Holding

The phrase ‘such rent as may be mutually agreed upon between the parties’ contemplates agreements made after the commencement of Section 29‑A; a prior agreement does not preclude rent fixation under Section 29‑A(5).

Summary

Vinaya Kumar Shukal, the owner of a plot let to Lakhat Ram in 1957 at a rent of Rs.170 per annum, sought fixation of a new rent under Section 29-A of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 after a building was erected on the land. The Delegated Authority rejected the application, holding that the existing rent agreement barred re‑determination, and the Allahabad High Court affirmed this view. On appeal, the Supreme Court examined the meaning of the phrase “such rent as may be mutually agreed upon between the parties” in s.29‑A(4) and held that it refers only to agreements made after the enactment of Section 29‑A; a pre‑existing agreement does not preclude the authority from fixing rent under s.29‑A(5). Consequently, the earlier rent agreement could be overridden and the rent could be enhanced. The Court set aside the High Court and Delegated Authority orders and remanded the matter for fresh consideration of the rent fixation application.

Issues considered

The scope of the expression ‘such rent as may be mutually agreed upon between the parties’ in s.29‑A(4) of the U.P. Urban Buildings Act.
Whether a rent agreement entered into before the commencement of s.29‑A bars the authority from fixing rent under s.29‑A(5).
Whether rent can be enhanced despite an existing pre‑act agreement.

Legislation cited

U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972s. 29-A(4), s. 29-A(5), s. 29-A(7)

Subjects

rent fixationSection 29-Apre‑existing rent agreementlandlord‑tenantU.P. Urban Buildings Actinterpretation of statuterent enhancement

Judgment

VINAYA KUMAR SHUKAL
A
v.
LAKHPAT RAM AND ANOTHER
)
AUGUST 22, 1990

[K.N. SAIKIA AND S.C. AGRAWAL, JJ.] B

U.P. Urban Buildings (Regulation of Letting, Rent and Eviction)
Act, 1972: Section 29-A, sub-sections (4), (5) and (71-'Such rent as
~"'- may be mutually agreed upon between the parties'-Interpretation of-
Rent agreement entered into prior to commencement of s. 29-A-
Whether bars determination of rent after the incorporation of s. 29-A-
Expression 'may be'-Scope of. -c
In 1957, the appellant let out a plot of land to Respondent No. 1 at
an annnal rent of Rs. 170. Respondent No. l constructed a building on
'°>-'
the plot of land in 1968, with the consent of the appellant. Aller the
insertion in 1976 of Section 29-A in the U.P. Urban Buildings (Regula- D
lion of Letting, Rent and Eviction) Act, 1972, appellant filed an applica-
lion before the delegated authority under the Act for rrxation of
appropriate rent for the said land under Section 29-A(S) of the Act. The
application was dismissed by the authority on the ground that Section
29-A(S) was applicable only to those cases in which there was no agreed
rent and since the parties, by mutual agreement,_ have accepted the E
;; annual rent at Rs.170 there was no question of rer.xation of the rent.

Aggrieved, the appellant filed ~ Writ Petition in the High Court,
which was dismissed.

~
The appellant has preferred this appeal, by special leave, against F
the said order of the High Court.

"
Allowing the appeal,

HELD: I. The words "such rent as may be mutually agreed upon
between the parties" in sub-section (4) of Section 29-A of the U.P, G
Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972
envisage an agreement with regard to rent entered by the landlord and
tenant aller the coming into fOrce of Section 29-A. An agreement prior
to the commencement of Section 29-A would not preclude determina-
~ lion of rent under sub-section (S) of Section 29-A. Generally, the words
'may be' are much ollener used with reference to the future than the H

965
966 SUPREME COURT REPORTS I1990] 3 S.C.R.

A past or present. In sub-section (4) of Section 29-A the words 'may be'
are preceded by the word •as' and are followed by the words 'mutually
agreed upon' which indicate that the words are used with reference to
the future. The provisions of sub-section (7) which give overriding effect
to the provisions of section 29-A over an existing contract also lend
support to this construction. The High Court was not correct in holding
B
the view that there could be no enhancement of the rent under sub-
section (5) of Section 29-A in view of the agreement between the appel-
lant and the tenant that the tenant shall pay rent at the rate of Rs.170
per annum. (970A-D I - •
Trilok Chand v. Rent Control and Eviction Officer & Anr.,
C (1988] I R.C.R. 633; approved.

Brown v. Batchelor, 25 L.J., Ex. 299; referred to.

