Holding

The application under Section 25 is barred by Order IX Rule 9 CPC and the transfer of tenancy rights, even if voluntary, is covered by Section 14(b) of the Delhi Rent Control Act, so the respondent is not a tenant.

Summary

The landlord (appellant) had a lease with Laxmi Bank, which was declared the real tenant in a 1948 suit. After the bank was wound up, the Official Liquidator sold the tenancy rights to respondent No.1, who took possession in February 1961. The landlord obtained a decree for eviction of the bank on 31 July 1961, and respondent No.1 later sought relief under Section 25 of the Delhi Rent Control Act to recall the warrant of possession. The Supreme Court held that the earlier dismissal of respondent’s suit for default of appearance barred the Section 25 application under Order IX Rule 9 of the CPC, and that the transfer of tenancy rights, even if voluntary, fell within the mischief of Section 14(b) of the Delhi Rent Control Act, rendering respondent not a tenant. Consequently, the respondent’s application was dismissed and the landlord’s appeal was allowed. The Court also granted respondent a limited time to vacate the premises on condition of filing an undertaking.

Issues considered

The dismissal of the earlier suit of the respondent for default of appearance under Order IX Rule 9 CPC bars a subsequent application under Section 25 of the Delhi Rent Control Act.
Whether the transfer of tenancy rights by the Official Liquidator, even if voluntary, falls within the prohibition of Section 14(1)(b) of the Delhi Rent Control Act.

Legislation cited

Code of Civil Procedure, 1908s. Order IX Rule 9
Delhi Rent Control Acts. 14(b), s. 25

Subjects

Delhi Rent Control ActSection 25Section 14(b)tenancy transferOfficial LiquidatorOrder IX Rule 9res judicataevictionlandlord-tenantsub-leaseassignmentSupreme Court

Judgment

444

A PARASRAM HARNAND RAO
v.
SHANTI PRASAD NARINDER KUMAR JAIN & ANR.
April 10, 1980
B [S. MURTAZA FA.ZAL ALI AND P. S. KAILASAM, JJ.]

Delhi Rent Control Act, Section 25 read with Order IX Rule 9 C. P. C.,
scope of-Whether the dismissal of the earlier suit of respondent-tenant for
default of appearance under Ordex IX Rule 9 C. P. C. a bar for an application
under section 25 of the Delhi Rent Control Act.

C Transfer of tenancy rights by the Official Liquidator, whether voluntary and _l__
did not come under the mischief of section 14(1) (b) of the D<lhi Rent Con-
trol Act.

The appellant landlord executed a .lease in respect of the disputed premises
in favour of respondent 2 for three years as far back as 1-4-1942. In 1948,
a suit was brought by the appellant for eviction of the tenant for non payment,
D of rent on the ground of conversion of the user of the premises. The suit for
possession was however dimissed but a decree dated 31-11-1948 for arrears of
rent was passed and it was held that Laxmi Bank was the real tenant. Subse-
quently, the Bombay High .Court ordered the Bank to be wound up and in the
winding up proceedings, the High Court appointed an Official Liquidator who
on 16-2-1961 sold the tenancy rights to respondent No. 1. The sale was con-
firmed by the High Court on the same d~te and as a result thereof respondent
E No. 1 took possession pf the premises on 24-2-1961. On 5-4-1961, the
landlord appellant filed ao application under the Delhi Rent Control Act for
eviction of Laxmi Bank. On 31-7-1961, a decree for eviction was passed in
favour of the appellant. On 22-1-1963, respondent No. 1 filed a suit for decla-
ration that he ,was a ten'.lnt Of the landlord appellant. The suit was dismissed
for non-prosecution on 5-5-1964 and an application to set aside the ex parte order
was also dismissed and the appeal against that order also failed. Thereafter
F respondent No. 1 filed an application under Section 25 Oil' the Delhi Rent Con-
trol Act for recalling the warrant of possession issued by the Court in pursuance
of the decree dated 31-7-1961 in favour of the appellant. The Rent Controller
allowed it on 20-12-1966. An appeal to the Rent Controller Tribunal was .,f_
ordered by order dfited 25-11-1968 in favour of the appellant A second appeal
filed by respondent No. 1 to the High Court was allowed in his favour and the
Rent Controller's order allowing recalling of the warrant of possession was -4
G restored. Hence the appeal by special leave by the landlord.

