VERY IMPORTANT POINT
Section 13(2)(i) Proviso of East Punjab Urban Rent Restriction Act, 1945 obliges the controller to assess provisionally (i) the arrears of resnt (ii) the interest on arrears of rent assessed by him and (iii) costs of application to be paid or tendered by tenant on first date of hearing of the main petition following the date of such assessment by controller in accordance with the procedure to be followed thereafter as laid down in this land mark judgment.

Headnote:(i) East Pujab Urban Rent Restriction Act, 1949-Section 13(2)(i)-Eviction petition on ground of default in payment of rent - rent note stating rent p.m. to be Rs. 2000/- excluding water and electricity charges-Tenant alleging it was Rs. 1800/- as admitted by landlord in a partition suit-Rent Controller holding rate of rent was Rs. 2000/- p.m.-Appellate authority holding it was Rs. 1800/- p.m.-Confirmed by High Court in revision-Appeal to Supreme Court-What is the rate of rent Rs. 2000/- or Rs. 1800/- p.m.? (The former) (Evidence Act-CPC-Admission of party).
       Held : We will first examine what is the rate of rent. It is admitted between the parties that the agreed rate of rent as recited in the deed of lease executed between the parties was Rs. 2000/- but it was the case of the tenants that the rate of rent so appointed was not intended to be acted upon. No reason has been assigned to show why the parties would have arrived at an agreed rate of rent of Rs. 2000/- per month and yet chosen not to act upon it. The subsequent conduct of the parties belies the plea taken by the tenants. For several months rent has been paid at the rate of Rs. 2000/- p.m. We would to refer in particular to the contents of the letter dated 9.8.1985 written by the tenants to Ratan Devi, the then landlord wherein it is stated inter alia "we are forwarding herewith two cheques of Corporation Bank, cheque No. CA 78/770482 dated 9.8.1985 for Rs. 4000/- being the amount of rent for June and July, 1985. Another cheque for United Commercial Bank, cheque No. 256453 dated 9.8.1985 for Rs. 2000/-, the rent of August, 1985 receipt of which please be acknowledged". The contents of this letter are neither disowned nor explained and this letter sinks a death-nail into the plea of the tenants. Apart from other evidence available on record, these two material pieces of evidence viz. the deed of lease and tenants letter abovesaid accompanied by cheques, are enough to overrule the plea of the tenants and to hold that the rate of rent is Rs. 2000/- p.m. The Appellate Authority, in arriving at a finding to the contrary, was deeply impressed by the fact that in the family litigation for partition of the property, the plaintiffs therein had alleged rate of rent of these premises as Rs. 1800/- p.m. and this averment was not disputed by the landlord herein, who was one of the defendants therein. The Appellate Court overlooked some very relevant facts. The plaintiffs in the partition suit were not the landlords realizing the rent; that was the landlord herein who was realizing the rent from the tenants. By an interim order the Civil Court had restrained parties and had directed the rent to be deposited in the Court so as to be available for distribution to the party found entitled at the end to release of the rent. The written statement filed in the civil suit by the landlord-plaintiff herein did not contain any admission as such; there was a mere failure to object. In that suit, rent payable by the tenants herein was not a subject matter of controversy; it was a side issue. Admission is only a piece of evidence and can be explained; it does not conclusive bind a party unless it amounts to an estoppel. Value of an admission has to be determined by keeping in view the circumstances in which it was made and to whom. A mere failure to object cannot be placed on a footing higher than an admission. If the two clear cut admissions made by the tenants, referred to herein above, were to be weighed against the landlord s mere failure to object a wrong averment as to rate of rent in a case where it was not a point in issue, then no inference other than the one of the rate of rent being Rs. 2000/- p.m. could have been drawn. To that extent, the finding arrived at by the Appellate Authority suffer from perversity and should have been set aside by the High Court even in exercise of revisional jurisdiction. On the material available on record, no inference other than the rent of the suit premises being Rs. 2000/- p.m., excluding water and electricity charges, can be drawn. We hold it accordingly. (Paras 6 and 7)
       (ii) Eas Punjab Urban Rent Restriction Act, 1949-Section 13(2)(i) proviso-Eviction petition on ground of default in payment of rent-Serious dispute as to rate of rent-Rs. 2000/- or Rs. 1800/- p.m.-Tenant paying @ Rs. 1800/- p.m.-Default of Rs. 200/- marginal and not deliberate-Eviction order by RC-Reversed by first appellate court and affirmed by High Court-Appeal against to Supreme Court-Lacuna in Act in such a case-Conclusions by Apex Court to remove the lacuna-Controller directed to follow the procedure-Appeal allowed accordingly (Transfer of Property Act, 1882)-Section 114-Forfeiture of lease for non-payment-Relief).
