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Case Analysis: Shankarlal Nadani v/s Sohanlal Jain

The case Shankarlal Nadani v. Sohanlal Jain has been decided by Supreme Court justices Hemant Gupta & v. Ramasubramanian on 12 April, 2022. The case is concerned with the power of the civil court to decide and pass a decree (in the matter of transfer of property) prior to any legal bodies. In Instance Appellant filed appeal in the apex court against the Rajasthan HC judgment which upheld decree passed by a civil court in a suit for possession filed by landlord, dismissed on the ground the suit was filed before the act has come into force in respect of the premises.

Legal provisions Involved
  1. Section 106 in The Transfer of Property Act, 1882:
    In absence of a contract, local law, or custom to the contrary, a lease of real estate for industrial, commercial, or agricultural use shall be deemed to be a lease from year to year, terminable by either party with six months' notice. A lease of real estate for any other use shall be deemed to be a lease from month to month, terminable by either party with fifteen days' notice.
     
  2. The Rajasthan Rent Control Act 2001 Section 1(2):
    1. Brief title, scope, and start. The Rajasthan Rent Control Act, 2001 is another name for this legislation.
    2. It shall initially apply to those municipal areas in the State that make up the District Headquarters, and later, to those other municipal areas that the State Government may, by notification in the Official Gazette, specify from time to time and have a population greater than 50,000 as of the 1991 Census.
       
  3. The Rajasthan Rent Control Act 2001 Section 18:
    Provides for the jurisdictional Rent Tribunal to decide on all landlord-tenant disputes.
     
  4. The Rajasthan Rent Control Act 2001 Section 32:
    If a landlord evicts a tenant from rented property without the tenant's agreement and without following due process, the tenant may petition the Rent Tribunal for the return of possession of the property within 30 days of learning of the eviction.

Facts:
  • The property was not in the urban area when the suit for possession was filed. When a notice of termination of tenancy served under section 106 of the transfer of property act, 1882, the suit for possession was filed on April 18, 2013.
  • The state government issued a notification on 11 July, 2014 regarding extending the provisions of the Rajasthan rent control act, 2012.
  • Even though the act will be started to apply on 11 may, 2015, the civil court passed the decree for possession against the appellant on 28 may, 2015.
  • The appellant filed appeal before the additional district judge of suratgarh, against the aggrieved decree. But then the appeal was dismissed on 5 October 2021.
  • In the second appeal before the Rajasthan High Court, the appellant cited the judgment of K. Ram Narayan Khandelwal V. Shri Pukhraj Banthiya, where it was held that the civil suit decree could not passed after the act had become applicable to the relevant territory. The high court concluded that the judgment is not binding because it was stayed by this court in a special leave petition.
  • The high court dismissed the appeal on the ground that the decree in the civil suit could be passed as same view was adopted by another co-ordinate bench of the high court in another case.
Issue:
  • Whether the order passed by the civil court against the appellants even though the act became applicable to the area in question?
  • Whether decree for possession against the Appellants is sustainable?
Arguments by Parties
The appellant argued that the present appeals should be heard simultaneously with the SPL arising out in the case of K. Ram Narayan khandelwal and other cases because it is still pending final disposition before the court. He argued that all matters which are pending in varying stages will follow suit after the legal question in one matter has been resolved. Further he argued that this petition before the court is preferred on the behalf of the landlord.

According to section 1(2) of the transfer of property act was applied to the municipal area that included the district headquarters in the state later on to those other municipal area which had a population greater than 50,000 as per 1991 census. It was the rent tribunal alone that would have jurisdiction to hear and decide the petitions connected to disputes between landlord and tenant after the state government announcement issued on July 11th, 2014 and it became effective on May 11th 2015.

As the result of that, the civil court was not able to issue the decree of possession because the rent tribunal is the only entity authorized to so. Reliance was placed upon with sub section (1) of the section 18 of the act to grand the overriding effect.

Moreover he argued that only rent tribunal would be able to hear and decide the petitions. So the civil court lost it authority to do so. However the rent tribunal does not deal with lawsuits that were already pending when the act began to apply to municipal area. They believe that the statute's text will determine whether or not an eviction decree can be issued after the act became operative.

On the other hand, respondent argued. The Landlord Appellant had filed an eviction action on behalf of the Tenant Respondent. A civil court accepted the lawsuit. On the date the lawsuit was filed, the property in dispute was not subject to rental law. However, the area in question was brought within the Tenancy Act through necessary communications during the process, prior to any final determination, and the matter was determined at the expense of the tenant.

Appellant in the above case stating that the statute cannot be enforced after the Haryana Rent Act has been implemented. However, current law does not contain such or similar provisions. As a result, the court ruled in the above decision that the eviction order could be enforced even though the lawsuit was filed when the law did not apply to the facility in question.

