Holding

A permission under Section 21 of the Delhi Rent Control Act obtained by false statements is void and may be revoked, denying the landlord the right to possession.

Summary

The landlord, Smt. Ram Chambeli, obtained permission under Section 21 of the Delhi Rent Control Act to lease her premises for three years by making false statements about her need for the property and the condition of her family. After the lease term, she sought possession, but the tenants contested, alleging that the permission was obtained by suppression of material facts. The Additional Rent Controller revoked the permission, but the Rent Control Tribunal and the High Court reinstated it and ordered eviction. The Supreme Court held that the permission was vitiated by the false statements and that collusion between unequal parties does not sanctify the transaction. Consequently, the Court set aside the lower courts' orders, dismissed the landlord's application for possession, and allowed the appeal with costs.

Issues considered

The validity of a permission under Section 21 of the Delhi Rent Control Act when obtained by false statements or suppression of material facts.
Whether collusion between a landlord and a weaker tenant can confer legitimacy on a transaction under Section 21.
Whether the landlord is entitled to possession under Section 21 when the claimed temporary necessity is false.
The applicability of the doctrine of oppression/illegal contract in the context of Section 21.

Legislation cited

Delhi Rent Control Act, 1958s. 14, s. 21

Subjects

Delhi Rent Control ActSection 21false statementssuppression of factscollusionoppressionillegal contractlandlord-tenantevictionsummary remedy

Judgment

A· 290
V. S. RABI AND ANR.
V,

SMT. RAM CHAMBELI
B.
JanuaJy 3, 1984 •
[E.S. VEN,KATARAMlAH AND R.B, MISRA, JJ.J

. Delhi Rent Co~tro/ Act, 1958, (Act 59 '°f 1958) Sectio; 2J~W.hile invoking ·
t~e re1nedial provisions of '·Section 21~ ~he lau;lllord Shot{!d conie with clean ha~ds a·
c . and not supprdss or falsify facis-Doctriue of suppressioverf will disentit/e hbn to
get back possession later iiz such case; of stippression of facts- Duty of the Court-
Meaning of collusion-Right to resile, when aval1able.....-Rule of oppression and illegal
contract explained. ·
The respondent Smt. Ran1 Chambeli leased out the suit premises to the
arpcllantS for a P.eriod o.f three yCars under an orQer dated ·December 22, 1977 passed
bY the Additional Rent Controller in Suit No. M/?98/77 µnder ·section 21 of the )-.
D Delhi Rent Contr9I ACt. . bii the expiry of the .said period, when the ~espondefil
filed an application ~eforc the Rent Controller for possess'ion of the preinises, the
appellants filed objections, highlighting how by suppression and falSifying facts
the resporident resorted to the proYisions of section 21 of the :Rent.Act, arl'd challeng-
ed the need for personal Occupation. :The Additional Rent Cpiltroller, therefore,
after hearing both sides revoked the perlnission granted in 1977. HOwever, the·
Rent Control Tribunal set aside the o_rd~r of the Addi. Rent Controller. and ordered
E eviction. The High Court in Second Appeal confinned Tribunal's order. Hence
"the tenan(s'appeat" by Special' Leave of the Court,
Allo\ving the· appeal, the c;:ourt,

-
(

·~
Hi5:LD .: 1. · On .the facts- and ciicumstances of the" case, the landlady· is
·not entitled to invoke· th'C ren;edy· under section.21 _of the Delhi Rent Control Ac~.
The permission under section 21 of the Act had been obtained by her .on the basis
F of wrong statement, but for which the permission wollld not have been accorded._
.. These statements which were in the nature of half truths were apparently ma.de
in Order to ffiake good the plea that_ there was only a .temBorary necessity to lease ·
out t\le building for ·a short period and that thCre wiS a bonafide anticipation that
there would be a pressing neCeSsity to reoccupy the pren}ises at '1e end of the period,
which wer(;! the two crucial factors governing an order under section 2_1 of the A~t.
[296 F; E]
S.B. Noronah v •. Prem Kun1ari Khaizna, [19.80] 1 S.C.R. 281; applied.
. . . . .
2: 1 It is true that the appellants who were the weaker.'of th6two parties
did not. question ihe .truth of.the staten1ents made by the r~spondent·when.the
.
. permiSsiOn was granted. · But such \collusion, if anY, between the two unequal
parties dO'es hot confer any sanctity on the transaction in question; In cases of
H this 'Ilature 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. [296 H; 297 A]

"
v.. s.. RAHi v. RAM CHAMBELJ (Venkataramiah, J.) 291 .