       Held : Though we are holding the rate of rent Rs. 2000/- p.m. excluding water and electricity charges but it cannot be denied that to being with there was a serious dispute as to the rate of rent as to whether it was Rs. 2000/-, and hence followed the dispute whether the amount tendered by the tenant in the suit along with interest and cost of application amounted to compliance with proviso under Section 13 (2)(i) and if so, whether a decree for eviction could at all have been passed. All such disputes were genuine and not frivolous or just in air without any basis. In this appeal, the tenant-respondents have, in the affidavit of Ashwini Kumar, supported by documents, filed with the leave of the court, set a statement of payment made, which reveals that the controversy between the parties is very narrow, and even if there is some default in payment it is marginal and not deliberate. There is a serious lacuna with which the relevant provision of the Act suffers which we propose to demonstrate and deal with so as to remove the same, if we can. (Para 8)
       The learned counsel for the tenants conceded during the course of hearing that on the present framing of the provision under examination, the obligation of the tenant to pay or tender even time barred rent, to take advantage of the proviso, cannot be denied. The question still remains what is the amount which the tenant should tender and what is the course to be followed if there be any genuine dispute between the amount claimed or alleged by the landlord to be due and the amount which the tenant admits or alleges to be due. Apparently the Punjab Act does not provide any mechanism taking care of such a situation. (Paras 14 and 15)
       To sum up, our considerations are :
        1. In Section 13(2)(i) proviso, the words assessed by the Contoller qualify not merely the words the cost of application but the entire preceding part of the sentence i.e. the arrears of rent and interest at six per cent per annum on such arrears together with the cost of application .
        2. The proviso to Section 13(2)(i) of East Punjab Urban Restriction Act, 1949 casts an obligation on the Controller to make an assessment of (i) arrears of rent (ii) the interest on such arrears, and (iii) the cost of application and then quantify by way of an interim or provisional order the amount which the tenant must pay or tender on the first date of hearing after the passing of such order of assessment by the Controller so as to satisfy the requirement of the proviso.
        3. Of necessity, the date of first hearing of the application would mean the date falling after the date of such order by Controller.
        4. On the failure of the tenant to comply, nothing remains to be done and an order for eviction shall follow. If the tenant makes compliance, the inquiry shall continue for finally adjudicating upon the dispute as to the arrears of rent in the light of the contending pleas raised by the landlord and the tenant before the Controller.
        5. If the final adjudication by the Controller be at variance with him interim or provisional order passed under the proviso, one of the following two orders may be made depending on the facts situation of a given case. If the amount deposited by the tenant is found to be in excess, the Controller may direct a refund. If, on the other hand, the amount deposited by the tenant is found to be short or deficient, the Controller may pass a conditional order directing tenant to place the landlord in possession of the premises by giving a reasonable time to the tenant for paying or tendering the deficit amount, failing which alone he shall be liable to be evicted. Compliance shall save him from eviction.
        6. While exercising discretion for affording the tenant an opportunity of making good the deficit, one of the relevant factors to be taken into consideration by the Controller would be, whether the tenant has paid or tendered with substantial regularity the rent falling due month by month during the pendency of the proceedings.
       The view of the law so taken by us advances the object sought to be achieved by the legislation, serves best the interests of landlord and tenant both, removes uncertainty in litigation and obscurity in drafting of the provision and also accords with the principles of justice and equity. Even if, it is an innovation, it is in the field of procedural law, without affecting the substantive rights and obligations of the landlord and the tenant and such innovation is permissible on the basis of authority and supported by principles of justice, good sense and reason. We have not touched the substantive rights of landlord and tenant, and are feeling satisied with a do .... little in the field of procedure so as to effectuate the purpose of enactment. We do not find that the Controller has, in the present passed any order under Section 13(2)(i) proviso as aforesaid and therefore the order for eviction stands vitiated on the view of the law which we have taken hereinabove. The appeal is allowed. The impugned judgment of the High Court and the orders of the Rent Controller as also of the Appellate Authority are all set aside. The case is sent back to the Controller. The Controller shall, after affording the parties an opportunity of hearing, pass a provisional order under the proviso to Section 13(2)(i) and afford the tenants an opportunity of making payment or tender and then proceed to decide the case afresh consistently with the law as settled hereby. The costs before the Appellate Authority, the High Court and this Court shall be borne by the parties as incurred. The costs before the Controller shall abide the result.
        (Paras 30, 31 and 32)

