Supreme Court modifies damages for tenant in long-standing eviction case: Diwakar Upadhyay vs. P.N. Khanna (2008)

Introduction

Date of the Judgment: September 26, 2008

Judges: R.V. Raveendran and Lokeshwar Singh Panta, JJ.

What happens when a tenant refuses to leave a property for decades, despite court orders? The Supreme Court of India addressed this issue in a case involving a long-standing dispute between a landlord and a tenant. The core question was whether the High Court was justified in directing the tenant to pay damages for using the premises at a rate it determined. Justices R.V. Raveendran and Lokeshwar Singh Panta delivered the judgment.

Case Background

In 1972, the first respondent, P.N. Khanna, as the landlord, applied for the release of a residential tenement. However, the Rent Control and Eviction Officer rejected this application on January 10, 1973, and allotted the premises to the appellant, Diwakar Upadhyay, on January 18, 1973, without fixing any rent. Aggrieved, P.N. Khanna filed revision petitions. The Additional District Judge, Bareilly, allowed the revision and remanded the matter. On January 21, 1975, the Rent Control and Eviction Officer released the premises in favor of P.N. Khanna, ordering the eviction of Diwakar Upadhyay. This order was challenged in revision but was dismissed by the District Judge, Bareilly, on July 23, 1975, granting six months to vacate the premises.

Diwakar Upadhyay then filed O.S. No.67 of 1976, arguing that the second respondent, B.K. Khanna, was the actual landlord, making the release in favor of P.N. Khanna illegal. Meanwhile, Form ‘C’ was served on the appellant to vacate the premises, which was challenged in a writ petition (W.P.No.2065/1977) but dismissed on July 18, 1978. Subsequently, Form ‘D’ was issued on November 23, 1978, but could not be executed due to a temporary injunction in the pending suit. The appellant’s suit was eventually dismissed on January 7, 1979, with a finding that both P.N. Khanna and B.K. Khanna were landlords, and there was no infirmity in the release order. An appeal was dismissed on February 18, 1981, and a second appeal was also dismissed on February 19, 1982.

On May 28, 1983, the landlords filed another application for possession and issuance of a fresh Form ‘D’. Diwakar Upadhyay objected, arguing that the release order in favor of only one landlord could not be enforced, citing a partition suit (O.S.No.305/1974) where part of the premises was allotted to B.K. Khanna. The Rent Control and Eviction Officer upheld the objections on May 23, 1984, stating that possession could not be delivered to P.N. Khanna. This was challenged in revision, but the District Judge rejected it on December 14, 1992, due to maintainability issues. Respondents 1 and 2 then challenged these orders in W.P.No.5585/1993. The High Court allowed the writ petition on February 20, 2006, stating that respondents 1 and 2 were co-owners and the release order was valid.

Timeline:

Course of Proceedings

The Single Judge of the High Court reviewed the case’s history and the landlord’s attempts to secure possession since the release order in 1975. The High Court noted the tenant’s conduct, which it considered an abuse of the judicial process. Consequently, the High Court set aside the orders dated May 23, 1984, and December 14, 1992. It directed the tenant to pay rent/damages for use and occupation at a rate of at least Rs.1,000/- per month from January 18, 1973 (the date of allotment), until February 20, 2006 (the date of the High Court’s order). Additionally, the High Court directed the tenant to pay Rs.100/- per day as damages from February 20, 2006, until the actual delivery of possession.

Legal Framework

Section 16(9) of the Uttar Pradesh Buildings (Regulation of Letting, Rent and Eviction) Act, 1972:

This section provides that the District Magistrate, when making an order of allotment, may also direct payment of one month’s presumptive rent. The relevant excerpt from the Act states:

“Section 16(9) of the Uttar Pradesh Buildings(Reg ulation of Letting Rent and Eviction) Act,1972 provides that the District Magistrate while making an order of allotment under sub-section (1)(a) may also direct payment of one month’s presumptive rent.”

In this case, no rent was fixed when the premises were initially allotted to the tenant.

Arguments

The counsel for the appellant, Diwakar Upadhyay, primarily challenged the High Court’s decision regarding the payment of damages for the use of the premises. The main point of contention was whether the High Court was justified in directing the payment of damages at the rates specified in its order.

• Challenge to the Rate of Damages: The appellant’s counsel argued that the rate of damages fixed by the High Court was excessive and not in line with the prevailing rent or market value of the property during the relevant periods.
• Justification for the Order: The appellant questioned whether the High Court could issue such an order for damages in a writ petition arising from an application for possession filed before the Rent Control and Eviction Officer.

Issues Framed by the Supreme Court

1. Whether the High Court was justified in directing payment of damages for use of the premises at the rates mentioned in its order.

Treatment of the Issue by the Court: “The following table demonstrates as to how the Court decided the issues”

Authorities

• Section 16(9) of the Uttar Pradesh Buildings (Regulation of Letting, Rent and Eviction) Act, 1972: The court considered this provision, which allows the District Magistrate to direct payment of one month’s presumptive rent when making an order of allotment.

Authorities:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• Section 16(9) of the Uttar Pradesh Buildings (Regulation of Letting, Rent and Eviction) Act, 1972: The Court considered this provision in the context of determining fair damages, noting that no rent was fixed when the premises were allotted.

What weighed in the mind of the Court?

The Supreme Court’s decision was influenced by several factors, primarily revolving around the conduct of the tenant and the need to balance the interests of both parties. The Court considered the tenant’s prolonged obstruction of the eviction process, which spanned over three decades, and the necessity of providing fair compensation to the landlord for the use and occupation of the premises during this period. However, the Court also took into account the initial rent agreement and the prevailing rent rates at different times to ensure that the damages were reasonable and not excessively punitive.

The Court’s reasoning can be summarized as follows:

Tenant’s Prolonged Obstructionist Conduct ↓ Need for Fair Compensation to the Landlord ↓ Consideration of Initial Rent and Prevailing Rates ↓ Modification of Damages to Ensure Reasonableness

Key Takeaways

• ✓ Prolonged obstruction of eviction can lead to significant damages.
• ✓ Courts will balance the interests of landlords and tenants to ensure fairness.
• ✓ Initial rent agreements and prevailing rent rates are important factors in determining damages.

Conclusion

The Supreme Court’s judgment in Diwakar Upadhyay vs. P.N. Khanna (2008) provides important guidance on the issue of damages in long-standing eviction cases. While the Court upheld the High Court’s decision to direct the tenant to pay damages, it modified the rate of damages to ensure fairness, taking into account the tenant’s obstructionist conduct, the need for fair compensation to the landlord, and the initial rent agreement. This decision underscores the importance of timely eviction and the need for courts to balance the interests of both landlords and tenants in resolving such disputes.

Category

• Rent Control Laws
  • Uttar Pradesh Buildings (Regulation of Letting, Rent and Eviction) Act, 1972
  • Section 16(9), Uttar Pradesh Buildings (Regulation of Letting, Rent and Eviction) Act, 1972
• Landlord-Tenant Disputes
• Eviction
• Damages
• Supreme Court Judgments

FAQ

1. What happens if a tenant refuses to leave a property after an eviction order?

   If a tenant refuses to leave a property after an eviction order, they may be liable to pay damages for the period they continue to occupy the premises.

2. How are damages calculated in eviction cases?

   Damages are calculated based on various factors, including the initial rent agreement, prevailing rent rates, and the tenant’s conduct during the eviction process.

3. What is the role of the court in determining damages?

   The court balances the interests of both landlords and tenants to ensure that the damages are fair and reasonable, considering all relevant factors.