Supreme Court settles jurisdiction in landlord-tenant disputes under Haryana Rent Act: Subhash Chander & Ors. vs. Bharat Petroleum Corporation Ltd. & Anr. (28 January 2022)

Introduction

Date of the Judgment: 28 January 2022
Citation: 2022 INSC 74
Judges: Justice Ajay Rastogi and Justice Abhay S. Oka
Can a landlord bypass the Rent Control Act and directly file a civil suit for eviction? The Supreme Court of India recently addressed this critical question in a case concerning property in Kaithal, Haryana. The core issue was whether a civil court had the jurisdiction to hear a suit for possession of a property when the Haryana (Control of Rent & Eviction) Act, 1973, applied. The Court held that the Rent Act provides a complete code for resolving such disputes, barring the jurisdiction of civil courts. The judgment was delivered by a two-judge bench comprising Justice Ajay Rastogi and Justice Abhay S. Oka, with Justice Rastogi authoring the opinion.

Case Background

The appellants, Subhash Chander and others, claimed ownership of a plot of land in Kaithal, Haryana. Their predecessor, Vinod Kumar, had leased the property to Burmah Shell Oil Storage Distributing Company Ltd. on 4th June 1958, for 20 years, starting from 1st April 1958. The lease agreement included a clause for a one-time renewal for another 20 years. This renewal was exercised, extending the lease until 1st April 1998. After the lease expired, the appellants served a legal notice on 30th January 1998, to the respondents, seeking to terminate their tenancy. Subsequently, on 7th August 1998, the appellants filed a civil suit for possession of the land, arguing that the respondents’ possession had become unauthorized.

Timeline:

Course of Proceedings

The trial court initially ruled in favor of the appellants on 13th March 2002, holding that the respondents were in unauthorized possession after the lease expired. However, the appellate court reversed this decision on 28th March 2006, stating that the civil court lacked jurisdiction and that the respondents were statutory tenants under the Haryana (Control of Rent & Eviction) Act, 1973. The High Court dismissed the second appeal on 8th July 2009, upholding the appellate court’s decision. This led to the appellants’ appeal before the Supreme Court.

Legal Framework

The case primarily revolves around the interplay between the Haryana (Control of Rent & Eviction) Act, 1973, and the Burmah Shell (Acquisition of Undertakings) Act, 1976. The Haryana Act applies to rented land within municipal limits, defining a “tenant” to include those occupying such land. The Burmah Shell Act, enacted by the Central Government, transferred the rights and interests of Burmah Shell to the Central Government and subsequently to Bharat Petroleum Corporation Ltd. (BPCL). Section 3 of the Burmah Shell Act states that on the appointed day, the rights of Burmah Shell shall stand transferred to the Central Government. Section 5(1) states that the Central Government shall be deemed to have become the lessee or tenant. Section 5(2) states that on the expiry of the term of any lease or tenancy, it shall be renewed on the same terms and conditions if desired by the Central Government. Section 7(3) states that the provisions of Section 5(2) shall apply to a lease or tenancy which vests in a Government company. Section 11 of the Burmah Shell Act provides that its provisions have an overriding effect over any other law.

The relevant sections of the Burmah Shell (Acquisition of Undertakings) Act, 1976 are:

• Section 3: Transfer and vesting in the Central Government of the undertakings of Burmah Shell in India. On the appointed day, the right, title and interest of Burmah Shell, in relation to its undertakings in India, shall stand transferred to, and shall vest in, the Central Government.
• Section 5(1): Central Government to be lessor or tenant under certain circumstances. Where any property is held in India by Burmah Shell under any lease or under any right of tenancy, the Central Government shall, on and from the appointed day, be deemed to have become the lessee or tenant, as the case may be, in respect of such property as if the lease or tenancy in relation to such property had been granted to the Central Government, and thereupon all the rights under such lease or tenancy shall be deemed to have been transferred to, and vested in, the Central Government.
• Section 5(2): On the expiry of the term of any lease or tenancy referred to in sub-section (1), such lease or tenancy shall, if so desired by the Central Government, be renewed on the same terms and conditions on which the lease or tenancy was held by Burmah Shell immediately before the appointed day.
• Section 7(3):The provisions of sub- section (2) of section 5 shall apply to a lease or tenancy, which vests in a Government company, as they apply to a lease or tenancy vested in the Central Government, and reference therein to the” Central Government” shall be construed as a reference to the Government company.
• Section 11: Effect of Act on other laws. The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act or in any decree or order of any court, tribunal or other authority.

