C.N. RUDRAMURTHY ETC.versusK. BARKATULLA KHAN AND ORS. ETC.

A                        C.N. RUDRAMURTHY ETC.
                                   v.
                   K. BARKATULLA KHAN AND ORS. ETC.

                                OCTOBER 8, 1998

B          [HON'BLE M.M. PUNCHHI, CJ., G.B. PATTANAIK AND
                       S. RAJENDRA BABU, JJ.]


         Rent Control and Eviction

C         Karnataka Rent Control Act, 1961-S. 31-Eviction suit-
    lnapplicability of the provisions of the Act to premises whose monthly rent
    exceeds Rs. 500/-Supreme Court holding in D. C. Bhatia 's case that provisions
    of S. 3(c) of Delhi Rent Control Act not applicable to premises whose
    menthly rent exceeds Rs. 3000-High Court relying upon a contrary view of
D   High Court in Padmanabha Rao's case declaring S. 31 as invalid-Eviction
    decree passed by Trial Court set aside-Parties directed to approach Rent
    Control Court-Validity of-Held, the law laid down by Supreme Court is
    binding on all Courts-High Court not justified in taking a contrary view
    by relying upon a decision which was impliedly overruled by Supreme
    Court-Eviction decree passed by Trial Court restored-Delhi Rent Control
E   Act, 1958-Sec. 3(c).

         Constitution of India, 1950-Article 141-Law declared by Supreme
    Court-Binding effect of-Held, law declared by Supreme Court is binding
    on all Courts-Karna/aka Rent Control Act, 1961-S. 31.

F          Appellant-landlord's suit for eviction was decreed by Trial Court. On
    appeal, High Court set aside the said decree holding that in view of provisions
    of S. 21(1) (I) of the Karnataka Rent Control Act, 1961, the Trial Court had
    no jurisdiction to pass an order of eviction. Appellant contended before the
    High Court that S. 31 of the Act, exempted from the applicability of the Act,
    premises whose monthly rent exceeded Rs. 500. It was also brought to the
G   notice of the High Court that this Court in Shobha Surendar's case* had
    held that the law laid down in D.C. Bhatia 's case** would be applicable. In
    D.C. Bhatia 's case it was held by this court that in view of S. 3(c) of Delhi
    Rent Control Act, 1958, the said Act would not be applicable to Premises
    whose monthly income exceeded Rs. 3000, which was akin to provision of S.
H   31 of the Karnataka Rent Control Act. However, High Court relying upon
                                          196
                                                                  0
                    C.N. RUDRAMURTHY v. K.B. KHAN                         197
the decision of this court in Rattan Arya 's case*** and decision of High         A
Court in Padmanabha Rao 's case**** declaring S. 31 of the Act as invalid,
directed the parties to work out their remedies under the Rent Control Act.
Hence the present appeal.
       On behalf of the respondents it was contended that since there was no
direct decision of this Court holding that the law laid down in Padmanabha        B
Rao 's case as incorrect, the said case may be examined by this Court; if S.
31 of the Karnataka Rent Control Act, 1961 was held valid relying upon D.C.
Bhatia's case, then the said enactment would keep out of its purview large
number of premises whose monthly rent exceeded Rs. 500.
     Allowing the appeal and setting aside the order of High Court, the           C
Court.
      HELD : 1. High Court was not justified in directing the parties to work
out their remedies under the Karnataka Rent Control Act 1961. The eviction
decree passed by Trial Court is restored. [201-G; 203-C)
      2.1. It is a matter of judicial discipline that requires that when this     D
Court states as to what the law on the matter is, the same shall be binding
on all the courts within the territory of India. This mandate of Article 141
of the Constitution is not based on any doctrine of precedents, but is an
imprimature to all courts than the law declared by this Court is binding on
them. Thus, it was not open to the High Court to consider the effect of the
decisions in Rattan Arya 's case, its §cope, what was decided therein and         E
whether there could be any distinction between that decision and the decision
rendered in D.C. Bhatia's case. The clear pronouncement made by this court
in Shobha Surendar 's case was that D. C. Bhatia 's case was applicable with
reference to S. 31 of the Karnataka Rent Control Act and, therefore, in view
of that decision the High Court's decision was upset in another matter            p
where, the High Court had followed the Padmanabha Rao's case. The law
declared by this Court is clear that the D.C. Bhatia's case was applicable to
the provisions of Karnataka Rent Control Act. Thus, it was not at all open
to the High Court to have tried to explain the decision of this Court and ought
to have simplicity followed the decision of this Court• .[201-D-E-F)
                                                                                  G
     D.C. Bhatia and Ors. v. Union of India, (1995) l SCC 104 and Shobha
Surendar v. Mrs. H. V. Rajan and Ors., in C.A. No. 13754of1996, relied on.

