This document summarizes 4 judgments of the Supreme Court of India related to the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947.
1) A previous court decision that found a decree to be null and void due to lack of jurisdiction did not operate as res judicata after a new law validated such decrees.
2) Premises belonging to the government or a local authority are exempt from the Act, including in the relationship between a lessee of such premises and their sub-tenant.
3) A building erected on land held by a person from a local authority (port trust) under a lease agreement belonged to the local authority and thus outside the scope of the Act
1. 1
Judgments of Hon'ble
Supreme Court on Bombay
Rents, Hotel and Lodging
House Rates Control Act, 1947.
Compiled by H. S. Mulia.
Supreme Court Judgments on Bombay Rents, Hotel and Lodging House Rates Control Act, 1947
4. 4
blocks in the demised premises, alter giving a notice to quit. The subtenant
claimed protection under Bombay Act 57 of 1947 and that under S. 28 of that
Act the Court had no jurisdiction to entertain the suit:
2.4. Held in the facts and circumstances, the demised premises including the
building belonged to the Board which was a local authority and therefore
were outside the operation at the Act in view of S. 4 (1). The fact that the
lessee incurred expenses in putting up the building was precisely the
consideration for the lessor granting him a lease for 999 years not only of the
building but of the land as well at what may be a cheap rent which the lessor
may not have otherwise agreed to do. By the agreement the building became
part of the land and the property of the lessor and the lessee took a lease on
that footing. The lessee or a person claiming title through him could not now
be heard to say that the building did not belong to the lessor. Forfeiture does
not, for the first time, give title to the lessor. On forfeiture he has all along
been his own property. The interest of the lessor in the demised premises
could not possibly be described as a contingent interest which would become
vested on the expiry or sooner determination of the lease. The City Civil Court
had, therefore, jurisdiction to entertain the suit. Messrs. Bhatia. Cooperative
Housing Society Limited v/s D. C. Patel, reported in AIR 1953 SC 16 (Four
Judges).
3. Bombay Rents, Hotel and Lodging House Rates Control Act (57 of 1947), S.4(1)
and S.(4)(a) lease tenancy Exemption from operation of Act Premises
belonging to Govt. or Local Authority Premises belonging to Port Trust taken on
lease Lessee letting out premises to subtenants Case does not fall under
S.4(4)(a) Protection under Act is not available to sublessees.
3.1. S.4(1) makes it clear that the provisions of the Bombay Rent Act are not
applicable to premises belonging to the Govt. or a local authority. Subsec. (4)
Supreme Court Judgments on Bombay Rents, Hotel and Lodging House Rates Control Act, 1947
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1973 he could not take shelter under Section 15A.
8.2. It is wholly wrong to say that if a licensor filed an application under
Section 41 of the S.C.C. Act instead of filing a regular civil suit he by
implication treated the occupant of the premises against whom the S.C.C.
application was filed as a subsisting licensee.
8.3. There was nothing to show in the records of this case that D had ever
accepted any money either in or outside court from W after 31st of March,
1966 by way of any rent of the licenced premises. A person continuing in
occupation of such premises after revocation of the licence is still liable to pay
compensation or damages for their use and occupation. If at any time such
compensation had been paid or accepted it could not undo the effect of the
revocation of the licence. D. H. Maniar v/s Waman Laxman Kudav, reported
in AIR 1976 SC 2340 (FB).
9. Bombay Rents, Hotel and Lodging House Rates Control Act (57 of 1947),
S.5(4A) , S.5(6A) Paying guest or licensee Licensee becomes paying guest if
licensor resides in same premises and for that licensor need not reside in same
room in which licensee resides. Moreover residence of licensor in remaining part
of premises need not be physical residence. Dejure control over remaining
premises would be sufficient.
9.1. All that is required to make a licensee answer the description of a paying
guest is that the licensor also resides in the premises of which a part is in the
possession of the paying guest and it is not required that the licensor should
physically reside in the same room as the paying guest. The words in which
the licensor resides qualify the words 'premises' which immediately precede
the said words and are not intended to qualify 'part of the premises'. It is also
not necessary that the licensor must be using the remaining part of the
premises for actual residence. The position of a 'paying guest' is similar to the
Supreme Court Judgments on Bombay Rents, Hotel and Lodging House Rates Control Act, 1947
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position of a 'lodger' in England. If the part is in the use of the 'lodger' and the
owner retains the control of the whole house, that is sufficient. Surendra
Kumar Jain v/s Royce Pereira, reported in AIR 1998 SC 394, para Nos.14 to
16.