2:2. Collusion in1plies the existenCe of two or n1ore parties \vho r;:an deal A
with each other independently with the object of entering into an arrangement
which may seive as a cloak to cover up the real state of affairs. When one party
a
can dominate over the will of the other, it would nOt be case of Collusion but one
of compulsioU; The ilbove view is fully in. cc;insonancc with the spirit behind the·
rule of oppression which ,is recognised as an exception to the doctrine" that a party
cannot recover what he has given to the other P.arty under an illegal contract. The
gro.und that the appellants ca·nnot challenge! the permission ,i_nitially grar.ted under B
section 21 of the ~ct is not, therefore) availa?le in this c~se. (297 B-CJ

S1nith ·v. Ci<ff[1817] 6 ~ & S 160@ 165, quoted with approval.

~.. CIVIL APPELLATE JUR1So1CT10N: Civil Appeal No. 28<lJ of 1982.

From the Judgment and Order dated. the 23rd August, l 982
of the Delhi High Court at New Delhi in S.A.O. No. 277 of 1982'.
c

B.X. Joseph and N.S. Das Behl for the Appellant.

J.M. Khanna for the Respondent.
D
The Judgment of the Court was delivered by :

~ V~NKATARAMIAH; J.· This is an appeal by ·sp~cial leave against
the judgment of the High Cou•t of Delhi ~atcd Augm.t 23. 1982 in
S.A.O. No. 277 of J982tJismissing the appeal filed by the appellants.
E
The respondent Smt. Ra1~ Chambeli leased out the premises

•'
in question to the appellan'ts under an order dated December ·22 •
1977 passed by the Additional R.enf Contr.oller in s.uit No. M/798/77
under section< 21 of tl1e Delhi Rent Control Act, I 958 (Act 59 of 1958)
(hereinafter referred to as 'the Act'), the rckvant part~ wJ1ich reads
thus : F

"Statement of Smt. Ram Chambcli w/o SJ1.' G.L. Gandhi.

I' am the owner-landlord of premises No. 637, Double
• Storey, New. Rajinder Nagar, New Delhi. The entire pre-
mises comprising of two rooms, kitchen, bath, ]aterine G
shown in the plan Exhibit-Al is surplus with me for a limited
period of 3·. years which I want to let out to the respondent
for res'dential purposes fer the said rericd at rupees 425/- p.m.
which is mentioned in ·Mark Il with effect from tl1e date of
perm1ss1on. I have never let out the. portion to anybody H
· earlier to it. My son and my mother were Jiving in the
292 • SUPRHME COURT REPORTS [J 984] 2 s.c.R •

A . said premises. My mother has not been reeling well.· My
son is studying in 9th class. After about three years my.
mother will be alright and my son.will grow up and for them
'J. spall require t-be· pre111i~es after three_ ·years. _

RO & AC ARC
B •
Statement of Shri V.S. Rahi, son of Sh: Thakur Gopal
Singh, 45 years, te·achcr •ind Smt. Santosh Rahi w/o Shri·
V.S. Rahi, aged 45 years, teacher .resident of 33/52, Prabhat
Rold, Karol Bagh, New. Delhi. We want. tlw premises
for three' yqrs for the residential purposes from .the date· of
c pe.rni:iSSion. We are ·not in poss·ession of the premises nor
were we.tenants In it. ·

'RO & AC ARC

ORDER J
. '
D This· order will dispose of application under Section 21
DRC Act filed by Smt. :Ram Chambel.i ~pplicant seeking
pennissio1i to let out first floor of her premises No.. .637
· Double Stof'ey, New Rajinder Nagar, New Delhi; It is stated •
that the first floor4tif the s·aid ·premises comprising of two
living rooms, kitchen, bath and late.tine detailed in plan
E exhibit. A-I is.surplus with her for a lim.ited period. of three
years cind she will req\lire it after the· said period of three.
years. The'- petitioner and respondent have· made statement
on oath in. this connection. In view of the statement of
the 'parties, permission u/s. 21 .of DRC Ac.t is 'granted to
Smt. R'.lm Chamlieli, wife of Shri G:L Gandhi applicant·
.F to let out first floor of her p;emises No. 637,Double
Storey, New Rajinder Nagar, New'Delhi to Shri V.S. Rahi
and Smt. Santosh Rabi respondents fot resi<lei1tial pufposes
for the said peri.od of three years with effect from the date.
of the order. . .
•
,G J. D: Kapoor,
Add. Rent Controller''

