GUJARAT STEEL TUBE CO. LTD.versusVIRCHANDBHAI B. SHAH AND ORS.

A                     GUJARAT STEEL TUBE CO. LTD.
                                         v.
                    VIRCHANDBHAI B. SHAH AND ORS.

                               OCTOBER 12, 1999

B               [B.N. KIRPAL AND N. SANTOSH HEGDE, JJ.]

          Bombay Rents, Hotel and Lodging House Rates Control Act, 1947:

         S.11 (4}-Suit for eviction of tenant-Non-payment of renl---Application
C by landlord u/s 11(4) for appropriate orders-Objection by tenant company
  contending that since a reference had been made to B.!.F.R. u/s. 15(1) of Sick
  Industrial Companies (Special Provisions) Act, 1985, in view of provisions of
  s.22 thereof no suit for recovery of money could be filed or proceedings taken
  against the tenant companyHeld, High Court and Appellate Bench of Small
  Causes Chief Court were right in holding that s.22 of Sick Industrial Com-
D panies (Special Provisions) Act did not prevent the filing of an eviction
  petition on the ground of non-payment of rent and order u/s. 11(4) of Bombay
  Rent Act could be passed-Sick Industrial Companies (Special Provisions)
  Act, 198~S.22.

E          Shree Chamundi Mopeds Ltd. v. Church of South India Trust Associa-
    tion, [1992] 3 sec 1, relied on.

         CIVIL APPELLATE JURISDICTION: Special Leave Petition (C)
    No. 14657 of 1999.

F        From the Judgment and order dated 20.8.99 of the Gujarat High
    Court in C.R.A. No. 1171of1999.

           Ranjit Kumar, H.A. Raichura and Ms. S.H. Raichura for the
    Petitioner.

G         The following Order of the Court was delivered :

         The respondent had filed a suit against the petitioner herein for
  eviction of the premises which had been let by the respondents to the
  petitioner. During the pendency of the suit, an application under Section
  11(4) of the Bombay Rent Act was filed. In this application, it was stated
H that the petitioner herein had not been paying the rent and, therefore,
                                        624
            GUJARAT STEEL TUBE CO. LTD. v. V.B. SHAH                       625

  appropriate orders as contemplated by the said sub-section should be            A
. passed.

      In the reply which was filed to the said application, it was, inter a/ia,
contended that the petitioner company had become sick and a reference
had been made to the B.I.F.R. under Section 15(1) of the Sick Industrial
Companies (Special Provisions) Act, 1985 (for short "the Act"). The               B
contention of the petitioner herein was_ that in view of the provisions of
Section 22 of the Act no suit for recovery of money could be filed or
proceeding taken against. the present petitioner.

      The trial court vide its order dated 25th January, 1999 rejected the . C
said application under Section 11(4) which was filed by the respondent.
Thereupon a revision was filed and the Appellate Bench of the Small
Causes Chief Court, Ahmedabad by its order dated 12th July, 1999 came
to the conclusion that the provisions of Section 22 of the Act were not
applicable in such a case. It placed reliance on a decision of this Court in D
Shree Chamundi Mopeds Ltd. v. Church of South India Trust Association,
[1992] 3 SCC 1. The petitioner thereafter filed a civil revision before the
High Court but with no success.

       It is submitted by Shri Ranjit Kumar, learned counsel for the
petitioner that in view of the plain language o~ Section 22 of the Act, the       E
application under Section 11(4) of the Bombay Rent Act was not main-
tainable. He also contended that no notice as contemplated under Section
12(2) of the Bombay Rent Act had been issued and, therefore, the question
of an application under Section 11(4) being filed could not arise.
                                                                                  F
      It is no doubt true that Section 12(2) requires a notice to be issued
in the manner provided by Section 106 of the Transfer of Property Act
before a suit for recovery of possession on ground of non-payment of rent
can be filed. This is an objection to the maintainability of the suit which
will have to be decided when the court takes up for consideration the
question as to whether order for eviction should be passed or not. Not-           G
withstanding this objection having been taken, an application under Section
11(4) can be filed. The said sub-section reads as follows :

            11. Court may fix standard rent and permitted increase in
         certain cases ....... .                                      H
    626                   SUPREME COURT REPORTS [1999] SUPP. 3 S.C.R.

