Holding

The appellants, though deemed tenants, failed to deposit the full rent and interest as required by Section 39 and therefore were not entitled to its protection, resulting in the dismissal of the appeal.

Summary

The Supreme Court considered an appeal by the heirs of a deceased tenant (the appellants) against an eviction decree. The landlords had terminated the tenancy and sued for eviction, rent, damages and mesne profits. After the U.P. Urban Building (Regulation of Letting, Rent and Eviction) Act, 1972 came into force, the appellants sought protection under Section 39 by depositing arrears of rent, but they paid only Rs. 80 per month against the court‑determined rent of Rs. 100 and failed to pay interest on delayed payments. The Court examined whether the heirs qualified as "tenants" under Section 3(a) and whether the partial, untimely deposits satisfied the conditions of Section 39. It held that although the heirs were deemed tenants, they did not comply with the statutory requirement of depositing the full rent and interest within one month, and therefore could not claim the benefit of Section 39. The eviction decree was upheld and the appeal dismissed.

Issues considered

Whether the heirs of a deceased tenant are deemed "tenants" under Section 3(a) of the U.P. Urban Building Act for the purpose of invoking Section 39.
Whether the partial and delayed deposit of rent at a reduced rate, without the requisite interest, satisfies the conditions of Section 39 to obtain protection from eviction.
Whether the termination of the tenancy prior to the commencement of the Act bars the heirs from claiming benefits under Section 39.

Subjects

rent controlevictiontenancystatutory tenantSection 39deposit of rentinterestheirslandlord

Judgment

OM WAT! GAUR AND ORS. A
v.
JITENDRA KUMAR AND ORS.

OCTOBER 31, 2002

[R.C. LAHOTI AND S.N. VARIAVA, JJ.] B

Rent Control and Eviction:

- U.P. Urban Building (Regulation of letting, Rent and Eviction) Act,
19~~~~~~
Eviction petition filed in the Civil Court under the old Act-On ground
c
of non-payment of rent etc.-Benefits no-eviction conferred on certain
categories of tenants after deposit of rent, interest and cost of suit under the
New Act-Section 39-Entitlement !<>-Held, since there was a short deposit D
of rent and interest, tenant is not entitled to such benefits.

Respondent-landlords determined the tenancy by serving a notice to
the tenant. Landlords filed eviction petition and also for recovery of rent,
damages and mesne profits. Tenant deposited arrears of rent for certain
period at a rate less than the actual rate of rent. Tenant died during the E
pendency of the suit and appellants (heirs of tenants) were brought on
record. Jn the !"eanwhile U.P. Urban building (Regulations of Letting,
Rent and Eviction) Act, 1972 was enacted. Vide Section 39 of the Act,
benefits no eviction on certain categories of tenants in the pending
proceeding had been conferred on depositing arrears of rent, interest
thereon and cost of the suit to the Landlord. Appellants filed applications F
praying for grant of such benefits but Court decreed the suit in favour of
landlords holding that there was short deposit of rent. Revision petition
filed by the appellants was allowed. Aggrieved, respondent-landlords
successfully filed writ petition in the High Court. Hence this appeal by
the tenant.
G
It was contended for the appellants that arrears of rent was deposited
before coming into force of the new Act and differential amounts and
interest were deposited thereafter. Therefore, provisions under Section 39
of the Act were duly complied with for getting benefit of no eviction.
17 H
18 SUPREME COURT REPORTS (2002] SUPP. 4 S.C.R.

A On behalf of the respondent, it was submitted that appellants'
tenancy had been terminated by notice and after coming into force of the
new Act, they were not tenants to claim benefits under Section 39 of the
Act.

Dismissing the appeal, the Court
B
HELD: 1.1. The provisions of the concerned statute have to be looked
at in order to ascertain the rights available under the statute. The
definition of "tenant" as contained in Section 3(a) of the U.P. Urban
Building (Regulation of Letting, Rent and Eviction) Act includes the heirs
and legal representatives residing with the tenant at the time of his death.
C Admittedly, the Appellants were residing with the tenant at the time of
his death. On coming into force of the new Act, even though the tenancy
had been terminated, rent was payable on behalf of the tenant and,
therefore, he would have been a tenant. On his death, the appellants who
were residing with him at the time of his death, would be tenants.
D (25-C-D)

