligation on the Controller to calculate and determine by its order (i) the
arrears of rent; (ii) the interest; and (iii) the costs, quantifying the amount
which should be paid or tendered by the tenant (at that stage) to comply with
the proviso. The words 'calculated' and 'allowed' occurring in the proviso
imply a duty cast on the Controller which has to be discharged judicially.
Such determination will be only for the purpose of securing compliance by H
810 SUPREME COURT REPORTS [2003) SUPP. 2 S.C.R.

A the tenant on 'the first date of hearing' succeeding the date of order by the
Controller, which order would be based on a summary enquiry and would
obviously be subject to final determination by the Controller at the end of the
regular full-fledged enquiry. Thus it is not correct to say that the provision
does not contemplate an enquiry, nor is it correct to say that such an
B interpretation would result in the holding of a full-fledged enquiry on the first
date of hearing, which is not possible.

In Mis. Rubber House's case, the Court further held that it is for the
tenant to calculate the exact arrears of rent due and to pay or tender the same
and if the tenant fails to do so, he is deemed not to have paid or made the
C valid tender of the rent. However, the case does not answer the question as
;to what would happen if the tenant, having paid or tendered the arrears of
rent as per his own calculation, is found at the end of the enquiry to have
made a wrong - if not a deliberately wrong - calculation of the arrears.

Rajinder Kumar Joshi's case is under the Punjab Act. There also the
D Court had noticed a lacuna in the legislative drafting raising a contention
worthy of serious consideration and the hardship to which a tenant may be
put where the landlord makes a demand on the tenant for rent which is not
due from him, as was found to have been done in that case. The Court was
faced with a dilemma in adopting either intewretation. If the provisions of
E Section I 3(2)(i) of the Act were to be so interpreted as to require the tenant
to tender the rent as demanded (though the demand is exaggerated by reference
to the rate of rent or the period of default) or to face the consequences of
eviction from the rented premises, the provision would result in causing
hardship to the tenant. On the other hand, to hold the requirement of the
proviso to Section 13(2)(i) to tender the rent as meaning the tender of the rent
F as the tenant thinks he is in arrears 'of, would render nugatory the requirements
of the said proviso. The Court felt the need for striking a balance between
the two situations so as not to render the protection given by the Act to the
t.enant illusory, and at the same time not to deprive the landlord of his
minimum legitimate expectation to be paid regularly the.rent for the use and
occupation of his premises. The solution which the Court provided was in
G the background of the facts of that case, and is hence a limited one. The
Court said that if the rate of rent is not fixed or becomes the subject matter
·of dispute, the tenant may have resort to Section 4 of the Act and apply to
the Controller to fix the fair rent failing which he must deposit the rent at the
rate as demanded by the landlord. If there is any dispute as to the period
H of default, the tenant may deposit the rent which he thinks to be in arrears,
VINOD KUMAR v. PREM LATA [LAHOTI, J.] 811
but he must take the risk for doing so. If it is proved ultimately that the rent A
paid or tendered by him was less than what was due, he must face eviction.
Such an interpretation gives an uncertainty to the litigation and does not take
care of several situations which may emerge in a litigation other than the one
as arose in that case before the Court.

It is true that the decisions in Mis. Rubber House (supra) and Rajinder B
Kumar Joshi (supra) were not brought to the notice of the Court deciding
Rakesh Wadhawan's case (supra) and it would have been better ifthat would
have been done at the Bar. However, the present petition has given us the
opportunity of examining afresh the merits of the three decisions under
consideration and also for making a comparative study of the provisions C
contained in the Punjab Act and the Haryana Act insofar as the ground for
eviction on account of default in payment or tendering the arrears of rent by
the tenant is concerned. We are of the opinion that Mis. Rubber House's case
and Rajinder Kumar Joshi's case do not place a correct interpretation upon
the provisions. The decision in Rakesh Wadhawan's case correctly lays down
the law and is re-affirmed. The interepretation placed by this Court in Rakesh D
Wadhawan's case on Section 13(2)(i) with the proviso in the Punjab ·Act
applies for interpreting Section 13(2)(i) and the proviso as contained in the
Haryana Act.

The petition is held devoid of any merit and is dismissed.
E
K.K.T. Petition dismissed