On th_e cxpi1·y of the period of three years mentioned in the· above
order the respondent filed an application before the Additional Rent
Controller for possession or the premises.' The appell.ants filed objec;
tions to the said application stating that. t~e respondent was coinfor-
'
·' . v.s. RAHi v. R.AM CHAMBELI (Venkataramiah, J.) . 293

tably living with her husband and son in .the ground floor . of the A
b11ilding; that she was not .·in need of the first floor of the· bu;lding .
.which had been leased·out in·their favour; that the statement that
her mother was Jiving with her was not true; tliat her son was studying
in the 7th class in 1977 and not in the 9th class as stated by her before ·
the Rent Controller in· 1977 and that the· Rent c'ontrollet had permitted
the l~asing out of the building under section 21 of the Act without B
applying his mind. H was further pleaded· that the application had
been· .filed with a v"iew to extracting higher r"ent. The appellant.s
also· stated. that the statement of the respondent that ·she had not
leased .out the building earlier to any body else·was not.true. After.
going through the affidavits filed by the parties in support of their
• cases the Additional Rent" Controller' held that the respondent.. had· c·
obtained the permission under section 21 of .the Act by making
. wrong statements and accordingly revoked the said perrnission ..Con-
sequently the appellants coul.d not be evicted unde,r that section.'
Aggrieved by the or.der · of the Additional Rent Controller, the
respondeii't filed an ap1}eal ·before the Rent. Contr'o'I. Tripunal. The
Tribunal allowed the appeal and directed the eviction of the D
· appellants. The Tribunal observed that when the Conirollcr had
been informed by tl1e respond.en ·,right at- the time when the per-
mission was gran'ted under section 21 of the Act that the property was ·
not required by her for a period of three years but wculd"te. needed
~ ·after that period foi· the use of her son and her mother who was unwell
,. at that time, there was no ground to hold that the ·transaction was· E
not genuine.· Tl;e sec~nd appeal filed by the. appellants against
. the order of the Tribunal was dismissed by the High Court. This
appeal by special .)eave is filed ~gains! the judgment of the' High
~~ ' '

· Section. 21 of tl)e Act reads . · F

"21. Where. a l~ndlord. does· not require the whole
or any part of any premises for" a particular period, and the
landlord, after obtaining the permission of the Controller
in the prescribed -. manner, lets the wh~k of the preinises
or part thereof as a residence, for ·such period as may be G
.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, the~1, not\vithstanding ;:i~yq1ing con-
•
tained in section 14 or in any .other law, the .Controller
may,_ on an application made· to him in this. behalf by the H
landlord within. such time as ·may be prescribed, place the
294' ' [1984) 2 S.C.R.
. SUPREME COURT REPORTS

A landlord in vacant possession ·of the premises :or part thereof
by evicting the· tenant and every other person who may be in
oc~upation of suc·h premises."

When section 21 of the Act was enacted it was believed that
it would encourage landlords . who would· not ordinarily be willing
B to lease out a building as a residence for a short time even though -
'they might not. be in need of it duri~g that pericd, to lease ii..out
for such short period because qf the si1mmary remedy provided by
that section to recover possession>of the building quickly from. the
tenant instead of the usual eviction proceedings which ·would take

c
a Jong tirnc to terminate. . . .. Alli

lt was not perhaps fully realised at the t'me of the enactment·
•
of section 2f .of the Act that many unscrupulous landlords would
'enter into· arrangements purportjng tb be 'those .under that .seCt.fon
but in reality were ordinary leases and would utilise the threat of the
summary remedy availabie under that section to realise higher rents
D or for any. other purpose considered to be contrary to the· benign ·
purposes sought to be:achiev~d by the Ace When one such case in •
which the genui~1eness of a transaction entered irito under section 21
of the Act came before this Court in S.B. Norimah v. Prem Kumari
Khanna, '1' Krishrni Iyer, J. observC'd :