      Padmanabha Rao v. State ofKarnataka, ILR (1986) Kar. 2480, impliedly
overruled.
      Rattan Arya v. State of Tamil Nadu, (1986) 3 SCC 385, held inapplicable.    H
    198       0               SUPREME COURT REPORTS [1998] SUPP. 2 S.C.R.

A          2.2. There is no necessity for this Court to examine the view taken by
    High Court in Padmanbha Rao 's case, when this Court applied its mind to
    the facts of the case, the law declared by this Court in D. C. Bhatia 's case
    and applied the same with reference to the provisions of the Karnataka Rent      ..,.
    Control Act. This Court itself considered the effect of D. C. Bhatia 's case
B   with reference to the provisions of the Karnataka Rent Control Act and
    applied the same thereto and thereafter declared what the law should be.
    Though this Court did not specifically referred to the decision in Padmanabha
    Rao 's case, the same stood overruled because the law declared by this Court
    was contrary to what was stated in Padmanabha Rao 's case.
                                                                    [202-A-B; D-E)
c         Padmanabha Rao v. State of Karna/aka, ILR (1986) Kar. 2480, held
    already overruled.

          3. Though Karnataka Rent Control Act was enacted in the year 1961
    and was to lapse by the end of 10 years time, it has been extended from time
    to time in the same form in which it was enacted originally or with some
D   modification wherever it was necessary. It cannot be imagined that the
    Legislature was not aware or conscious of the fact as to the rents prevalent
    in the city of Bangalore or in other parts of the State in respect of non-
    residential premises. Perhaps, the Legislature thought it was necessary to
    give protection of the Act to only very poor tenants who pay rent less than
E   Rs. 500 per month considering the fact that tenants in other premises are
    economically of superior class and can l\ithstand the maneouvers of a landlord
    however powerful he may be. If that was the policy of the law, as stated in
    D. C. Bha'ia 's case, it was not open to the Court to have declared the same
    to be invalid. (203-A-B-C)

F         Malpe Vishwanath Acharya v. State of Maharashtra, (1998) 2 sec 1;
    Rattan Arya v. State of Tamil Nadu, (1986) 3 SCC 385; Motor General
    Traders v. State of A. P., (1984] 1 SCC 222; Synthetics and Chemicals ltd.
    and Ors. v. State of U.P. and Ors., [1990) l SCC 109 and Sant Lal Bharti
    v. State of Punjab, [1988) 1 SCC 366, held inapplicable.

G        CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5039 of
    1998 etc.
          From the Judgment and Order dated 14.8.97 of the Karnataka High Court
    in R.F.A. 171 of 1993.