There is also a rule that the rights of the parties must be finalized on the day of litigation, which is the official commencement date of litigation. Plaintiffs have the right to settle on the day the proceedings commence, so the rights of the parties must be considered from this point onwards

 Since 1982, the respondent's father, who is now the appellant has been the renter of shop no.4 at Jain Katla, Bikaner Road, Suratgarh, after the death of his father. The property was let out of the lease for a monthly rent of Rs.583.33, the appellant continued to rent the shop on a monthly rent of Rs.583.33, and the appellant continued to rent the shop on a monthly basis.


Decision of the court
To address the question of jurisdiction, the Supreme Court referred to more than enough judgments like:
  • Atma Ram Mittal v/s Ishwar Singh Punia,
  • Vineet Kumar v/s Mangal Sain Wadhera,
  • Ram Saroop Rai v/s Lilavati,
  • Shri Kishan v/s Manoj Kumar And
  • Ramesh Chandra v/s Additional District Judge.
 The court stated that it has been held in the aforesaid judgments referred to suits filed within the exemption period. Even if the premises are located within the urban to which the act is applicable, the civil court had the authority to pass the decree. Moreover, the bench added that the decree can be validly executed if the suit was filed within the exemption period, except vineet Kumar's case which was explicitly held to be not laying good law.

Then the court observed section of the act is silent on the question of the validity of a decree of a civil court. The act came into force on May 11, 2015, after the civil suit was filed therefore the decree could be passed and executed. After the applicability of the act to the area in question, the landlord and tenant dispute can be raised only before the rent tribunal but not before the civil court.

The Division Bench said:
"However, a suit filed before the civil court prior to the applicability of the Act has to be decided by the civil court. A decree passed by the civil court is valid and executable and is not interdicted by the applicability of the Act to the area in question. The Act is applicable to the area in question from the date the notification came into force and it does not bar the decree of the civil court or the pendency of such civil suit."

Furthermore, the supreme court also mentioned one of the principles is the rights of the parties have to be determined on the date when the suit has been filed and the rights of the parties have to be examined on the said day when he initiated the proceedings. Thus, the court evidently mentioned that we do not find any error in the order passed by the high court of Rajasthan and dismissed the appeal.

Ratio Decidendi & Obiter Dicta
The reason beyond the judgment, under the act in question, section 18 of the Rajasthan rent control act, 1950 does not talk about the validity of any decree of the civil court but only restricts the jurisdiction of the civil court from the date the civil suit was filed therefore the decree could be passed and executed. However, the applicability of the act can be raised only before the rent tribunal, not the civil court. But in this instance, the suit was filed before the applicability of the act.

Therefore, a suit filed prior to the applicability of the act has to be decided by the civil court and it is executable and valid. Thereby appeals dismissed. The bench made some remarks and reported ECGC Limited v.Mokul shriram EPC JV,2022 SCC ONLINE SC 184 was examining the question as to whether the condition of deposit while filing appeal under the Consumer Protection Act, 2019 would be applicable or the provisions as it existed under the Consumer Protection Act, 1986 when the complaint was filed would be applicable.

This Bench considering the Constitution Bench judgments in Garikapati Veeraya v. N. Subbiah Choudhry & Ors; AIR 1957 SC 540, Vitthalbhai Naranbhai Patel v. Commissioner of Sales Tax, M.P., Nagpur, AIR 1967 SC 344 and Hardeodas Jagannath v. The State of Assam, AIR 1970 SC 724 held that the provisions of the Consumer Protection Act, 2019 would not be applicable to the complaints filed prior to the commencement of the 2019 Act. Therefore, the Judgment and Decree passed in the suit for possession do not suffer from any illegality.

Analysis
When the appellant filed suit for possession, the civil court passed a decree against him on 28 May 2015. Then he went to an appeal under section 100 of CPC before the additional district judge of suratgarh. However, it was also rejected on October 5, 2012. Subsequently, he again appealed before the high court cited Rajasthan High Court K Ram Narayan Khandelwal V. Shri Pukhraj Bathiya judgment desperately dismissed the same.

Finally, he approached the apex court, his mention is section 18 of the act and argued the former petition should not be dismissed, since the date of applicability of the act in question the civil court does not have the authority to decide the matter; the Jurisdiction of the civil court in the instance matter was ceased from the date.

But the apex court held every civil court has the authority to decide on matters before the applicability of the act in question. Moreover, section 18 does not talk about validity but the restriction of the civil court. In the instance case, the first suit was filed on April 18, 2013, and got decision On May 28, 2015 though the suit has been dismissed after the applicability of the act, the proceedings of the suit has started for two years. The rights of the parties have to be determined on the date when lis commences i.e., on the date of filing of the suit. The plaintiff is entitled to decree on.

that day when he initiated the proceedings; therefore, the rights of the parties must be examined as on the said day. so, he is entitled to decree on that day when he initiated the suit for possession. Therefore, the first decree passed by the civil court is valid and does not hold any illegality. The civil court and apex court are precise in judgment and decree.

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