E "ft is easy to envisage the terrible blow to .the rent ·control
Jaw if Section 21 were freely permitted to subvert the scheme
. of Section 14. · Every landlord will insist on a tenant going
•through the formal exercise Qf Section 21, making ideal
· avermcnts in terms of that Section .. The consequence will
be· that . both the Civil Procedure Code which· prescribes
F · suits for recovery of possession and the· Delhi Rent Control
Act which prescribe.s grounds for evictiort \vill be eclipsed.
by the pervasiye operation of Section ·21. , Neither grounds
for evictioil nor suits for.·cviction WiJJ thereafter be needed,
and if the landlord moves the court for a mere warrant t~
place the Jandtdnl, through the court precess. in vacant
G possession of the premises, he gets it. No court-fee, no
decree, no execution petition, no terminalion of tenanc);_
\Vish for possession_ and the co"urt is at. your Command .
.Such a horrendous situation will be the negation of the rule ·
of law in this area. So it is that we deem it necessary to
H
(I) [1'980] I S.C.R. 281.
v.s. RAH! v. RAM CHAi.imi,LJ (Venk.alaramiah, J.) 295

. lay down the law as implied in·Secti.on 2!'. A
When an- application under Section 21 .is filed by the
·landlord and/or ten~nt; the Contro!!er must satisfy himself
by .such inquiry as .lie may make ·abqut the. compulsive 're-.·
q11iremei1ts of that provision.' If ·he makes a mindless order,.
the Court, \Vhen challenged. at.· the time of execution, will B
go· into the question aS to whether the twin cOnditiuns for
sanction have .really been fulftlkd."

The appeal before us bas to be con'sidered · agai1ist the above · ..
bac1"ground. .
.
.
' .
. ' . c
It is urged by the appellants that the order passed under sedion
21. '0f~h_e Ai;;i in this Case-havir,g.hCt:n obt:::ined _en· t:he basis.of state-
ments which were wrong, the app!icaticn for eviction should be
dis1nissed.

While it is true that the Court should . proce~d ·with the initial .D
presumption that the order under section 21 of the. Act was a regular
one, the Court should. still examine the ·maierial plae<d befcre it by
the. tena11t i'rrducted und9r that provision in order' to satisfy itself
th.at there· has riot b~~!) any mi-sus~ of the said proVision by th,e Jarid!Ord
taking advantage of the helpless ·$itua1ion ·in \Vhic~ the tenf}nt 'vas
placed. a-t. the ti111c when such order \.v"as obtained. E
• _ fn the instdnt case . it.is See;1 tha~ there wei·e three wrpng state-
. ments .ma.<;te·by the ~esponde:nt \\;hen. She apprcaChed !he ·AdditioTI31

•I
Rent COn~roller scekirig ,pern1issinn 11nder · secticn 21 cf the Act" to
lease out' the property. First, it is. not true thai the 'building had
not bceri Jeas<;d out earlier. Now it is admitted before us that there
was. on~ Kat~ria occµJ)ying tl~-e 'buiiditlg a~ a ·.teriant ·an a. mo~thly
F
rent,ofRs. 100/- oniy and .he had vacated the same abaut. four 'or
live months before the, date on which.the orde~ was ma.de under section .

.. 21 while it is. true that he had been there as• tenant even before the
respondent purchased ihe building "in the year l 972 .. After he vacated
· the building, .it was leased out to the appellants on a . rent of·RS. 425/- G -·
per mensem. ·Secondly, it is admitted that the respondent's mother
was not living with her. It is now admitted before us that the wom'an
who is more tliitn 75 years old described as the mother of
the re.spon-
denl'in the statement of the respondent recorded by the Additional .
Rent Controlier vvhen pern1issiOn was given u~1d.er secti'cn. 21-- is the · ff.
si'ster .of the 'respondeni's father although in the course .of the .pro-
296 SUPREME COURT REPORTS . (1984) 2 S.C:R·

A ceedings before· ·the Additional Rent Controller out of which this
appeal arises, she was described as the adoptive mother of the res-
pondent. It·is now stated that she is the foster mother of the respon~
dent a~d that she came with. the respondent to the residence of her
husband after her marriage. It is stated that she was suffering from ·
cataract in her eyes;. that it was not ripe for· being treated in 1977
B when the order was passed ·under section ··21 of the Act and that· it
was exp~cted that after the cataract was removed she would need the ·
· - building in the occupaiio11 ofthe appellants which is equal in size
. to the ground floor in the occupation of the respondent. Thirdly;
the son of the· respondent was an . young boy studying in the seventh
class in !977 and not in the ninth class. From the foregoing it is
c obvious that-the respondent had suppressed that ·thj!re was a tenant
iri the building who had vacated only a few months before the date
of the .application under section 2fofthe Act; had ·made false statement
• · about the relationship with her so-called foster mother; had not
disolosed the nature of her sickness which was· expected to be cured
in three years; had stated that her son was studying in the ninth class
D to make it appear that he ~ould be sufficiently old at the end of the
period of thre~ years and that he would be in need of extra accommoda-
tion. These statements which· were in the nature of half-trµths were
apparently made in order to make good the plea that t.here was only
a temporary necessity to lease out the building for a short pericd
and that the respondent bona fide anticipated that there. would be
E a pressing·,necessity to reocc.upy the premises at the end of the pcricd
which are the two crucial factors governing an order under secticn 21
of the Aci: The reasons given in this case are .quite unconvincing~
·'we arc not satisfied that the respondent honestly believed when she .
applied .for permission under. section 21. of t]Je.Act that' she would.
be in need of the premises in question at the end of the stipulated
F period. On a consideration of the material before him, the Additional
Rent Controller' was right in holding thaLthe permission under section
21 of the Act had been obtained by the respondent ori the basis of
wrong statements but for which the permission would not have been
accorded. •

