Thakkar Damji Raghavji vs Jamiyatram Kapoorchand Modi and Others

Baxi, J.—The Appellant has preferred this appeal against the judgment of Mr. Justice Chhatpar reversing in second appeal the decree of the District Judge, Central Saurashtra and restoring the decree of the Civil Judge, Sr. Dn., Rajkot by which the Civil Judge dismissed the Appellant''s suit for recovery of Rs. 1440/- which according to the Appellant represented the excess paid by him over the standard rent in respect of a cabin which the Respondents had let to him.

The rent which was payable under the tenancy was Rs. 150/- per month and the tenancy, commenced from Kartak Sud 1 St. 2004 (13-11-47). The Appellant paid Rs. 1800/- as rent for 12 months upto Asho Vadamas St. 2004 (1-11-1948). When the cabin was let, the Rajkot Bhadut Sanrakshan Dhara of 1947, which will hereafter be referred to as the Rajkot State Act, was in force and continued to be in force up to the end of the twelve months for which rent was paid. After the integration of the Rajkot State with the Saurashtra State, the Ordinance No. 25 of 1948 applying Central and Bombay Acts mentioned in the schedule were applied to Saurashtra. This schedule was amended from time to time by the inclusion of new Acts and the Bombay Rents, Hotel and Lodging House Rates Control Act 1947 which will hereafter be called as the Bombay Rent Act, was applied to Saurashtra by being included in the schedule by means of an amending Ordinance. This Act came into force in Saurashtra i on 20-12-1948. After the application of the Bombay Rent Act the Appellant applied to the Civil Court for fixation of standard rent which was fixed at Rs. 30/- per month and confirmed in appeal on 31-12-49. The Appellant thereafter filed this suit on 15-6-50 against the Respondent-landlords for recovery of Rs. 1440/- which according to him represents the excess paid by him over the standard rent for the above period of 12 months. According to him the Respondents were liable to refund the entire amount of Rs. 1800/- under the Rajkot State Act as the standard rent of the cabin had not been in accordance with its provisions but he accepted his liability to pay Rs. 30/- per month for this period as the standard rent at that rate was fixed under the Bombay Rent, Act and asked for the refund of the amount of Rs. 1800/- less Rs. 360/- representing the standard rent during this period.

It is conceded that the Appellant''s right to recover the excess payment is governed by the Rajkot State Act. That Act was repealed on the date of the suit on the application of the Bombay Rent Act by virtue of the provisions of Section 9(3) of Ordinance 25 of 1948. It is contended on behalf of the Appellant that he had acquired a vested right to claim the refund under the repealed Act and that right was not affected by its subsequent repeal. On behalf of the Respondents it is contended that no right had accrued to the Appellant at all under the old Act and therefore there was nothing vested in the Appellant upon which he could base his suit. The questions that arise for determination in this appeal, therefore, are whether the right to claim any refund had accrued to the Appellant under the Rajkot State Act and if so, what is the effect of the repeal of that Act on that right. The first question will have to be examined in some detail but as regards the second question there is little doubt that if the alleged right for refund had accrued to the Appellant, the repealing Ordinance cannot affect that right and the Appellant''s right of action against the Respondents to enforce that right survives in spite of the repeal of the Rajkot State Act. This principle is clearly laid down by the Saving and Transitory provisions contained in Section 9 of the Ordinance. Section 9(a) enacts that nothing in the Ordinance shall affect amongst other things any right, privilege, obligation or liability already acquired, accrued or incurred under any law in force in the State before the commencement of the Ordinance which law in this case is the Rajkot State Act. This provision has been incorporated in the Saurashtra General Clauses Ordinance 71 of 1949, Section 5(c). of which enacts that the repeal of an enactment shall not, unless a contrary intention appears, affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed or affect any investigation, legal proceeding or remedy in respect of such right, privilege, obligation or liability and such investigation, legal proceeding or remedy may be instituted, continued or enforced as if the repealing Act had not been passed. The latest enactment on the subject is the Saurashtra Act (Interpretation) Act 1952 in which similar provisions are j made about the effect of the repeal of an enactment. It is, therefore, clear that if the Appellant had acquired a vested right to claim the refund from the Respondents under the Rajkot State Act, such right could not be affected by its repeal. On general principles also, if a party has acquired a vested right under the provisions of a repealed enactment, he has also a vested right to move an appropriate Court and pursue his remedy through its final stage and the repealing Act cannot take away that right unless it so expressly provides. In - Sundrabai Sitaram Narangikar Vs. Manohar Dhondu Khandalgaonkar, which was a case in which the effect of the repeal of Section 33, Bombay District Police Act (1890) was considered, it was held that the repeal of the Section would not affect the rights or liabilities of the parties flowing from a transaction which was made while the Section was in force. We hold, therefore that if the right to claim the refund had accrued to the Appellant under the Rajkot State Act, upon which he could have based his suit in the Rajkot State Courts, such right is not affected by the repeal of that Act.

