Holding

A permission under Section 21 of the Delhi Rent Control Act is valid if the statutory conditions—bona‑fide non‑requirement of the premises, permission obtained in the prescribed manner, residential purpose, and a written agreement—are satisfied, and the order is not void for lack of stated reasons or absence of a registered lease.

Summary

The landlord, I.M. Lal, obtained permission under Section 21 of the Delhi Rent Control Act, 1958, to let his newly built premises to Ramesh Khanna for a two‑year residential tenancy, after stating that he did not require the premises for that period. When the tenant refused to vacate after two years, the landlord sought eviction under the same section; the Rent Controller and the Rent Control Appellate Tribunal upheld the eviction. The Delhi High Court set aside the order, calling it a "mindless" order for lacking reasons, a written lease, and registration. The Supreme Court held that the permission was valid, the order was not mindless, and Section 21 is a self‑contained code; no separate lease or registration is required. Consequently, the High Court’s decision was reversed and the eviction order restored.

Issues considered

Whether a permission under Section 21 of the Delhi Rent Control Act is invalid if the landlord does not state reasons for his non‑requirement of the premises for a particular period.
Whether the Rent Controller must be satisfied of the landlord's non‑requirement and whether failure to state reasons makes the order "mindless".
Whether a written agreement under Section 21 must be executed before or after the permission and whether such agreement requires registration.
Whether Section 21 operates as a code by itself, obviating the need for a separate lease or registration.

Legislation cited

Delhi Rent Control Act, 1958s. 14, s. 19, s. 20, s. 21
Indian Evidence Act, 1872s. 58
Transfer of Property Acts. 107

Subjects

Delhi Rent Control ActSection 21limited tenancyevictionlandlord's non‑requirementregistration of leasemindless orderstatutory conditionsrent control

Judgment

INDER MOHAN LAL A
v.
RAMESH KHANNA

AUGUST 4, 1987

[SABYASACHI MUKHARJI AND S. NATARAJAN, JJ.] B

.... Delhi Rent Control Act, 1958: s. 21-Requirements of-Permi-
ssion to let out premises for limited period-Validity of-Reason for
landlord's non-requirement of premises-Whether to be stated-
- Agreement in writing-Whether to be registered.
c
'( Practice & Procedure: View taken by the High Court over a
number of years-Should normally be adhered to.

The appellant made an application before the Rent Controller on
or about July 15, 1976 to let out the premises to the respondent for D
residential purposes for a period of two years under s. 21 of the Delhi
Rent Control Act, 1958 as he did not require the premises for that
period. The respondent agreed before the Rent Controller to the above
statement of the appellant and undertook to vacate the premises after
the expiry of two years from July 15, 1976. Accordingly, the Rent
Controller made an order allowing creation of a limited tenancy for a E
period of two years from July 15, 1976. The respondent having refused
to vacate the premises after two years, the appellant filed an application
under s. 21 on behalf of himself and his family members claiming
possession of the premises for their bona fide need and use. The Rent
Controller passed an eviction order and the Appellate Tribunal upheld
the same. F

The High Court allowing the appeal of the tenant-respondent held
that the order under s. 21 of the Act was a mindless order inasmuch as
no reason had been stated as to why the premises in question was not
required for a limited period, that it was not stated as to bow the G
premises in question was dealt with before creating the said tenancy and
that there was no writing and no lease registered after the permission
was granted.

Allowing the appeal by special leave,
H

765
766 SUPREME COURT REPORTS [1987] 3 S.C.R.

A HELD: 1.1 The permission granted hf the Rent Controller
under s. 21 of the Delhi R<>nt Control Act was valid. The order permit-
ting limited tenancy was not a mindless order but one passed by him
after taking the relevant factS into consideration. (7800 I

1.2 In order to attract s. 21 of the Act, it is necessary firstly
B that the landlord must not require the premises either in whole or
part for a particular period; secondly, the landlord must obtain the
permission of the Controller in the prescribed manner; thirdly, letting
of the whole or part of the premises must be for residence, and fourthly
such letting out must he for such period as may he agreed· in writing.

c
These and these alone are the conditions which are required to he
fulfilled. [772G-773B]
-
1.3 Section 21 only gives sanction if the landlord makes a state-
ment to the satisfaction of the Court and the tenant accepts that the
landlord does not require the premises for a limited period. This state-
ment of the landlord must be bona fide. The purpose must he residence.
D There must not he any fraud or collusion. There is a presumption of
regularity. But it is open in particular facts and circumstances of the
case to prove to the satisfaction of the executing court that there was
collusion m· conspiracy between the landlord and the tenant and the
landlord did not mean what he said or that it was a fraud or that the
tenant agreed because he was wholly unequal to the landlord. [776F-H]
E
1.4 In the instant case there was no permission previously. This
was the first letting. There was no evidence that when the landlord
stated that he did not require the premises in question for a particular
period, he did not mean what he said or that he made a false statement.
There was no evidence at any stage that the tenant did not understand
F what the landlord was stating or that he did not accept what the land-
lord stated. There was no evidence that either the tenant was in collu-
sion or perpetrating any fraud with the landlord or the tenant was
unequal to the landlord in bargaining powers. There was thus uo evi-
dence to show that the Controller did not apply his mind. [779F, 776H-777B]

