Whether tenant can be evicted from tenanted premises on ground of compromise?

IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
BENCH AT AURANGABAD

WRIT PETITION NO.5381 OF 2011

Abedali Khan s/o Rahematali Khan,
Age 45 years, Occu.Business,R/o Paltan, Taluka Hingoli,District Hingoli ..PETITIONER

VERSUS

Devidas s/o Dhonduji Poghe,
Age 65 years, Occu.Pensioner,
R/o Behind Bus Stand, Lonar,Taluka Lonar, Dist.Buldhana ..RESPONDENT

Mr A.P.Bhandari, Advocate for petitioner
Mr M.V.Ghatge, Advocate for respondent

CORAM : MRS MRIDULA BHATKAR, J.

DATE OF RESERVING
THE JUDGMENT : 12.9.2011

DATE OF PRONOUNCING
THE JUDGMENT : 28.9.2011

JUDGMENT
Rule. Rule returnable forthwith. With the consent of parties, this petition is heard finally at the stage of admission.

2. By this writ petition, petitioner takes an exception to the order dated 2nd May 2011 passed by 5th Civil Judge, Junior Division, Hingoli wherein the objection raised by the petitioner/judgment debtor in Execution Proceedings No.3 of 2011 was rejected.

3. Petitioner has filed a Civil Suit bearing No.96/2010 on 6.8.2010 for injunction in which it is prayed that the respondent/defendant be restrained from evicting the petitioner, without due process of law. It is the case of the petitioner that in the month of February 2000, respondent let out his house No.7 for rent of Rs.500/- per month and since then he is residing there as a tenant by paying amount of Rs.500/-

from time to time without any arrears. Respondent in 2010, started disturbing the possession of the petitioner and directed him to vacate the premises. Respondent had entered the house and asked him to vacate it. Respondent filed written statement on 23.9.2010 and denied all the averments made and contentions raised by the petitioner. Respondent denied that petitioner is a tenant and is paying rent of Rs.500/- per month. It was contended that petitioner has deceptively inducted himself in the said house and has illegally taken the possession of the house from one Suryawanshi. The parties thereafter arrived at settlement and they submitted written compromise purshis on 28.9.2010 before the Court. The Court, on the same day recorded presence of the parties along with the advocates and verified that the contents of compromise which were affirmed by both the parties and passed the order accordingly.

4. As per the terms of the compromise, petitioner was supposed to vacate the house on 8.12.2010 and petitioner was allowed to reside till then without payment of any rent. It was agreed by the parties that if petitioner fails to vacate the premises, then respondent has right to take out execution proceedings against the petitioner.

5. Petitioner did not vacate the premises. Hence, respondent took out execution proceedings in R.D.No.10/2010. Petitioner, being a judgment debtor filed objection to the execution petition. He challenged the (execution proceedings on the point) validity of compromise recorded under Order 23, Rule 3 of the Code of Civil Procedure and execution therein. It was contended that petitioner-judgment debtor is a tenant and, therefore, he cannot be evicted pursuant to the compromise, which is contrary to the law. The executing Judge heard both the parties and rejected the objection raised by the petitioner.

Hence this petition.

6. Learned Counsel for the petitioner submitted that petitioner has filed a suit for injunction, which was compromised before the trial Court. So, the petitioner is a plaintiff and decree cannot be executed against the petitioner/plaintiff.

Learned Counsel for the petitioner submitted that the petitioner, a tenant can be evicted by the landlord only in the proceedings filed by the landlord under Section 16 of the Maharashtra Rent Control Act. He submitted that the petitioner being a tenant has filed the suit for injunction, this fact cannot be ignored. In support of his submissions, he relied on following rulings :

(i) Firozi Lal Jain V/s Man Mal and another, reported in AIR 1970 SUPREME COURT 794;
(ii) Smt. Kaushalya Devi and others Vs. K.L.Bansal, reported in AIR 1970 SUPREME COURT 838;
(iii) K.K.Chari Vs. R.M.Seshadri, reported in AIR 1970 SUPREME COURT 1311

(iv) Sushil Kumar Mehta Vs. Gobind Ram Bohra, reported in (1990) 1 Supreme Court Cases 193

(v) Kolhapur Motor Transport Producers and Consumers Co-operative Society Ltd., Vs. Ramchandra Mahipatrao Rane and ors., reported in 1990 (O) BCI 114 He argued that the the compromise was beyond the scope of the jurisdiction of the Court hence, trial Court lacked inherent jurisdiction to compromise the suit.