Allowing the appeal, the Court
HEID : 1. The application of respondent No. 1 under Section 25 of the
Delhi Rent Control Act is clearly barred by the principle contained in order
IX Rule 9 Civil Procedure Code. It was the appellant who brought the pre-
vious suit which resulted in a decree for eviction of the tenant on 31-7-1961-a
8 date when the Ist respondent had already taken possessicin of the premises by
virtue of transfer made by the Official Llquidator. There is nothing to show
that respondent No. 1 was a tenant within the meaning of Delhi Rent Control
P. H. RAO v. SHANTI PRASAD (Fazal Ali, J.) 445

Act so as to· maintain an application under section 2S of the Act, when in A
fact he was an unlawful sub-lessee. [447A, E, F-G]

Suraj Ratan Thirani and Ors. v. Aza1nabad Tea Co. and Ors. {1964) 6
S. C. R. 192; applied,

2. The language of section 14(b) of the Delhi Rent Control Act is wide
enough not only to include any sub-lease but even an assignment or any other B
mode by which possession of the tenanted premises is parted. In view of the
wide amplitude of s, 14 (b), it does not exclude even in involuntary sale,
[4480-EJ

In the instant case, the official Liquidator had merely stepped into the
shoes of Laxmi Bank which was the original tenant and even if the official
liquidator had transferred the tenancy interest to respondent No. 1 under the C
order of the Court, it was on behalf of the original tenant. It was undoubtedly
a voluntary sale which clearly fell within the mischief of s. 14 (1\ (b) of the
De1hi Rent Control Act. Assuming that the sale by the Official Liquidator was
an involuntary sale, then it undoubted\ y beCame an assignment as provided for
by s. 14 (b) of Delhi Rent Control Act. [448A-C]

Krishna Das Nandy v. Bidhan Chandra Roy, A.I.R. 1959 Cal. 181) Over• D
rnled.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1085 of 1970.
Appeal by Special Leave from the Judgment and Order dated
17. 3. 1969 of the Delhi High Court in SAD No. 2/69.
f E
P. R. Mridul and 0. P. Sharma for the Appellant.

S. K. Bisaria for the Respondent.
The Judgment of the Court was delivered by
FAZAL Au, J. This appeal by special leave is directed against a (I'
judgment of the Delhi Court and arises out of ,an application filed
by Respondent No. 1 who claimed to be the .te)J.ant of the appellant,
recalling the warrant of possession issued by the Controller in pur-
suance of a decree dated 31-7-1961 passed against the 1st resrondent.

The case had a rather chequered career having passed through G
several phases. To begin with the landlord-appellant executed a lease
in respect of the disputed premises in favour of Respondent No. 2 for
three years as far back as 1.4.1942. In 1948, a suit was brought
by the appellant for eviction of the tenant for non-payment of rent
on the ground of conversion of the user of the premises. The suit
for possession was however dismissed but·a decree dated 31. 11. 1948 B
for arrears of rent was passed and it was held that Laxmi Bank was
the real tenant. Subsequently, the Bombay High Court ordered the
446 SUPREME COURT REPORTS [1980) 3 s.c.it.

A' Bank to be wound up and in the winding up proceedings, the said
High Court appointed an Official Liquidator who on 16. 2. 1961 sold
the tenancy rights to Respondent No. 1-S. N. Jain. This sale was con-
firmed by the High Court on the same date and as a result 'thereof
respondent No. 1 took possession of the premises on 24.2.1961. On
5. 4. 1961, the land-lord-appellant filed an application under the Delhi
Rent Control Act for eviction of Laxmi Bank. On 31. 7. 1961, a
decree for eviction was passed in favour of the landlord-appellant. On
23-1-1963. Respondent No. 1 filed a suit for a declaration that he
was a tenant of the landlord-appellant. This suit was dismissed for
non-prosecution on 5.5.1964 and an application to set aside the ex- _..__
parte decree was also dismissed and the appeal against that order also
failed. Thereafter Respondent No. 1 filed an application under s. 25
of Delhi Rent Control Act (hereinafter referred to as the Act) for re-
calling the warrant of possession issued by the Court in pursuance of
the decree dated 31. 7. 1961 in favour of the landlord.
The present appeal arises out of these proceedings. The Rent
D Controller allowed the application and recalled the warrant of possess-
ion by its Order dated 20. 12. 1966. The matter was then taken up
by the landlord in appeal to the Rent Control Tribunal which _by its
Order dated 25. 11. 1968 reversed the order of the Rent Controller
and dismissed the tenant's application. A second appeal against the
E order of Tribunal was then filed by the tenant to the High Court which
reversed the order of the Rent Control Tribunal and restored the
order of the Rent Controller, hence this appeal by special leave.
Mr. Mridul appearing for the appellant challenged before us the
findings of the High Court on point nos. 1 & 3 which are formulated
at page 91 of the judgment of the Delhi High Court. These points
F may be extracted thus : -
"(!) The application made by the appellant before the
High Court under section 25 was not barred by reason of the
dismissal of the appllant's suit for default of appearance
under Order IX Rule 9, C.P.C.
(3) The transfer to the appellant by th~ Official Liquida-
tor of the tenancy rights being voluntary did not come
within the mischief of section 14(1 )(b) of the Act.
In the first place it was argued that so far as point Ne. 1 is con-
cerned, the High ,Court was wrong in holding that the application of
ti Respondent No. 1 was not barred by the reason of the dismissal of
the appellant's suit for setting aside the ex-parte decree by the principle
of 'Res Judicata or Order IX Rule 9 C.P.C. It was contended tha-
P. H. RAO v. SHANTI PRASAD (Fazal Ali,!.) 447