Arguments

Appellants’ Arguments:

• The appellants argued that the Burmah Shell (Acquisition of Undertakings) Act, 1976, a special legislation, overrides the Haryana (Control of Rent & Eviction) Act, 1973. They contended that Section 11 of the 1976 Act gives it an overriding effect, excluding other laws inconsistent with it.
• They submitted that the respondents’ status as a statutory tenant under the 1973 Act is incorrect because Section 5(2) of the 1976 Act only allows for one lease renewal, which had already been availed. After the lease expired on 1st April 1998, the respondents became trespassers, and a civil suit for possession was the appropriate remedy.
• The appellants relied on the judgments of the Supreme Court in Depot Superintendent, H.P. Corpn. Ltd. and Another v. Kolhapur Agricultural Market Committee, Kolhapur, Ram Bharosey Lal Gupta(Dead) by LRs and Others v. Hindustan Petroleum Corporation Limited and Another, and Bharat Petroleum Corporation Limited v. Rama Chandrashekhar Vaidya and Another to support their claim that no further extension was permissible.

Respondents’ Arguments:

• The respondents conceded that only one lease extension of 20 years was permissible and that it had expired on 1st April 1998. However, they argued that they became statutory tenants under the Haryana (Control of Rent & Eviction) Act, 1973.
• They contended that they could only be evicted by invoking Section 13 of the 1973 Act, which applies to the property in question. Therefore, the civil court did not have jurisdiction to try the suit.
• The respondents relied on the Constitution Bench judgment of the Supreme Court in V. Dhanapal Chettiar v. Yesodai Ammal, followed in Shyam Lal v. Deepa Dass Chela Ram Chela Garib Dass, to support their argument that the jurisdiction of the civil court was barred.

Issues Framed by the Supreme Court

The Supreme Court framed the following issue for consideration:

1. Whether the jurisdiction of the Civil Court is barred and the petition for possession filed by the appellants/plaintiffs will lie before the Rent Controller under the Haryana (Control of Rent & Eviction) Act, 1973.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues:

Authorities

The Supreme Court considered the following authorities:

Cases:

• V. Dhanapal Chettiar v. Yesodai Ammal [ (1979) 4 SCC 214 ] – Supreme Court of India: This case established that even after the expiry of a contractual tenancy, a tenant can only be evicted under the provisions of the applicable State Rent Act.
• Shyam Lal v. Deepa Dass Chela Ram Chela Garib Dass [ (2016) 7 SCC 572 ] – Supreme Court of India: This case followed the principles laid down in V. Dhanapal Chettiar.
• Depot Superintendent, H.P. Corpn. Ltd. and Another v. Kolhapur Agricultural Market Committee, Kolhapur [ (2007) 6 SCC 159 ] – Supreme Court of India: This case clarified that there is no option for further renewal under the Burmah Shell Act beyond what is specified in the lease deed.
• Ram Bharosey Lal Gupta(Dead) by LRs and Others v. Hindustan Petroleum Corporation Limited and Another [ (2013) 9 SCC 714 ] – Supreme Court of India: This case dealt with the legal obligation to renew a lease, which was not the issue in the present case.
• Bharat Petroleum Corporation Limited v. Rama Chandrashekhar Vaidya and Another [ (2014) 1 SCC 657 ] – Supreme Court of India: This case held that only one extension of lease was permissible under the lease deed and the Burmah Shell Act.

Legal Provisions:

• Haryana (Control of Rent & Eviction) Act, 1973: This Act governs landlord-tenant relationships in Haryana, including the eviction of tenants.
• Section 2(h) of the Haryana (Control of Rent & Eviction) Act, 1973: Defines “tenant” to include those occupying rented land.
• Section 13 of the Haryana (Control of Rent & Eviction) Act, 1973: Specifies the grounds for eviction of a tenant under the Act.
• Burmah Shell (Acquisition of Undertakings) Act, 1976: This Act transferred the rights of Burmah Shell to the Central Government and subsequently to BPCL.
• Section 3 of the Burmah Shell (Acquisition of Undertakings) Act, 1976: Provides for the transfer of Burmah Shell’s rights to the Central Government.
• Section 5(1) of the Burmah Shell (Acquisition of Undertakings) Act, 1976: Deems the Central Government as the lessee or tenant.
• Section 5(2) of the Burmah Shell (Acquisition of Undertakings) Act, 1976: Allows for one lease renewal on the same terms.
• Section 7(3) of the Burmah Shell (Acquisition of Undertakings) Act, 1976: Extends the provisions of Section 5(2) to Government companies.
• Section 11 of the Burmah Shell (Acquisition of Undertakings) Act, 1976: Gives the Act an overriding effect over other laws.

