Object & Purpose of Slum Clearance Act : The Law

Justice Nandrajog
Delhi High Court

The Division Bench of the Delhi High Court in a recent decision in Virender Singh v State Bank of India has recapitulated the importance and object of the Slum Clearance Act in matters where the landlord seeks to evict tenants under the relevant rent control legislation. The relevant extracts from the judgment are reproduced hereinbelow;

12. The object and purpose of a Rent Control Legislation was highlighted by the Supreme Court in the decision reported as 1985 (2) SCC 683 Gian Devi Anand Vs. Jeevan Kumar. In para 23 it was observed:- 

“The Rent Acts which are indeed in the nature of social welfare legislation are intended to protect tenants against harassment and exploitation by landlords, safeguarding at the same time the legitimate interest of the landlords. The Rent Acts seek to preserve social harmony and promote social justice by safeguarding the interests of the tenants mainly and at the same time protecting the legitimate interests of the landlords. Though the purpose of the various Rent Acts appear to be the same, namely, to promote social justice by affording protection to tenants against undue harassment and exploitation by landlords, providing at the same time for adequate safeguards of the legitimate interests of the landlords, the Rent Acts undoubtedly lean more in favour of the tenants for whose benefit the Rent Acts are essentially passed.” 

13. In the context of the Delhi Rent Control Act, 1958, the word "Tenant‟ is defined in clause (ii) of Section 2(l) of the Act, as follows: 

“2 (l) “tenant” means any person by whom or on whose account or behalf the rent of any premises is, or, but for a special contract, would be, payable, and includes . . . 

(ii) any person continuing in possession after termination of his tenancy . . .” 

14. It is apparent that the definition of "tenant‟ in the Delhi Rent Control Act incorporates the concept of a statutory tenant. But since the Delhi Rent Control Act is not applicable to tenancies where the monthly rent payable is in excess of Rs. 3,500/-, the question of a tenant whose tenancy has expired by efflux of time or has been otherwise validly determined as per the Transfer of Property Act, 1882 becoming a statutory tenant does not arise. 

15. The essential object of the Slum Act is entirely different. It was noted by a Full Bench of this Court in the decision reported as AIR 1972 Del 34 (FB) Bardu Ram v. Ram Chander. It was observed:- 

“An essential object of the Slum Areas Act is to enable the poor, who have no other place to go to and who, if they were evicted to remain in their dwellings until provision is made from a better live for them elsewhere..” 

16. For holding as aforesaid, reliance was placed by the Full Bench on the decision of the Supreme Court reported as AIR 1961 SC 1602 Jyoti Pershad v. U.T. of Delhi, wherein it was observed:- 

“Obviously, if the protection that is afforded is read in the context of the rest of the Act, it is clear that it is to enable the poor who have no other place to go to, and who if they were compelled to go out would necessarily create other slums in the process and live perhaps in less commodious and more unhealthy surroundings than those from which they were evicted to remain in their dwellings until provision is made for a better life for them elsewhere...The Act, no doubt, looks at the problem not from the point of view of the landlord, his needs, the money he has sunk in the house and the possible profit that he might make if the house were either let to other tenants or was reconstructed and let out, but rather from the point of view of the tenants who have no alternative accommodation and who would be stranded in the open if an order for eviction were passed.” 

17. It is because of the difference in the object and purpose of the Slum Act and the Delhi Rent Control Act that in the decision reported as AIR 1977 SC 789 Lal Chand (dead) by L.Rs. & Ors. Vs. Radha Kishan‟, the Supreme Court observed as under:- 

“15. The Slum Clearance Act was passed, inter alia, for the protection of tenants in slum areas from eviction. As observed by this Court in Jyoti Pershad v. Administrator for the Union Territory of Delhi, (1962) 2 SCR 125 = (AIR 1961 SC 1602) the Slum Clearance Act looks at the problem of eviction of tenants from slum areas not from the point of view of the landlord and his needs but from the point of view of tenants who have no alternative accommodation and who would be stranded in the open if they were evicted. The policy of the Slum Clearance Act being that the slum dweller should not be evicted unless alternative accommodation is available to him, we are of the view that the word „tenant‟ which occurs in Section 19 (1)(a) must for the purpose of advancing the remedy provided by the statute be construed to include a person against whom a decree or order for eviction has been passed. We might mention that a Full Bench of the Delhi High Court in Bardu Ram Dhanna Ram v. Ram Chander Khibru, AIR 1972 Delhi 34 (FB) has taken the same view, namely, that the word „tenant‟ in Section 19 of the Slum Clearance Act includes a person against whom a decree or order of eviction has been passed.” 

