TaxTMI 
TaxTMI 
1991 (12) TMI 271
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...., the parties are, once permitted to regulate their relationship in accordance with the section, totally governed by the terms of their contract. 3. The section operates in terms thereof, notwithstanding any other law, unless the contract itself, or the permission of the Controller is vitiated by fraud. Absent such vitiating circumstance, and once the Controller has accorded sanction, the parties to the contract are presumed to have entered into their relationship at arm's length and the law binds them to the terms of their agreement. 4. While the Act is meant for the protection of the tenant, the legislative policy reflected in Section 21 is to carve out an area free of that protection. Where the conditions stipulated in Section 21 are satisfied, the prohibition contained in Section 14 against eviction of tenants except on the specified grounds or the requirements of the Transfer of Property Act or the Civil Procedure Code or any other law are removed or dispensed with. 5. The section is attracted in the specific circumstances postulated by it. The absence of requirement by the landlord of the whole or any part of the premises for a particular period, the permission of the ....
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.... that section must satisfy that he has strictly complied with the provisions of that section. The landlord must obtain the permission of the Controller in the manner prescribed. He is not entitled to the permission unless the condition specified for the purpose in Section 21 is satisfied, namely, the absence of his requirement of the building for a particular period. The period must be clear and definite. The lack of requirement must be honestly felt by the landlord. That the landlord does not require the building is a question of honest belief held by him at the relevant time, that is, at the time of his seeking the Controller's permission. The landlord must have honestly and reasonably believed that he would not require the building for the period specified in his application to the Controller for permission to let out the premises. If that belief was truthfully held by him at the time of his application to the Controller, the fact that subsequent events proved him wrong, and that he did not require the building not only for the period stated in the application, but also for a longer period, or that he required it earlier than anticipated, would not make the belief any less h....
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....ble to be evicted on an application by the landlord, although the stipulated period of the lease has not expired. All this is because the very basis of the Controller's order has been violated by the fundamental breach of the guilty party. The section thus postulates that both the landlord and the tenant act honestly. Neither of them can take advantage of his own deceit or breach. No sanction of the statutory authority procured by fraud can protect the guilty or harm the innocent. 10. Fraud is essentially a question of fact, the burden to prove which is upon him who alleges it. He who alleges fraud must do so promptly. There is a presumption of legality in favour of a statutory order. The Controller's order under Section 21 is presumed to be valid until proved to be vitiated by fraud or mala fide. If his order was obtained by the fraud of the party seeking it or if he made a 'mindless order' in the sense of acting mala fide by illegitimate exercise of power owing to non-application of his mind to the strict requirements of the section, then the special mechanism of the section would not operate. [See S.B.Noronah v. Prem Kumari Khanna ). 11. My learned brother, R.M....
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.... inclined towards landlord, was subjected to inherent and implied limitations by this Court in Noronah, S.B. Noronah v. Prem Kumari Khanna in larger social interest of fairness and justice, which permeates our jurisprudence, to avoid any abuse of provision or arbitrary exercise of power, by directing such sanction or permission to pass the test of being clear of fraud or collusion. Even a mindless order was held to vitiate the proceedings. And the tenant was permitted to raise the objection in execution. Another was added to it in V.S. Rahe v. Ram Chambeli when an order on incorrect facts was also held to be invalid. But the decision not only created misapprehension amongst tenants who seized upon it to raise all possible objections frivolous and otherwise but was misunderstood by the authorities, too, who applied erroneously and tested validity of the permission on requirement on the date of execution, or it was bad because She reason due to which sanction was obtained did not materialise even at time of execution. At times the yardstick applied was of bonafide necessity as understood in Section 14 of the Act. Consequently short term tenancy became an illusion and in a span of ten....
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....tutory restriction or condition. However, Noronah (supra) culled out, dual protection for tenants one substantive and other procedural by providing that validity of sanction could be assailed on fraud etc. and the objection could be taken in execution. But the latter, that is, procedural safeguard has been diluted in four subsequent decisions of three Judge Bench. In Vohra (supra) warrant of possession issued under Section 21, without service of notice, to the tenant was upheld as after expiry of short term tenancy the tenant had no right to continue. However, to avoid a tenant from being completely shut out even where the permission was obtained by 'a mere ritualistic observance of procedure' or, 'where such permission was procured by fraud' or, 'was a result of collusion' the court held that competing claims could be harmonised by insisting upon his approaching (tenant) the Rent Controller during the currency of the limited tenancy for adjudication of his sooner he discovers facts and circumstances that tend to vitiate ab initio the initial grant of permission. It was reiterated in Shiv Chand Kapoor (supra). Yamuna Maloo Yamuna Maloo v. Anand Saroop narro....
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....y days, before expiry of lease to the landlord it is clear that the tenant was not only aware that he was required to vacate the premises after expiry of the time but he requested the landlady to grant him some more reasonable time for vacating the premises. In any case in absence of any averment in the application that he was not aware of various allegations made against the landlady in the application seeking invalidity of the permission granted by Controller the application was liable to be dismissed. No exceptional circumstance so as to bring it within the principle laid down in Yamuna Maloo's (supra) case could be deciphered either from the application or from the statement of the tenant. Neither the Controller nor the Appellate Authority found any exceptional circumstance which could justify the tenant to resist the execution after expiry of the period. Therefore, the Controller was not justified in entertaining his objection and entering upon an enquiry which was roving in nature and wholly uncalled for. But since law was not so clear when the objection was decided by the Controller it is appropriate to examine if the finding on merits is sustainable. 18. With this the ....
