Holding

The concession clause is not penal; the consent decree is executable and Section 114 cannot override Section 12(3) of the Bombay Rent Act.

Summary

The landlord filed an eviction suit under Section 12(3) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, which was settled by a compromise decree granting the tenant a grace period to pay arrears and vacate by 10 October 1970, with a concession that the landlord would not execute the decree if the arrears were fully paid. The tenant failed to pay the full amount, and the executing court issued a warrant for possession under Order XXI Rule 35 of the Code of Civil Procedure. The appellate and High Courts held that the concession clause was penal and therefore unenforceable, dismissing the execution proceedings. On appeal, the Supreme Court held that the concession was not a penalty but a valid benefit, that the decree was executable, and that Section 114 of the Transfer of Property Act could not override the special provisions of Section 12(3) of the Bombay Rent Act. Consequently, the Supreme Court set aside the lower courts' orders, allowed the appeal, and remitted the matter to the executing court to proceed with possession.

Issues considered

Whether the compromise decree intended to create or continue a landlord‑tenant relationship.
Whether the clause permitting eviction in the consent decree is penal in nature or a concession.
Whether Section 114 of the Transfer of Property Act can be invoked notwithstanding Section 12(3) of the Bombay Rents Act.
Whether the execution of the decree under Order XXI Rule 35 of the CPC is proper.

Legislation cited

Bombay Rents, Hotel and Lodging House Rates Control Act, 1947s. 12(3)(a), s. 12(3)(b)
Code of Civil Procedure, 1908s. Order XXI Rule 35
Transfer of Property Act, 1882s. 114

Subjects

rent controlevictionconsent decreepenal clauseconcessionSection 12(3) Bombay Rent ActSection 114 Transfer of Property Actexecution of decreelandlord-tenant relationship

Judgment

- PRITHVICHAND RAM CHAND SABLOK A
v.

S.Y.SHINDE

MAY, 131993
B
[A.M. AHMADI ANDS. MOHANJJ.]

Bombay Rents, Hotel and Lodging House Rates Control Act, 1947-Section
12( 3 )-Terms ofcompromise before court including non-execlit ion ofdecree for
possession where entire arrears paid by specified date-Character of the com-
promise terms whether penal ora concession-Held, where defendant benefits for c
complying Wilh a requirement, and does noT Stiffer for failing TO abide by if, it is
not penal-Civil Procedure Code, order XX/ Rule 35.

Bomba)' Rents, Hotel and Lodging House Rates Control Act, 1947-Section
12(3) (b)-Transferof Property Act, 1882-Section 114-Held, Section 12(3) (b)
is a special provision and cases governed by the Bombay Act must be resolved in D
accordance with Section 12(3) ofThe Act and noT under section 114 of Transfer of
Property Act.

The appellant-landlord filed an eviction suit for possession of the
demised premises mainly on the ground of arrears ofrent under Section 12(3)
of the Bombay rent Act, 1947. E

The suit was settled between the parties. By the terms of the compro-
mise, possession would be given by the tenant to the landlord by 10 October
1970, or the landlord ma~· recover possession by execution based on this
decree; but, if the tenant paid the entire arrears in full by 10October1970, the F

- landlord would not execute the decree for possession.

The tenant failing to pay the entire arrears as stipulated the landlord-
decree holder ·med execution proceedings. The executing Court issued a
warrant for possession but the Appellate Court set aside the order and
G
dismissed the pra)•er for eviction. The High Court remanded the matter to the
Appellate Court to determine the character of the compromise terms. That
court again allowed the appeal and dismissed the execution proceedings
altogether.

On appeal, the High Court agreed with the Appellate Court. It found H
729
730 SUPREME COURT REPORTS [1993] 3 S.C.R.

A that clause permitting eviction was penal in nature and therefore, not
enforceable.
--
The questions before this court were: did the parties to the compromise
intend to create or continue the relationship oflandlord and tenant; whether
the compromise terms in the consent decree were penal in nature or merely
B
gave a concession; and whether Section 114 Transfer of Property Act could _....
be invoked while executing a decree for possession, notwithstanding Section
12(3) of the Bombay Act.