1.2. The deposits of rent at the rate of Rs. 80 per month were not on
time. Besides interest had not been deposited on delayed payment of rent.
The first deposit was on 29th April, 1967 (for the period from 1st October,
1966 to 31st March, 1967). Thus from October 1966 to March 1967 there
E had been no deposits. Interest would have been payable on this delayed
payment. Admittedly this interest amount had not been deposited. The
second deposit was only on 6th October, 1967 (for the period from 1st
April, 1967 to 30th September, 1967). Even here no interest had been
deposited for the delayed payments. The third deposit was on 25th April,
F 1968 (for the period from 1st October, 1967 to 31st March, 1968). Here
again interest had not been deposited for the delayed payments. More
importantly, the Appellants chose to deposit at the rate of Rs. 80 per month
when the actual rent was Rs. 100 per month. By choosing to deposit at
the rate of Rs. 80 per month they took a risk that if the Court did not
accept their contentions there would be no full deposit. The trial Court in
G its uecree held that the rent was Rs. I 00 per month. This portion of the
decree has not been challenged. Once it was held that the rent was Rs.
I 00 there was no deposit of the full rent within one month of the coming
into force the said Act as envisaged by Section 39. Thus on this ground
the High Court was right in confirming the decree for eviction.
(25-H; 26-A-C)
H
-. OM WA Tl GAUR ,. JITJ-:NDRA KUMAR [S.N. VAR/AVA. J.J

Damadila! v. rarashram. 119761 4 SCC 855, distinguished.
19

A
Anand f\.'h·as Prh·are Ltd. \', ,.4nondii Kalyanji Pedhi and ()rs., 119641 -&
SCR 852 and .Jagdish Chander Chatte1jee v. Sri Kishon. 11972[.2 SCR 461,
referred to.

CIVIL APPELLATE JURISDICTION Civil Appeal No. 516 of 8
1999.

From the Judgment and Order dated 30.7.1998 of the Allahabad
High Court in C.M.W.P. No. I 1858 of 1982.

Sudhir Kr. Gupta and Anurag Pandey for the Appellants. c
R.D. Upadhaya, Ms. Arti Upadhaya, Syed Ali Ahmad, Syed Tanweer
Ahmad and Girdhar G. Upadhaya for the Respondents.

The Judgment of the Court was delivered by
D
S.N. VARIAVA, J. This Appeal is against a Judgment dated 30th July,
1998.

Briefly stated the facts are as follows:

The Appellants are the wife, son and daughter of one A.K. Gaur. The E
said A.K. Gaur was the tenant of the Respondents I and 2 (hereinafter called
landlords). The premises had been given on rent to said A.K. Gaur at a
monthly rent of Rs. ! 00. On 29th September, I 966 the landlords sent a notice
terminating the tenancy of A.K. Gaur with effect from the 31st day of the
receipt of the notice. The tenancy was terminated on the ground that the rent
had not been regularly paid. By his letter in reply dated 6th October, 1966 F
A.K. Gaur claimed that the rent up to September, 1966 had already been
paid. The said A.K. Gaur claimed that the rent was only Rs. 80 per month
as certain facilities had been withdrawn.

The landlords then filed Suit No. 2385 of 1966 for eviction, for recovery G
of rent and for damages and rnense profits. A.K. Gaur filed an application
seeking permission to deposit the rent in the Court. This permission was
granted by the Court. On ?.9th April, 1967 A.K. Gaur deposited the rent due
and payable for the period from Isl October, 1966 to 31st March, 1967. On
6th October, 1967 he deposited rent for the period from Isl April, 1967 to
30th September, 1967. On 25th April. 1968 he deposited rent for the period H
20 SUPREME COURT REPORTS [2002] SUPP. 4 S.C.R.

A from I st October, 1967 to 31st March. 1968. All these deposits were at the
rate of Rs. 80 per month. The landlords then applied that they be allowed to
withdraw the amounts lying deposited in Court. A.K. Gaur opposed this
application on the ground that the landlords could only withdraw provided
they accepted that Rs. 80 per month was the rent of the premises. The landlords,
B therefore, did not pursue their application and no order was passed thereon.

On 15th January, 1970 A.K. Gaur died. The Appellants were brought
on record as his heirs. On 15th July, 1972 the U.P. Urban Buildings (Regulation
of Letting, Rent and Eviction) Act, 1972 (hereinafter refereed to a~ the said
Act) was enacted. Sections 3(a) and 39 of the said Act read as follows:
c "3. Definitions.-In this Act, unless the context otherwise requires-

(a) "tenant", in relation to a building, means a person by whom its
rent is payable, and on the tenant's death-

(!) In the case of a residential building, such only of his heirs
D as normally resided with him in the building at the time of
his death;

