Supreme Court Upholds Eviction Order: Landlord Wins Rent Dispute in Trilok Singh Chauhan vs. Ram Lal (2017)

Introduction

Date of the Judgment: December 11, 2017

Citation: (2017) INSC 992

Judges: A. K. Sikri, J., Ashok Bhushan, J.

Can a High Court overturn a trial court’s factual findings on rent in a revision petition? The Supreme Court of India recently addressed this question in a case involving a landlord seeking to evict a tenant for non-payment of rent. The core issue revolved around whether the High Court was justified in reversing the Trial Court’s decision regarding the rate of rent and subsequent eviction order. The judgment was delivered by a two-judge bench comprising Justice A. K. Sikri and Justice Ashok Bhushan, with Justice Ashok Bhushan authoring the opinion.

Case Background

The appellant, Trilok Singh Chauhan, owned a shop in Rishikesh, which was rented to the respondent, Ram Lal, who operated a clothing business. A dispute arose when the landlord claimed the tenant had not paid rent from December 2000 onwards. The landlord issued a notice on September 7, 2001, stating that the rent was Rs. 1500 per month and demanded payment of the outstanding amount along with interest. The notice also stated that failure to pay would result in the termination of the tenancy. The tenant, however, claimed the rent was only Rs. 250 per month. The landlord filed a case in the Small Causes Court for recovery of rent, compensation, and eviction. The tenant denied the claimed rent and stated that he had sent Rs. 1250 for the period of September 2001 to January 2002 by money order, which was refused by the landlord. The Trial Court initially rejected the landlord’s application for amendment to include a prayer for possession, but the High Court allowed it, subject to a cost payment.

Timeline

Course of Proceedings

The Trial Court initially framed ten issues and later added an issue on whether the landlord had waived his right to evict the tenant. The Trial Court ruled in favor of the landlord, deciding that the rent was Rs. 1500 per month and ordering the tenant’s eviction along with payment of outstanding rent and damages. The tenant then filed a revision petition before the High Court of Uttarakhand under Section 25 of the Provincial Small Cause Courts Act, 1887. The High Court reversed the Trial Court’s decision, holding that the rent was Rs. 250 per month and criticizing the landlord for seeking to regain possession and profit from the property. The landlord then appealed to the Supreme Court.

Legal Framework

The case primarily revolves around the interpretation and application of Section 25 of the Provincial Small Cause Courts Act, 1887. This section empowers the High Court to review decisions of the Small Causes Court to ensure they are in accordance with the law. Specifically, Section 25 states:

“Sec. 25. Revision of decrees and orders of Courts of Small Causes: The High Court, for the purpose of satisfying itself that a decree or order made in any case decided by a Court of Small Causes was according to law, may call for the case and pass such order with respect thereto as it thinks fit.”

The Supreme Court also considered Section 114 of the Evidence Act, regarding adverse presumption for not producing evidence. The Court also referred to the U.P. Act No. 13 of 1972, which the tenant pleaded was applicable to the premises.

Arguments

Appellant (Landlord)’s Arguments:

• The Trial Court correctly determined the rent to be Rs. 1500 per month based on the evidence presented, including the Evaluation List from the Nagar Palika, Rishikesh.
• The High Court erred in reversing the factual findings of the Trial Court without proper justification.
• The tenant’s possession of the shop for nineteen years without paying the correct rent was unjust.
• The notice issued on 07.09.2001 clearly terminated the tenancy, and the landlord was entitled to seek eviction.

Respondent (Tenant)’s Arguments:

• The rent was Rs. 250 per month, and a premium of Rs. 1,20,000 was paid to the landlord, for which no receipt was issued.
• The Trial Court did not address the additional issues framed on 20.01.2009, specifically regarding the waiver of eviction rights.
• The landlord’s motive was to secure possession of the property and profit from it, as observed by the High Court.
• The premises is covered by U.P. Act No. 13 of 1972.

