Malchand Agarwala vs Santolal Agarwalla

Ram Labhaya, J.—This is an appeal from the order of the Additional District Judge, Lower Assam Districts dated 29-11-1951 by which the order of Mr. A. Hai. Additional Subordinate Judge dated 28-5-1951 fixing fair and reasonable rent of the premises in dispute at Rs. 1300/- per annum was upheld. Malchand Agarwalla the landlord has assailed the correctness of the orders or the courts below.

The facts leading to this appeal may be briefly stated. Malchand Agarwalla, Appellant is the owner of the premises in question. Santolal Agarwalla, the karta of the joint Hindu family known as Santolal Puranmall, got a portion of the premises at an annual rental of Rs. 3001/-. Later on, he discovered that the rent had been charged at a very exorbitant rate and was excessive. The landlord had taken advantage of his need and ignorance. He therefore applied under Sections 3 and 4 of the Assam Urban Areas Rent Control Act, 1946 (Act 3 of 1946) (hereinafter called the Act) for fixation of fair rent of the premises. In paragraph 5 of his petition he stated expressly that the rent for the first year commencing from 31-10-1948 and amounting to Rs. 3001/- had been paid in advance. No relief in the petition was claimed for this year presumably because payment for the year had been made. This petition was resisted. On facts after a consideration of the entire evidence, the learned Subordinate Judge allowed an increase of 30 per cent, over the previous rent and fixed the annual rental payable u/s 3 at Rs. 1300/-. On appeal the finding as to fair and reasonable rental was upheld.

The learned Counsel for the Appellant has urged mainly that the application for fixation of fair rent was barred by the rule of ''res judicata''. This is a new point, it was not raised in any of the courts below. The learned Counsel for the Respondent contends that the appeal is not competent and therefore it is not necessary to go into the merits of the appeal He urges that u/s 9 a landlord or a tenant aggrieved by any decision or order of the Court under the provisions of S. 4(1) has got a right of appeal against that decision. But there is no provision in the Act allowing a right of second appeal. This right, he argues, cannot be claimed inferentially; it should be specifically provided for. This contention may be examined first.

Section 9 which governs the right of appeal is as follows:

A landlord or a tenant aggrieved by any decision or order of the Court under the provisions of Ss. 4(1), 5, 6 and 8(2) of this Act shall have a right of appeal against the same as if such decision or order were a decree in a suit for ejectment of the tenant from the house.

A right of appeal has been given to a landlord or a tenant from the decisions u/s 4(1) in express terms. But the section does not merely confer this right of appeal. It provides further that the aggrieved party shall have a right of appeal as if such decision or order were a decree in a suit for ejectment of the tenant from the house. This provision has to be interpreted in a way that full effect is given to the following important clause:- "as if such decision or order were a decision in a suit for ejectment."

Mr. Lahiri contends that these words confer the status or the quality of a decree on any decision or order made u/s 4(1) with the necessary consequence that the Civil P. C. will apply to it just exactly as it would apply to any other decree under the Civil P. C. The appellate decision will also be a decree and will be subject to second appeal on grounds specified in S. 100, Civil P. C. His contention really is that the right of second appeal is necessarily implied in the provision which declares that the order or the decision u/s 4(1) shall be treated as a decree for purposes of appeal.

In -- The State of Bombay Vs. Pandurang Vinayak Chaphalkar and Others, their Lordships of the Supreme Court interpreted almost the same language though used in a different context. Ordinance No. 1 of 1948 was repealed by Act, 31 of 1948. Section 15(1) of the Act provided that

the Bombay Building (Control on Erection) Ordinance, 1948, is hereby repealed and it is hereby declared that the provisions of Sections 7 and 25 of the Bombay General Clauses Act, 1904, shall apply to the repeal as if that Ordinance were an enactment.

Mahajan J. who delivered the judgment of the court when interpreting the words "as if that ordinance were an enactment" observed as follows:

It appears to us that the attention of the learned Judges was not pointedly drawn to the concluding words of Section 15(1) of the Act. It is specifically provided therein that the provisions of Sections 7 and 25 of the Bombay General Clauses Act shall apply to the repeal as if the Ordinance were an enactment. The Ordinance by use of those words was given the status of an enactment and therefore the word Ordinance occurring in the notification has to be read accordingly and as extending the Act to those areas, and unless that is done, full effect cannot be given to the concluding words used in S. 15(1) of the Act. The concluding words of S. 15(1) of the Act achieve the purpose that was achieved in the Cotton Cloth and Yarn (Control) order by the "Proviso". By reason of the deeming provisions of Section 16, the language used in the notification extending the Ordinance to those areas as a necessary consequence has the effect of extending the operation of the Act to those areas. When a statute enacts that something shall be deemed to have been done, which in fact and truth was not done, the Court is entitled and bound to ascertain for what purposes and between what persons the statutory fiction is to be resorted to and full effect must be given to the statutory fiction and it should be carried to its logical conclusion.