even if. the previous suit filed by respondent No. ,1 for declaration of
his status as a tenant was dismissed for default but as the application
for setting aside the decree also failed, there was an adjudication
against the then plaintiff-respondent No. 1 and therefore the present
suit was clearly barred by the principles pf Res Judicata or Order IX
A
Rule 9. At any rate there can be no escape from the posiliP'n that
the application of respondent No. 1 would be clearly barred by the
principle contained in Order IX Rule 9. C.P.C. In case of Suraj Ratan
Thirani & Ors. v. The Azamabad Tea Co. & Ors.(') this Court held
thus:
"We are not however impressed by the argument that the
ban imposed by 0. IX, r. 9 creates merely p. personal bar c
or estoppel against the particular plaintiff suing on the same
cause of action and leaves the matter at large for those claim-
ing under him. Beyond ·the absence in 0. IX, r. 9· of the
words referring "to those claiming nnder the ,plaintiff" there
is nothing to warrant this argument. It has neither principle,
nor logic to commend it • . . . . . . . The rule would obviously D
have no value and the bar imposed by it would be rendered
meaningless if the plaintiff whose suit was dismissed for de-
fault had only to transfer the property to another and the
latter was able to agitate rights which his vendor was pre-
cluded by law from putting forward."
f E
In the instant case it was appellant who brought the previous
suit which resulted in a decree fpr eviction of the tenant on 31-7-1961-
a date when the 1st respondent had already taken possession of the
premises by virtue of transfer tnade by the Official Liquidator. Thus
the identity of the subiect matter being substantially the same, this
case clearly falls within the ambit of the ratio in the case supra. On
this ground alone therefore the appellant is entitled to succeed because
the High Court with due respect does opt appear to · have properly
construed the scope of Order IX Rule 9 C.P .C. There is however noth-
ing to show that respondent No.1 was tenant within the meaning of
• Rent Control Act so as ·to maintain an application under s. 25 of the
Act when in fact he was an unlawful sub-lessee. As regards point No.
3, the High Court relying on a decision of Calcutta High Court in
Krishna Das Nandy vs. Bidhan Chandra Roy(') has found that as
the transfer in favour of respondent No. 1 by the Official Liquidator
was confirmed by the Court, the status of the tenant by respondent
No. 1 was acquired by operation of law and therefore the transfer B
(I) [1964] 6 S. C. R. 192.
(2) A. I. R. 1959 Cal. 181.
448 SUPREME COURT REPORTS [1980] 3 S.C.R.

A was an involuntary transfer and the provisions of Rent Control Act
would not be attracted. After careful perusal of Calcutta case, in
1be first place it appears that the section concerned bas not been ex·
tracted and we are not in a position to know what was the actual
language of the section of the Bengal Act. Secondly, in our opinion,
the official liquidator had merely stepped into the shoes of Laxm£
B
Bank which was the original tenant and even if the official liquida·
tor had transferred the tenancy interest to respondent No. 1 under
the orders of the Court, it was on behalf of the original tenant. It
was undoubtedly a voluntary sale which clearly fell within the mis-
chief of s.14(1) (b) of the Delhi Rent Control Act. Assuming that
c the sale by the official Liquidator was an involuntary sale, then it
undoubtedly became an assignment as provided for by s. 14(b) of
Delhi Rent Control Act. S. 14(b) runs thus :-

"14(b )-that the renant has; on or after the 9th day
of June, 1952, sublet, assigned or otherwise parted with the
possession of the whole or any part of the premises with·
D
out obtaining the consent in writing of the landlord."

The language of s. 14(b) is wide enou1;h not only to include
any sub-lease but even an assignment or auy other mode by which
possession of the tenanted premises is parted. In view of the wide
amplitude of s.14(b) we are clearly of the opinion that it does not
E
exclude even an involuntary sale. Fore these reasons therefore we
a,re unable to agree with the view taken by the High Court. The
appeal is accordin:ly allowed, the judgment and decree of the High
Court are set aside and the plaintiff's application under s. 25> of the
Delhi Rent Control Act is dismissed.
F
Mr. Bisaria, learned counsel appearin1; for the respondent sub-
mitted that 31\ the tenant has been in the premises for a period of
19 years and is conducting business therein, he may be permitted
sufficient time to make alternative arrangements. Mr. Mridul appear-
ing for the' appellant fairly conceded that he would have no objection
G if one year's time is allowed to the respondent provided be gives
an undertaking for banding over peaceful and vacant possession at
the expiry of the time. We therefore allow time to the respondent to
vacate the premises on or before 15th April, 1981 on the condition
that he files an undertaking within two weeks to the :effect ( 1) that
he shall hand-over vacant and peaceful possession to the landlord
B on or before 15th April, 1981; (2) that be shall not induct any per-
son on the premises; (3) that be shall go on paying the compensation
for wrongful use of premises equivalent to the rent.
P. H. RAO v. SHANTI PRA~AD (Fazal Ali,/.) 449

The ulldertaking must be filed supported by an affidavit within A
two weeks from today failing which the order granting time shall
stand revoked.
There will be no order as to costs.

S.R. Appeal allowed.

I
,.ll,