7. Per contra, learned Counsel for the respondent argued that the suit was compromised between the parties and trial Court after its satisfaction has recorded the compromise. The respondent, therefore, has every right to take the possession of the suit premises by executing decree in view of the terms of the compromise. While refuting the submissions of learned Counsel for the petitioner, learned Counsel for the respondent relied on amendment of the 1976, which was enacted in Rule 3 of the Code of Civil Procedure. Mr Ghatge argued that in view of this amendment, if the parties are same, then they can enter into a compromise beyond the subject-matter of the suit and, therefore, though the suit for injunction was filed by the petitioner the terms in respect of handing over the possession were lawful and the execution proceedings taken out are also legal and valid. In support of his submissions, he relied on :

(i) Sm. Lalmuni Devi and others Vs. Shiv Shanker Tiwary and ors., reported in AIR 1980 PATNA 184;

(ii) Gangadeep Pratishthan Pvt. Ltd., and ors. Vs. M/s. Mechano and others, reported in AIR 2005 SUPREME COURT 1958;

(iii) Rasiklal V/s.Govind Pandurang Anantwar, reported in AIR 1993 BOMBAY 34

(iv) Pushpa Devi Bhagat (D) by L.R. Vs.Rajinder Singh and Ors., reported in AIR 2006 SUPREME COURT 2628 (1) Learned Counsel for the respondent submitted that most of the cases relied by the learned Counsel for the petitioner are prior to the amendment of 1976 in Order 23 Rule 3 of the Code of Civil Procedure. He submitted that the learned Single Judge of the Bombay High Court in case of Mathulla Verghese & another Vs. Vijaya Rajaratnam (Mrs.) and ors., reported in 2001 (3) BOM.C.R. 205 has taken a view that tenant can be evicted on the basis of the compromise between the landlord-tenant under Order 23 Rule 3 of the Code of Civil Procedure.

8. In the present matter, suit is filed by the petitioner though for injunction simplicitor, all the averments are based on landlord-tenant relationship. Though this relationship is denied by the respondent in the written statement and contentions of trespass are raised; the pleadings in the plaint are to be considered to decide the jurisdiction and scope of the suit.

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9. Compromise has taken place immediately after written statement was filed and before framing of the issues. Thus, neither petitioner nor the respondent had an opportunity to prove their respective cases. On this background, the contents in the compromise purshis are to be read. The terms of the compromise are written in Marathi, so it was understood by both the parties. Petitioner’s stand that he is tenant and respondent is landlord is accepted. It was mentioned that there was no dispute between the parties about arrears. Both the parties wanted to keep their relation cordial and friendly. Therefore, they agreed to enter into compromise. It was further agreed that petitioner while occupying the suit premises upto 28.12.2010 was allowed to occupy the premises for a period of three months and thereafter he would vacate the premises;

failing which the respondent has every right to evict the petitioner out of the house. Nothing is stated about payment of the rent for a period of future three months. So, it appears that future three months rent free stay in the suit premises was a consideration for vacating the premises. On the same day, the trial Court recorded the compromise in presence of parties and advocates. The contents of the compromise were affirmed by both the parties and then he passed the order.

10. Before this Court it was argued that respondent-landlord is a defendant and, therefore, he cannot take out execution proceedings in the suit filed by the plaintiff. In short whether defendant can be a decree holder in suit?

11. Section 2 (3) of Code of Civil Procedure defines decree holder :

“decree-holder” means any person in whose favour a decree has been passed or an order capable of execution has been made;
Not only plaintiff but any person, in whose favour a decree has been passed, or any person in whose favour an order capable of execution has been made is a decree holder. The order of the compromise was in favour of the respondent/defendant therefore, in such circumstances, defendant also can be a decree holder. However, as per the definition of the Decree Holder, the said order, which is in favour of that person should be capable of execution. The rights of the parties in the present case are not determined and issues are not adjudicated by the Court due to compromise. Therefore, this decree in favour of the defendant is executable or not is the crux of the petition.