Seen in the light of the above authoritative pronouncement it would appear that words "as if such decision or order were a decree'' carry the same meaning as the words "such decision or order shall be deemed to be a decree in a suit for ejectment,". In -- AIR 1930 54 (Privy Council) it was held that where a person is "deemed to be" something, the only possible meaning is that whereas he is not in reality that something, the Act requires him to be treated as if he were. In view of these weighty pronouncements from the Supreme Court and the Privy Council, there can be no escape from the position that an order or decision u/s 4(1) has the force of a decree in an ejectment suit.

The next question is What would be the nature or the quality of the decision passed on appeal by an aggrieved party. Would the decision of the appellate court also be a decree and thus subject to second appeal, u/s 100, Civil P. C. or would it be merely an order against which no second appeal would lie? The Act makes no express provision on the point. But notwithstanding this omission it would appear that once the order or decision u/s 4(1) is treated as a decree for purposes of appeal, it will continue to have the same effect as any other decree under the Civil P. C. till the disposal of the appeal. The appear front a decree is finally disposed of when a decree is signed in accordance with the appellate judgment.

When a Statute declares that a person or thing shall be deemed to be or shall be treated as something which in reality it is not, it shall have to be treated as so during the entire course of the proceeding. The legal fiction introduced by legislation has to be given full effect. If an order u/s 4(1) has to he regarded as tantamount to a decree for purposes of appeal, the order on appeal will have the same status as though the appeal were from a decree. For, it is only in that way that full effect is given to the statutory direction. An order would not be treated as a decree if it is so treated merely for the purposes of the filing of the appeal. It remains a decree all throughout the course of the appeal. The appellate decision is the most essential part of the appellate proceeding. Even for that decision the order of the trial court is to be treated as a decree. The appellate decision will therefore have to be a decree.

This principle was enunciated in -- ''East End Dwellings Co. Ltd. v. Finsbury Borough Council'', 1952 A. C. 109 (C) where while dealing with the provisions of the Town and County Planning Act, 1947, Lord Asquith made reference to it and observed as follows:

If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it...... The statute says that you must imagine a certain state of affairs; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs.

Reliance was also placed on this principle in The State of Bombay Vs. Pandurang Vinayak Chaphalkar and Others, , and it was held that

when a statute enacts that something shall be deemed to have been done, which in fact and truth was not done, the court is entitled and bound to ascertain for what purposes and between what persons the statutory fiction is to be resorted to and full effect must be given to the statutory fiction and it should be carried to its logical conclusion.

The effect of carrying the provisions of S. 9 to their logical conclusion would be that the order which has to be deemed as a decree would result in an appellate decree if appealed from and therefore a second appeal would he if the case is covered by the provisions contained in S. 100, Civil P. C.

No express provision for a second appeal would be necessary if the provision made in S. 9 is carried to its logical conclusion. The right would follow as a necessary corollary or consequence. It would be its necessary implication. The expedient adopted by the legislature would be another way of providing for the right of second appeal. The view receives support from another important pronouncement of their Lordships of the Privy Council in -- ''Secy. of State v. Chelikani Rama Rao'', AIR 1916 PC 21 (D). In this case, certain islands in the bed of the sea were sought to be constituted into forest area. The move was opposed by certain persons whose claims were rejected by the forest officer acting under the Madras Forest Act. They appealed to the District Court as provided for by the Statute. It was held by their Lordships of the Privy Council that the decision of the District Court in such cases was not final.

When proceedings of such a character reach the District Court, that Court is appealed to as one of the ordinary courts of the country with regard to whose procedure, orders and decrees the ordinary rules of CPC apply; and when an ordinary court of the country is seised of a dispute relating to a legal right to possession of and property in, land, it would require a specific limitation to exclude the ordinary incidents of litigation.