G S.B. Noronah v. Prem Kumari Khanna, [1980) 1 S.C.R. 281; ~
Nagindas Ramdass v. Dalpatram Ichharam, [1974) 2 SCR 544; V.S.
Rahi and anotherv. Smt. Ram Chambeli, [1984) 2 SCR 290;J.R. Vohra
v. India Export House Pvt. Ltd. and another, [1985) 2 SCR 899 and
Smt. Dhanwantiv. D.D. Gupta, [1986] 3 SCC 1, referred to

H 2. It is not necessary to state under s. 21 the reasons why the
I.M. LAL v. RAMESH KHANNA 767

~ landlord did not require the premises in question for. any particular
A
period. The landlord or the tenant may be able to show that cogent
reasons did exist or were within the knowledge of the parties as to why
the landlord did not require the whole or a part of his premises for a .
specified period. [777BC, 782B]

B
t weaker3. sections.
There is no presumption that in all cases the tenants are the
The presumption is, on the contr~ry, in favour of
..,,, sanction. It is he who challenges the statement and the admission of the
landlord or the tenant who has to establish facts. In the instant case the
onus was on the tenant to show that the sanction under s. 21 was a

- ., nullity. He did not make any attempt to dislodge the presumption in
favour of the permission. [777C, 779F]
c
4.1 An agreement in writing submitted along with the application
under s. 21 of the Act is really a proposed agreement. It comes into
effect only after the grant of permission. It does not require regis-
!ration. [782CD]
D
~ S.B. Noronah v. Prem Kumari Khanna, (1981] 1SCR281, refer-
red to.

Vijay Kumar Bajaj v. lnder Sain Minocha, (1982] 2 Rent Control
Reporter 392, approved.
E
4.2 It has been consistently held by the Delhi High Court that
~ s. 21 is a coae by itself, that the order of permission is itself an authority
and that no lease was necessary. This view has been acted upon for long
and transactions have been completed in the Union Territory on the
'r basis of permission and it was never doubted that there was any re-
quirement of any lease or any agreement subsequent to the order and F
the same required registration. The view taken by the High Court over
a number of years should normally be adhered to and not to be dis-
turbed. A different view would not only introduce an element of uncer-
tainty and confusion but it would also have the effect of unsettling
transactions which might have been entered iflto on the faith of those
. ...C, decisions. [780A-C] G

Raj Narain Pandey and others v. Sant Prasad Tewari & others,
(1973] 2 SCR 835 and Kasturi Lal v. Shiv Charan Das Mathur, (1976]
8 Rent Control Reporter 703, referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 468 H
of 1987.
768 SUPREME COURT REPORTS [1987] 3 S.C.R.

A From the Judgment and Order dated 19. 7 .1985 of the Delhi High
Court in Second Appeal No. 374 of 1980.

Madan Bhatia, N.D.B. Raju and Vineet Kumar for the
Appellant.

B Dr. L.M. Singhvi, K.B .. Rohtagi, Praveen Jain and Baldev ~
Atreya for the Respondent.

The Judgment of the Court was d,elivered by

C
SABYASA CHI MUKHARJI, J. This appeal by special leave is
from the judgment and order of the High Court of Delhi dated 19th of
July, 1985. The appellant had made an application on or about 15th of
-
July, 1976 before the Rent Controller to let out the premises for a
period of two years under section 21 of the Delhi Rent Control Act,
1958 (hereinafter called 'the Rent Act'). The Rent Controller after
recording the statements of the appellant and the respondent made an
D order permitting creation of limited tenancy only for a period of two
years for residential purposes to which the respondent had agreed upon.
It may be material to refer to the fact that the appellant in his applica-
tion under section 21 of the Rent Act had stated as follows:

"I do not require the premises for a period of two
E years from 15.7.76. The purpose of letting shall be residen-
tial only and the premises are shown in the site plan Ex.
A-1. The proposed agreement is Ex. A-2. Limited tenancy
under section 21 of the Act may be allowed to be created
for the said period."

F The respondent agreed to the aforesaid statement and stated as
follows:

"I have heard the statement of the petitioner and I accept it
as correct. I have no objection. I shall vacate the premises
after the expiry of two years from 15.7.76. The purpose of
G letting shall be residential only". ~

Upon this the Rent Controller passed the following order:

''This is an application filed under section 21 of the
Act for permission to create limited tenancy for a period of
H two years from 15.7.76. The purpose of letting shall he
J.M. LAL v. RAMESH KHANNA [MUKHARJI. J.] 769

