Transitional tenant protection under Section 39 depends on timely deposit from commencement, not on expiry of the new-building moratorium.

Section 39 of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 gives only limited transitional protection to tenants of buildings newly brought under regulation. It applies where the old Act did not previously govern the building, the eviction suit was pending on commencement, and the tenant makes the required deposit of rent, damages, interest, and costs within one month from commencement or from knowledge of pendency, whichever is later. The Supreme Court held that this time limit cannot be postponed until expiry of the ten-year exemption period for new buildings, so a deposit made later does not attract the protection.

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Issues: Whether Section 39 of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 protected a tenant in respect of a building completed in 1967, where the eviction suit had been instituted before commencement of the Act but the statutory deposit was made only after expiry of the ten-year exemption period.

Analysis: Section 39 applies only where the building is one to which the old Act did not apply, the eviction suit was pending on the date of commencement of the Act, and the tenant deposits rent, damages, interest, and costs within one month from the date of commencement of the Act or from the date of knowledge of pendency, whichever is later. The scheme of Sections 2(2), 39, and 40 shows that the Legislature intended a limited transitional protection for pending proceedings in respect of buildings that were brought under regulation for the first time. The text of Section 39 ties the deposit period to the commencement of the Act, and the provision cannot be read to postpone that period until the expiry of the ten-year moratorium on new buildings. The earlier decisions considered were distinguished on their facts, and the interpretation that would make protection depend on the fortuitous time taken by litigation was rejected.

Conclusion: The tenant was not entitled to the benefit of Section 39 because the deposit was not made within one month from commencement of the Act. The courts below erred in refusing eviction.

Final Conclusion: Transitional protection under Section 39 is confined to proceedings pending at commencement and to deposits made within the statutory time from that commencement; it does not extend to deposits made only after the moratorium period for a new building expires.

Ratio Decidendi: Section 39 of the Act affords protection only when all statutory conditions are satisfied within the time linked to commencement of the Act, and the deposit requirement cannot be postponed until the expiry of the ten-year exemption period.

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