Allowing the appeal, this Court,
c
HELD : It is well-settled that a decree passed on the basis of a compro-
mise by and between the parties is essentially a contract between the parties
which derives sanctity by the court superadding its seal to the contract. But
all the same the consent terms retain all the elements of a contract to which
D the court's imprimatur is aflb:ed to give it the sanctity of an executable court
order. The court will not add its seal to the compromise terms unless the terms.
are consistent with the relevant law. (735-H)

If the law vests exclusive jurisdiction in the court to adjudicate on any
matter, the court will not add its seal to the consent terms unless it has applied
E its mind .to the question.

In such a case it is the independent satisfaction of the court which
changes the character of the document from a mere contract to a court's
adjudication which will estop the tenant from contending otherwise in any
F subsequent proceedings and operate as res judicata. (736-B)

The character of the consent ·decree will depend on the nature of the
dispute resoh·ed and the part played by the court while superadding its.seal
to it. (736-C)

G
(2) If a defendant is required to suffer the consequence of his failure to
abide b~· terms stipulated, such consequence would be penal in nature. But if
the defendant gets some benefit by complying with a requirement, such as

-
clause can never be penal in character. (739-B)

H (3) Admittedly the tenant had failed to pay or tender in court the
PRJTHVJCHAND 1·. SHINDE 731

standard rent and permitted increases due to the landlord. (736-E) A

The clause in the consent terms whereby, upon payment of the entire
rent etc. due from the tenant, b~· a stipulated date was clearly to secure his
dues i.e. arrears of rent etc. This is in the nature of a concession.
B
Where a landlord gran~ a concession and agrees that if the entire
arrears is cleared by a stipulated date, he will not insist on possession that will
not render the clause penal in nature. (739-E)

(4) If the condition precedent for availing of the benefit of concession
c
under clause (3) of the consent terms is satisfied, the relationship oflandlord
and tenant continues but if the tenant fails to comply with the condition
precedent for availing of the benefit or concession the forfeiture operates and
the tenant becomes liable for eviction under the decree. (739-G)

(5) After the enactment of clause (b) to section 12(3) which is a special D
provision incorporating the equity provision contained in section 114, T.P.
Act, in a modified form, cases governed under the Act must be resolved in
accordance with section 12(3) of the Act and not under section 114, T .P. Act.
The landlord's right to seek eviction has been drastically reduced and
circumscribed
. . sections 12 and 13 of the Act. Similarlv. the tenant must also
bv
E
seek protection from eviction h~· complying with the requirements of the Act.
(740-B)

If such is not the legal position, Sections 12 (3) (a) and 12 (3) (b) would
be rendered wholly nugatory. Under the Act a tenant is allowed to continue
in possession notwith-standing the termination of the contractual tenancy if F
the abides by the provisions of the Act. Ifhe fails to abide b~· the requ.irement
of section 12(3) of the Act, he must take the consequences flowing therefrom.
There is no question of granting him double protection. (740-C-E)

Krishnabai ''· Hari, 8 BLR 813 and Gajanand Govind v. Pandurang Keshav, 53 G
B.L.R.100, referred to. (840-B)

Pradesh Kumar Bajpai v. Binod Belzari Sharkar, [1980] 3S.C.R. 93, relied on.
(840-H)

H
732 SUPREME COURT REPORTS [1993] 3 S.C.R.

A CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2881 of 1993.

From the Judgment are Order dated 16.1.85 of the Bombay High Court in
W.P. No. 1755 of 1983
.:.

B V .M. Tarkunde, R. Karanjawala, Rajesh Kumar and Ms. Suruchi Aggarwal
for the Appellant.

S.B. Bhasme and A.S. Bhasme for the Respondent.

The Judgment of the Court was deliYered by .
c
AHMADI, J. Special leave granted.
The appellant, landlord, filed an eviction suitNo. 419 of 1968 for possession
of the demised premises mainly on the ground of arrears ofrent under section 12(3)
0 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947
(hereinafter called 'the Act'). That suit was settled between the parties, the relevant
terms whereof read as under :

(1) The possession of the suit premises is to be given by the
defendant to the plaintiff by 10th October, 1970. If the defendant
E does not give possession, then the plaintiff is to take possession by
execution on the basis of this decree.

(2) ............... ···········

(3) The defendant is given a concession that if the defendant paid the
entire amount mentioned in clause (2) above, i.e., the amount
F involved in the suit, future mesne profits, electricity charges, water
charges, the rent of the godown, expenses of the suit by 10th
October, 1970, the plaintiff will not execute the decree for posses-
sion.''