JUDGMENT

R.C. Lahoti, J.-Late Parmodh Paul, who died during the pendency of the proceedings and whose legal representatives, the appellants before us, have been brought on record, filed a petition under Section 13 of the East Punjab Urban Rent Restrictions Act, 1949 (hereinafter the Act , for short), against the respondent-firm through its two partners on the ground of the tenants having defaulted in payment of rent, a ground for eviction under Clause (i) of sub-Section (2) of Section 13 of the Act. Hereinafter for the sake of convenience and brevity, Late Parmodh Paul shall be referred to as the landlord and the respondents as the tenant .

2. According to the averments made in the petition for eviction filed on 17.9.1991, the suit premises were obtained by the tenants on tenancy from Shri Mani Ram and Smt. Ratan Devi, the then owners and landlords, under the rent note dated 20-9-1982. The rate of rent agreed upon was Rs. 2000/- per month excluding water and electricity charges. The tenants neither paid nor tendered the arrears of rent from 1st March, 1985. There was a civil litigation relating to partition of joint family properties, including the suit premises, between the members of the family wherein, in terms of an interim order passed by the Civil Court, the tenants had deposited rent at the rate of Rs. 1800/- per month for the period October 1985 to January 1988. In the eviction petition, the landlord prayed for a direction from the Rent Controller to evict the tenants on the ground of non-payment of rent.

3. In the written statement dated 8.1.1992 the tenants admitted to have executed the rent note reciting the rate of rent at Rs. 2000/- per month, other than water and electricity charges, but submitted that the rate of rent so appointed was never intended to be acted upon the real monthly rent of the premises was Rs. 1800/- only. In the family litigation, to which the tenants were not a party, in terms of the order passed by the Civil Court, rent at the rate of Rs. 1800/- was deposited for the period October 1985 to January 1988. The rent for the period upto September 1985 was paid to the landlords. Subsequent arrears accumulating owing to infighting amongst the legal heirs, for the period 1.2.1988 to September 1991, i.e. for 44 months, amounting to Rs. 79200/- plus interest Rs. 8910/- and costs Rs. 75/- totalling Rs. 88,185/- were tendered before the Rent Controller on 14.11.1991.

4. The Rent Controller held the rate of rent of the demised premises was Rs. 2000/- excluding water and electricity charges. The amount tendered by the tenants was found to be short and, therefore, invalid. Consequently, at the end, the tenants were ordered to be evicted from the suit premises.

5. The tenants preferred an appeal before the Appellate Authority. The Appellate Authority reversed the finding of the Rent Controller and held the rate of rent to be Rs. 1800/-, at which rate the arrears had stood cleared and, therefore, the tenants were not liable to be evicted. Civil Revision preferred before the High Court by the landlord was dismissed by the High Court forming an opinion that the finding of fact arrived at by the Appellate Authority was not liable to be interfered with an exercise of revisional jurisdiction. This is an appeal by special leave preferred by the landlord.

6. We will first examine what is the rate of rent. It is admitted between the parties that the agreed rate of rent as recited in the deed of lease executed between the parties was Rs. 2000/- but it was the case of the tenants that the rate of rent so appointed was not intended to be acted upon. No reason has been assigned to show why the parties would have arrived at an agreed rate of rent of Rs. 2000/- per month and yet chosen not to act upon it. The subsequent conduct of the parties belies the plea taken by the tenants. For several months rent has been paid at the rate of Rs. 2000/- p.m. We would to refer in particular to the contents of the letter dated 9.8.1985

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2002 Supreme(SC) 564

Cases Referred (8)