residential only and the premi~es is shown in the site plan A
Ex. A-1. The proposed agreement is Ex. A-2. From the
perusal of the statements of the parties I am satisfied that
as at present the petitioner does not require the premises.
Therefore, limited tenancy is allowed to be created for a
period of two years from 15. 7. 76."
B
The appellant filed an application on 6th November, 1978 for
eviction of the respondent as the respondent had refused to vacate the
premises in spite of his statement made before the Rent Controller.
The appellant filed an application on the said date under section 21 of
- the Rent Act on behalf of himself and his family members claiming
possession of the premises for their bona fide need and use. The appel- c
lant contended that he (the appellant) was a retired official and was
living in a rented house while the respondent was a rich man doing
business in jewellery and was also owning a house in Delhi. In the
application made under section 21 of the Rent Act the appellant had
stated that the appellant owned a newly built house in the New Friends
~ Colony comprising of dining, drawing, three bed rooms with attached D
bath rooms, a study room, family lounge and a garage. The appellant
had further stated that he did not require the premises for the personal
residence for a period of two years. The appellant had also stated in
that application, that the appellant had agreed to let it out to the
respondent for the first time on the terms and conditions set out in the
proposed lease deed for a period of two years. It was stated that the E
- . •respondent had heard the statement and recorded that he had no
,. objection and would vacate the premises after expiry of two years.
Subsequently, when the second appeal was pending in the Delhi High
'f Court, the appellant had filed an application for early hearing in which
he had stated that when the construction of the house in question was
completed the appellant's father R.B. Nanak Chanu, advocate, was F
old and alone (the appellant's mother had died earlier and other
brother and sister being away from Delhi) and in view of his father's
ailing health the appellant was living with him in the rented premises at
4-Flag Staff Road, Delhi to look after his old and ailing father. It was
..(in those circumstances that the appellant had decided to let out the suit
premises for a limited period of two years only. It may be mentioned G
that the appellant's father died two months after the Rent Controller
had granted permission.

The Rent Controller after hearing both the parties on the 4th of
January, 1980 held, rejecting the contention of the respondent, that
section 21 of the Rent Act was not ultra vires. Furthermore, he was H
770 SUPREME COURT REPORTS (1987] 3 S.C.R.

A ·satisfied that a limited tenancy had been created and as such he
granted permission for eviction. Aggrieved by the aforesaid order the
respondent preferred an appeal to the Rent Control Appellate Tri-
bunal. The Rent Control Appellate Tribunal upheld the eviction
order.

B On or about the 19th of July, 1985, being further aggrieved, the ~
respondent preferred a second appeal before the High Court of Delqi.
The High Court of Delhi by the impugned judgment allowed life 1"'fi'
appeal on the ground that there was no ground stated in the appli-
cation under section 21 of the Rent Act as to why a limited tenancy
was intended to be made. The High Court held that the order under -
C section 21 of the Rent Act was a mindless order inasmuch as the
respondent before it had not disclosed as to how the demised premises )'
were being dealt with before creating the said alleged tenancy and why
the respondent before it did not require the demised premises for the
alleged period of two years and as to why the same would be required
by him after the period of two years.
D
~'
The High Court relying on the decision in the case of S. B.
Noronah v. Prem Kumari Khanna, (1980] 1 S.C.R. 281, held that the
order in question in this case was a mindless order and in that view of
the matter the order passed under section 21 of the Rent Act was not
valid. The High Court was of the view that there was no inquiry for the
E Controller to come to the conclusion on the basis of the material that
the premises for which the permission was sought for creating a limited
tenancy was in fact available for being let for a limited period onl)l and
A=-
.
in the absence of that, this was a mindless order.
y
The appellant has come up in appeal before this Court from the
F said decision.

The question, therefore, that arises for consideration of this
Court is whether in view of the requirements of section 21 of the Rent
Act, was the permission invalid? The main points upon which the High
Court has relied are: firstly, on the materials put forward before the
G Rent Controller for sanction under section 21 of the Rent Act, no ~
reason had been stated as to why the premises in question was not
required for a limited period; secondly, it was not stated as to how the
premises in quee,tion was dealt with; thirdly, the High Court was of the
view that there was no writing and no lease registered after the permis-
sion was granted. So far as the second ground, namely, as to how the
H premises in question was dealt with prior to the letting out in the
l.M. LAL v. RAMESH KHANNA [MUKHARJI, J.] 771

'1 instant case the High Court was obviously and factually incorrect. It A
was stated in the application for permission that it was agreed to be let
out 'for the first time' and secondly, it was stated that the appellant
owned 'newly built house'. Therefore two facts were clearly stated
namely, this was a 'newly built' premises and further that there was no
prior letting. In the aforesaid facts and circumstances of the case there-
t· fore, it cannot be denied that how the premises in question was dealt B
with before the letting out had been clearly stated.

It is true however, that why the premises in question was stated
by the appellant not to be required for a limited period had not been

- 'specifically' stated at the time of seeking permission under section 21
by the appellant. The appellant had stated that he did not require the c
premises in question for a period of two years. He had not stated as to
why he did not require the said premises for the said limited period of
two years. The question therefore is was it necessary to seek a valid
order under section 21 to state that reason and if permission was
granted on satisfaction of the Rent Controller on other conditions
without being satisfied as to why the landlord did not require the D
premises in dispute for a limited period, the order would suffer from
the vice of being a mindless order. Such an order if otherwise the
conditions are satisfied would not be an invalid order. In order to
determine that question it is necessary to bear in mind the parameters
and the purposes of section 21 of the Rent Act. The Delhi Rent Control
Act like other Rent Control Legislations had been passed to provide E
for the control of rent and eviction. The Rent Acts all over the country
-.-' came in the wake of partjtion and explosion of population in metro-
politan and new urban cities. There are acute shortages of accommo-
dation. Very often these shortages and the demand for accommoda-
tion led to rack-renting as well as unreasonable eviction of the tenants.
To meet that situation and to facilitate proper letting the Rent Acts F
were passed all over the country ensuring fair return to the landlords
and giving the landlords the right of eviction for limited purposes and
at the same time protecting the tenant from unreasonable eviction by
the landlords. This led to a series of litigations leading to long delays
resulting specially in metropolitan cities like Delhi, Calcutta and
Bombay in reluctance of many landowners who had vacant premises G
for letting out only for limited period either because of the family
conditions or official commitments as they did not require the pre-
mises immediately and at the same time who were reluctant to part
with the said premises on rent because of the long delay and the
procedure that had to be followed to recover possession of those
premises. H
772 SUPREME COURT REPORTS [ 19871 3 S.C.R.