10. Bombay Rents, Hotel and Lodging House Rates Control Act (57 of 1947),
S.5(7), S.7, S.10AA.
10.1. Amount of educational cess is recoverable by the landlord from the tenant
under S. 10AA of the Rent Act.. Section 7 of the Rent Act does not prohibit
the recovery of the increase to which landlord may be entitled under the
provisions of the Act in addition to the standard rent. Sections 5(7), 9, 10 and
10AA of the Rent Act indicate that permitted increase becomes part of the
rent. The building can well be said to be reasonably expected to be let at the
figure arrived at by adding the permitted increase to the standard rent. The
valuation has therefore, to be arrived at after taking into account the amount
of educational cess levied by the Corporation. Even if it leads to some kind of
inconvenience of variation in valuation at frequent intervals that can be no
consideration for not giving full effect and meaning to the provisions of the
Act of 1888 and the Rent Act. Bombay Municipal Corporation , Appellant v.
The Life Insurance Corporation of India, Bombay, reported in AIR 1970 SC
1584 (FB).
11. Bombay Rents, Hotel and Lodging House Rates Control Act (57 of 1947),
S.5(8) 'Premises' Lease of land having no building thereon, for making
construction for installing machines. Building constructed on that land and
machinery also installed. Whether same can be termed as 'premises' under Rent
Act? Held. Yes.
11.1. So far the facts of the present case are concerned, the lease had been
granted to the Binny Company for installing ginning and processing machines
Supreme Court Judgments on Bombay Rents, Hotel and Lodging House Rates Control Act, 1947
13. 13
have accepted the erroneous view that standard rent was actually fixed by the
appellate Court for the first time whereas what had happened was that the
application for fixation of standard rent had been dismissed for non
prosecution. This was not "fixation" of standard rent. Hence, no question of
giving time to pay up arrears after a "fixation" of standard rent arose in the
case C.R. Appl. No. 67 of 1973, D/ 1991975 (Guj), Reversed. Mistry
Premjibhai Vithaldas v/s Ganeshbhai Keshavji, reported in AIR 1977 SC 1707
(FB). Para Nos.10, 11 &13.
13. Bombay Rents, Hotel and Lodging House Rates Control Act (57 of 1947),
S.5(10), S.7 Whether standard rent can be altered and refixed if there is any
structural alteration or change in the amenities? Held No.
13.1. Section 11(a) is intended to enable the Court, upon an application in any
suit or proceeding, to modify the standard rent as a result of structural
alteration or change in the amenities involving further capital investment of
the owner. However, demolition of a building is not one such contingency
contemplated by S. 11(a) of the Act. Municipal Corporation of Greater
Mumbai v/s Kamla Mills Ltd. Reported in AIR 2003 SC 2998, para No.36.
14. Bombay Rents, Hotel and Lodging House Rates Control Act (57 of 1947),
S.5(11)(b) lease Lease of certain watan land by father of A to R for storing
timber Death of father of A R continued to be tenants within S. 5 (11)
Determination of lease consequent on death of father of A, not material.
14.1. Section 5 (11) (b) is clear that any person remaining, after the
determination of the lease, in possession, with or without the assent of the
landlord is also a tenant for the purposes of the Act. The learned counsel
argued that the determination of the lease contemplated by Section 5 (11) (b)
was determination by an act of the landlord and not determination by the
operation of the law. We do not see any justification for so confining the
Supreme Court Judgments on Bombay Rents, Hotel and Lodging House Rates Control Act, 1947
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meaning to be given to the expression 'the determination of the lease' in
Section 5 (11) of the Act. Tavangowda Tamangowda Patil v/s Yellappa
Krishna Muchandni, reported in AIR 1980 SC 590.