The next question for determination is whether the right which the Appellant claims did in fact accrue to him under the Rajkot State Act. In order to determine this question it is necessary to briefly examine the relevant provisions of the Act. The Act is called the Rajkot Bhadut Sanrakshan Dhara, 1947. The rules for fixing the standard rent of buildings are contained in Sections. 3, 4 and 5 of the Act. With regard to buildings which were let in St. 1999 Section 3 enacts that the landlord shall not be entitled to receive from the tenants more than 10 per cent, over and above the average rent for that year. With regard to buildings which were never let prior to St. 1999, or which were newly built after that year and with regard to buildings which were rebuilt after being completely demolished Section 4 enacts that the landlord shall be entitled to recover only such rent which may be fixed by the Bhadut Niyaman Samiti. The constitution and the membership of that Samiti have been stated in Section 2(3) of the Act and Section 5(2) requires the landlord to get the rent fixed by the Samiti before 1-12-47 and until such rent has been got fixed, he is prohibited from recovering any rent. The standard rent therefore in respect of buildings which were built after St. 1999 is the rent which may be fixed by the Samiti. The provisions requiring the landlord to get the rent fixed before 1-5-47 cannot apply to the suit premise for it was built after that date and obviously standard rent cannot be fixed in respect of buildings which had no existence at the date. The prohibition against the acceptance of rent before the fixation of the standard rent therefore cannot apply to the Respondents, if Section 5(2) is literally construed. Section 4, however, contemplates the fixation by the Samiti of standard rent on such buildings also and it may be assumed for the purpose of this appeal that the Respondents were under an obligation to get the standard rent fixed by the Samiti and were prohibited from recovering rent until the Samiti fixed it. The next relevant section is Section 6 upon which the Appellant relies. According to this section any agreement of rent; whether made before or after the Act, in contravention of the standard rent fixed under Sections 3, 4 and 5 shall, to the extent of the contravention, be void and if the landlord has received rent or other advantage in excess of the standard rent after 1-5-47 the tenant shall be entitled to receive back such excess.

According to Mr. Chinoy for the Appellant the above provisions made an agreement to chargerent in excess of the standard void and made it illegal for the landlord to recover any rent before fixation of the standard rent and further gave the tenant a vested right to claim the refund of such excess. He urged that the Respondents having failed to get the standard rent fixed, the Appellant was entitled to refund of the whole amount and in any event his right to the refund could not be affected by the illegal omission on the Respondents'' part to approach the Samiti and get the standard rent fixed.

Now a tenancy containing a provision to pay rent is not wholly void under the Rajkot, State Act. What is declared void is the contract to receive or pay rent in excess of the standard rent. It is therefore clear that until the standard rent is fixed and the rent actually agreed to be paid by the tenant is found higher than the standard rent, it cannot be said that any part of the agreement is void. Similarly the right of refund which the Act gives to the tenant is in respect of this excess only and not the entire amount paid by him. Therefore before the tenant can claim the right to any amount from the landlord by way of refund, the standard rent has to be fixed and the excess determined and it is only after the fixation of the standard rent as provided by Section 5(2) that a vested right to claim. the refund comes into existence. So long however, as the rent is not fixed, he cannot claim anything and no cause of action can accrue to him upon which he can base his suit. Now when an Act is repealed it must be considered, except as to transactions past and closed, as if it had never existed. Similarly if an Act gives a right to do anything, which in this case was the fixation of the standard rent by the Samiti, the thing to be done, if not completed before the Act is repealed, must upon the repeal of the Act be left in status quo. (See Craies on Statute Law, 5th Edition, p. 380). The Appellant could have got the excess determined by the Samiti but he should have got this done before the Rajkot State Act was repealed. However he took no steps to get the rent determined before its repeal and consequently the matter must now remain in status quo and the Appellant cannot claim anything.

It was however argued that the Rajkot State Act imposed upon the Respondents as landlords and not upon the tenant, the responsibility to get the rent fixed by the Samiti and if they are allowed to retain the entire amount recovered by them that would be equivalent to allowing them to take advantage of their own wrong. It was urged that if this was allowed no landlord might approach the Samiti and would continue to receive rent in excess of the standard rent with impunity and thus defeat the provisions of the Act. This argument appears at first sight to be impressive but a little closer examination of it will show that it has no substance. Section 5(2) of the Act no doubt enjoins upon the landlord the duty of getting the rent fixed and not to recover any rent till then; but the tenant can refuse to pay the rent until the standard rent is fixed and in that case the landlord can recover nothing until the standard rent is got fixed by him. The tenant is, therefore, not as helpless as it is sought to be made out. Moreover Section 6 of the Act, which provides for the refund, does not say that in the event of the landlord accepting rent without getting the standard rent fixed, he will be compelled to refund the whole amount. On the contrary it directs the refund of the excess only. Thus the section envisages the contingency of the landlord accepting the rent before the standard rent is fixed and provides that in such an eventuality he shall refund only the excess over the standard rent. If the Act had intended that the tenant was entitled to claim the refund of the entire amount received by the landlord before the standard rent was fixed, a provision to that effect would have been made by the section. It seems to us, therefore that provision prohibiting the recovery by a landlord of any rent before the standard rent is fixed merely means that if the tenant refuses to pay the rent until the fixation of the standard rent the landlord has no remedy except as provided by Section 5(2). If however the tenant pays the rent then the landlord accepts it subject to the liability to refund the excess if later on it is discovered that he has received more than the standard rent. The Appellant could have got the standard rent fixed by the Samiti and there is nothing in the Act which prohibits him from doing so. He paid the rent voluntarily and cannot now complain that the amount should be refunded to him merely on the presumption that if the Samiti had been approached it would have fixed the standard rent at a figure lower than the rent which he agreed to pay or at the figure at which the Civil Court fixed it under the Bombay Rent Act. We do not think that it is fair that the landlord should be penalised for not doing something which the tenant could have done equally well, but did not choose to do.

Mr. Chinoy referred to a decision of the Bombay High Court in - Sir Kasturchand Ltd. Vs. Commissioner of Income Tax, in which the powers of the Income Tax. Officer to make an assessment u/s 23(c), Income Tax Act (1922) were considered. That decision does not apply because the question there was not whether something had to be done under the Income Tax Act before any right came into-existence. The decision relates to the power of the Income Tax Officer to make assessment and has no bearing on the point before us.

Mr. Chinoy lastly referred to Section 84, Trusts Act and argued that the Respondents must be regarded as holding the amount paid by the Appellant to them in trust for him as the effect of permitting them to retain it would be to defeat the provisions of the Rajkot State Act. We have already shown that the Act did not intend that the landlord should receive no rent before fixation of the standard rent. The Appellant is unable to claim the refund not because the provisions of the Act regarding the refund of payment have been violated but because there is now no machinery by which steps could be taken to fix the standard rent as provided by the repealed Act and determine the excess payment. There is therefore no question that by the Respondents keeping the amount any provisions of the Act is defeated.

In the result the appeal fails and is ordered to be dismissed with costs.

Shah C.J.

I agree.