A Section 21 of the Rent Act was an attempt to meet that reluc-
tance. Section 14 of the Rent Act controls the eviction of tenants and
gives protection to the tenants against eviction. It stipulates that
notwithstanding anything to the contrary contained in any other law or
contract, no order or decree for the recovery of possession of any
premises shall be made by any court or Controller in favour of the
B landlord against a tenant unless certain specified conditions were r
fulfilled. Those conditions were laid down in different sections and --l
provisos thereof. It is not necessary to set these out in detail. As
mentioned herein before that led to a good deal of reluctanc<: on the part
of the landlords to part with the possession of the premises in their
occupation because of the time and expenses consuming process
involved for recovery of possession. In order, therefore, to induce
c
reluctant/potential landlords to create tenancies, section 21 was enac-
ted for the benefit of the capital city of Delhi. This is a new provision-
the unique provision made for the metropolitan city of Delhi. Section
21 of the Rent Act reads as follows:

ID "21. Where a landlord does not require the whole or any
part of any premises for a particular period, and the land-
lord, after obtaining the permission of the Controller in the
prescribed manner, lets the whole. of the premises or part
thereof as a residence for such period as may be agreed to
in writing between the landlord and the tenant and the
E tenant does not, on the expiry of the said P''riod, vacate
such premises, then notwithstanding anything contained in
section 14 or in any other law, the Controller may, on an
application made to him in this behalf by the landlord
within such time as may be prescribed, place the landlord
in vacant possession of the premises or part thereof by
F evicting the tenant and every other person who may be in
occupation of such premises."

An analysis of this section makes it clear that in order to attract
section 21, the first condition is that the landlord does not require the
whole or part of any premises for a particular period. If that condition
is fulfilled then the said landlord after obtaining the permission of the
Controller in the prescribed manner lets the whole of the premises or
part thereof as a residence for such period as may be agreed to in
writing between the landlord and the tenant and the tenant does not on
the expiry of the said period, vacate such premises, then notwithstand-
ing anything contained in section 14 or in any other law, the Controller
H may, on an application made to him in this behalf by the landlord
J.M. LAL v. RAMESH KHANNA [MUKHARJI, J.] 773

within such time as may be prescribed, order the eviction of the
A
tenant. Therefore the first condition must be that the landlord must
not require the premises either in whole or part of any premises for a
particular period. Secondly, the landlord must obtain the permission
of the Controller in the prescribed manner. Thirdly, letting of the
whole or part of the premises must be for residence. Fourthly, such
t letting out must be for such period as may be agreed in writing. There- B
fore, there must be an agreement in writing, there must be a permis-
• sion of the Controller for letting out for a limited period, the landlord
must not require the premises for a particular period and letting of the
premises must be as a residence. These and these alone are the condi-

- tions which are required to be fulfilled.

In Nagindas Ramdass v. Dalpatram Ichharam, [1974] 2 SCR 544, C
the question was whether a compromise decree for eviction could be
passed because the Rent Act enjoined the eviction only on the satisfac-
tion of the court. The respondent-landlord in that case instituted a suit
under the Bombay Rent Act, 1947 for possession against the tenant on
two grounds, namely, arrears in payment of rent and bona fide re- D
~ quirement of the premises for personal use and occupation. A com-
promise decree was passed. When the appellant applied for execution
of the decree the tenant contended that the compromise decree had
been passed by the Rent Court without satisfying itself as to the exis-
tence of grounds of eviction under the Act and hence being a nullity
was not executable. It was held by this Court that the public policy E
permeating this Act was the protection of tenants against unreason-
-~ able eviction. Construing the provisions of sections 12, 13 and 28 of the
Act in the light of the said policy, it should be held that the Rent Court
". under the Act was not competent to pass a decree for possession either
I in invitum or with the consent of the parties on a ground which was de
hors the Act or ultra vire~ the Act. The existence of one of the statut- F
ory grounds mentioned in sections 12 and 13 was a sine qua non to the
exercise of jurisdiction by the Rent Court. Parties by their consent
could not confer jurisdiction on the Rent Court to do something
which, according to the legislative mandate, it could not do. But if at
the time of the passing of the decree there was some material before
~the Court on the basis of which the Court could primafacie be satisfied G
about the existence of a statutory ground for eviction, it would be
presumed that the court was so satisfied and the decree for eviction,
though passed on the basis of the compromise would be valid. Such
material may be in the form of evidence recorded or produced or it
may partly or wholly be in the shape of express or implied admissions
made in the compromise agreement. Sarkaria, J. speaking for the H
774 SUPREME COURT REPORTS [1987] 3 S.C.R.