15. Bombay Rents, Hotel and Lodging House Rates Control Act (57 of 1947),
S.5(11) (c) Whether the status of a member in the case of tenant copartnership
housing society is that of a tenant within the meaning of S. 5(11) of the Rent Act
1947? Held No.
15.1. As there is no relationship of landlord and tenant between the Society and
the member. M/s. Anita Enterprises v/s Belfer Coop. Housing Society Ltd,
reported AIR 2008 SC 746, para Nos.27 & 28.
16. Bombay Rents, Hotel and Lodging House Rates Control Act (57 of 1947),
S.5(11) (c) & 28 Tenant of copartnership housing society inducting third person
in his allotted accommodation. Whether such transfer establishes relationship of
landlord and tenant, between member and third person? Held No.
16.1. Further held that The question regarding legality or otherwise of the
creation of tenancy right by the member of tenant copartnership society
which amounts to transfer of interest of a member in the property of the
Society, can be decided by raising a dispute before the Cooperative Court.
M/s. Anita Enterprises v/s Belfer Coop. Housing Society Ltd, reported AIR
2008 SC 746, para Nos.33, 35 & 36.
17. Bombay Rents, Hotel and Lodging House Rates Control Act (57 of 1947),
S.5(11)(c)(ii) and S.15 Tenant of nonresidential premises continuing in
occupation after contractual period is over He cannot bequeath his right of
occupation by will in favour of person who was not member of his family
carrying on business at time of his death.
17.1. A person occupying a nonresidential premises as a tenant after the
contractual period is over cannot bequeath his right to occupy the property as
Supreme Court Judgments on Bombay Rents, Hotel and Lodging House Rates Control Act, 1947
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The definition of 'tenant' is too exhaustive to include any member of the
family residing with him. Such members of his family who were residing with
the tenant at the time of his death, or in their absence any heir of the
deceased tenant, as may be decided in default of agreement by the Court,
would become tenant only on his death. The concurrent findings of the Courts
below are that son, respondents 2 and 3 built the house for which the first
respondent tenant did not contribute any money; she did not shift her
residence to the said house though she was visiting that house off and on.
Inasmuch as the first respondent tenant did not built any house and
respondents 2 and 3 are not the tenants, the first of the three alternatives,
referred to in S. 13(1) is not available to the landlord to seek eviction of the
first respondent tenant. Anandi D. Jadhav v/s Nirmala Ramchandra Kore,
AIR 2000 SC 1386, para Nos.5 & 8.
21. Bombay Rents, Hotel and Lodging House Rates Control Act (57 of 1947),
S.5(11)(c) Original tenant having two sons. On death of original tenant rent
bills were issued in name of his elder son and on death of elder son rent bills
were issued in name of his widow. No division of premises and rent was not
being paid separately by younger son. Members of family of original tenant
succeeded to tenancy together. Suit filed for eviction. Widow of elder son
impleaded as tenant represented all tenants. Whether the decree passed in suit
for eviction is binding on all members of family covered by tenancy? Held. Yes.
21.1. Younger son claiming to be member of family residing with original tenant
at time of his death cannot resist execution of decree. Moreso, when younger
son was not residing in premises with family of elder son. Therefore, there
was no necessity to implead appellant younger son as necessary party to suit
for eviction. Ashok Chintaman Juker v/s Kishore Pandurang Mantri,
reported in AIR 2001 SC2251.
Supreme Court Judgments on Bombay Rents, Hotel and Lodging House Rates Control Act, 1947
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22. Bombay Rents, Hotel and Lodging House Rates Control Act (57 of 1947),
S.5(18)(b), S.11(1)(c) houses and rents Fixation of standard rent Principle
of apportionment Applicability Apportionment What is How it has to be
applied.
22.1. The principle of apportionment is not alien to the spirit and scheme of the
Act. It is applicable to the fixation of standard rent.
22.2. Apportionment or equal distribution of the burden of rent on every
portion is a rule of justice and good sense. If the standard rent of a whole
was a specific amount, it stands to reason that the standard rent of a part or
subdivision of that whole should not ordinarily exceed that amount.
