ABBOBAKER Vs. MAHALAKSHMI TRADING CO

JUDGEMENT

(1.) Leave granted.

(2.) This appeal is by the landlord against the order dated 22nd August, 1996 passed by the Karnataka High Court in HRRP No. 1769 of 1995 arising out of HRC No. 66 of 1994. The appellant-landlord filed the aforesaid HRC case under S. 21(1)(j) of the Karnataka Rent Control Act against the tenant-respondent in respect of the premises in question. The aforesaid proceeding was ultimately disposed of on the basis of a compromise entered into between the parties and the terms embodied in the compromise petition dated 22nd April, 1994 formed a part of the decree of the Court. In accordance with the aforesaid compromise decree the tenant delivered the vacant possession of the tenanted premises and the landlord was permitted to demolish and reconstruct a new building thereon. It was also stipulated in the compromise that the tenant will be accommodated in the two shop rooms measuring 200 sq. ft. each on the ground floor soon after the new construction is over and be further accommodated in two shop rooms measuring 200 sq. feet each in cellar floor for the purpose of godown after the construction is over. Clause (5) of the compromise decree dealt with the rent to be paid by the tenant on occupying the premises in the new building after construction of the same. The dispute in the present case centres round the terms and conditions of the aforesaid Cl. (5) and what was the rent intended to be paid by the tenant for occupation of one shop in the cellar floor and one shop in the ground floor. The appellant-landlord on getting vacant possession of the tenanted premises, demolished the same and put up a new construction. The tenant-respondent filed a petition for getting possession of the newly built shops in accordance with the compromise decree dated 22-4-1994 and the said petition was registered as Execution Petition No. 204 of 1995. In the said execution proceedings the appellant-landlord was set ex parte and the executing Court directed issue of delivery warrant. Subsequently, under the orders of the executing Court the lock was broke open and with the police help the tenant-respondent got the possession of the premises as per the compromise decree and the execution case was closed. The landlord-appellant approached the High Court against the order of the executing Court directing delivery of the possession in favour of the respondent and obtained an interm order of stay of issuance of delivery warrant on 6-12-1995, but much before the said date the premises in question had been possessed by the respondent-tenant on 28-11-1995, and therefore, the interim order issued by the High Court became infructuous. The landlord-appellant before the High Court though raised a contention that the compromise decree could not have been executed but Mr. R. F. Nariman, learned senior counsel, appearing for the appellant did not press the same. The tenant thus has obtained possession of 400 sq. ft. of the newly constructed building in execution of the compromise decree and that has become final. A further contention had been raised by the landlord before the High Court to the effect that the compromise decree is an integrated one and under the decree though the tenant would be entitled to get possession of two shop rooms measuring 200 sq. ft. each after the new construction of the shop rooms are over but the said tenant is also liable to pay rent at a concessional rate of 25% less of the prevailing fair rent in the area and without discharging that obligation the tenant could not have merely obtained possession of the two shop rooms measuring 400 sq. feet in execution of a part of the decree. The tenant, however, resisted the aforesaid contention by contending that the tenant would be liable to pay 25% less of the fair rent to be determined by the Controller under S. 14 of the Act and until that determination is made the landlord cannot resist the execution of the decree in relation to possession of the two shop rooms measuring 400 sq. feet. The High Court on consideration of the rival contentions and applying its mind to the terms and conditions of the compromise decree came to the conclusion that the parties waived under the agreement the provisions of Ss. 26 to 28 of the Act and after construction of the new building the tenant is entitled to get possession of two shop rooms measuring 400 sq. feet in accordance with the provisions of the compromise decree. The High Court further came to the conclusion that the fair rent for the premises has to be determined by the Controller under S. 14 of the Act and, there-fore, it would be open for the parties to approach the Controller for fixation of fair rent in respect of the premises which has been put in possession of the tenant, so that, the Controller would determine the same and on such determination being made the tenant would be liable to pay the same at a concessional rate of 25% less of the fair rent. It is this direction of the High Court which is the subject-matter of challenge in the present appeal.

(3.) Mr. R. F. Nariman the learned senior counsel appearing for the appellant contended that the High Court committed serious error in falling back upon the provisions of the Act for the purpose of fixing the rent of the premises, possession of which had been given to the tenant under the compromise decree, having held that by the compromise entered into between the parties the provisions of Ss. 26 to 28 of the Act have been waived. The learned senior counsel further urged that the expression 'prevailing rent in the area' in Cl. (5) of the compromise decree is foreign to the criteria for fixation of fair rent of a building by the Controller under S. 14(6) of the Act and on a plain grammatical meaning being given to the words used in Cl. (5), the only conclusion that can be arrived at is that the parties intended that the tenant would pay rent at a concessional rate of 25% less of the prevailing rent in the area in respect of one shop in the cellar floor and one shop in the ground floor and the conclusion of the High Court to the contrary is wholly unsustainable. Mr. G. V. Chandra Shekhar the learned advocate appearing for the respondent on the other hand contended that use of the phrase 'fair rent' in Cl. (5) of the compromise decree can only refer to the fair rent to be determined by the Controller under the provisions of the Act, and therefore, the impugned order of the High Court is immune from interference by this Court. Mr. Shekhar further contended that allowing the landlord to charge rent for the premises higher than the fair rent to be fixed by the Controller would be against the public policy and would frustrate the object for which the very enactment was made and as such Court should be slow in giving a meaning to the terms of a compromise which would be against the public policy. Mr. Shekhar further contended that in the absence of any mechanism as to how the prevailing rent in the area could be determined it would be only logical to hold that the parties intended under the aforesaid Cl. (5) for fixation of fair rent by the Controller in exercise of power under S. 14 of the Act.