Under clauses (2) and (4) of the compromise terms the rent in respect of the suit
G premises was to be calculated on the basis of standard rent of Rs. 30 per month,
the rent of the store room (godown) was to be calculated at the standard rent of Rs.
...
9 per month and electricity and water charges at Rs. 3 per month and so calculated,
the entire arrears had to be paid on or before 10th October, 1970 to avail of the
concession given in clause (3) of the compromise terms. The Trial Court passed
H a decree in terms of the compromise.
PRITHVICHAND \', SHINDE [AHMADI. J] 733

The arrears so calculated worked out to Rs. 3353. 58p. as on 10th October, A
1970. The tenant, however, paid a sum of Rs .. 2040 only on 9th February, 1970 and,
therefore, did not comply with the terms regarding payment of entire arrears on or
before 10th October, 1970. Thereupon, the decree holder filed execution proceed-
ings on 2nd November, 1970. The tenant raised objections in regard to the
executability of the decree. The Executing Court rejected the objections raised by
the tenant and issued a warrant for possession of the demised premises under Order B
21 Rule 35 of the Code of Ci vii Procedure, 1908 (hereinafter called 'the Code').
The tenant preferred an appeal against the order of the Executing Court which

• came to be allowed. The orderof the Executing Court was set aside and the prayer
for eviction was dismissed. The decree-holder moved the High Court under Article
227 of the Constitution. The High Court set aside the order of the Appellate Court c
and remitted the matter to the Appellate Court with a direction to decide the
character of the compromise terms on the basis of which eviction was sought. After
the matter went back to the Appellate Court that court re-considered the matter and
once again allowed the appeal setting aside the order of the Executing Court
directing issuance of warrant under Order 21 Rule 35 of the Code. The Appellate
Court dismissed the execution proceedings altogether. Against that order passed D
by the Appellate Court the decree-holder once again moved the High Court under
Article 227 of the Constitution. The High Court considered the various submis-
sions made before it by the rival parties and summarised the propositions emerging
from the relevant provisions and the case law in paragraph 32 of the judgment as
under: I E

"(l) If by a consent decree the status of a landlord and tenant is
established between the plaintiff and the defendent, the Court in
exercise of its equitable jurisdiction is not precluded from granting
relief against forfeiture of a term contained in the consent decree.
F
(2) Where the question is not one of the creation of a tenancy or the
continuation of a tenancy and where a decree passed either by
consent or in invitum permits payment of the decretal amount in
installments and provides that the decretal amount becomes pay-
able at once in the event of failure in the payment of one or more G
installments, there is no question of granting relief. The Courts are
bound to execute the decree in accordance with its term~.

(3) Where, however, the relationship of landlord and tenant is
continued between the parties by a compromise decree, the judg-
734 SUPREME COURT REPORTS (1993] 3 S.C.R.

A menH.lebtor. who is a tenant. would be entitled to relief '!-gainst
forfeiture resulting from his failure to pay the rent on the stipulated
date.

(4) Where the consent decree provides for the continuance of the
possession of the tenant up to a particular date beyond which he has
B
no right tor emain in possession at all and ori which date the landlord
is entitled to execute the decree for possession, the time given from
the date of the decree till the other date is by way of concession and
in such a case, there is no creation of new tenancy or continuation
of the existing tenancy.
c
(5) If the-consent decree provides possession for the continuation of
the of the tenant on certain terms up to a particular date and also
provides for the continuation of the tenant's possession after the
date if he complies with certain conditions, then such a decree
provides forthe continuance of the possession of the tenant from the
D
date of the consent decree itself. In such a case, it cannot be said that
the plaintiff's allowing the defendant to continue up to and beyond
that specified date is by way of concession:·

The High Court, therefore, concluded that the refusal by the Appellate Court
E to evict the tenant on the basis of the consent decree was correct in law and hence
it was not required to interfere with the order of the Appellate Court. It came to the
conclusion, on a true interpretation of the relevant clauses of the consent decree,
that the clause by which eviction was permitted was penal in nature and, therefore,
not enforceable. Clause (3) of the compromise tem1 was treated as granting relief
against forfeiture. In this view of the matter the judgment-creditor, landlord,
F
having failed to secure possession of the demised premises by putting the consent
decree to execution. has approached this Court under Article 136 of the Consti-
tution.