12. Order 23, Rule 3 enables parties to compromise the suit and empowers the Court to record and accept it. By way of an amendment, the following portion is substituted by the Code of Civil Procedure (Amendment Act, 1976):

” So far as it relates to the parties to the suit, whether or not the subject-matter of the agreement, compromise or satisfaction is the same as a subject-matter of the suit.”
This amendment has widened the scope of the compromise between the parties. So, the parties may arrive at an agreement or compromise in respect of the subject-matter, which may not be the same as the subject-matter of the suit. It is permissible for the parties to travel beyond from the subject-

matter and cover the disputed issues between them and bring under the compromise.

13. Learned Counsel for the petitioner emphasised on the explanation which states that an agreement or compromise, which is void or voidable under the Indian Contract Act, 1872 (9 of 1872), shall not be deemed to be lawful within the meaning of this rule, then this cannot be considered as a valid compromise.

Considering the terms of the compromise entered into by the parties and recorded by the Court, this compromise or an agreement is not a void or voidable under the Indian Contract Act and, therefore, explanation is not applicable to it. The amendment enables a compromise entered into between the parties is as per their satisfaction, free will and agreement, executable even though not covered under the statutory provision of Section 16 of the Maharashtra Rent Control Act.

14. Section 15 and 16 of Maharashtra Rent Control Act protect the tenant and give grounds for the eviction of the tenant.

Section 15 and Section 16 though are covered under two different chapters, yet they form one scheme of the Act. This being a beneficial legislation, these sections protect the interest of the tenant. Section 15 alone forms chapter III which is about the relief against forfeiture. Then, Section 16 is covered under separate Chapter No. IV about recovery of possession. The section states that the landlord shall be entitled to recover the possession of any premises, if the Court is satisfied under the circumstances, which are enumerated in Section 16. Thus, the grounds available to recover the possession are specifically mentioned in Section 16. Section 15 is a non obstentive and puts bar on the landlord to evict tenant if tenant pays or willing to pay standard rent and permitted increases. This section is similar to Section 12 of the Bombay Rents Hotel and Lodging House Rates Control Act, 1947. It provides the relief against eviction to the tenant and it restricts unfettered right of landlord to recover possession of the premises from the tenant.

15. Whether Section 16 prohibits any compromise between the landlord and tenant in respect of handing over of the possession and further execution of decree of eviction of the tenant based on such compromise ? By way of compromise petitioner-tenant was willing and agree to hand over the possession of the vacant premises to the respondent but thereafter he withdrew his consent and so, the landlord wants to evict the tenant for withdrawal of his consent to the agreement, which was recorded before the Court. Undoubtedly, the sanctity of the compromise, which is recorded by the Court is to be honoured by the parties.

16. Thus, there is no bar on parties contracting out compromise under Order 23 Rule 3 of the Code of Procedure, even for vacating the rental premises and consequential eviction on failure to vacate the same. Thus, Order 23, Rule 3 is applicable to the eviction suits governed under special statute like Maharashtra Rent Control Act and not violative to the statute. In the compromise, landlord and tenant one of the party or parties mutually agree to give away their rights and accept certain terms.

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17. In the case of Kolhapur Motor Transport Producers and Consumers Co-operative Society Ltd. (supra), learned Single Judge of this Court had an occasion to deal with the same issue. In that case the landlord filed Regular Civil Suit against the tenant – society and the relief was restricted only to the recovery of amount of the rent. The parties filed compromise, which was accepted by the Court and decree to that effect was recorded. The petitioner – society committed two defaults in paying the installments of arrears. Plaintiff-landlord levied execution of the said compromise decree. Tenant filed objection on the ground that decree relating to possession is a nullity as the eviction of tenant is permissible only on the grounds, which are mentioned the Bombay Rents Hotel and Lodging House Rates Control Act, 1947. Petition was filed challenging the order of the executing Court. This Court held that the compromise can be valid only if it is in accordance with the Act i.e. only if the landlord has asked for possession of the building on any of the grounds laid down in Section 13 of the Bombay Rents Hotel and Lodging House Rates Control Act, 1947 and no decree for possession could have been passed on the basis of compromise under Order 23, Rule 3 of the Code of Civil Procedure. Though said judgment was passed in the year 1989, i.e. after the amendment of 1976, on careful reading of the judgment, the discussion of Order 23, Rule 3 of the Code of Civil Procedure i.e. about the wider scope of amended Rule 3 is not found. It appears that somehow the amendment enabling the parties to compromise by going beyond the subject-matter is not discussed while restricting its application to the decree of eviction taken out pursuant to the compromise. In case of Mathulla Verghese & another Vs. Vijaya Rajaratnam (Mrs.) and ors (supra), Single Judge of this Court while dealing with the similar issue and deciding the scope of Order 23, Rule 3 of the Code of Civil Procedure and its applicability to the eviction proceedings under the Bombay Rents Hotel and Lodging House Rates Control Act, 1947 has taken a following view and held that :