A Court held that admissions if true and clear were by far the best proof
of the facts admitted especially when these were judicial admissions
admissible under section 58 of the Evidence Act. In that case the Court
found because of the admission to pay the arrears of rent and mesne
profits at the ·contractual rate and lhe withdrawing of his application
for fixation of"standard rent, that there was no dispute with regard to 1
B the amount of standard rent and there was an admission that the rent ~
was in arrears. The Court observed at pages 552 to 553 of the report as
follows:

"From a conspectus of the cases cited at the bar, the

c
principle that emerges is, that if at the time of the passing
of the decree, there was some material before the Court,
on the basis of which, the Court could be prima facie
-
satisfied, about the ex'stence of a statutory ground for evic-
tion, it will be presumed that the Court was so satisfied and
the decree for eviction, though apparently passed on the
basis of a compromise, would be valid. Such material may
D take the shape either of evidence recorded or produced in
the case, or. it may partly or wholly be in the shape of an
express or implied admission made in the compromise
agreement, itself. Admissions if true and clear are by far
the best proof of the facts admitted. ;Admissions in plead-
ings or judicial admissions, admissible under s. 58 of the
E Evidence Act, made by the parties or their agents at or
before the hearing of the case, stand on a higher footing
than evidentiary admissions. The former class of admis-
sions are fully binding on the party that makes them and
constitute a waiver of proof. They by themselves can be
made the foundation of the rights of the parties. On the
F other hand, evidentiary admissions which are receivable at
the trial as evidence, are by themselves, not conclusive.
They can be shown to be wrong."

The aforesaid principle must be borne in mind in order to judge
the invalidity of the order passed under section 21 of the Act which was
G based on the statements made by the appellant and the respondent. ~·
The facts of the case upon which great deal of reliance was placed by
the High Court in the judgment under appeal and upon which the
appellant relied very heavily are mentioned in the case of S.B.
Noronah v. Prem Kumari Khanna (supra). There this Court reiterated
that section 21 of the Rent Act carved out a category for special treat-
H ment. While no landlord could evict without compliance with sections
J.M. LAL v. RAMESH KHANNA [MUKHARJI, J.] 775

14, 19 and 20 of the Act, a liberal eviction policy could not be said to A
under-lie in section 21. The Court observed that the Parliament was
presumably keen on maximising accommodation available for letting,
realising the scarcity crisis. One source of such spare accommodation
which is usually shy is potentially vacant building or part thereof
which the landlord is able to let out for a strictly limited period provided
he had some credible assurance that when he needed it he would get it B
back. The law sought to persuade the owner of the premises available
for letting for a particular period by giving him a special assurance
that at the expiry of that period the appointed agency would place the
landlord in vacant possession. Section 21 confined the special remedy

- to letting for residential uses only. Parliament had the wholesome fear
that if the section were not controlled by many conditions it might
open the floodgates for wholesale circumvention of the rent control
c
legislations by ingenious landlords exploiting the agonising need of
houseless denizens.

Section 21 of the Act over-rides section 14 precisely because it
was otherwise hedged in with drastic limitations and safeguarded itself D
against landlords' abuses. The first condition was that the landlord did
not require the demised premises 'for a particular period' only. That
meant that he must indicate to the authority before which sanction was
sought for letting what was the particular period for which he could
spare the accommodation. The Controller exercised an important reg-
ulatory function on behalf of the community. The fact that a landlord E
-,c- and a potential tenant together apply, setting out the formal ingre-
dients of section 21, did not relieve the Controller from being vigilant
to inquire and satisfy himself about the requisites of the landlord's
. 'y non-requirement 'for a particular period' and the letting itself being 'as
a resident'. A fraud on the statute could not be permitted especially
because of the grave mischief that might be perpetrated in s.uch event. F

The Court highlighted that it would be a terrible blow to the rent
control law if section 21 were freely permitted to subvert the scheme of
section 14. Every landlord would insist on a tenant going through the
formal exercise of section 21, making ideal ave1ments in terms of that
_~ section. The consequence would be that both the Civil Procedure G
Code which prescribed suits for recovery of possession and the Delhi
Rent Control Act which prescribed grounds for eviction would be
eclipsed by the pervasive operation of section 21. Neither grounds for
eviction nor suits for eviction would thereafter be needed, and if the
landlord moved the Court for a mere warrant to place the landlord,
through the Court process, in vacant possession of the premises, he H
776 SUPREME COURT REPORTS [1987] 3 S.C.R.

A woul.d get it. No court-fee, no decree, no execution petit10n, no termi-
nation of tenancy-wish for possession and the Court was at your
command. The Court observed that such a horrendous situation would
be the negation of the rule of law in this area.

When the application under Section 21 is filed by the landlord
B and/or tenant the Controller must satisfy himself by such inquiry as he --l'
may make, about the compulsive requirements of that provision. If he
makes a mindless order, the Court, when challenged at the time of ~
execution will go into the question as to whether the twin conditions
for sanction have really been fulfilled. Of course, there will be a pre-

c
sumption in favour of the sanction being regular, but it will still be
open to a party to make out his case that in fact and in truth the -
conditions which make for a valid sanction were not present.