The Act was enacted to amend and consolidate the law relating to the control
G of rents and of evictions from demised premises. It imposes certain restrictions on
the right of the landlord from recovering possession so long as the tenant pays or
is ready and willing to pay standard rent and permitted increases and observes and
performs the other conditions of the tenancy which are consistent with the
provisions of the Act. If the tenant has failed to pay the rent and permitted increases
due from him he can be evicted for that neglect in the manner set out in section 12
H
-I ' ~. ; -'--_ /

\ 'I
PRJTilVICHAl<D r. SHINDE [AHMADI. J] 735
' -- - ·-

-of theAct. The other ~rci,·isi~n which confers a ri;ht of eviction is section 13 of l\
the Act with which we are not concern'ect in this Case. The facts of the case clearly
• re;eal that the landlord had sought eviction under section 12 of the Act as the tenant
- had corruniited a breach of su~section (IJlhereof, in that, he had failed to pay the
rent to the landlord. To comply with the requirement of sub-section (2) of that
provision_ the landlord had served the tenant with a notice prior to the institution B
of the suit seeking eviction under section 12(3) of the Act. This sub-section is in
-- ~---
two pans and_ll1'ly_ be extracted for ready reference :

.. 12 (3) (a) Where the rent is payable by the month and there is no
dispute regarding the amount of stfili.dard rear or pennitted in-
creases. if such rent or increases are in arrears for a period of six - C
months or roore and the tenant neglects to make payment thereof
until the expiration of the period of o~e montli after notice referred
to in sub-section (2), the coun may pass a decree for eviction in any
such suit for recovery of possession.
'D
12(3) (b) In any other case-no-decree for eviction shall be passed in
any such suit ifon the day of hearing of the suit or on or before such
other date as the coun may fix, the tenant pays or tenders in cmin the
standard rent and permitted increases then due and thereafter
continues to pay or tendei ill court regularly such rent and permitted
increases till the suit is finally decided and also pays costs of the s~ft - E.
_as directed by the c_oun."

Oause (a) setS out the Circumstances in which the tenant forfeits the
protection of the statute and entitles and landlord to evict him. If the case does not
fall within the scoi>e of clause (a) the question io be considered is whether eviction F
should be ordered under clause (b). This is clear from the opening words, "in any .
other case.~ If, however, the tenant satisfies the conditions of the said clause, the
·w protects him from eviction as is clear from the words, ·•no decree of eviction
1hall be passed in any such suiC. The suit in the present case was filed under
section 12(3) of the Act but before the coon could adjudicate whether clause (a)
or clause (b) was attracted the partie~ arrived at a settlement, the relevant terms - G
hereof have been extracted hereinbefore. It is-well-settled that a decree passed on
: the basis of a cemp(oinise by and between the varties is essentially a contract
~ between the parties which derives sand:.il;y by the coun superadding its seal to the
contract. But all the same the consern terms retain all the elements of a contract to
which the coun's imprimattiris affixed to give it the sanctity of an executable coon· H
736 SUPREME COURT REPORTS [I 993) 3 S.C.R.

A order. We must, however, point out that the court will not add its seal to the
compromise terms unless the terms are consistent with the relevant law. But, if the
law vests exclusive jurisdiction in the court to adjudicate on any matter, e.g.
fixation of standard rent, the court will not add its seal to the consent terms by
which the parties have determined the standard rent unless it has applied its mind
to the question and has satisfied itself that the re·nt proposed by consent is just and
B
reasonable. In such a case it is the independent satisfaction of the court which
changes the character of the document from a mere contract to a court's adjudica-
tion which will estop the tenant from contending otherwise in any subsequent
proceedings and operate as res judicata. If the standard rent is fixed solely on the
basis of agreement between the parties, such a decree in invitum will not preclude
c the tenant from contending in any subsequent proceeding that the rent is excessive
and require the Court· to fix the standard rent. Therefore, the character of the
consent decree will depend on the nature of the dispute resolved and the part played
by the court while superadding its seal to it.