Stroud's Judicial Dictionary, 5th Edn. p. 1575; referred to.
D
2. The Judgment and order of the High Court dated February 19.
1990 as well as the order dated April 14. 1978 passed by the Delegated
Authority are set aside and the matter is remanded to the Delegated
Authority for consideration of the application submitted by the appel-
lant for fixation of rent under Section 29-A of the Act in accordance
with law. (970E-F]
E
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5933
of 1983.

F
From the Judgment and Order dated 19.2.1980 of the Allahabad
High Court in Civil Misc. Petition No. 5860 of 1978.

R.K. Jain, Ms. Abha R. Sharma and R.P. Singh, for the •
-
Appellant. J
M.C. Dhingra for the Respondents.
G The Judgment of the Court was delivered by

S.C. AGRAWAL, J. This appeal by special leave involves the
question as to the interpretation of the provisions of Section 29-A of
the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction)
Act, 1972 (hereinafter referred to as 'the Act').
H
V.K. SHUKAL v. LAKHPAT (AGRAWAL, J.] 967

The Act was enacted by the U .P. State legislature to provide, in
A
the interest of the general public, for the regulation of letting and rent
) of, and the eviction of tenants from certain classes of buildings situated
in urban areas, and for matters connected therewith. The Act, as
originally enacted, was confined in its application to buildings only. It
was amended by U.P. Act XXVIII of 1976 whereby Section 29-A was
inserted with a view to give protection against eviction to certain clas- B
ses of tenants of land on which building exists. The relevant o/ovisions
of Section 29-A read as under:

"(2) This Section applies only to land let out, either before
or after the commencement of this Section, where the
tenant, with the landlord's consent has erected any per-
manent structure and incurred expenses in execution c
thereof.

xxx xxx xxx

(4) The tenant of any land to which this Section applies o
shall be liable to pay to the landlord such rent as may be
mutually agreed upon between the parties, and in the
absence of agreement, the rent determined in accordance
with sub-section (5).

(5) The District Magistrate shall on the application of the E
landlord or the tenant determine the anrual rent payable in
respect of such land at the rate of ten per cent per annum of
the prevailing market value of the land, and such rent shall
be payable, except as provided in sub-section (6) from the
date of expiration of the term for which the land was let or
from the commencement of this Section, whichever is later. F

( xxx xxx xxx

(7) The provisions of this section shall have effect,
notwithstanding anything to the contrary contained in any
contract or instrument or in any other law for the time G
being in force."

The appellant is the owner of a plot of land measuring 30 x 65
sq. ft. situated at Garhmukteshwar Road (Azad Road) Meerut. The
said plot of land was let out by the appellant to the respondent No. 1
on March 20, 1957 at an annual rent of Rs.170. After the said plot of H
968 SUPREME COURT REPORTS I 1990] 3 S.C.R.
A land had been let out to him, respondent No. 1 with the consent of the
appellant constructed a building over the said plot in 1965. After the
enactment of Section 29-A the appellant submitted an application on
September 29, 1976, before the District Supply Officer1Delegated
\
Authority, Meerut, for fixation of appropriate rent for the plot of land
B . under sub-section (5) of Section 29-A. The said application of the
appellant was dismissed by the District Supply Officer 1Delegated
Autho{ity by order dated April 14, 1978 on the view that the provi-
sions of sub-section (5) of Section 29-A for fixation of rent are applic-
able to those cases only in which there is no agreed rent and that in this -
case both the parties have accepted that the rent of land is Rs.170 per '
year has been fixed on the basis of mutual agreement and, therefore,
c the question of re-fixation of rent does not arise. Feeling aggrieved by
the said order of the District Supply Officer the appellant filed a writ
petition in the High Court of Judicature at Allahabad under Article ~
226 of the Constitution of India. The said writ petition was dismissed
by a Division Bench of the said High Court by order dated February '--(

19, 1980. The learned Judges have held that under Section 29-A the
D
District Magistrate has jurisdiction to determine the rent only in those
cases where there is no agreement relating to rent and if there is an
agreement between the landlord and the tenant then the District
Magistrate has no jurisdiction to determine the rent. The learned
Judges have further found that in the instant case admittedly an agree-
ment existed between the appellant and the tenant that the tenant shall
E
pay rent at the rate of Rs. 170 per annum to the appellant and as such \
there could be no enhancement of the rent under sub-section (5) of
Section 29-A. Feeling aggrieved by the said decision of the High Court
the appellant has filed this appeal after obtaining special leave to
~
appeal.
F
Shri R.K. Jain, the learned counsel for the appellant has urged ''°'
that sub-section (4) of Section 29-A postulates determination of rent in
accordance with sub-section (5) in cases where the rent has not been
I
mutually agreed upon between the parties. The submission of Shri Jain
is that the expression "such rent as may be mutually agreed upon
between the parties" in sub-section (4) of Section 29-A means rent
G which has been mutually agreed upon after the enactment of Section
29-A and any agreement prior to the said enactment would not pre-