The landlord argued that the Trial Court had considered all relevant evidence, including the evaluation list from the Nagar Palika, Rishikesh, which indicated a rent of Rs. 1500 per month. The landlord also pointed out that the tenant had failed to produce his diary, which would have contained records of rent payments, leading to an adverse inference under Section 114 of the Evidence Act. The tenant, on the other hand, contended that the rent was Rs. 250 per month, and the High Court correctly reversed the Trial Court’s judgment because the Trial Court had not addressed the additional issues framed on 20.01.2009.

The tenant further argued that the landlord had waived his right to evict him by issuing the notice dated 07.09.2001, and the prayer for eviction was barred by limitation. The tenant also contended that the landlord’s intention was to secure possession of the property for profit, which was highlighted by the High Court.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the main issues that the court addressed were:

1. Whether the High Court was justified in reversing the Trial Court’s finding on the rate of rent.
2. Whether the Trial Court’s failure to address the additional issues framed on 20.01.2009 was a valid ground for setting aside its judgment.
3. Whether the landlord had waived his right to evict the tenant by the notice dated 07.09.2001.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

• Hari Shankar & Ors. Vs. Rao Girdhari Lal Chowdhury, AIR 1963 SC 698 – The Supreme Court discussed the scope of Section 25 of the Provincial Small Cause Courts Act, 1887, and held that the High Court should not interfere with findings of fact unless there is a miscarriage of justice, the decision is not according to law, the court had no jurisdiction, the court based its decision on inadmissible evidence, the unsuccessful party was not given a proper opportunity of being heard, or the burden of proof was placed on the wrong shoulders.
• Mundri Lal Vs. Sushila Rani(Smt) & Anr., (2007) 8 SCC 609 – The Supreme Court held that the jurisdiction under Section 25 of the Act, 1887 is wider than the Revisional Jurisdiction under Section 115 C.P.C., but a pure finding of fact based on appreciation of evidence may not be interfered with. The court also explained the circumstances under which findings can be interfered with in exercise of jurisdiction under Section 25, which include when findings are perverse, based on no material, arrived at upon taking into consideration inadmissible evidence, or arrived at without consideration of relevant evidence.
• Section 25 of the Provincial Small Cause Courts Act, 1887 – This section was the primary legal provision under consideration, defining the High Court’s revisional powers over Small Causes Courts.
• Section 114 of the Evidence Act – The Court referred to this section to draw an adverse inference against the tenant for not producing the diary containing records of rent payments.

Judgment

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

How each authority was viewed by the Court?

✓ Hari Shankar & Ors. Vs. Rao Girdhari Lal Chowdhury, AIR 1963 SC 698*: The Supreme Court relied on this case to define the scope of revisional jurisdiction under Section 25 of the Provincial Small Cause Courts Act, 1887, emphasizing that High Courts should not interfere with factual findings of the Trial Court unless there is a miscarriage of justice.

✓ Mundri Lal Vs. Sushila Rani(Smt) & Anr., (2007) 8 SCC 609*: The Supreme Court used this case to further clarify the limitations of revisional jurisdiction, stating that findings of fact should not be reversed unless they are perverse, based on no evidence, or made without considering relevant evidence.

✓ Section 25 of the Provincial Small Cause Courts Act, 1887: The Court analyzed this section to determine the extent of the High Court’s power to review decisions of the Small Causes Court.

✓ Section 114 of the Evidence Act: The Court used this provision to justify drawing an adverse inference against the tenant for not producing the diary containing records of rent payments.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• Factual findings of the Trial Court: The Court emphasized that the Trial Court had based its findings on the evidence presented, including the Evaluation List from the Nagar Palika and the tenant’s failure to produce his rent payment diary.
• Limitations of Revisional Jurisdiction: The Court reiterated that the High Court’s revisional jurisdiction under Section 25 of the Provincial Small Cause Courts Act, 1887, does not allow it to overturn factual findings unless there is a miscarriage of justice or the findings are perverse.
• Clarity of the Notice: The Court noted that the notice issued by the landlord clearly stated the termination of the tenancy and the intention to seek eviction, thus negating any claim of waiver.
• Adverse Inference: The Court drew an adverse inference against the tenant for not producing his rent payment diary, which was crucial evidence.