(2) In the case of a non-residential building, his heirs;

xxx xxx xxx
E 39. Pending suits for eviction relating to buildings brought under
regulation for the first time. In any suit for eviction of a tenant from
any building to which the old Act did not apply, pending on the date
of commencement of this Act, where the tenant within one month
from such date of commencement or from the date of his knowledge
F of the pendency of the suit, whichever be later, deposits in the court
before which the suit is pending, the entire amount ofrent and damages
for use and occupation (such damages for use and occupation being
calculated at the same rate as rent) together with interest thereon at
the rate of nine per cent per annum and the landlord's full cost of the
suit, no decree for eviction shall be passed except on any of the
G grounds mentioned in the proviso to su_b-section ( 1) or in clauses (b)
to (g) of sub-section (2) of Section 20, and the parties shall be entitled
to make necessary amendment in their pleadings and to adduce
additional evidence where necessary.

Provided that a tenant the rent payable by whom does not exceed
H twenty-five rupees per month need not deposit any interest as
OM WA Tl GAUR v. JITENDRA KUMAR [S.N. VARIAVA . .I.] 21

aforesaid.'' A
It is an admitted position that the old Act did not apply to the concerned
premises. The Appellants made an application under Section 39 of the said
Act claiming that they had deposited all the rents and calling upon the landlords
to confirm the same. The landlords filed a reply denying that all the rents had
been deposited. The landlords however did not set out what had not been B
deposited. The Court, therefore, called upon the Landlords to indicate what
according to them had not been deposited. The landlords then gave particulars
indicating that the deposits had only been made at the rate of Rs. 80 per
month whilst the rent was Rs. 100 per month. They also indicated that there
had been delay in deposits and that interest had not been deposited in respect C
thereof. The landlords claimed that the Appellants had deposited Rs. 1491
less and, therefore, were not entitled to the benefit of Section 39. The Landlords
also claimed that as the tenancy of A.K. Gaur had been terminated the
Appellants were not entitled to the benefit of Section 39.

On 12 August, 1980 the suit filed by the landlords was decreed. It was D
held that the rent for the premises was Rs. 100 per month. It was held that
there was a short deposit and that, therefore, the Appellants could not claim
the benefit of Section 39. It was also held that the Appellants were not the
tenants under the said Act and, therefore, not entitled to the benefit of Section
39.
E
Civil Revision No. 128of1980 filed by the Appellants was allowed by
a Judgment dated 31st July, 1982. In this judgment it has been held that the
Appellants were tenants within the meaning of the said Act. It was held that
they had deposited all the amounts and were entitled to the benefit of Section
39.
F
The landlords then filed Writ Petition 11858 of 1982 in the High Court
of Allahabad. This Writ Petition came to be allowed by the impugned Judgment
dated 30th July, 1998. It is held that rent, at the rate of Rs. 100 per month,
I had not been deposited and the entire amount of the rent had not been
deposited. It is held that the deposits at the rate of Rs. 80 per month were not G
made on time and interest for the delayed period had also not been deposited.
The Court, therefore, set aside the Order dated 31st July, 1982 and restored
the decree of the trial Court. The question whether the Appellants could
claim the benefit of Section 39 was not answered on the footing I.hat even if
th.e said Act applied the Appellants had not complied with the requirements
of Section 39. H
22 SUPREME COURT REPORTS [20021 SUPP. 4 S.C.R.

A Mr. Sudhir Kumar Gupta, the learned counsel for the tenant-Appellants
has submitted that. according to the Appellants, the rent was Rs. 80 per
month. He submitted that even prior to the coming into force of the said Act
the Appellants had deposited the rent in Coutt. He submitted that at the time
the said Act came into force there were no arrears. He submitted that, as there
were no arrears, no interest was payable. He pointed out that after the said
B Act came into force, the Appellants had deposited the difference of Rs. 20
per month and interest thereon. He submitted that, therefore, the Appellants
have fully complied with Section 39 of the said Act.

Mr. Sudhir Kumar Gupta relied upon the definition of "tenant" under
C Section 3(a) of the said Act. He submitted that the heirs of the tenant were
deemed to be the tenants under said Act.

Mr. Sudhir Kumar Gupta relied upon the case of Damadilal v.
Parashram reported in (1976) 4 SCC 855, wherein it has been held as follows:

"I I. We find it difficult to appreciate how in this country we can
D
proceed on the basis that a tenant whose contractual tenancy has
determined but who is protected against eviction by the statute, has
no right of property but only a personal right to remain in occupation,
without ascertaining what his rights are under the statute. The concept
of a statutory tenant having no estate or property in the premises
E which he occupies is derived from the provisions of the English Rent
Acts. But it is not clear how it can be assumed that the position is the
same in this country without any reference to the provisions of the
relevant statute. Tenancy has its origin in contract. There is no dispute
that contractual tenant has an estate or property in the subject-matter
of the tenancy, and heritability is an incident of the tenancy. It cannot
F be assumed, however, that with the determination of the tenancy the
estate must necessarily disappear and the statue can only preserve his
status of irremovability and not the estate he had in the premises in
his occupation. It is not possible to claim that the "sanctity" of contract
cannot be touched by legisl::!tion. It is therefore necessary to examine
G the provisions of the Madhya Pradesh Accommodation Control Act,
1961 to find out whether the respondents' predecessor-in-interest
retained a heritable interest in the disputed premises even after the
termination of their tenancy.