Under clause (a) of section I 2 (3) of the Act, if the conditions stated therein
D
are satisfied, the court has to pass a decree to evict the tenant from the demised
premises. So also under clause (b) of that sub-section, if the tenant fails to pay or
tender in court the standard rent and permitted increases due on tlle first date of
hearing of the suit or on or before such date as· the court may fix, the court has to
pass·a decree for ejectment. In the present case the suit was governed by section
E 12(3) of the Act and even if we assmpe that it fell within the purview of clause (b),
the tenant was liable to be evicted as admittedly the tenant had failed to pay or
tender in court the standard rent and permitted increases due to the landlord as is
obvious from clause (2) of the consent terms. It is for this reason that the tenant __.
suffered a decree for eviction and agreed to deliver possession of the suit-premises
by I0th October, 1970. By clause (2) of the consent terms the tenant further agreed
F to pay to the landlord by 10th October, 1970 the entire amount due including legal
fees and expenses from the date of the suit till delivery of possession. Clause (3)
of the consent terms carries the crucial term that the tenant is given a concession,
and that concession is that if he pays the entire amount mentioned in clause (2) by
lOtb October, 1970, the landlord will not execute the decree for possession. That
G has given rise to the question whether clause (1) of the consent decree is in the
nature of a penalty for non-payment of tlle outstanding dues upto 10th October,
1970 or clause (3) of the consent decree is merely a concession given ~o the tenant
if he complies with the terms or requirements of that provision.

H
Now as pointed out earlier the ejectment suit was filed on the allegation that
the tenant had neglected to pay the rent and other charges in respect of the demised
--
PRJTHVICHAND ,._ SHINDE [AHMADI, J]
737

premises. The suit was, therefore, founded on the right to evict conferred by A
section 12(3) of the Act. We will assume that it was a case to which clause (b) to
that sub-section was attracted. It is evident from the terms of the compromise that
eyen on the date of the compromise in July 1970 the tenant was in arrears of rent.
If the suit had gove to trial the landlord may have secured a decree in ejectment for
the tenant's failure to comply with the requirements of clause (b) of section 12(3)
of the Act.By clause ( l) of the compromise decree it was, therefore, provided that B
the tenant will vacate and deliver possession of the demised premises by 10th
October, 1970. Failure to deliver peaceful possession by that date would entitle the
landlord 'to take possession by execution· of the decree. Clause (2) indicates the
rate at which the arrears will be calculated and clause (4) describes those rates as
standard rent. Clause (4) describes those rates as standard rent. Clause (3) which c
is the crucial clause gives a 'concession·. What is that concession? It is that if the
tenant pays up the entire amount of arrears, i.e., the amount involved in the suit
meaning thereby the claim of arrears set out in the suit, future mesne profits,
electricity and water charges, the rent of the godown, cost of the suit, by 10th
October, 1970, the landlord will not execute the decree for possession. Counsel
for the appellant argued that as the tenant had failed to clear the arrears of rent and D
other charges payable under the terms of the lease, he was liable to be evicted under
cla~se (b) of section 12(3) of the Act. That is reflected in clause (l) of the
compromise terms. However, the landlord gave a concession by clause (3) to the
effect that if the entire arrears are cleared by 10th October, 1970, he would not
execute the decree for possession. This, counsel argued, does not show that the E
decree for possession was provided for as in terroresm to be construe? as a penalty
and not a concession. Counsel contended that while a penal stipulatjon cannot be
enforced, a grant of a concession cannot undo the main operative part of the
eviction dec;ree unless it is shown that the tenant had done all that was necessary
to avail of the concession. Counsel for the tenant, however, insisted that the
provision for delivery of possession is in the natureofa penalty and was, therefore, F
unenforceable. He supported the judgment of the High Court and submitted that
the appeal should be dismissed with costs.

It is settled law that unless the terms of contract are an:'Jiguous the intention
of the parties must be gathered from the terms themselves. It is only where the G
terms are ambiguous and capable of more than one meaning that evidence aliunde
can be permitted to gather the intention of the parties. In our view. the terms
forming the basis of the consent decree in the instant case are clear and unambigu-
ous and do not call for extrinsic material to gather the intention of the parties. Two
questions. therefore, arise for consideration, namely, (i) did the parties to the
compromise intend to create or continue the relationship of landlord and tenant? H
738 SUPREME COURT REPORTS [1993) 3 S.C.R.