18. Purpose of the Slum Act is to protect the occupiers of properties in slum areas irrespective whether they were tenants or not and relevant would it be to highlight that the Slum Act only defines an occupier and does not define a tenant. The object of the Slum Act is to protect the occupiers from eviction unless permission is obtained from the competent authority and relevant would it be to highlight that as per Section 19, while granting or declining permission the relevant criteria is the means of the occupier. If the occupier has no means to relocate himself, permission for ejectment has not to be granted inasmuch as it would be presumed that upon ejectment the occupier would create a further slum. It is well settled that protection under Section 19 would be available to a person, whether he is a tenant or an occupier who is poor and is unable to arrange for alternative accommodation. 

19. In the decision reported as 71 (1978) DLT 318 Dimple Pvt. Ltd. Vs. Harsh Kaur Aggarwal & Ors. it was observed that the 

The decisions referred to above clearly bring out that the protection under Section 19 of the Slum Act is not available to a company. In paras 33 to 35 it was observed as under:- 

“33. Learned Counsel for respondent No. 1, Mr. Ishwar Sahai, on the other hand has argued that the petitioner company are a jurisdiction. They are not a natural person. Thus the protection meant for the eviction of poor tenants from their respective accommodations cannot be made available to the petitioner. I find myself in perfect agreement with the learned Counsel for respondent No. 1. 

34. Admittedly the petitioners are a company. Thus they are a juristic person.A Company is formed when certain persons join hands with a view to carrying on some commercial or industrial undertaking. Thus it can naturally be formed by those persons who have got sufficient funds to carry on their business. A Company cannot be run by poor persons with no financial means to run the same. The object and the purpose for the enactment of the Slum Areas (Improvement & Clearance) Act, 1956 was to clear the slums and to provide protection to poor tenants against harassment at the hands of landlords who bring forward and initiate proceedings for their eviction... 

35. I am also tempted to cite the observations of a Single Judge of this Court as reported in Bismilla Jan v. Jain Tractors & Auto Spare, 1985 Rajdhani Law Reporter 477, (para 13).....”The Slum Act was enacted for giving protection to poor individual tenants who have small means and cannot afford to get alternate accommodation outside the slum area or within the slum if evicted. If a couple of persons with substantial means float a company which goes into losses, even if they are evicted from the premises, they cannot create slums, particularly when the same persons own other concerns which also have offices at different places”. 

20. The view taken by the learned Single Judge was earlier on taken by another Single Judge in the decision reported as 105 (2003) DLT 422 Shyam Kishore & Anr. Vs. Roop Saree Kendra. 

21. The view is incorrect for the reason it ignores the law on the subject that the concept of a contractual tenancy is only applicable where the Rent Control Legislation so envisages and that ejectment of an occupier of a property in a slum area, be the occupier a tenant or otherwise is entirely different than the issue of payment of damages for unauthorized use and occupation. A person occupying a slum property upon becoming liable to pay damages may not be evicted from the property for non-payment of damages, but that would not mean that damages cannot be recovered. The Slum Act does not regulate the rent payable by a tenant or the charges payable for unauthorized use and occupation. If the Rent Act does not apply to a slum area, rent payable would be governed as per contract between the parties and damages for unauthorized occupation as per the general law applicable. 

Effect of Sub-Letting : Relevant Rate of Rent under Delhi Rent Control Act: The Law

Justice A.K. Sikri
Delhi High Court

An interesting question was raised in the instant case (M/s. Atma Ram Properties (P) Ltd. vs M/s. Pal Properties (India) Pvt. Ltd. And Others), where the Premises in question was let out to the tenant for a rent less than Rs. 3500/- per month and the said tenant further sub-let the Premises for an amount exceeding Rs. 3500/- per month. The question that arose for the consideration of the Bench was which rate of rent would be applicable to determine the question regarding jurisdiction of the Civil Court in view of S. 50 of the Delhi Rent Control Act.

The Bench held that once the tenant sublets the property for a rent exceeding Rs. 3500/- per month, then the relevant rent for the consideration of the Court would be the amount exceeding Rs. 3500/- per month. The Court held that once the premises fetches a rent exceeding Rs. 3500/- per month, the tenant loses the protection afforded by the Delhi Rent Control Act. The relevant Para(s) of the judgments are reproduced hereinbelow;

14. The last question which calls for determination is as to whether the tenancy of the defendants is protected under the provisions of Delhi Rent Control Act and the suit is not maintainable in view of Section 50 of the said Act. On this aspect facts are not in dispute. Defendants 1 to 3 are paying the rent of Rs. 1540/-. However, they have sub-let a part of the tenanted premises to defendant No. 4 and defendant No. 4 is paying the rent of Rs. 24,701.25 paise to defendants 1 to 3. Therefore, no evidence is required and legal question which calls for determination is as to whether it is a rent of Rs. 1540/- paid by tenants to the landlord or it is a rent of Rs. 24,701.75 paise paid by sub-tenant to tenants which would be a determinative factor in such proceedings. This issue is no more res integra. Identical question came up for consideration before the Division Bench of this Court in the case of P.S. Jain Company Ltd. Vs. Atma Ram Properties (P) Ltd. & Ors. . In para-5, the question which fell for consideration was posed. It reads as under:

"The point for consideration in the appeal is: Whether a tenant who is paying a rent of Rs. 900/- p.m. Section 3(c) of the Delhi Rent Control Act, 1958) can be evicted by a simple notice under Section 106 Transfer of Property Act, through the civil Court if he has lawfully sub-let there premises to two tenants, one for Rs. 40,000/- p.m. and another for Rs. 4,500/- p.m. (in each cases for more than Rs. 3,500/- p.m.)?

15. The answer to this question is found in paras 8, 9 and 12 of that judgment. After relying upon for Supreme Court judgments dealing with purposeful construction of a statute rather than adopting mechanical approach, in para-12 the Court observed as under:

"12. In our view, the intention behind Section 3(c) is that a premises which fetches a rent of Rs. 3,500/- p.m. should be exempt and that protection should be restricted to buildings fetching a rent less than Rs. 3,500/- p.m. In case a tenant paying less than Rs. 3,500/- p.m. to his landlord has sublet the very same premises may be lawfully for a rent above Rs. 3,500/- p.m., then the question naturally arises whether such a tenant can be said to belong to weaker sections of society requiring protection. By sub-letting for a rent above Rs. 3,500/- p.m., the tenant has parted with his physical possession. He is receiving from his tenant (i.e. the sub-tenant) more than Rs. 3,500/- p.m. though he is paying less than Rs. 3,500/- p.m. to his landlord. The above contrast is well illustrated by the facts of the case before us. The appellants tenant is paying only Rs. 900/- p.m. to the plaintiff, while one for Rs. 40,000/- p.m. and another for Rs. 4,500/- p.m. In regard to each of these units, the sub-tenants have no protection of the Rent Act. In our view, the purpose of Section 3(c) is not to give any protection to such a tenant.

16. Thus it is clear that the relevant rent is the one which is paid by sub-tenant to the tenant. In the instant case it is more than Rs. 3,500/- PM and, therefore, no protection under the Delhi Rent Control Act would be available to the defendants and the present suit is not hit by Section 50 of the Rent Control Act.

Tenant by 'Holding Over' and 'Sufferance' : The Law explained

This snippet deals with the Law relating to concept of Tenant by 'Holding Over' and 'Sufferance' as provided under the Transfer of Property Act. In Inmacs Ltd. v. Prema Sinha & Ors., the Delhi High Court has culled out the entire law pertaining to tenancy vis-a-vis the provisions of the Transfer of Property Act;

12. Section 105 of the Transfer of Property Act, 1882 defines a lease of an immovable property as a transfer of a right to enjoy immovable property for a certain time, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee who accepts the transfer on such terms. The transferor is called the lessor and the transferee is called the lessee. The price is called the premium and the money, share, service or other thing to be so rendered is called the rent. 

13. Section 106 of the Transfer of Property Act 1882 deals with the duration of leases and states that in the absence of a contract, or local law or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable on the part of either lessor or lessee, by six month's notice and a lease of immovable property for any other purpose shall be deemed to be lease from month to month, terminable, on the part of either lessor or lessee by 15 days' notice. Section 107 of the Transfer of Property Act, 1882 stipulates that a lease of immovable property from year to year, or for any term exceeding 1 year can be made only by and under a registered instrument. Law is clear. If a lease is evidence by a contract, as in the instant case, the duration of the lease would be as per the contract and at the expiry of the lease period as per contract the lease expires by efflux of time. Expiry of lease by efflux of time results in the determination of the relationship between the lessor and the lessee and since the lease expires under the contract by efflux of time, no notice of determination of the lease is required. 

14. Once a lease expires, the mandate of clause q of Section 108 of the Transfer of Property Act 1882 makes it the bounden duty of the lessee to put the lessor into possession of the leased premises. 

15. To the extent aforenoted there is no problem in law, but as in the present case, more often than not, rent is tendered post expiry of the lease period by efflux of time and accepted by the landlord. What happens”16. Section 116 of the Transfer of Property Act 1882 reads as under:- “116. Effect of holding over-If a lessee or under-lessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or under-lessee, or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased, as specified in section 106.” 

17. On the strength of having paid the last agreed rent the tenant is naturally expected to claim that his status is that of a tenant holding over and till tenancy is determined by a notice under Section 106 of the Transfer of Property Act 1882 the status continues. 

18. As noted above, mandate of clause q of Section 108 of the Transfer of Property Act 1882 is that on the expiry of the lease the lessee is bound to hand over possession of the leased premises to the lessor and therefore the lessor would be entitled to maintain an action to compel the lessees to abide by the mandate of clause q of Section 108 of the Transfer of Property Act 1882. 

19. A person who enters upon the property of another without authority of law is a trespasser. It could be argued that the very next moment after the period of lease stands expired the act of entering upon property by the tenant is an act of trespass. But law says no. A lessee who continues in possession after expiry of the lease, without the consent of the lessor or without any agreement between the parties or in disagreement with the lessor, is treated in law as a tenant by sufferance. But where the lessor consents to the continued possession of lessee on the same terms and conditions as per the original lease a tenancy by holding over comes into operation. 

20. The words “accepts rent or otherwise assents to his continuing in possession” in Section 116 of the Transfer of Property Act contemplates that from the side of the lessee there should be an offer to take a new lease and on the side of the lessor there must be a definite consent to the continuation of possession. In other words there must be a bilateral contract. 

21. Such a bilateral contract could be express or implied. Thus mere continuance of possession after the expiry or determination of the lease is not enough to entitle the tenant to establish tenancy by holding over. 

22. More often than not, the only evidence which surfaces is the tender of rent and its acceptance by the landlord. As observed in the decision reported as AIR 1951 SC 285, Eastern Investment Ltd. Vs. Commissioner of Income Tax the acceptance of rent is only one form of the assent of the lessor to the lessee remaining in possession of the property. But, as observed in the decision reported as AIR 1949 FC 124, Kai Khushroo Bezonjee Capadia Vs. Bai Jerbai Hirjibhoy Warden and Anr., the acceptance must be of rent as such. 

23. Since law requires a bilateral agreement between the parties for the tenant continuing to holding over, offer and acceptance of rent is at best an evidence raising a presumption of assent but would not amount to a conclusive proof of such assent. It could be rebutted by other evidence. 

24. In order that the acceptance of rent may amount to assent of the lessor it has to be shown that the offer of rent was made on the express ground that the lessee intended to continue the lease and that the acceptance was with the full knowledge of the nature of the offer. This is a question of fact which has to be determined from the circumstances of each case. Greater is the period of continued possession coupled with receipt of rent, stronger would be the presumption in favour of the lessee. 

25. Where a tenant fails to establish a case of holding over, his status would be, as noted above, that of a tenant at sufferance. The difference in the status of a tenant holding over and a tenant at sufferance was explained by the Supreme Court in the decision reported as AIR 1996 SC 140, R.V. Bhupal Prasad Vs. State of A.P. wherein their Lordships said:- “8. Tenant at sufferance is one who comes into possession of land by lawful title, but who holds it by wrong after the termination of the term or expiry of the lease by efflux of time. The tenant at sufferance is, therefore, one who wrongfully continues in possession after the extinction of a lawful title. There is little difference between him and a trespasser. In Mulla”s Transfer of Property Act (7th Edn.) at page 633, the position of tenancy at sufferance has been stated thus: A tenancy at sufferance is merely a fiction to avoid continuance in possession operating as a trespass. It has been described as the least and lowest interest which can subsist in reality. It, therefore, cannot be created by contract and arises only by implication of law when a person who has been in possession under a lawful title continues in possession after that title has been determined, without the consent of the person entitled. A tenancy at sufferance does not create the relationship of landlord and tenant. At page 769, it is stated regarding the right of a tenant holding over thus: The act of holding over after the expiration of the term does not necessarily create a tenancy of any kind. If the lessee remaining in possession after the determination of the term, the common law rule is that he is a tenant on sufferance. The expression “holding over” is used in the sense of retaining possession. A distinction should be drawn between a tenant continuing in possession after the determination of the lease, without the consent of the landlord and a tenant doing so with the land-lord”s consent. The former is called a tenant by sufferance in the language of English law and the latter class of tenants is called a tenant holding over or a tenant at will. The lessee holding over with the consent of the lessor is in a better position than a mere tenant at will. The tenancy on sufferance is converted into a tenancy at will by the assent of the landlord, but the relationship of the landlord and tenant is not established until the rent was paid and accepted. The assent of the landlord to the continuance of the tenancy after the determination of the tenancy would create a new tenancy. The possession of a tenant who has ceased to be a tenant is protected by law. Although he may not have a right to continue in possession after the termination of the tenancy, his possession is juridical. 13. In view of the settled possession of law, the possession of the appellant is as tenant at sufferance and is liable to ejectment in due course of law. But his possession is not legal nor lawful. In other words, his possession of the theatre is unlawful or litiguous possession. The appellant may remain in possession until he is ejected in due course in execution of the decree in the suit filed by the respondent. His possession cannot be considered to be settled possession. He is akin to a trespasser, though initially he had lawful entry.” 

26. Dealing with the issue whether accepting rent after serving upon the tenant a notice to quote amounts to a waiver under Section 113 of the Transfer of Property Act, in the decision reported as 2006 (4) SCC 205, Sarup Singh Gupta Vs. S. Jagdish, their Lordships of Supreme Court held:- “6 “ A mere perusal of Section 113 leaves no room for doubt that in a given case, a notice given under Section 111, Clause (h), may be treated as having been waived, but the necessary condition is that there must be some act on the part of the person giving the notice evincing an intention to treat the lease as subsisting. Of course, the express or implied consent of the person to whom such notice is given must also be established. The question as to whether the person giving the notice has by his act shown an intention to treat the lease as subsisting is essentially a question of fact. In reaching a conclusion on this aspect of the matter, the Court must consider all relevant facts and circumstances, and the mere fact that rent has been tendered and accepted, cannot be determinative. 7 A somewhat similar situation arose in the case reported in Shanti Prasad Devi vs Shankar Mahto 2005 (5) SCC 543. That was a case where the landlord accepted rent even on expiry of the period of lease. A submission was urged on behalf of the tenant in that case that Section 116, Transfer of Property Act was attracted and there was a deemed renewal, of the lease. Negativing the contention, this Court observed that mere acceptance of rent for the subsequent months in which the lessee continued to occupy the premise even, after the expiry of the period of the lease, cannot be said to be a conduct signifying his assent to the continuing of the lease even after the expiry of the lease period. