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Synopsis

The Supreme Court recently set aside a Himachal Pradesh High Court order which treated a consent order made between landlord and tenant with regard to an eviction suit on payment of Rs 12,500 in 1979 as one conferring ownership right on the tenant.

"We are crystal clear in our mind that the High Court had patently erred in interpreting the consent order and in reversing the well-considered judgments and orders of the court of first instance and the first appellate court, dismissing the suit of the tenant," a bench of Justices Pankaj Mithal and R Mahadevan said.

The top court set aside the judgment of the high court of 2011 and allowed an appeal filed by one Beena and others.

There was no dispute to the fact that there existed a relationship of landlord and tenant between the parties and that the landlord had filed an application for the eviction of the tenant under Section 14 of the Himachal Pradesh Urban Rent Control Act on the ground of dilapidated condition and on bona fide need.

The bench referred to the consent statements made by the landlord and tenant to point out, those nowhere provided that the amount liable to be deposited by the tenant was a sale consideration of the property, though, it could be stated that it was equivalent to the value of the property or that the tenant, or on deposit of such an amount, he would become the owner of the property. 

"Therefore, on the plain reading of the statements, it cannot be said by any stretch of imagination that there was any settlement of transfer of the property on the sale consideration. It may also be noted that there is no document witnessing the transfer of the property in pursuance of the statements or the consent order," the bench said.

The court also said the Rent Controller in passing the consent order on September 05, 1979 had recorded that the dispute between the landlord and tenant had been compromised. According to the terms of the compromise contained in the statements of the parties, on the payment of Rs 12,500 by the tenant as the price of the house, he was to become the owner in possession. 

"This narration of fact that the tenant would become the owner in possession in the order of the Rent Controller is obviously against the record, i.e., the statement of the parties, wherein it has nowhere been stipulated that the tenant, on deposit would become the owner of the property," the bench held.

However, in the end, the Rent Controller himself recorded that on the price of Rs 12,500 being deposited on or before December 15, 1979, the application of the landlord would be deemed to have been dismissed and on failure to deposit, it shall deem to have been allowed, court pointed out.

"It means the consent order was only with regard to dismissing and allowing of the application of the landlord in the eventuality of depositing of the amount and non depositing of the amount by the tenant. The settlement recorded in terms of the statements of the parties and even the consent order does not in any way provide or confer right of ownership upon the tenant, nor it could have been done in a proceeding for eviction of the tenant," the bench noted.

No document, much less a registered instrument, was executed between the parties transferring the title of the suit premises. In its absence obviously no transfer of title can pass from one party to another. In such a proceeding, the only option available to the Rent Controller was either to order eviction or to dismiss the application for eviction as has been done by him, the bench pointed out.

The building existing on the tenanted premises was alleged to be in a dilapidated condition when the application under Section 14 of the Act was filed by the landlord in the year 1977. It had collapsed after the consent order was passed during the pendency of the revision arising from the order of the executing court. 

It was admitted by the parties that after the collapse of the building and its vacation by the tenant, altogether a new building has been constructed on the premises in question by the landlord.

In the case, despite the fact that there was no eviction order against the tenant or any positive direction in his favour, he moved an application for the execution of the consent order, which came to be allowed by the Rent Controller in 1989, wherein it was directed that the name of the tenant be entered as owner in possession of the disputed premises by making corrections in the relevant records. 

Aggrieved by the order of the executing court, the landlord preferred a civil revision, contending that there could have been no execution of the consent order at the behest of the tenant, as his application for eviction of the tenant stood dismissed and that the executing court could not have ordered for recording the name of the tenant as owner in possession of the disputed premises. 

The civil revision was allowed, holding that in the meantime, the building had collapsed and nothing remained on the spot which could be recorded in the name of tenant. The court, therefore, in the end had held that the remedy of the tenant was not by way of an execution petition and the order of the Rent Controller was not sustainable in law.

The appeal of the tenant was dismissed. But the high court in second appeal said under the consent order, the tenant had become the owner of the suit premises and since he became the owner, and had been dispossessed by the landlord, he was entitled to a decree of possession. 

Thus, the high court's order was challenged before the apex court, which allowed the appeal by the landlord.

Case Title: Beena & Ors Vs Charan Das (D) Thr LRs & Ors