There was no provision for appeal from the decision of the District Court yet it was held that the appeal to the High Court was competent on the principle enunciated in the Judgment.

On the strength of the same principle, it was held in -- AIR 1934 81 (Privy Council) that an appeal having been given to the High Court by Section 75(2) of the Provincial Insolvency Act from an original decision or order of the District Court, a further appeal to the Privy Council would lie under the usual conditions of the CPC Code, in spite of S. 4(2) of the Insolvency Act which provided that the decision of the District Court was final.

In -- AIR 1936 93 (Privy Council) also the same principle was applied to a decision of the High Court given under the Sikh Gurdwaras Act. Their Lordships held that the provisions of the CPC with reference to appeals to the Privy Council apply to decrees of the High Court made u/s 34 of the Sikh Gurdwaras Act as the Jurisdiction exercised by the tribunal constituted under the Sikh Gurdwaras Act and the jurisdiction on appeal given to the High Court were not such special jurisdictions as would exclude the application of the principle that when a dispute is referred to an established court without any limitations, the ordinary incidents of procedure in that court, including any general right of appeal from its decisions attach thereto.

The principle which has been consistently adhered to by their Lordships in the cases referred to above would seem to cover the present case. The court under the Assam Urban Areas Rent Control Act (Act 13 of 1949) means the court of ordinary civil jurisdiction in the area in which the house is situate, which would be competent to pass a decree for the ejectment of a tenant from the house. Section 4(1) lays down that

the court shall, on an application made before it in this behalf by the landlord or the tenant issue notice upon the other party and after holding such enquiry as it thinks fit fix the amount of the monthly rent to be paid by the tenant to his landlord for any house in accordance with the provisions of S. 3 of this Act.

The section further provides that the rent so fixed shall be binding on both the parties. The order or the decision of the court u/s 4(1) has the force of the decree by reason of the provision; contained in S. 9. The decision u/s 4(1) affects rights in property. It is given by an ordinary court whose procedure is regulated by the provisions contained in the CPC It follows that its decree even though so constituted by a legal fiction should have all the attributes of a decree under the CPC It would therefore be subject to second appeal where a second appeal is competent under the provisions of Section 100, Civil P. C.

In support of his contention Mr. Ghose ha relied on two decisions, one from the Madras High Court In Re: Sri A. Ramanuja Ayyangar, First Grade Pleader, and the other from the High Court of Oudh -- ''Irshad Hussain v. Bakhshish Husain'', AIR 194 Oudh 254 (H). But these decisions do not decide the point in controversy. They are decisions under the Court-Fees Act. The question whether a second appeal would lie in a case such as the one not before us did not arise in these cases. They are distinguishable.

Mr. Ghose has also relied on -- ''Mahadeo Le Agarwalla v. Durgadutta Lohia'', ILR (1951) Ass 300 (I), a Division Bench decision of the Court. He himself represented the Appellants that case & had put in an appeal and a revision against the same order. He could not press both At the hearing he stated that the appeal was no competent and agreed to its dismissal. His revision petition was heard and disposed of on merit. There was no objection to the competency of the revision petition. The question whether an appeal from the order of the District Judge was computer or not was not raised or decided. That case therefore is no authority for the proposition that second appeal from a decision given by the appellate court under the Act does not lie.

Reference has also been made to S. 38(3) of the Bengal Money-Lenders Act, and to a similar provision in the rules under the Madras Agriculture Relief Act 4 of 1938. It is pointed out that the Acts expressly provide for second appeals. The do not carry us very far. The legislature may expressly provide for a right of appeal, or it may give a particular order of the ordinary, civil court the, force of a decree. In the latter case, it will automatically be subject to second appeal under the CPC Code, unless there is a specific provision to the contrary.

My conclusion in these circumstances is that the decision of the appellate court is not final and that a second appeal would lie on grounds specified in S. 100, Civil P. C. The preliminary objection is overruled.

The main contention raised on behalf of the Appellant is that the decision given in Suit No. 52 of 1948 decided on 30th June, 1950 and confirmed in appeal on 4-9-1951, operates as ''res judicata'' against the claim put forward by the Respondent in his petition for fixation of rent under 9. 4(1) of the Act. This suit was against Matiram Agarwalla. He was sued as partner or Manager of the firm Santolal puranmall. The suit was based on a handnote for a sum of Rs. 2000/-. Plaintiff Malchand Agarwalla also sued as Karta of his family. His case was that the Defendant got the premises in question on rent from 31-10-1948. The rent fixed was Rs. 3001/-. He paid Rs. 1001/- on 28-10-1948, and promised to pay Rs. 2000/- on taking possession. The possession was given to him but he could not pay the amount in cash and gave a promissory note instead on 2-11-1948 agreeing at the same time to pay interest at As.-/12/- per cent per mensem. The suit was on this handnote.

