1979 (4) TMI 167 - HC - Indian Laws

Tenancy Agreement Valid Between Landlord and Tenant, Void Against Controller: Jurisdiction Issue Resolved

Shankerlal Gupta Versus V. Jagadishwar Rao

The court held that the tenancy agreement, though created in contravention of the Rent Control Act, was valid between the landlord and tenant but void ... - Issues Involved:1. Jurisdiction of Civil Court to entertain the suit.2. Validity of tenancy created in contravention of the Rent Control Act.3. Applicability of Section 23 of the Indian Contract Act.4. Public policy considerations in the context of the Rent Control Act.Detailed Analysis:1. Jurisdiction of Civil Court to entertain the suit:The primary issue was whether the Civil Court had jurisdiction to entertain the suit for recovery of possession and damages. The trial court had decreed the suit, affirming its jurisdiction. The appeal questioned this jurisdiction, arguing that the eviction should be governed by the Rent Control Act, not by a Civil Court. The court concluded that the Civil Court lacked jurisdiction as the tenancy was governed by the Rent Control Act, which mandates that eviction matters be handled by the Rent Controller.2. Validity of tenancy created in contravention of the Rent Control Act:The court examined if a tenancy created without notifying the vacancy to the Accommodation Controller, as required by the Rent Control Act, was valid. The appellant argued that such tenancies were void, citing previous judgments. However, the court referred to the Supreme Court's decision in Muralidhar v. State of U.P., which held that tenancies created in contravention of the Act are valid inter se between the parties but void against the State. The court agreed with this view, stating that the tenancy, though created in violation of the Act, remains valid between the landlord and tenant but not against the Controller.3. Applicability of Section 23 of the Indian Contract Act:The court considered whether the tenancy agreement was void under Section 23 of the Indian Contract Act, which renders agreements unlawful if they are forbidden by law or opposed to public policy. The appellant argued that the tenancy was void as it contravened the Rent Control Act. The court, however, concluded that the agreement was not forbidden by law inter se between the parties, although it was void against the Controller. The court emphasized that the Act does not explicitly render such tenancies void but imposes penalties for non-compliance.4. Public policy considerations in the context of the Rent Control Act:The court analyzed whether the tenancy agreement was opposed to public policy. The appellant contended that the agreement violated public policy as it contravened the Rent Control Act's provisions designed to prevent unreasonable eviction and ensure proper control of housing. The court, however, concluded that the public policy underlying the Act was to protect tenants from unreasonable eviction and regulate leasing, not to render such agreements void. The court held that the agreement, while void against the Controller, was valid inter se between the landlord and tenant, aligning with the Act's purpose of tenant protection.Conclusion:The court held that the tenancy agreement, though created in contravention of the Rent Control Act, was valid between the landlord and tenant but void against the Controller. The Civil Court lacked jurisdiction to entertain the suit for eviction, which should be handled by the Rent Controller. The decision in G. Eswaraiah v. Mahendrappa Khani was overruled, affirming the Supreme Court's view in Muralidhar v. State of U.P. The reference was answered accordingly, and the case was remitted to the Division Bench for a decision on merits according to law.