“16. The second objection of Mr. Irani was that consent terms were beyond the scope of the suit because they also effect the probate petition. He also relied upon certain judgments in this regard but it appears that he did not take into consideration amendment to Rule 3 of Order XXIII which was carried out in 1977 and now as Rule 3 of Order XXIII stands, the compromise need not be restricted to the subject- matter of the suit. The amendment says that the Court may pass decree in accordance therewith so far as it relates to the parties to the suit, whether or not the subject-matter of the agreement, compromise or satisfaction is the same as the subject-matter of the suit. When provisions of law are clear in themselves and there is no bar for doubt or ambiguity it has to be held that including something about the probate proceedings and about the rights of the parties in those proceedings in the consent terms to be filed in this suit is not at all illegal.”
Case of Sushilkumar Mehta (supra) is on the point of jurisdiction of the Court and is not useful in the present matter.

18. (a) In Smt. Lalmuni Devi and others Vs. Shiv Shanker Tiwary and ors. (supra), the scope of Order 23, Rule 3 of the Code of Civil Procedure in respect of the compromise decree, which was passed in a suit for various declarations and dissolution of business was considered. Hence, it is not related to eviction of the tenant.

(b) In Rasiklal V/s.Govind Pandurang Anantwar (supra), learned Single Judge of our High Court has decided this matter in 1992 i.e. after the amendment in Rule 3 of Order 23 of the Code of Civil Procedure. Landlord had filed the eviction proceedings and also filed a suit for injunction restraining the tenant from construction or alteration in the tenanted premises.

The said matter was compromised by landlord and tenant.

However, the landlord allowed tenant to enjoy possession at enhanced rent for a period of ten years and after expiry of ten years landlord obtained the decree for delivery of possession in terms of earlier compromise. This Court has rightly held that landlord has withdrawn the eviction proceedings against the tenant and allowed to retain the possession at enhanced rent for ten years and therefore, decree for delivery of vacant possession does not fall beyond the ambit of Order 23 Rule 3 of the Code of Civil Procedure. Thus, the proceedings for eviction were taken out by the landlord.

(c) In Pushpa Devi Bhagat (D) by L.R. Vs.Rajinder Singh and Ors., reported in AIR 2006 SUPREME COURT 2628 (1), Landlords terminated the tenancy after lease period is over and filed suit for recovery of possession. When the suit was partly tried, the parties entered into compromise and tenants undertook to vacate the suit premises. It was held that the consent decree was valid compromise under Order 23 Rule 3 of the Code of Civil Procedure. Appeal filed against the concerned decree by the party was not maintainable under Section 96 (3) of the Code of Civil Procedure. This is so because a consent decree is nothing but a contract between the parties superimposed with the seal of approval of the Court. In the said appeal, the Court held that when the decree is challenged, then the Court, which recorded the compromise will itself consider and decide the question as to whether there was a valid compromise or not. While In the present case the Court, which recorded the compromise has decided the issue and upheld the compromise. Other issues were discussed and decided in the said appeal and the Honourable Supreme Court held that decree in pursuance of such settlement was an executable decree in a suit for possession and the settlement was under first part of Rule 3 of Order 23 of the Code of Civil Procedure. However, unlike matter in hand, in Pushpa Devi Bhagat (supra) suit was filed for recovery of possession by the landlord under the grounds available for eviction.