The Defendant in that case did not raise the plea that the amount sued for on the basis of the handnote was due on account of rent which was not fair or reasonable. The plea of payment alone was raised which was the subject matter of issue No. 2. This plea could not be substantiated. The result was that there was a decree for Rs. 2000/- against Matilal as manager and partner of Messrs. Santolal Puranmall. The decree was passed on 30-6-1950. Santolal Agarwalla, the tenant, as Karta of the family known as "Santolal Puranmall" initiated the proceeding u/s 4(1) of the Act on 8-3-1949. The case if the Petitioner was that rent for the first year had been paid. But as it was excessive and exorbitant, he prayed for fixation of a fair and reasonable rent. The trial judge disposed of the petition by his order dated 28-5-1951. The suit on the handnote was decided about a month later on 30-6-1950. The plea of ''res judicata'' could not have been raised in the proceeding u/s 4(1) of the Act as the decision of the suit came after the disposal of the proceeding.

Both the suit and the proceeding u/s 4(1) were disposed of by Mr. Abdul Hai, Additional Subordinate Judge, Lower Assam Districts and both the decisions were appealed from. On appeal from the decision in the miscellaneous case under the Act also the plea of ''res judicata'' was presumably not pressed. The points which were raised lave been all separately dealt with and disposed of by Sri M. K. Barkataki, Additional District Judge in his order dated 29-11-1951 and the plea of ''res judicata'' is not one of them. At this state for the first time it is urged by reason of the decision in Money Suit No. 52/48 disposed of finally by appeal on 4-9-1951, that the petition u/s 4(1) is barred by the rule of ''res judicata''. It is argued that it was open to the Defendant in Suit No. 52/48 to plead hat the sum claimed on account of rent could lot be decreed as the rate of rent was in excess of what the Plaintiff was entitled to under the Act. It was a plea which was available and which ought to have been raised and the application of the rule of constructive ''res judicata'' is thus attracted.

It may be observed that suit No. 52/48 was based on a handnote. The handnote had been passed to the Plaintiff in lieu of cash payment of rent. The amount due represented the balance of rent for the first year. The period of tenancy was also originally fixed at one year. The defence to the suit was that the sum claimed had been paid.

So far as the period of the first year is concerned, the Respondent did not claim any relief in his petition u/s 4(1). His allegation was that the rent for the first year had been paid. The implication was that he prayed for fixation of a fair and reasonable rent for the period subsequent to the first year of the tenancy. In regard to the period of the first year his position being that he had paid off the rent the relief could only take the form of a claim for refund. Such a claim could not have been put forward u/s 4(1) of the Act. In any case no such claim was made. We are therefore not concerned with the effect of the decision in Suit No. 52/48 on the liability of the Respondent for the first year of the tenancy as no relief has been claimed in the petition u/s 4(1) of the Act for this period. If the benefit of any final order that is made in the proceeding out of which the present appeal arises is sought and execution of decree in Money Suit No. 52/48 is resisted on its basis, the question will then have to be decided in the execution proceeding. It is not necessary to give any decision on that question in the pre- sent proceeding, for, that question does not arise in view of the stand taken by the Respondent in his petition u/s 4(1) of the Act.

In regard to fixation of rent for the period commencing from the expiry of the first year of the tenancy the plea of ''res judicata'' has got no force at all. Section 4(1) confers on the tenant a continuing right. A tenant may go on paying rent for any period. That payment would not estop him from applying u/s 4(1) for fixation of rent in accordance with the provisions of the section. If payment outside the court under a contract would not create any estoppel, payment made in obedience to an order of the court also could not preclude the tenant from asking for relief u/s 4(1) of the Act for a period not covered by the order.