Fact:Law Ratio

The Court’s reasoning was a blend of factual analysis and legal principles. The emphasis on the Trial Court’s findings and the limitations of revisional jurisdiction shows a preference for upholding lower court decisions based on evidence. The clarity of the notice and the adverse inference drawn against the tenant further solidified the Court’s decision.

Logical Reasoning:

The Supreme Court considered alternative interpretations but rejected them. For example, the High Court’s view that the rent was Rs. 250 per month was rejected because it was not supported by the evidence. The Court also rejected the argument that the landlord had waived his right to evict the tenant, citing the explicit language of the notice. The final decision was reached by analyzing the evidence, applying the legal principles governing revisional jurisdiction, and interpreting the notice issued by the landlord.

The Supreme Court held that the High Court had erred in reversing the Trial Court’s decision. The Court emphasized that the High Court’s revisional jurisdiction under Section 25 of the Provincial Small Cause Courts Act, 1887, is limited and does not allow it to overturn factual findings unless there is a miscarriage of justice or the findings are perverse. The Court also held that the Trial Court had already addressed the issue of eviction rights in Issue No. 9, and the additional issues were related to the same matter. Finally, the Court concluded that the landlord had not waived his right to evict the tenant, as the notice clearly stated the termination of the tenancy and the intention to seek eviction.

The majority opinion was authored by Justice Ashok Bhushan, and Justice A. K. Sikri concurred with the judgment.

“The findings recorded by the Trial Court were based on evidence brought on record.”

“We thus are of the clear opinion that High Court committed an error in setting aside the findings of the Trial Court on the rate of rent.”

“From the averments of notice, as quoted above, it is clear that tenancy was terminated and landlord contemplated eviction of the tenant. We thus are of the view that there is no question of the waiver of eviction.”

Key Takeaways

• High Courts should not interfere with factual findings of Trial Courts unless there is a clear miscarriage of justice or the findings are perverse.
• Revisional jurisdiction under Section 25 of the Provincial Small Cause Courts Act, 1887, is limited and does not allow for a re-appreciation of evidence.
• Notices for termination of tenancy should be clear and unambiguous about the landlord’s intention to evict the tenant.
• Tenants should maintain proper records of rent payments, as failure to do so can lead to adverse inferences.
• Landlords should ensure that their claims are supported by evidence, such as receipts, evaluation lists, and other relevant documents.

This judgment reinforces the importance of maintaining proper records and adhering to the legal procedures in landlord-tenant disputes. It also clarifies the scope of revisional jurisdiction, emphasizing that High Courts should not act as appellate courts in such matters.

Directions

The Supreme Court did not give any specific directions other than setting aside the High Court’s judgment and restoring the Trial Court’s decree. The parties were directed to bear their own costs.

Specific Amendments Analysis

There is no specific amendment discussed in the judgment.

Development of Law

The ratio decidendi of this case is that the High Court should not interfere with the factual findings of the Trial Court unless there is a miscarriage of justice. The Supreme Court reiterated the limited scope of revisional jurisdiction under Section 25 of the Provincial Small Cause Courts Act, 1887. This judgment reinforces the existing legal position and clarifies the boundaries of the High Court’s revisional powers.

Conclusion

The Supreme Court allowed the appeal, setting aside the judgment of the High Court and restoring the decree of the Trial Court. The Court held that the High Court had erred in reversing the Trial Court’s findings on the rate of rent and that the landlord had not waived his right to evict the tenant. The Supreme Court’s decision underscores the importance of factual findings by trial courts and the limitations of revisional jurisdiction under Section 25 of the Provincial Small Cause Courts Act, 1887.