A            xxxx                 xxxx                  xxxx

                (4) Whether at any stage of a suit for recovery of rent, whether
            with or without a claim for possession of the premises, the Court
            is satisfied that the tenant is withholding the rent on the ground
            that. the rent is excessive and standard rent should be fixed, the
B           court shall, in any other case if it appears to the Court that it is
            just and proper to make such an order the Court may make an
                                         •
            order directing the tenant to deposit the Court forthwith such
            amount of the rent as the Court considers to be reasonably due to
            the landlord, or at the option of the tenant an order directing him
c           to pay to the landlord such amount thereof as the Court may
            specify. The Court may further make an order directing the tenant
            to deposit in Court periodically, such amount as it considers proper
            as interim standard rent or "at the option of the tenant an order to
            pay to the landlord such amount thereof as the Court may specify,
            during the pendency of the suit. The Court may also direct that if
D           the tenant fails to comply with any order as aforesaid, within such
            time as may be allowed to it, he shall not be entitled to appear in
            or defend the suit except with leave of the Court, which leave may .
            be granted subject to such terms and conditions as the Court may
            specify.
E
            xxxx                                      xxxx

          While dealing with an application under Section 11(4) the court will
                                                                                     -
    have to apply its mind, take all facts and circumstances into consideration,
    and then decide whether it is just and proper to make an order requiring
F   the payment of the rcn~ by the tenant. At this stage, we are only concerned
    with the order passed on an application under Section 11(4). The stage of
    considering the contention that a notice under Section 12(2) had not been
    issued had not arisen before the trial court. It is presumably for this reason
    that in none of the orders passed by the courts below there is any direct
G   reference to any contention raised on the basis of Section 12(2) of Bombay
    Rent Act.

         It was submitted by Shri Ranjit Kumar that Section 22 of the Act .
  after its amendment in 1994 does not permit the filing of any suit for the
  recovery of money. He submitted that the application which was filed for
H eviction by the landlord was to the effect that there were arrears of rent
                   GUJARAT STEEL TUBE CO. LTD. v. V.B. SHAH                     627

       which had not been paid and, therefore, the court should order payment          A
       of rent and al the same time order eviction of the tenant on account of
       non-payment of arrears.

             For the purpose of considering this contention we will proceed on
       the basis that the tenancy of the petitioner had been terminated by a notice
       having been issued under Section 106 of the Transfer of Property Act. In        B
       other words, the petitioner was entitled, at the time when the application
       under Section 11(4) was filed, to the protection of the Rent Control Act
       and no more.




-             Section 22 no doubt, inter alia, states that notwithstanding any other
       law no suit for recovery of money shall lie or proceeded with except with
       the consent of the Board, but as we look at it the filing of an eviction
       petition on ground of non-payment of rent cannot be regarded as filing of
                                                                                       C




       a suit for recovery of money. If a tenant does not pay the rent, then the
       protection which is given by the Rent Control Act against his eviction is       D
       taken 'iway and with the non-payment of rent order of eviction may be
       passed. It may be possible that in view of the provisions of Section 22, the
       trial court may not be in a position to pass a decree for the payment of
       rent but when an application under Section 11(4) is filed, the trial court in
       effect gives an opportunity lo the tenant to pay the rent failing which the
                                                                                       E
       consequences provided for in the sub-section would follow. An application
       under Section 11(4), or under any other similar provision, cannot, in our
       opinion, be regarded as being akin to a suit for recovery of money.

              We may also point out that this Court in Shree Chamundi Mopeds
        Ltd. (supra) had occasion to consider the question as to whether an F
        application for eviction under the Rent Control Act was maintainable
        notwithstanding the provisions of Section 22 of the Sick Industrial
        Companies Act. It was held that on the termination of the contractual
        tenancy, the Karnataka Rent Control Act, with which the Court was .
---     concerned in that case, gave protection to a statutory tenant to continue to G
      . occupy the premises but the said right could not be regarded as property
        of the company for the purpose of sub-section (1) of Section 22 of the Act.
        The Court held that the provisions of Section 22(1) were not applicable to
        the eviction proceedings instituted by the landlord against the sick
        company. It appears to us that the aforesaid principle would be clearly H
    628                    SUPREME COURT REPORTS (1999) SUPP. 3 S.C.R.
                                                                                    -
A applicable in the present case and appropiate orders could be passed
    under the relevant provisions of the Rent Control Act.

          The High Court and the Appellate Bench of the Small Causes Chief
    Court were, therefore, right in coming to the conclusion that the provisions
    of Section 22 of the Sick Industrial companies (Special Provisions) Act,
B   1985 did not in any way prevent the filing of an eviction petition on the
    ground of non-payment of rent and that the order under Section 11(4) of
    the Bombay Rent Act could be passed.

           The petition is, accordingly, dismissed.

    R.P.                                                     Petition dismissed.




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