12. Section 2(1) of the Madhya Pradesh Accommodation Control
H Act, 1961 defines 'tenant' to mean, unless the context otherwise
OM WAT! GAURv. .JITENDRAKUMAR[S.N. VARIAVA ..I.) 23
requires a person by whom or on whose account or behalf the rent of A
any accommodation is or, but for a contract express or implied, would
be payable for any accommodation and includes any person occupying
the accommodation as a sub-tenant and also any person continuing in
possession after the termination of his tenancy whether before or
after the commencement of this Act; but shall not include any person B
against whom any order or decree for eviction has been made.

The definition makes a person continuing in possession after the
determination of his tenancy a tenant unless a decree or order for
eviction has been made against him, thus putting him on par with a
person whose contractual tenancy still subsists. The incidents of such C
tenancy and a contractual tenancy must therefore be the same unless
any provision of the Act conveyed a contrary intention. That under
this Act such a tenant retains an interest in the premises, not merely
a personal right of occupation, will also appear from Section 14 which
contains provisions restricting the tenant's power of subletting. Section
14 is in these terms: D
Section 14. Restrictions on sub-letting.· (I) No tenant shall, without
the previous consent in writing of the landlord-

(a) sub-let the whole or any part of the accommodation held by him
as a tenant; or.
E
(b) transfer or assign his rights in the tenancy or in any part thereof.
(2) No landlord shall claim or receive the payment of any sum as
premium or pugree or claim or receive any consideration
whatsoever in cash or in kind for giving his consent to the sub-
letting of the whole or any part of the accommodation held by F
the tenant.

There is nothing to suggest that this section does not apply to all tenants as
defined in Section 2(i). A contractual tenant has an estate or interest in
premises from which he carves out what he gives to the sub-tenant. Section
14 read with Section 2( I) makes it clear that the so-called statutory tenant has G
the right to sublet in common with a Contractual tenant and this is because
he also has an interest in the premises occupied by him. Considering the
position of the sub-tenant of a statutory tenant in England Lord Denning said
in Solomon v. Orwell, (1954) I All ER 874:

When a statutory tenant sublets a part of the premises, he does not H
24 SUPREME COURT REPORTS [2002] SUPP. 4 S.C.R.

A thereby confer any estate or interest on the sub-tenant. A statutory
1 "
tenant has no estate or interest himself, and he cannot carve something
out nothing. The sub-tenant, like the statutory tenant, has only a
personal right or privilege. In England the statutory tenant',s right to
sublet is derived from specific provisions of the Acts conceding this
right to him; in the Act we are concerned with in this appeal, the right
B flows from his status as a tenant. This is the basic difference between
the English Rent Restrictions Acts and the Act under consideration
and similar other Indian statutes. In a Special Bench decision of the
Calcutta High Court, Krishna Prasad Bose. v. Smt. Sarajubala Dasi,
65 Cal WN 293, 297-298, Bachawat, J., considering the question
C whether a statutory tenant continuing in occupation by virtue of the
West Bengal Premises Rent Control (Temporary Provisions) Act, 1950
could sublet the premises let to him, said:

The Rent Control and Tenancy Acts create a special world of
their own. They speak of life after death. The statutory tenancy arises
D phoenix-like out of the ashes of the contractual tenancy. The
contractual tenant may die .but the statutory tenant may live long
thereafter. The statutory tenant is an ex-tenant and yet he is a tenant.

The concept of statutory tenancy under the English Rent Acts and
under the Indian statutes like the one we are concerned with in this
E appeal rests on different foundations. It must therefore be held that
the precessors-in-interest of the present respondents had a heritable
interest in the premises and consequently the respondents had the
right to prosecute -the appeal in the High Cpurt. Mr. Gupta's first
submission thus fails."