The sanction granted under section 21, if it has been procured by
fraud and collusion cannot withstand invalidity because, otherwise,
high public policy will be given as hostage to successful collusion. The
D doctrine of estoppel cannot be invoked to render valid a proceeding
which the legislature, has on grounds, of public policy subjected to ~
mandatory conditions which are shown to be absent. As between un-
equals the law steps in and as against statutes there is no estoppel,
especially where collusion and fraud are made out and high purpose is
involved.
E
Law that non-performs stultifies the rule of law and hence the
need for strict compliance. Or else, the sanction is non-est. Collusion ~-
between the strong and the weak cannot confer validity where the
mandatory prescriptions of the law are breached or betrayed. y

F An analysis of this judgment which has been applied in the vari-
ous cases would indicate that section 21 only gives sanction if the
landlord makes a statement to the satisfaction of the court and the
tenant accepts that the landlord does not require the premises for a
limitecj period; this statement of the landlord must be bona fide. The
purpose must be residence. There must not be any fraud or collusion.
G There is a presumption of regularity. But it is open in particular facts >-
and circumstances of the case to prove to the satisfaction of the execut-
ing court that there was collusion or conspiracy between the land-
lord and the tenant and the landlord did not mean what he said or that
it was a fraud or that the tenant agreed because the tenant was wholly
unequal to the landlord. In the instant case none of these conditions
H were fulfilled. There is no evidence in this case that when the landlord
J.M. LAL v. RAMESH KHANNA [MUKHARJI, J.] 777

stated that he did not require the premises in question for a perticular A
period, he did not mean what he stated or that he made a false state-
ment. There was no evidence in this case at any stage that the tenant
did not understand what the landlord was stating or that he did not
accept what the landlord stated. There was no evidence that either the
tenant was in collusion or perpetrating any fraud with the landlord or
the tenant was unequal to the landlord in bargaining powers. It is B
I- manifest that there is no evidence to show that the Controller did not
apply his mind. If that is so then on the principle enunciated by this
Court in Noronah's case, this sanction cannot be challenged. It is not
necessary to state under section 21 the reasons why the landlord did
not require the premises in question for any particular period. Nor is
- there any presumption that in all cases the tenants are the weaker c
sections. The presumption is, on the contrary, in favour of sanction, it
is he who challenges the statement and the admission of the landlord
or the tenant who has to establish facts as indicated in Nagindas's case.

In V.S. Rahi and another v. Smt. Ram Chambeli, [1984] 2 SCR
290, this Court on the facts found that the permission under section 21 of D
the Act had been obtained by her on the basis of wrong statement, but
for which the permission would not have been accorded. These state-
ments which were in the nature of half truths were apparently made in
order to make good the plea that there was only a temporary necessity to
lease out the building for a short period and that there was a bona fide
anticipation that there would be a pressing necessity to reoccupy the E
premises at the end of the period, which were the two crucial factors
governing an order under section 21 of the Act. It was stated that the
appellants, in that case, who were the weaker of the two parties did not
question the truth of the statements made by the respondent when the
permission was granted. But such collusion, if any, between the two
unequal parties did not confer any sanctity on the transaction in ques- F
tion. The observations of this Court in that case must be understood in
the light of the facts mentioned by this Court. It was found in Rahi's
case that there were wrong statements made by the appellant when he
approached the Rent Controller. It was admitted before this Court
that it was a wrong statement. These were mentioned in pages 295-296
of the Report. What was urged was that the appellants being the G
tenants had colluded with the respondent. It was reiterated by this
Court, it is always open to the weaker of the two parties to establish
that the transaction was only a camouflage used to cover its true
nature. When one party could dominate over the will of the other, it
would not be a case of collusion but one of compulsion. The Court
relied on the observations of Lord Ellen borough in Smith v. Cuff, H
778 SUPREME COURT REPORTS [ 1987] 3 S.C.R.

[ 1817) 6 M & S 160 at 165 that it can never be predicted as pari de/icto
.~
A
where one holds the rod and the other bows to it. See the observations
of this Court at pages 297 and 298 of the Report. There is no evidence
in this case that there was any wrong or incorrect statement made by
the landlord nor is there any evidence that the tenant-respondent
herein was the weaker side of the bargain. In that view of the matter
B the respondent cannot get much assistance from this decision of this -I
Court.
~
This question was again considered by this Court in J.B. Vohra
v. India Export House Pvt. Ltd. and another, [1985] 2 S.C.R. 899
where Tulzapurkar, J. referring to Noronah's case observed that sec-
tion 21 carved out tenancies of particular category for special treat-
c ment and provided a special procedure that would ensure to the land-
-
)--
lord vacant possession of the leased premises forthwith at the expiry of
the fixed period of tenancy, evicting whoever be in actual possession.
Such being the avowed object of prescribing the special procedure,
service of a prior notice on the tenant upon receipt of the landlord's
D application for recovery of possession and inviting his objections
followed by an elaborate inquiry in which evidence might have to be ~
recorded would really frustrate that object. It will be vitiated because
it is procured by fraud practised by landlord for creating a limited
tenancy. If it is found that the initial order granting permission to
create limited tenancy was vitiated by fraud practised by the appelllant
E inasmuch as he had suppressed the fact that an earlier application for
such permission had been declined on the ground that premises had ,_,,,,, _
been kt out for commercial-cum-residential purposes and then there
would be no executable order pursuant to which any warrant for pos-
session could be issued under section 21 of the Act. In the instant case, y
there is no such collusion and therefore, the principle of Noronah's
F case would not be applicable. The ratio of that decision must be under-
stood in its proper light.