The right to sue for ejectment of an annual tenant accrues every year and so the withdrawal of a previous suit for ejectment does bar a subsequent suit for ejectment against the same party on a subsequent cause of action vide -- Kumari and Others Vs. Adit Misir, . Similarly, a dismissal of a suit for enhancement of rent is no bar to the filing of a fresh suit for enhancement of rent in a subsequent year vide -- ''Badri" Prasad v. Ram Charan'', 31 Ind Cas 866 (BRUP) (K). A decree for rent for a particular period will be conclusive as to the amount payable by the Defendant for the years for which the rent was claimed in the suit; but it may not be conclusive as to the rate of rent payable for successive periods of the same tenancy vide -- ''Mahabir Singh v. Tirbhawan Bahadur Singh'', AIR 1941 Oudh 259 (L).

Suit No. 52 of 1948 was not a rent suit. It was based on a handnote. The relationship between the parties was that of creditor and debtor. It was not the case of a landlord suing a tenant for the balance of unpaid rent. Rent had been paid by the passing of a handnote though not in cash. But even if the suit is taken as a suit for rent, it was for the balance of rent due for the first year of the tenancy which according to the arrangement between the parties was the period of the lease. There was no dispute about the rate of rent or its fairness for that period. The only question was whether it had been paid or not. That decision cannot operate as ''res judicata'' for any subsequent period even if the provisions of Section 4(1) are not taken into consideration. But where the tenant has got the right at any time during the subsistence of the tenancy to apply for fixation of rent as u/s 4(1) in accordance with the principles laid down in the Act, that right cannot be taken away by any decree for rent which is for a specific period & does not determine the rate of rent for the future.

Mr. Lahiri has relied on Explanation IV to Section 11. Assuming that Section 11 or the principle of it can apply to this case the explanation Will not apply where there is a continuing or a recurring cause of action on which a suit may be founded. If a rent suit is limited to a particular period there would be no obligation on the tenant to raise the question as to what the fair rent should be for the future. If the question is raised and decided, it would be a different matter. But it cannot be said that there is any obligation on the tenant in these circumstances to raise the question even for the future when the law leaves the option with him to raise the question at his pleasure during the subsistence of the tenancy. Pleas which are not necessary to sustain the claim made in the case cannot be regarded as matters which might and ought to have been made the ground of defence or attack.

In Suit No. 52 of 1948 the plea was that the amount claimed had been paid. It was therefore not necessary to raise the question as to what would be fair rent for the future. The decisions relied on by Mr. Lahiri are in this view of the matter distinguishable and of no assistance. These cases -- M.B. Ram Ran Bijoy Prasad Singh Vs. Ramagya Kuer and Others, ; -- Shib Chandra Talukdar and Others Vs. Lakhi Priya Guha and Others, and -- ''Bayyan Naidu v. Suryanarayana'', AIR 1914 Mad 399 (2) (FB) (O), are between landlords and tenants. But the distinguishing feature of the present case is that the tenant has a statutory right to ask for the fixation of rent at any time during the period that he is in occupation of the premises. His right is founded on the mandatory provisions contained in Sections 3 and 4(1). Notwithstanding any contract to the contrary no landlord is entitled to charge monthly rent for any house at a figure higher than that which would be permissible on a calculation in accordance with the terms of S. 3. This statutory right cannot be defeated by recoveries made by the landlord whether with or without the intervention of a court of law. This is the distinguishing feature of the case, which excludes it from the operation of Clause (4) of S. 11. C. P. C. The Respondent was therefore not debarred from applying for fixation of fair rent u/s 4(1) for the period not covered by Suit No. 52/48; nor were the courts below precluded from fixing it.

The parties were at issue in regard to the question of court-fee in the courts below. The trial court having fixed Rs. 1300/- as the annual rent ordered the Respondent to pay court-fee on that amount. The learned Additional District Judge agreed with the trial Judge on this point. Mr. Lahiri has not been able to show that the court-fees charged were deficient. The language of S. 9 appears to have influenced the decision of the courts below. If is provided therein that the decision or order u/s 4(1) and some other sections of the Act shall have the force of a decree in a suit for ejectment of the tenant from the house. The courts evidently treated the proceeding as a suit for ejectment and on that basis were content to realise the court-fee on the annual rental fixed. We have not been referred to any provision of the Court Fees Act under which any higher court-fee could be charged. On the other hand, it is contended on behalf of the Respondent that ''ad valorem'' court-fee on the sum of Rs. 1300/- was not payable. It is not necessary to decide that question as the Respondent paid the court-fee on this amount without objection and did not appeal from that part of the order. The result of the foregoing discussion is that this appeal fails and is dismissed, with costs.

Sarjoo Prosad C.J.

I agree.