F He also relied upon the judgment in the case of Mam Chand Pal v. Shanti
Agarwal (Smt.) reported in [2002] 3 SCC 49. In this case it has been held that
a very rigid or technical view should not be taken in respect of deposit of
rent. It has been held that if the tenant has substantially complied with the
provisions then the benefit of the statute should be given to the tenant. Mr.
G Sudhir Kumar Gupta submitted that the Rent Control Act was a beneficial
legislation and, therefore, it must be liberally interpreted in favour of the
tenant.

On the other hand, Mr. Upadhyaya, the learned counsel for the landlord-
Respondents submitted that the Appellants were not the tenants. He submitted
H that the tenancy of A.K. Gaur had been terminated by a Notice dated 29th
OM WAT! GAUR 1•. JITENDRA KUMAR [S.N. VARIAVA . .I.] 25

September, 1966. He submitted that thereafter Shri A.K. Gaur was not a A
'' tenant. He subn1itted that at the tin1e \\'hen the said Act ca111e jnto force Shri
A.K·. Gaur \\'ould not have been a tenant as no rent \Vas payable by hin1: l~e
submitted that. therefore. the Appellants also would not be tenants. He relied
on the cases of Anand 1Vivas Pr irate Ltd. v. rlnanc(ji Ka~rani Pedhi and Ors ..
reported in (1964] 4 SCR 852 and Jagdish Chander Challerjee v. Sri Kishan B
reported in [ 1972] 2 SCR 46 I. In both these cases it has been held that a
person in occupation after tennination of tenancy has no estate or interest in
the premises occupied by him.

We are unable to accept this submission of Mr. Upadhyaya. In Jagdish
Chander 's case the ratio laid down in Anand Niva 's case was approved. In C
Damadda/'s case (supra) both these decisions have been considered and the
principles laid down therein have been disapproved Damadi/a/ 's case lays
down that the provisions of the concerned statute have to be looked at in
order to ascertain what the rights are available under the statute. The definition
• of a "tenant" as contained in Section 3(a) of the said Act includes the heirs
and legal representatives residing with the tenant at the time of his death. D
Admittedly, the Appellants were residing with A.K. Gaur at the time of his
death. On the coming into force of the new Act, even though the tenancy had
' been terminated, rent was payable on behalf of Shri A.K. Gaur and, therefore,
he would have been a tenant On his death the Appellants who were residing
with him at the time of his death would be tenants.
, E
Mr. Upadhyaya then submitted that the High Court was right in
concluding that even if Section 39 applied the Appellants had not deposited
• the entire amount of the rent and interest. He pointed out that the trial Court
had fixed the rent at Rs. I 00 per month. He submitted that the Appellants
took a risk in depositing rent by calculating it at the rate of only Rs. 80 per F
month. He submitted that once the trial Court fixed the rent at Rs. 100 per
.. month there was shortfall in deposit and thus the Appellants could not be said
to have deposited the entire amount ofrent. He submitted that even otherwise
the interest had been paid only on the difference of Rs. 20, even though the
deposits at rate of Rs. 80 per month were not on time. He submitted that,
therefore, the High Court was right in confirming the decree of eviction G
passed by the trial Court.

We find that the deposits of rent at the rate of Rs. 80 per month were
not on time. The first deposit was on 29th April, I 967 (for the period from
!st October, 1966 to 31st March, 1967). Thus from October 1966 to March
1967 there had been no deposits. Interest would have been payable on this H

'
26 SUPREME COURT REPORTS [2002] SUPP. 4 S..C.R.

A delayed payment. Admittedly this interest amount had not been deposited.
The second deposit was only on 6th October, 1967 (for the period from I st ''
April, 1967 to 30th September, 1967). Even here no interest had been deposited
for the delayed payments. The third deposit is on 25th April, 1968,.-(for the
period from I st October, 1967 to 31st March, 1968). Here again interest had
not been depos°ited for the delayed payments. More importantly, the Appellants
B chose to deposit at the rate of Rs. 80 per month when the actual rent was Rs.
I 00 per month. By choosing to deposit at the rate of Rs. 80 per month they
took a risk that if the Court did not accept their contentions there would be
no full deposit. The trial Court in its decree dated 12th August, 1980 held
that the rent was Rs. I 00 per month. This portion of the decree has not been
C challenged. Once it was held that the rent was Rs. I 00 there was no deposit
of the full rent within one month of the coming into force the said Act as
envisaged by Section 39. Thus on this ground the High Court was right in
confirming the decree for eviction.

We, therefore, see no reason to interfere. The Appeal stands dismissed
D with no order as to costs.

Mr. Sudhir Kumar Gupta applies for time to enable his clients· to vacate.
We grant time of 4 months from today for the Appellants to vacate the
premises on their filling in this Court within 3 weeks from today the usual
undertaking.
E
S.K.S. Appeal dismissed.