Therefore, if the court feels that for securing the ends of justice and giving
effect to the provisions and policy of the Act, it is reasonably necessary and
feasible to work out the standard rent by apportionment, it can legitimately
do so. This principle, however, is applicable where on the basic date, that
portion of which the standard rent is to be determined, had not been let
separately as one unit, but the whole, of which it is a part, had been let on
that date. Apportionment postulates that on account of its having been let on
the basic date, the whole had acquired a standard rent which has to be
allocated to smaller units subsequently carved out of it.
22.3. True, that unlike the English Rent Control Act of 1920 or the later English
Acts, the (Bombay) Act does not expressly speak of apportionment. But the
language of its relevant provisions is elastic enough to permit the fixation of
standard rent on apportionment basis. Section 11(1) gives a discretion to the
Court to fix such amount as standard rent as it "deems just", though in
exercising this discretion the Court has to pay due regard to (i) the provisions
of the Act and (ii) the circumstances of the case, and it is not to be rigidly and
indiscriminately applied.
Supreme Court Judgments on Bombay Rents, Hotel and Lodging House Rates Control Act, 1947
23. 23
application of that part cannot have been intended to depend upon what a
lessee may do or may not do.
25.3. The fact that the lease permitted the lessees to take construction loans
from prospective tenants of the buildings to be constructed by the lessees does
not affect the purpose for which the land was leased. Osman Fakir
Mohammed Divecha , Appellant v. Ali Akbar Javed Sadakya, reported in AIR
1970 SC 1893 (FB).
26. Bombay Rents, Hotel and Lodging House Rates Control Act (57 of 1947),
S.6 Premises, let for education Protection from eviction by educational
institutions Premises let out on rent to club Club activities not showing the
premises were let for education Benefit of Act cannot be claimed by club.
26.1. Where the premises were let out on rent to a club and the activities of the
Club were more in the nature of cultural activities or recreational activities,
inasmuch as they related fraternising among the members by playing indoor
or outdoor games or otherwise, such activities cannot lead the conclusion that
the premises were let for purposes of education and consequently the club
was not entitled to the protection of the Act. Haji Ismail Valid Mohmad v/s
Sports Club in the name of Union Sports Club, reported in AIR 1992 SC 1855
(FB).
27. Bombay Rents, Hotel and Lodging House Rates Control Act (57 of 1947),
S.11 Default in payment of rent Composite tenancy Under contract, property
tax along with monthly rent is required to be paid by tenant. Whether default in
payment of rent at end of every succeeding month does not convert monthly
tenancy into yearly one. Held. No. Ansuyaben Kantilal Bhatt v/s Rashiklal
Manilal Shah, reported in AIR 1997 SC 2510.
28. Bombay Rents, Hotel and Lodging House Rates Control Act (57 of 1947),
S.11(1)(e) Standard rent Application for fixation of Subsistence of pre
Supreme Court Judgments on Bombay Rents, Hotel and Lodging House Rates Control Act, 1947
24. 24
existing dispute is sine qua non for making application. Held. No.
28.1. There is no need for a preexisting dispute to subsist before invoking the
jurisdiction of the Court under Section 11(1)(e) of the Act. Filing an
application for determination of the standard rent itself is a dispute entitling
the tenant to take the benefit of Section 12(3)(a). The dispute may arise in
diverse forms. Devkaran Nenshi Tanna v/s Manharlal Nenshi, reported in AIR
1994 SC 2747, para No.6.
28.2. Further held in para No.8 that : Where the order fixing standard rent was
passed on basis of compromise reached between the parties and it was clear
from the order that the Court did not apply its mind to the factum whether
the terms agreed by the parties are just and reasonable and whether it would
be the standard rent consistent with the provision of the Act, the tenant
would not be precluded from making an application for fixation of standard
rent again when the notice was issued by the landlord demanding payment of
the arrears of the standard rent. The Act is a welfare legislation and parties
cannot contract out of the statute and the seal of approval of the Court does
not super add its sanctity, nor receive its legality or validity or sanctity
without due adjudication. The order should disclose the application of Court's
mind to the facts and then to the determination of the standard rent on the
basis of the terms, other evidence or records and the consent of the parties is
consistent with the Act and should record its satisfaction.