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19. I place reliance on Roshan Lal and another Vs. Madan Lal and others, reported in AIR 1975 SUPREME COURT 2130, where it was held that Order XXIII Rule 3 of the Code of Civil Procedure is applicable to eviction suits governed by the special statutes. In that matter landlord has filed a suit for eviction against the defendant-tenant. The parties entered into compromise and trial Court passed a decree for eviction against the tenant, which was objected by defendants-tenant on the ground that compromise decree was void and not executable as it is against the provisions of the Act. This objection was accepted and execution was dismissed. Miscellaneous Appeal was dismissed, which was filed before the District Judge. Second Miscellaneous Appeal, which was filed before the Madhya Pradesh High Court was allowed and it was held that the decree was not nullity and was executable. So, tenant, the original defendants, who were the judgment debtors filed appeal in the Supreme Court. The Apex Court while deciding the said issue has referred a landmark case of K.K.Chari Vs. R.M.Seshadri (supra), in which Apex Court has come across the similar issue.

The Apex Court, on the basis of judgment in K.K.Chari Vs. R.M. Seshadri (supra) further elaborated the reasoning on this issue and though at the time of deciding this matter, there was no amendment of 1976 widening the scope of the compromise, yet it was held that such decree was executable. The said view was taken by the Apex Court in the year 1975 when this amendment was absent. Bar of restricting the compromise only to the subject-matter of the suit is expressly lifted by this amendment.

However, it is not to be construed that the provision is unrestricted. Widening the scope does not mean it is unlimited.

20. Order 23 Rule 3 of the Code of Civil Procedure is a procedural law, enabling the compromise beyond the subject-

matter of the suit. However, the Maharashtra Rent Control Act is a special statute wherein Section 16 deals with the grounds of eviction and entitlement of the possession under specific grounds. Undoubtedly, the substantive Act will have priority over the procedural law. Therefore, by harmonious interpretation a balance between the procedural law and statutory provisions under the Maharashtra Rent Control Act can be achieved.

21. Unless one of the grounds available under Section 16 is taken up, pleaded or shown to the Court at the time of compromise and unless it is mentioned in the compromise, the decree based on such compromise will not be executable.

Landlord and tenant may enter into compromise, where tenant is ready to vacate the premises. Court is satisfied about it as the parties before the Court mutually agree, though any ground for eviction or vacating the rented premises, which is available under Section 16 of the Maharashtra Rent Control Act is not mentioned in the compromise, the compromise can be materialised if the tenant vacates the premises voluntarily.

However, the obstacle in the execution will arise if premises is not vacated.

22. Thus, while submitting the terms of the compromise, it is mandatory that at least one of the grounds for eviction which is available under Section 16 of the Maharashtra Rent Control Act ought to have been mentioned in the compromise purshis or there should be a clear indication of such ground which might have been pleaded either in the plaint by landlord or in the written statement if the landlord is a defendant. Thereafter, it is the duty of the Court while recording the compromise, to satisfy itself that any ground under Section 16 ought to have been mentioned in the compromise and then accept it. In case of Roshan Lal (supra), the Apex Court has enlightened us on this issue and has held :

” If, however, parties choose to enter into a compromise due to any reason such as to avoid the risk of protracted litigating expenses, it is open to them to do so. The Court can pass a decree on the basis of the compromise. In such a situation the only thing to be seen is whether the compromise is in violation of the requirement of the law. In other words, parties cannot be permitted to have a tenant’s eviction merely by agreement without anything more. The compromise must indicate either on its face or in the background of other materials in the case that the tenant expressly or impliedly is agreeing to suffer a decree for eviction because the landlord, in the circumstances, is entitled to have such a decree under the law.”
Passing a decree for eviction on adjudication of the requisite facts or on their admission in a compromise either expressed or implied is not different.

Thus, in the terms of compromise why landlord wants premises and the ground, which is available under Section 16 should reflect in the compromise, then only that compromise becomes executable.

On this background, the present compromise is to be looked into. In the compromise purshis, the status of the parties as landlord and tenant is accepted. No ground which is available under Section 16 of the Maharashtra Rent Control Act is mentioned, indicated or reflected. Therefore, the decree based upon the terms of the compromise being contrary to Section 16 of the Maharashtra Rent Control Act, becomes unexecutable.

Going back to the definition of Decree Holder, though the defendant-landlord is having a decree/order in his favour, the same is not executable, as in the compromise no ground available under Section 16 of the Maharashtra Rent Control Act is mentioned or clearly indicated. So, eviction of the tenant contrary to Section 16 of the Maharashtra Rent Control Act is violative to the said special statute.

The order passed by learned 5th Civil Judge, Senior Division, Hingoli is set aside. Writ Petition is allowed.

Rule made absolute accordingly.

( MRS MRIDULA BHATKAR, J.)

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