          Rama Jois, P.R. Ramsesh, R.K. Khanna Surya Kant and Sushi! Balwada
H   for the Appellants.
         C.N. RUDRAMURTHY v. K.B. KHAN [RAJENDRA BABU, J.]                  199
      S.K. Kulkarani and Ms. Sangeeta Kumar for the Respondents.                    A
      The Judgment of the Court was delivered by

       RAJENDRA BABU, J. The appellant filed a suit against Bhaskaran, the
original tenant in occupation of a premises bearing No. I 99 and 200 situated
at Brigade Road in Bangalore city for recovery of possession thereof on the         B
ground that he had defaulted in payment of rent and had sublet the same
contrary to law. The original tenant set up the defence that he had not sublet
the suit premises or any portion thereof, but had only entered into an agreement
to run business on his behalf and he was not liable to be evicted. The original
tenant died on 8.1.1983 and his legal representatives were brought on record.       C
They filed a written statement on 1.8.1984 contending that their father had
parted with possession of the suit premises to respondent No. I and no decree
could be passed against them. Respondent No. I was impleaded as a defendant
on an application made by him. He contended that he had become a partner
with Bhaskaran with the consent of the appellants and partnership stood
dissolved as on 10.12.1982 and thus he was a tenant under the appellant             D
directly. His tenancy had not been terminated and, therefore, there was no
cause for suit. By a decree made on 31.3.1993, the City Civil Court directed
the eviction of the first respondent. Respondent No. I preferred an appeal
against the said decree in the High Court. This appeal is against that order
made by the High Court of Karnataka in that appeal filed by Respondent No. I.       E
      In the High Court three principal points were formulated for
consideration:-

      (I) Whether the first respondent is a tenant? If not, what is his status?

      (2) Whether the suit is maintainable for ejection of the first respondent?    F

     (3) Whether the first respondent is entitled for mesne profits under
Order XX Rule IO of the C.P.C.?

      The first two points raised for consideration turned on the question          G
whether the first respondent is a tenant or not? If he is a tenant, it was stated
that the matter has necessarily to go before the Rent Control Court for
eviction under Section 21 of the Karnataka Rent Control Act (hereinafter
referred to as "the Act"). However if the first respondent is declared to be
a trespasser, he is liable for eviction by virtue of a decree in the suit. The
Courts below took' the view that the first respondent is liable to pay rents or     H
    200                         SUPREME COURT REPORTS [1998] SUPP. 2 S.C.R.

A damages from 10.12.1982 and, therefore, they had no difficulty in answering
    the third point raised for consideration. What is really in issue before us are
    the first two points.

           The High Court held that there is no acceptable evidence to declare the
    first respondent as a tenant and thereby affirmed the conclusion reached by
B   the trial court. After examining the scope of Section 23 of the Karnataka Rent
    Act which forbids creation' of sub-lease or assignment or transfer either whole
    or any part of the demised premises, the learned Judge was of the view that
    the original tenant allowed others to carry on the business in his name as he
    was unable to carry on the business by himself due to old age initially by
C   inducting the first respondent as a partner of the firm and then in his own
    capacity as a owner of the business concern which was not an unknown
    mode of transfer of tenancy and, therefore, the first defendant was not a
    trespasser. He, however, noticed that the first respondent was not inducted
    with the consent of the landlord and therefore his possession becomes
    unlawfi.Il and he is liable to be evicted under the provisions of Section 21(1)(f)
D   of the Karnataka Rent Control Act and no other conclusion was possible in
    this regard. In view of that finding he held that the Civil Court has no
    jurisdiction to pass an order of eviction as there is a specific provision
    ousting the jurisdiction of the Civil Court to entertain any suit for eviction
    of a tenanted premises. On that basis, he allowed the appeal and set aside
E   the decree made by the trial court and directed the parties to work out their
    remedies in a Rent Court.