Section 21 of the Rent Act was examined by this Court in Smt.
Dhanwanti v. D.D. Gupta, [1986] 3 S.C.C. I. There was observed by
Pathak, J. as the learned Chief Justice then was, that it was possible
G for the owner of a premises, on looking to the immediate future, to >-
find that for certain reasons he was unable to occupy the premises
forthwith himself but that he may do so later in the not very distant
future. The mere fact that the owner has let out the premises after
obtaining permission under section 21 of the Act for a limited period,
and thereafter on the expiry of that period has found it necessary to
H obtain permission to let out the premises again for another limited
J.M. LAL v. RAMESH KHANNA [MUKHARJI, J,[ 779
.....
period cannot necessarily lead to the inference that from the very A
beginning the premises were available for letting out indefinitely. The
Rent Controller and the Rent Control Tribunal should have examined
the circumstances prevailing on each occasion when an application was
made under section 21. It was observed that assumption would not be
justified where there is no positive material to indicate that from the
j- very beginning there was never any intention on the part of the land- B
lord to occupy the premises himself. There was no such material in that
"t- case. On the contrary there was material showing that the landlady had
expectation that her son and his family would be in Delhi after two
years' period of tenancy. This is significant for the present issue. There
- is nothing to show that the permission of the Rent Controller was
obtained by practising fraud or that it could be regarded as a nullity or c
that material facts were concealed. The principle of that decision will
-f
apply much more in this case. It is observed in that decision that it
seems to have been ignored altogether that it is perfectly possible for
the owner of a premises, on looking to the immediate future, to find
that for certain reasons, he is unable to occupy the premises forthwith
himself but that he.may do so later in the not very distant future. It is D
~
not always that a man can plan his life ahead with any degree of
definiteness. Prevailing uncertainty in the circumstances surrounding
him may not permit clear-sighted vision into the future. The circum-
stances might justify his envisioning his need for the premises two o'r
three years later, and therefore applying for permission under section
21 of the Act to let out the premises accordingly. E
~
The facts are more stronger and clearer in support of the instant
case. Here there was no permission previously. This was first letting
y out. There was nothing which indicated that any statement was made
which was incorrect. We are of the opinion that sanction under section
21 in the instant case was not a nullity. The onus was on the tenant to F
show that it was so. He did not make any attempt to dislodge the
presumption in favour of the permission.

Learned counsel for the appellant also stressed befo~e us that
section 21 of the Rent Act was a complete code by itself. The order
..... was under section 21 of the Rent Act. No further question of lease or G
registered lease arose thereafter.
~

This question has been settled by series of decisions of the Delhi
High Court upon which people have acted for long. See the decision in
Kasturi Lalv. Shiv Charan Das Mathur, [1976] Rent Control Reporter
Vol. 8 703 where at pages 708-709, Misra, J. of the Delhi High Court H
780 SUPREME COURT REPORTS [1987] 3 S.C.R.

A had clearly indicated numerous cases where it was held that section 21
was a code by itself. The order of the permission is itself an authority;
no lease was necessary and if that is the state of law in Delhi, it is too
late in the day to hold otherwise. See the observations of this Court in
Raj Narain Pandey and others v. Sant Prasad Tewari & others, [ 1973 I 2
S.C.R. 835, where this Court observed that in the matter of the in-
B terpretation of a local statute, the view taken by the High Court over a
number of years should normally be adhered to and not to be dis-
turbed. A different view would not only introduce an element of un-
certainly and confusion but it would also have the effect of unsettling
transactions which might have been entered into on the faith of those
decisi-;ms. In Delhi transactions have been completed 'on the basis of
c permission and it was never doubted that there was any requirement of
-
any lease or any agreement subsequent to the order and the" same
required registration. It must be observed that in Noronah's case there
was no admission on oath nor was there any question of registered
lease.

D Numerous other decisions were cited before us but in the view '..
we have taken on the two basic points that the permission was valid
and the order permitting limited tenancy was not a mindless order but
one pa_ssed after application of the mind taking the two relevant facts
under section 21 of the Act into consideration, it is not necessary to
discuss these decisions any further. In view of the fact that section 21 is
E a code by itself, there was no question of any further agreement in
......___
writing which has to be registered arises. There is no merit in the -,
contention of the respondent.

There is another aspect of the matter which has to be borne in
mind. The tenant not only failed to establish any fact impeaching the
F order, he waited for the full term to take this point and did not contest
when the permission was obtained on a misrepresentation.

It was submitted by Shri Bhatia that in Delhi most of the trans-
actions have been done under section 21 on the assumption that after
order of the court no further or separate document or lease was re-
G quired to be executed or that such document or lease had to be regis-
tered. It w:as submitted that numerous transactions have taken place
on that basis. It was urged that if it is now found that is not the correct
position and the correct position in law is that there should be a lease
containing the terms of the lease being for 11 months, such enuncia-
tion of law should only be made applicable prospectively. Counsel for
H the appellant contended that otherwise it would have disastrous conse-
J.M. LAL v. RAMESH KHANNA [MUKHARJI, J.I 781 ....

quences of unsettling numerous decisions and unsettling many settled A
transactions between the parties. He drew our attention to the deci-
sion of this Court in J.C. Golak Nath & others v. State of Punjab and
another, [1967] 2 S.C.R. 762. If we had any doubt on the scope and
ambit of section 21, we might have considered this submission urged
on behalf of the appellant provided we were sure, factually that large
;t- number of transactions had been completed on the assumption that no B
further lease was required after the permission under section 21. Our

--· - attention was also drawn to the decision of the Privy Council and the
observation of Lord Blanesburgh in the case of Dhanna Mal and others
v. Rai Bahadur Lala Moti Sagar, A.LR. 1927 Privy Council 102. If we

- were inclined to the view that section 21 was not a code by itself but
required separate lease to follow it up then perhaps we might have C
considered the effect of the aforesaid decision and observations.

