Compromise decree under rent control: conditional concession was not penal, and eviction decree became executable on breach.

A compromise decree under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 did not create a fresh tenancy or continue landlord-tenant protection beyond Section 12(3); it only regulated enforcement of an existing eviction decree, so the tenant could not claim independent relief outside the statute. The clause postponing possession if arrears were paid by a stipulated date was not penal, because it merely conferred a concession that execution would be withheld on timely compliance and left the decree otherwise operative. On breach of the condition, the decree remained executable, and general relief against forfeiture under property law could not displace the special rent control scheme.

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Issues: (i) Whether the compromise decree created or continued the relationship of landlord and tenant so as to attract the protection of the rent control law; (ii) whether the clause postponing possession and making execution contingent on non-payment was penal in character or merely a concession and therefore executable.

Issue (i): Whether the compromise decree created or continued the relationship of landlord and tenant so as to attract the protection of the rent control law.

Analysis: The compromise terms had to be read as a whole. The decree first granted possession and recovery of arrears, and then conferred a benefit if the tenant cleared the entire dues by the stipulated date. The decisive feature was that the compromise did not create a fresh tenancy by itself; instead, it regulated enforcement of the eviction decree already passed under the rent statute. The statutory scheme under Section 12(3) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 controlled the parties' rights, and protection could be claimed only in the manner contemplated by that provision.

Conclusion: The compromise did not create a new tenancy or justify treating the tenant as entitled to independent relief outside Section 12(3) of the Act.

Issue (ii): Whether the clause postponing possession and making execution contingent on non-payment was penal in character or merely a concession and therefore executable.

Analysis: A clause is penal only when failure to comply attracts a forfeiture or enhanced liability in terrorem; it is not penal when it grants a benefit that the obligor may take advantage of by timely performance. Here, the tenant was given a concession that the landlord would not execute the decree for possession if the entire arrears and related sums were paid by the stipulated date. The decree otherwise remained fully operative. Section 114 of the Transfer of Property Act, 1882 could not override the special rent control regime, because the tenant could not claim double protection where the statute itself governed eviction. The execution order under Order 21 Rule 35 of the Code of Civil Procedure, 1908 was therefore justified.

Conclusion: The clause was not penal; it was a valid concession, and on breach the decree for possession was executable.

Final Conclusion: The tenant having failed to satisfy the condition for availing the concession, the executing court was right in ordering possession, and the orders of the appellate court and the High Court were liable to be set aside.

Ratio Decidendi: Where a compromise decree under a rent control statute grants the tenant a concession to avoid execution upon timely payment of arrears, the clause is not penal if it merely withholds execution of an otherwise valid decree; on breach, the decree remains executable and relief against forfeiture under general property law cannot displace the special statutory eviction scheme.

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