           In this background a contention was raised on behalf of the appellant
    that Section 31 of the Karnataka Rent Control Act enabled the filing of the
    suit as the rent in respect of the same was above Rs.500 per month. The High
F   Court held that Section 31 of the Karnataka Rent Control Act had been
    declared invalid in Padmanabha Rao v. State of Karna/aka, !LR ( 1986) Kar
    2480. The view expressed by this Court in Civil Appeal No. 13754 of 1996
    entitled Shobha Surendar v. Mrs. H V. Rajan and Ors., was also brought to
    the notice of the High Court which reads as follows :-

            "In view of the decision of this Court in D.C. Bhatia and others v.
G
            Union ofIndia, [1995) 1S.C.C.104, this appeal would merit acceptance
            and accordingly we accept the same, set aside the impugned orders
            of the High Court and restore that of the Trial Court with regard to
            possession of the property in dispute as well as entitlement of the
            appellant to contractual rent up till the date of vacating for which item
H           is being allotted hereby to the respondents."
         C.N. RUDRAMURTHY v. K.B. KHAN [RAJENDRA BABU, J.]                 201
      While considering the question whether the decision of this Court in         A
Shobha Surendar case had impliedly overruled the decision of the Karnataka
High Court in Padmanabha Rao 's case, the High Court held that the decision
laid down in Rattan Arya v. State of Tamil Nadu, reported in [1986] 3 SCC
385, should be followed and the decision in D.C. Bhatia 's case had no
application.
                                                                                   B
       In D.C. Bhatia's case (supra) this Court was concerned with a provision
under the Delhi Rent Control Act and Section 3(c) made it clear that the Act
was not applicable to any premises whether residential or non-residential
whose monthly rent exceeds three thousand rupees which is akin to the
provision under Section 31 of the Kamataka Rent Control Act. In Shobha             C
Surendar's case the High Court had proceeded to rely upon Padmanabha
Rao 's case; when the matter was brought to this Court though no specific
reference was made to Padmanabha Rao's case, this Court stated that the law
laid down in D. C. Bhatia 's case would be applicable, it was not open to the
High Court to state that it would prefer to follow the decision in Rattan Arya's
case. Indeed it is a matter of judicial discipline that requires that when this    D
Court states as to what the law on the matter is, the same shall be binding
on all the Courts within the territory oflndia. This mandate of Article 141 of
the Constitution is not based on any doctrine of precedents, but is an
impramatur to all courts that the law declared by this Court is binding on
them. If that is so, it was not open to the High Court to consider the effect      E
of the decisions in Rattan Arya's case, its scope, what was decided therein
and whether there could be any distinction between that decision and the
decision rendered in D.C. Bhatia's case. The clear pronouncement made by
this Court in Shobha Surendar's case was that D.C. Bhatia's case was
applicable with reference to Section 31 of the Kamataka Rent Control Act and,
therefore, in view of that decision, the High Court's decision was upset in        F
another matter where the High Court had followed the Padmanabha Rao's
case. In effect, Padmanabha Rao's case stood impliedly overruled. Thus, it
was not at all open to the High Court to have tried to explain the decision
of this Court and ought to have implicitly followed the decision of this Court.
The law dec!ared by this Court is clear that the D.C. Bhatia's case was            G
applicable to the provisions of Karnataka Rent Control Act. So it was not
open to the learned Judge to take any other view in the matter. Thus we are
of the view that the direction issued by the High Court to the parties to work
out their remedies under the Rent Control Act is not at all correct.

      However, learned counsel for the respondents submitted that there has        H
    202                        SUPREME COURT REPORTS [1998) SUPP. 2 S.C.R.

A   been no decision of this Court directly stating that the law declared by the
    High Court in Padmanabha Rao' s case was not correct and, therefore, the
    view taken in Padmanabha Rao's case may be examined by us and we may
    either uphold the view expressed therein or take another view though such
    a course was not open to the High Court. We do not think such an exercise
B   is necessary when this Court applied its mind to the facts of the case, the
    law declared by this Court in D. C. Bhatia 's case and applied the same with
    reference to the provisions of the Karnataka Rent Control Act. If there has
    to be any change in the policy, it is certainly open to the Legislature to
    intercede it and make appropriate law in that regard. Therefore, this argument
    advanced on behalf of the learner' counsel for the contesting respondent
C   does not appeal to us.