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....Kapoor this Court did not approve of the decision of the High Court that a permission granted under Section 21 was mindless only because on the date of expiry of the period of limited tenancy the age of the landlord's son was about 19 or 20 years whereas the minimum age prescribed by law for marriage was 21 years when the reason for requirement of the premises after expiry of lease period was marriage of the son. The Bench further deprecated the practice of the Authorities of entering into roving inquiry at the instance of tenant as that would frustrate the very purpose of limited period of tenancy contemplated by Section 21. In Smt. Dhanwanti Devi Smt. Dhanwanti v. D.D. Gupta it was held that even successive letting under Section 21 prior to grant of sanction could not adversely reflect on the permission as it was reasonable for landlord to let out looking to immediate future. Nor could the permission be said to be vitiated because after expiry of the period the landlord may in changed circumstances, decide to let out again. In Inder Mohan Lal Inder Mohan Lal v. Kamesh Khanna it was held that the landlord was under no obligation to disclose reasons for letting out for a short ....
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....lord and the tenant in writing. But the jurisdictional fact can be said to be two, availability of vacant premises which are not required by the landlord for the particular period and its letting out for residential purpose. For instance a permission obtained under Section 21 may be vitiated if the premises were not vacant on the date of application. Similarly if the permission is obtained in respect of nonresidential premises. What is significant is that the declaration by the landlord that the premises were available for letting out for short period is not required to be backed by any reason. And an application filed under Section 21 with or without reasons is neither bad nor contrary to law. It may be accompanied by statement of reasons or the application may merely state that the landlord does not require the premises for the period mentioned therein. In either case the application shall be in accordance with law. And if the Controller is satisfied that what was stated was correct he is obliged to grant permission. This satisfaction may be arrived at by believing the statement or requiring a landlord to give reasons or furnish such information as the Controller may consider nec....
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....r a legal right; a false representation of a matter of fact whether by words or by conduct, by false or misleading allegations, or by concealment of that which should have been disclosed, which deceives and is intended to deceive another so that he shall act upon it to his legal injury. In Oxford, it has been defined as criminal deception, use of false representation to gain unjust advantage; dishonest artifice or trick. According to Halsbury's Laws of England, a representation is deemed to have been false, and therefore a misrepresentation, if it was at the material date false in substance and in fact. Section 17 of the Contract Act defines fraud as act committed by a party to a contract with intent to deceive another. From dictionary meaning or even otherwise fraud arises out of deliberate active role of representator about a fact which he knows to be untrue yet he succeeds in misleading the represented by making him believe it to be true. The representation to become fraudulent must be of fact with knowledge that it was false. In a leading English Derry v. Peek [1889] 14 App. Cas. 337 case what constitutes fraud was described thus, fraud is proved when it is shown that a fal....
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....ive reason that the premises shall be required by son, daughter or any other family member does not result in misrepresentation or fraud. It is not misrepresentation under Section 21 to state that the premises shall be needed by the landlord after expiry of the lease even though the premises in occupation of the landlord on the date of application or, after expiry of period were or may be sufficient. A non-disclosure of fact which is not required by law to be disclosed does not amount to misrepresentation. Section 21 does not place any positive or comprehensive duty on the landlord to disclose any fact except that he did not need the premises for the specified period. Even the Controller is not obliged with a pro-active duty to investigate. Silence or non-disclosure of facts not required by law to be disclosed does not amount to misrepresentation. Even in contracts it is excluded as is clear from explanation to Section 17 unless it relates to fact which is likely to effect willingness of a person to enter into a contract. Fraud or misrepresentation resulting in vitiation of permission in context to Section 21 therefore could mean disclosure of false facts but for which the Controll....
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....days before tenancy was to come to an end, the tenant, which is a firm, wrote a letter, through one of its partners to the landlady for sympathetic consideration for renewal of lease as theft had occurred in the premises in which the tenant had lost valuable goods. There was a veiled, irrelevant, suggestion in the letter that no reason was disclosed by her for requiring the premises as her family was having sufficient accommodation for living. Since the landlady did not agree to extend the lease and filed an application under Section 21 of the Act for a direction to the Controller to place her in vacant possession of the premises an objection was filed by the tenant on all possible grounds which could be imagined from inaccuracy, lack of knowledge, fraud, collusion etc. One of the objections was that since the premises was taken by one of the partners of the firm, only, without any authority the agreement entered into by him for grant of permission under Section 21 was not binding. It was also alleged that this was done without knowledge of other partners. Therefore the permission was neither binding nor enforceable. But the partner who made the statement was neither examined nor i....
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....nfortunately, it appears, the authorities assumed fraud and misrepresentation on mere averment in the objection of the tenant and proceeded to record the finding on premise that the landlady was required to prove it. Apart from the procedural error even the finding that the premises were not needed by her after three years is not well founded. The law does not require to give any reason on the date when the application is made. May be that one of her sons was in Army and the other was at Bombay and therefore she did not need the premises for them on the date of application. Yet the landlady could, well, visualize that she would need the premises after three years either because her son who was in Military was to be posted at Delhi, who in fact was posted in the meantime, or because her other son who had been rendered jobless in 1978 and was not doing well in life may need the house for establishing a factory in NOIDA. In fact some land was allotted and licence too appears to have been issued in his favour. But that is not relevant What is relevant is a prima facie evidence led by her to prove that her statement that she shall be requiring the premises after three years was not a me....