~
elude determination of rent under Section 29-A of the Act. In support
of this submission Shri Jain has invited our attention to the decision of
the Full Bench of the Allahabad High Court in Tri/ok Chand v. Rent ~

Control and Eviction Officer and Another, I1988] 1 R.C.R. 633.
H
V.K. SHUKAL v. LAKHPAT [AGRAWAL, J.J 969

In Trilok Chand v. Rent Control and Eviction Officer case
A
, (supra) a Full Bench of the High Court has considered the correctness
) of the decision of the Division Bench in the present case and has
construed the provisions of Section 29-A of the Act. In that case it has
been held that sub-section (4) of Section 29-A precludes determination
of rent only in those cases where the agreement fixing the rent was
entered into subsequent to the coming into force of Section 29-A. It B
has been observed:

. - . "The reason is this, sub-section (4) applies to the land to
which Section 29-A applies. It provides that the tenant
shall be liable to pay to the landlord such rent as may be
agreea between the parties. In the absence of such agreed
rent, the sub-section further provides that the tenant is
c
liable to pay the rent determined in accordance with sub-
section (5). These terms are clear enough and indicate that
the agreement envisaged thereunder is not the agreement,
existed prior to coming into force of Section 29-A. It refers
to subsequent agreement only. The words "such rent as D
may be mutually agreed upon between the parties" refers
to future agreement and not the past agreement. Sub-
section (4) again emphasises "such rent". Such rent, in the
context means the rent to be mutually agreed upon by
parties. Sub-section (4) further states that in the absence of
agreement, the rent has to be determined in accordance E
with sub-section (5)."
(p. 636)

"Yet another reason to support our view could be found
from sub-section (7). It provides that notwithstanding any-
thing to the contrary contained in any contract or instru- F
ment or in any other law for the time being in force, the
provisions of Section 29-A shall have effect. It means
clearly that the agreement if any existing on the date of
coming into force of Section 29-A is no bar for enforcing
the rights under sub-section (5). Sub-sections (4) and (5)
shall prevail and not the antecedent agreement, if any." (p. G
636)

The learned Judges of the Full Bench have overruled the deci-
-i, sion of the Division Bench in the present case.

We are in agreement with the view propounded by the Full H
970 SUPREME COURT REPORTS [1990] 3 S.C.R

A Bench in Trilok Chand's case (supra). In our opinion, the words "such
rent as may be mutually agreed upon between the parties" in sub-1
section (4) of Section 29-A envisage an agreement with regard to rent\
entered by the landlord and tenant after the coming into force of
Section 29-A. An agreement prior to the commencement of Section
29-A would not preclude determination of rent under sub-section (5)
B
of Section 29-A. In this context it may be mentioned that the words
"may be" used in sub-section (4) of Section 29-A are much oftener
used with reference to the future than the past or the present (Pollock
C.B. in Brown v. Batchelor, 25 L.J. Ex. 299, Stroud's Judicial Dictio- - •
nary, 5th Edn. P. 1575). In sub-section (4) of Section 29-A the words
"may be" are preceded by the word "as·· and are followed by the
c words "mutually agreed upon" which indicate that ihe words are used
..
with reference to the future. The provisions of sub-section (7) which
give overriding effect to the provisions of Section 29-A over an existing
contract also lend support to this construction. We are, therefore,
unable to uphold the view of the learned Judges of the Division Bench '-"
of the High Court in this case that there could be no enhancement of
D the rent under sub-section (5) of Section 29-A in view of the agreement
between the appellant and the tenant that the tenant shall pay rent at
the rate of Rs.170 per annum.

The appeal is, therefore, allowed. The judgment and order of
the High Court dated February 19, 1980 as well as the order dated . .
E April 14, 1978, passed by the District Supply Officer/Delegated ~
Authority, Meerut, are set aside and the matter is remanded to the
District Supply Officer/Delegated Authority, Meerut for considera-
tion of the application submitted by the appellant for fixation of rent
under Section 29-A of the Act in accordance with law. No order as to
costs.

G.N. Appeal allowed. ,
I