29. Bombay Rents, Hotel and Lodging House Rates Control Act (57 of 1947),
S.11(4) Sick Industrial Companies (Special Provisions) Act (1 of 1986), S.22
Eviction petition for nonpayment of rent. Whether same is maintainable against
sick company? Held. Yes.
29.1. Order under S. 11(4) of Rent Act can also be passed and S. 22 of 1985
Act does not prevent such proceedings. Gujarat Steel Tube Co. Ltd. ,
Supreme Court Judgments on Bombay Rents, Hotel and Lodging House Rates Control Act, 1947
28. 28
being transferred or assigned, and devolves on his death only in the manner
provided by the statute. The right of a lessee from a landlord on the other
hand is an estate or interest in the premises and in the absence of a contract
to the contrary is transferable and the premises may be sublet by him. But
with the determination of the lease, unless the tenant acquires the right of a
tenant holding over, by acceptance of rent or by assent to his continuing in
possession by the landlord, the terms and conditions of the lease are
extinguished, and the rights of such a person remaining in possession are
governed by the statute alone. Section 12(1) of the Act 57 of 1947 merely
recognises his right to remain in possession so long as he pays or is ready and
willing to pay the standard rent and permitted increases and performs the
other conditions of the tenancy, but not the right to enforce the terms and
conditions of the original tenancy after it is determined. Assuming that the
tenant was entitled to sublet the premises under the terms of the lease he
could not, relying upon S. 12(1), exercise the right to sublet granted under
the lease after he became a statutory tenant. Anand Nivas Private Ltd. v/s
Anandji Kalyanji's Pedhi, reported in AIR 1965 SC 414 (FB).
32.2. Above referred ratio is distinguish in Damadilal and others, Appellants v.
Parashram, reported in AIR 1976 SC 2229 (FB) and overruled in Om Wati
Gaur v/s Jitendra Kumar, reported in AIR 2003 SC 229.
33. Bombay Rents, Hotel and Lodging House Rates Control Act (57 of 1947),
S.12, S.13 Civil P.C. (5 of 1908) , O.37 , R.2 (Bombay) houses and rents
Houses and Rents R. 8 of the Rules made under the Act is not ultra vires
Exercise of discretion under O. 37 R. 2 Extent of.
33.1. Rule 8 of the Rules made under the Bombay Rents, Hotel and Lodging
House Rates (Control) Act, which provides that its under the Act may be
instituted in accordance with the procedure laid down in O. 37 is not ultra
Supreme Court Judgments on Bombay Rents, Hotel and Lodging House Rates Control Act, 1947
29. 29
vires and void. It is fallacious to contend that under provisions of the Act the
landlord is not entitled to a decree as a matter of right; the Court has to
consider the position of the tenant and has a discretion to pass or not to pass
a decree and therefore to a suit governed by the Act the provisions of O. 37 R.
2 C. P. C. (Bombay), which makes it incumbent on the Court to pass a decree
in circumstances coming within that subrule, are inapplicable.
Ramkarandas Radhavallabh v/s Bhagwandas Dwarkadas, reported in AIR
1965 SC 1144.
34. Bombay Rents, Hotel and Lodging House Rates Control Act (57 of 1947),
S.12, S.13, S.14 houses and rents Houses and Rents Scope Expression "is
determined for any reason", meaning of Interest of tenant when comes to an
end.
34.1. It is not correct to say that as soon as a notice determining a contractual
tenancy is given, the subtenant of the contractual tenant who was there from
before has to be deemed A tenant under S. 14 from the date the notice
expires.
34.2. The words "is determined for any reason" in the context of the Act mean
that where the interest of a tenant comes to an end completely, the pre
existing subtenant may, if the conditions of S. 14 are satisfied, be deemed to
be a tenant of the landlord.
34.3.The interest of a tenant who for purposes of S. 14 is a contractual tenant
comes to an end completely only when he is not only no longer a contractual
tenant but also when he has lost the right to remain in possession which S. 12
has given to him and is no longer even a statutory tenant. In other words S.
14 would come into play in favour of the subtenant only after the tenancy of
the contractual tenants has been determined by notice and the contractual
tenant has been ordered to be ejected under S. 28 on any of the grounds in S.