In aid of the submission that in order to be entitled to eviction
under section 14 of the Rent Act, the court had to be satisfied itself
that the statutory ground for eviction existed and that application of
satisfaction of the court could not be by-passed and circumvented by a D
compromise decree, reliance was placed on certain observations on a
decision in Ferozi Lal Jain v. Man Mal and another, [ 1970] 3 S.C.C.
181. In view of the facts of the particular case, we are of the opinion
that it is not necessary to discuss the said decision in detail. Numerous
decisions of the Delhi High Court were placed before us in support of
or in respect of contentions of the parties specially in support of con- E
tention that the Delhi Rent Act required a separate lease. The scope
and ambit of the Delhi Rent Act after the decision of Noronah's case
came up for consideration before a division bench of the Delhi High
Court in Vijay Kumar Bajaj v. lnder Sain Minocha, [1982] 2 Rent
Control Reporter 392. In that decision, in the light of section 21, the
following questions were posed: F

( 1) Whether the permission under section 21 of the Act is invalid
in view of Supreme Court judgment in S.B. Noronah's case (supra), if
reasons for not requiring the premises by the landlord for a particular
period are not disclosed in his application or his statement before the
. ~ Controller? G

(2) Whether before or after permission execution of any agree-
ment in writing to let the premises for the fixed period is necessary, if
so, whether such a document requires registration?

(3) Whether the proposed agreement of tenancy in writing sub- H
782 SUPREME COURT REPORTS (1987] 3 S.C.R.

A milted along with the applicatiol) under Section 21 of the Act, in this
appeal required registration?

The questions were answered by the High Court as follows:

(!) Not necessarily. The landlord or the tenant may be able to
B show that cogent reasons did exist or were within the knowledge of the · .~

-
parties as to why the landlord did not require the whole or a part of his
premises for a specified period.
'\
(2) No registration is necessary. The agreement in writing may
be entered into either before or after grant of permission.
c
(3) An agreement in writing submitted along with the applica·
tion under section 21 of the Act is really a proposed agreement. It
comes into effect only after the grant of permission under section 21 of
the Act. It does not require registration.

D We are in agreement with the views of the Delhi High Court.

Large number of decisions of this Court were cited in support of
the contention that eviction decree passed in contravention of the
statutory conditions or passed without consideration whether the
statutory conditions are fulfilled or not are not binding and cannot be
E enforced. See Bahadur Singh and another v. Muni Sub rat Dass and
another, [1969] 2 S.C.R. 432 and Kaushalya Devi and others v. Shri .·~
K.L. Bansal, [1969] 2 S.C.R. 1048. '

We are, however, of the opinion that in view of the facts found in
the instant appeal before us, these decisions are not of any relevance.
F
Similarly, our attention was drawn to the observations of this
Court in Mansaram v. S.P. Pathak and others, (1984) 1 S.C.R. 139 and
State of Maharashtra v. Narsingrao Gangaram Pimple, (1984) 1 S.C.R.
621. In the view we have taken and the real controversy in this case,
this contention is no longer open.
G
On the unregistered lease question, our attention was drawn to a
decision of the Delhi High Court in Jagat Taran Berry v. Sardar Sant
Singh, A.LR. 1980 Delhi 7. As we have held that section 21 was a code
by itself and no further document was required, it is not necessary to
pursue the matter any further.
H
l.M. LAL v. RAMESH KHANNA [MUKHARJI, J.] 783

Similarly, our attention was drawn to a division bench judgment A.
of the Calcutta High Court in the case of Ram Abatar Mahato v. Smt.
Shanta Bala Dasi and others, A.I.R. 1954 Calcutta 207 on the question
of the terms and extent of section 107 of the Transfer of Property Act
and whether a document in performance of an agreement had to be
registered or not. As mentioned hereinbefore in the view we have
t taken, it is not necessary for us to pursue this aspect any further as to B
the question whether oral evidence should be introduced to explain
the terms of a document embodied in writing.

Our attention was drawn to certain observations of this Court in
State of Uttar Pradesh v. Singhara Singh and others, [1964] 4 S.C.R.
485 butthe same are not relevant for our consideration in the present c
controversy in the light in which we have understood it. Equally same
is the decision in respect of the observations of Fazal Ali, J. of the
Jammu and Kashmir High Court in Ishwar Dutt and another v. Sunder
Singh and others, A.I.R. [1961] J & K 45 and the observations of this
Court in Sri 5 Sita Maharani and others v. Chhedi Mahto and others,
A.l.R. [1955] S.C. 328. D

In the aforesaid light we are of the opinion that the High Court
was in error in the view it took in setting aside the decision in the
second appeal. The appeal is, therefore, allowed and the order and
judgment of the High Court of Delhi dated 19th of July, 1985 are set
aside and the order and judgment of Rent Control Tribunal dated 28th E
of August, 1980 are restored.. The appellant is entitled to the costs of
this appeal.

P.S.S. Appeal allowed.