Judgment

How each authority was viewed by the Court?

• The Supreme Court followed V. Dhanapal Chettiar v. Yesodai Ammal [ (1979) 4 SCC 214 ]* and held that even after the expiry of the contractual tenancy, a tenant can only be evicted under the provisions of the applicable State Rent Act.
• The Supreme Court followed Shyam Lal v. Deepa Dass Chela Ram Chela Garib Dass [ (2016) 7 SCC 572 ]*, which reiterated the principles laid down in V. Dhanapal Chettiar.
• The Supreme Court distinguished Depot Superintendent, H.P. Corpn. Ltd. and Another v. Kolhapur Agricultural Market Committee, Kolhapur [ (2007) 6 SCC 159 ]* by stating that the issue was regarding the second renewal, which is not the case in the present matter.
• The Supreme Court distinguished Ram Bharosey Lal Gupta(Dead) by LRs and Others v. Hindustan Petroleum Corporation Limited and Another [ (2013) 9 SCC 714 ]* by stating that the issue was regarding the legal obligation to renew the lease, which is not the same as the present matter.
• The Supreme Court distinguished Bharat Petroleum Corporation Limited v. Rama Chandrashekhar Vaidya and Another [ (2014) 1 SCC 657 ]* by stating that the issue was regarding the automatic renewal of lease, which is not the case in the present matter.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the principle that State Rent Acts provide a complete code for resolving landlord-tenant disputes. The Court emphasized that once a lease expires, a tenant becomes a statutory tenant under the applicable Rent Act, and eviction can only occur through the mechanisms provided by that Act. The Court also highlighted the overriding effect of Section 11 of the Burmah Shell Act, but clarified that it pertains to the transfer of rights and not to the exclusion of the provisions of the Haryana Rent Act.

Logical Reasoning:

The Court rejected the argument that the Burmah Shell Act overrides the Haryana Rent Act, emphasizing that the latter provides a complete mechanism for resolving landlord-tenant disputes. The Court stated that, “the jurisdiction indeed of a civil Court is impliedly barred from the field covered specifically by the provisions of the Act 1973 and that being the complete code determining the rights of a tenant/landlord to the exclusion of the other laws…”. The Court also noted that, “even after the expiry of the period of contractual tenancy, the tenant can be evicted only in terms of provisions of the State Rent Act which is applicable in reference the subject property in question.”. The Court further clarified that, “To that extent, Section 11 of the Act has an overriding effect to the provisions of other laws.”. The Court emphasized that the respondents became statutory tenants and could only be evicted under the provisions of the Haryana Rent Act.

Key Takeaways

• Civil courts do not have jurisdiction to entertain suits for possession of properties covered under the Haryana (Control of Rent & Eviction) Act, 1973.
• Tenants become statutory tenants under the Rent Act upon expiry of their contractual tenancy, and can only be evicted through the mechanisms provided under that Act.
• The Burmah Shell (Acquisition of Undertakings) Act, 1976, does not override the provisions of the Haryana Rent Act regarding eviction of tenants.
• Landlords must seek eviction through the Rent Controller under the Haryana Rent Act rather than filing a civil suit.

Directions

No specific directions were issued by the Supreme Court in this judgment.

Specific Amendments Analysis

There is no specific amendment discussed in the judgment.

Development of Law

The ratio decidendi of this case is that when a property is governed by a State Rent Act, the jurisdiction of civil courts is barred in matters of eviction, and the provisions of the Rent Act must be followed. The Supreme Court reaffirmed the principle that a tenant becomes a statutory tenant after the expiry of a contractual tenancy and can only be evicted through the mechanisms provided under the applicable Rent Act. This judgment reinforces the importance of State Rent Acts in protecting tenants’ rights and clarifies that special legislations like the Burmah Shell Act do not override the specific provisions of State Rent Acts concerning eviction.

Conclusion

In conclusion, the Supreme Court dismissed the appeal, holding that the civil court did not have jurisdiction to entertain the suit for possession. The Court reiterated that the Haryana (Control of Rent & Eviction) Act, 1973, provides a complete code for resolving landlord-tenant disputes, and the respondents, having become statutory tenants, could only be evicted under the provisions of that Act. The Burmah Shell (Acquisition of Undertakings) Act, 1976, does not override the specific provisions of the Haryana Rent Act concerning eviction.