Supreme Court Judgments on Bombay Rents, Hotel and Lodging House Rates Control Act, 1947
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operates against landlord only after contractual tenancy is determined in
accordance with S. 111 T. P. Act Suit for recovery of possession under S. 12
Nat maintainable unless tenancy is determined and notice under S. 12 (2) is
served. Bhaiya Punjalal Bhagwanddin v/s Dave Bhagwatprasad Prabhuprasad,
reported in AIR 1963 SC 120 (FB).
37.1. Above referred ratio is impliedly overruled in the case of V. Dhanapal
Chettiar v/s Yesodai Ammal, reported in AIR 1979 SC 1745 (Seven Judges).
38. Bombay Rents, Hotel and Lodging House Rates Control Act (57 of 1947),
S.12(1) and S.12(3)(b) houses and rents eviction tenancy Houses and
Rents Suit by landlord against eviction of tenant Tenant in arrears of rent
During pendency of suit, tenant not paying standard rent, nor was he ready or
willing to pay Instead, he claimed that he was not liable to pay any amount
Tenant, held could not claim protection from eviction. Maganlal Chhotabhai
Desai v/s Chandrakant Motilal, reported in AIR 1969 SC 37 (FB). Para Nos. 10 &
11.
39. Bombay Rents, Hotel and Lodging House Rates Control Act (57 of 1947),
S.12(1), S.12(3)(b) and S.11(3) houses and rents eviction Houses and Rents
Suit for eviction of tenant on ground of arrears for a period of more than six
months Tenant though raising dispute as to standard rent, making no
application under S. 11 (3) Cannot claim protection under S. 12 (1) by merely
offering to pay or even paying all arrears due when court is about to pass decree
Tenant failing to pay or deposit in court regularly amount of standard rent due
after first hearing, cannot get protection of S 12 (3) (b).
39.1. Where a suit for eviction is filed on the ground that the tenant was in
arrears for a period of more than 6 months and the tenant although raising a
dispute as to the standard rent or permitted increases recoverable under the
Act, makes no application in terms of S. 11 (3) he cannot claim the protection
Supreme Court Judgments on Bombay Rents, Hotel and Lodging House Rates Control Act, 1947
37. 37
there is any dispute between the landlord and the tenant regarding the
amount of permitted increases, it can be decided by the Court only on an
application made by the tenant who has received a notice from his landlord.
Thus in a suit for ejectment it would not be open for the tenant to raise a
dispute regarding the permitted increases. If on receipt of a notice the tenant
has either not paid the amount of the permitted increase and not raised a
dispute by filing an application then, by virtue of Sections 12(2) and (3), the
landlord would be entitled to a decree for eviction. Laxman Jiwaba
Baherwade v/s Bapurao Dodappa Tandale AIR 2002 SC 3266, para No.6.
45. Bombay Rents, Hotel and Lodging House Rates Control Act (57 of 1947),
S.12(3) , Cl.(a) and Cl.(b) houses and rents Houses and Rents Dispute about
amount of standard rent Final order of standard rent by Small Cause Court
Tenant and landlord both questioning amount of standard rent by revision
petitions Dispute cannot be said to have come to end Case will be governed
not by Cl.(a) but by Cl. (b).
45.1. Eviction under Cl. (a) is made to depend upon several conditions. One
such condition is that there should be no dispute regarding the amount of
standard rent. Clause (b) comprehends all cases other than those falling
within Cl. (a) and a case in which there is a dispute about the standard rent
must obviously fall not in Cl. (a) but in Cl. (b).
45.2. Where, though the final order of standard rent is passed by the Court of
Small Causes, neither the landlord nor the tenant accepts the determination,
but each side questions the amount by filing revision petitions, particularly
the landlord files one revision after another to get the amount increased, it
would be strange for him to claim that there was no dispute subsisting. The
case will be governed not by Cl. (a) but by Cl. (b). Jashwantrai Malukchand
v/s Anandilal Bapalal, reported in AIR 1965 SC 1419 (FB).
Supreme Court Judgments on Bombay Rents, Hotel and Lodging House Rates Control Act, 1947