A and, (ii) is the clause providing for eviction penal in character? Now. as pointed.
out earlier by clauses (I) and (2) of the compromise terms, the tenant is required
to deliver vacant possession of the demised premises together with arrears bf rent
etc. by 10th October, 1970. It is further provided that if the tenant fails to deliver
possession and defaults in paying the arrears due from him by 10th October, 1970,

B
the landlord will be entitled to recover both possession and arrears of rent, etc., by
executing the decree. Thus by the first two clauses of the consent terms, the
---
landlord secured a decree for possession as well as arrears of rent, etc.; giving a
grace period to the tenant to comply therewith by 10th October, 1970. Thereafter
by clause (3) of the consent terms, the tenapt is given a "concession, in that, if he
pays the entire arrears of rent, mesne profits, electricity and wat~r charges, cost of
c the suit, etc. by 1Ot/1 October, 1970, the landlord agrees not to execute the decree
for possession. In other words on the fulfillment of the obliga~ion to clear the entire
arrears of rent and other charges by 10th October, 1970, the tenant is given a
concession that the decree for possession passed against him will not be put to
execution. Such a clause cannot, in our opinion, be said to be penal in character.
It is necessary to understand when a clause in the contract can be described as penal
D in character. Let us illustrate by taking two concrete situations. A plaintiff files a
suit to recover Rs. 20,000 with interest and costs from the defendant. They enter
into a compromise, the terms whereof are as under :

Situation 1 :
E The defendant shall pay to the plaintiff a sum of Rs. 15,000
and costs on or before 3 lst December, 1993. If, however, he fails to
pay the said amount of Rs. 15,000 with costs within the time
stipulated, the plaintiff will be at iiberty to recover the entire sum of
Rs. 20,000 with interest and costs from the defendant by executing
F the decree.
The latter clause of such a decree will clearly be in terrorem
and, therefore, penal in character. No court will ~xecmte the same.
Situation 2 :
G The decree provides that the defendant shall pay Rs. 20,000
with interest and costs to the plaintiff. However, if the defendllllt
pays Rs. 15,000 and costs on or before 3 lst December, 1993 to the
plaintiff, the plaintiff will tr~at the decree as fully satisfied and will
not claim the balance amount from the defendant.

H In such a case the latter clause operates as a concession and the
. PRITIIVICHAND t'. SHINDE [AHMADI, J] 739

plaintiff waives his right to the balance amount. Such a decree will A
be executable to the full extent if the defendant fails to avail of the
concession by paying Rs. 15,000 and costs on or before Jlst
December, 1993.

From the above two illustrations it should become clear that if the defendant B
is re quired to suffer the consequence for his failure to abide by the terms by a
stipulated date such a consequence would be penal in nature but on the other hand
if the defendant gets some benefit by complying with the requirement by the
stipulated date such a clause granting benefit can never be treated as penal in
character. Applying this test to the decree in question, it is obvious that by the first
two clauses of the consent terms a decree for possession of the demised premises C
as well as arrears of rent, etc. is passed and the tenant. is giJen a grace period upto
I0th October. 1970 to comply with the same failing which the landlord is given the
right to put the decree to execution and obtain possession of the premises and
recover the arrears of rent, etc. through court. By clause (3) of the consent terms,
however, the tenant is granted a concession that if he pays the entire rent etc. due D
from him by 10th October, 1970, the landlord will not put the decree to execution
for recovery of possession. This stipulation is clearly to secure his dues i.e. arrears
of rent, etc. Depending on the situation in which a landlord is placed, he may grant
the concession to the tenant to ensure that the huge amount of arrears is not Jost.
If tie grants such a concession and agrees that if the entire arrears is cleared by a·
stipulated date he will not insist on possession that will not render the clause penal E
in nature. In a given situation where the tenant is in financial difficulty and is not
in a position to comply with the requirement of section 12(3) of the Act, he can
request the landlord to grant him a concession in the nature of relief against
forfeiture. If such a concession is to be read as penalty rendering the decree non-
executable even where the tenant fails to satisfy the requirements of availing the F
concession, no landlord will in future grant such a concession, thereby
causinghardship in deserving cases. We are, therefore, of the opinion that the First
Appellate Court as well as the High Court were in error in treating clause (3) of the
consent terms as penal in character and incapable of execution. If the condition
precedent for availing of the benefit or concession under clause (3) of the consent
terms is satisfied, the relationship oflandlord and tenant continues but if the tenant G
fails to comply with the condition precedent for availing of the benefit or
concession the forfeiture operates and the tenant becomes liable for eviction under
the decree.

The High Court has placed reliance on the Full Bench ueci:.ion inKrishnabai
H
v. Hari, 8BLR 813andGajanandGovindv. Pandurang Keshav, 53BLR100. in
740 SUPREME COURT REPORTS [1993] 3 S.C.R.