          Yet another argument was pressed upon us to the effect that when a
    provision of law in an enactment has been declared to be invalid and when
    the Supreme Court declares the law with reference to another enactment of
    similar nature, it would not be open to the High Court to say that the decision
D   of this Court should be taken to have been overruled or upset the decisions
    rendered by the High Court declaring the law to be invalid. This principle has
    no application in the present case at all because this Court itself considered
    the effect of D. C. Bhatia 's case with reference to the provisions of the
    Kamataka Rent Control Act and applied the same thereto and thereafter
E   declared what the law should be. Though this Court did not specifically refer
    to the decision in Padmanabha Rao's case, it is needless to say that the same
    stood overruled because the law declared by this Court was contrary to what
    was stated in Padmanabha Rao' s case. Therefore that argument also is not
                             •
    sound and needs to be rejected.

F         It is submitted that if we take the view that Section 31 of the Karnataka
    Rent Act is valid in view of D.C. Bhatia's case, then the enactment will keep
    out of its purview large number of premises inasmuch as the rent payable in
    respect of commercial premises in Bangalore will certainly be more than Rs.
    500/- per month. We have given our careful consideration to this aspect of
G   the matter. Relying upon the decisions in Malpe Vishwanath Acharya v. State
    of Maharashtra, [1998] 2 SCC I; Rattan Arya v. State of Tamil Nadu, [1986]
    3 SCC 385; Motor General Traders v. State of A.P., [1984] l SCC 222; Synthetics
    and Chemicals ltd. and Ors. v. State of U.P. and Ors., [1990] 1 SCC 109 and
    Sant Lal Bharti v. State of Punjab, [ 1988] 1 SCC 366, it was submitted that
    with passage of time and change of circumstances the continued operation
H   of an Act which was valid were enacted may become invalid as being arbitrary
          C.N. RUDRAMURTHY v. K.B. KHAN (RAJENDRA BABU, J.)                  203

and unreasonable. Though Kamataka Rent Control Act was enacted in the                A
year 1961 and was to lapse by the end of 10 years time, it has been extended
from time to time in the same form in which it was enacted originally or with
some modification wherever it was necessary. We cannot imagine that the
Legislature was not aware or conscious of the fact as to the rents prevalent
in the city of Bangalore or in other parts of the State in respect of non-           B
residential premises. Perhaps, the Legislature thought it was necessary to
give protection of the Act to only very poor tenants who pay rent less than
Rs.500 per month considering the fact that tenants in other premises are
economically of superior class and can withstand the maneuvers of a landlord
however powerful he may be. If that was the policy of the law, we do not think
as stated in D. C. Bhatia 's case, it was open to the Court to have declared the     C
same to be invalid.

       In the result, we are of the view that the decree passed by the trial court
is to be restored by setting aside the order made by the High Court and we
order accordingly. The appeal, therefore, stands allowed. However, considering
all aspects of the matter, we are of the opinion that the first respondent be        D
given some reasonable time to vacate the premises and which in this case we
consider will be a period upto 30th of June, 1999 subject to the filing of usual
undertaking within four weeks from today. In the event such an undertaking
is not filed before this Court, it would be open to the appellant to seek for
immediate eviction in addition to the condition that he shall vacate the             E
premises and deliver the same on or before 30th of June, 1999.

      CIVIL APPEAL NO. 5040 OF I998 ARISING OUT OF

      SPECIAL LEAVE PETITION (CIVIL) NO. 4557 OF I998.
                                                                                     F
      In view of the decision rendered by us in Civil Appeal arising out of
Special Leave Petition (C) No. 6836 of 1996, the view taken by the High Court
has got to be upheld and this appeal deserves to be dismissed. However, the
appellant is granted time to vacate the premises on or before 30th of June,
1999 upon his furnishing the usual undertaking in this Court within four
weeks from today.                                                                    G
S.V.K.L                                                         Appeal allowed.