• G It is, however, urged that the appellants who had colluded with
the respondent when po;rmission was granted under section 2i' of the
Act should not be now allowed to resile from the stand they had taken
· then., It is· true that the appellants who were the weaker of the two
parties did not question the truth of the statements made by the
H respondent when the permission was granted. But sucl1 collussion,
if any; beiween the t~o unequal parties does not confer any sanctity·
v.s. RAHi v. RAM CHAMBELl (Venkataramiah, J.)' ?,97
•
• on the transaction in question. In cases of this nature it is always A
open to the weaker of the two parties to establish that the transaction
was only a camouflage used to cover its true nature. Collusion implies
the existence of~o or more parties who can deal with each other
independently with the object ·of entering into an arrangement which .
. may serve as a cloak t-0 cover up the" real state of affairs. When·
one party can dominate over the will of the other, it would not be · B
a case of ·collusion but one of compulsion~ The above Vitw' is fully
in consonance with the spirit behind the rule of ci]lpression which is
. recognised.as.an exception to the doctrine that a party cannot recover .
what he has given to 'the. other party under an illegal contract. 'It
can never be pred.icated as pari de/icto where one holds the rod and
the other bows to it'. (Per Lord Ellenborough in Smith v. Cuff C
(1817) 6 M & S 160 at 165). Cases which call for appropriate relief·
. to be given to an innocent party where 'one has the power to dictate,
the other has no alternative but to submit are not uncommon. Cheshire
and Fifoot's Law· of Contract (10th Edn.) referes to another type of·
case belonging to this category. At page 338 of that !realise is the
'.' following .passage : D

. "Another type of case where the parties are not regarded
as equally delictual is where the contr"act. is n•ndcrcd illegal
by·a statute, the object of which is to proteci one class of
persons from the machinations of another class, as for example
where it forbids a 1and1;,rd to take a premium from.a prospec- E
live tenant. Here, the duty of observing the law is placed
squarely upon the shoulders of t.he landlord, a11d the pro-

•
I
tected person, the tenant, may recover an illegal premiu111
in an action jor money had and. received, even if the statutf'
omits to afford him this remedy either expressly or by impli-
cation. In the words of Lord Mansfield : · F

. Where contracts or transactions are prohib.ited ·
by positive statutes·, for the sake of protecting one set of
men from another set of men;· the one from their situa-
tion and· condition being liable to be· oppressed and
imposed upon by the other; there the parties are not in G
pari delicto; and in furtherance of these statutes,
person injured after the transaction is finish<d and com,
the pleted, may bring his action and defeat the
contract."
H
The ground that the appellants cannot ch,allenge th~ permission
298 SUPREME COURT REPORTS [1984) 2 s.c.R.
•
A

. . .
initially granted under section 21 of the Act is not therefore, available•.
in this case:
.
The Tribunal and the High Court have approached the present
.

case in a mechanical way ani,I have failed to apply correctly the ratio
· of the d.ecision in Noronah's ca.1e to the facts before thei11. We are
B of the view ·that on· the facts and in the .circumstances_ of the case ,the
respondent is not.entitle<) to invoke the remedy under section 21 of the.
Act to. recover possession of the premi~es.'.

In the result, the judgments of the High Court ..and of the T-ribunal -
are set aside and the application filed b'y th& respondent unde~ section
c 21 of the Act for recovery ~f the premises is dismissed.

. The appeal is accordingly allowed with costs .

. .
)
.. S.R.· , Appml allowed. fl

..:411
• ' .

t·

I .