A taking the view that the Executing Court can grant relief against forfeiture on the
strength of section 114 of the Transfer of Property Act, 1882. The High Court
seems to think that in execution of a consent decree, such as the one with which ·
we are concerned, it is open to the Executing Court to go behind the decree by
invoking section 114, T.P.Att, notwithstanding section 12(3) of the Act. In our
view After the enactment of clause (b) to section 12(3) which is a special provision
B
incorporating the equity provision contained in section 114,T.P.Act:in a modified
form, cases governed under the Act must be resolved in accordance with section
12(3) of the Act and not und~r section 114, T.P.Act The landlord's right to seek
eviction has been drastically reduced and circumscribed by section 12 and 13 of
the Act. Similarly the tenant must also seek protection from eviction by complying
c with the requirements of the Act. If such is not the legal position, section 12(3) (a)
of the Act which Qlandates the Court to pass a decree for eviction if the
requiremernsofthatclause are satisfied would berendered wholly nugatory. Same
would be the position in the case of application of section~·l2(3) (b) of the Act
because that clause precludes the passing of the decree if the 'tenant satisfies the
requirements of that provision. It must be remembered that after the enactment of
D the Act the landlord's right to re-enter on expiry of the lease iS' curtailed by the
provisions of the Act which has made special provisions granting protection from
eviction if the tenant abides by his obligations under the Act. Underthe Act a tenant
is allowed to continue in possession notwithstanding the termination of the
contractual tenancy if he abitles by the provisions of the Act. If he fails to abide by
E the requirement of section 12(3) of the Act, he must take the consequences flowing
therefrom: There is no question of granting him double protectfon. That is what this
Court clarified in Pradeslz Kumar Bajpai v: Binod Be/Jan· S/zarkar, [1980] 3 SCR
93. That was a case arising under the provisions of the U.P. (Temporary) Control
of Rent and Eviction Act, 1947. The question which was seriously debated at the
Bar before this Court was whether in addition to the safeguards provided to the
F tenant unde~.the said Act,. the tenant was also entitled to the benefit of section 114,
T.P:Act The right of the landlord tQ have the tenant evicted was restricted under
the said rent restriction legislation. As that law had restricted the power of the
landlord to evict the tenant except in accordance with the provisions \herein
contained, the terms of the contract and the provisions of the T.P.Act. it was urged,
G were no longer attracted. Clause (a) of section 3(1) inter alia provided that the suit
may be filed with the permission of the District magistrate when the tenant is in
arrears of rent for more than three months and has failed to pay the same to the
landlord within one month of the service upon him of the notice of demand.
Dealing with this contention this Court held that once the requirements of the rent
legislation are satisfied, the tenant cannot claim the double protection of invoking
.. H' ·the provisions of the T.P.Act or the terms of ·the contract and the provision of
PRITHVICHAND "· SHINDE [AHMADI, J] 741

section 114, T.P.Act, cannot be read into the rent legislation. A

This Court concluded thus :

"In the case before us, it is not in dispute that after _the Rent Act came
into force, the landlord cannot avail himSelf of clause 12 which
provides for forfeiture, even if the tenant neglected to pay the rent B
for over two months. The landlord cannot enter into possession
forthwith without notice. The only remedy for him is to seek
-I
eviction under the provisions of the Rent Act. In such circumstances
the tenantcannotrelyon Section I 14ofthe Transferof Property Act
and claim that he should be given an opportunity to pay the arrears C
of rent, even though the requirements of section 3(1) had been
fulfilled."

It is, therefore, obvious that the tenant cannot avail of the benefit of section
114, T.P.Act since his case was governed by the provisions of section 12(3) (b) of
~~ . D

For the foregoing reasons, we are of the opinion that the executing court was
right in issuing a warrant for possession under0rder21Rule35 of the Code against
the tenant since the tenant had failed to take advantage of the concession clause
by clearing the arrears of rent, mesneprofits, etc. by 10th October, 1970. The First E
Appellate Court as well as the High Court were in error in holding that the decree
was not executable as clause (3) thereof was in the nature ofa penalty. We set aside
the orderof the First Appellate Court as well as the High Court and remit the matter
to the. executing court to proceed further in accordance with law. We may,
however, make it clear that if there have been subsequent developments between.
the parties creating any de novo relationship that will not be affected by this order. F
In the facts a~d circumstances of the case, we make no order as to costs.
'
U.R. Appeal allowed.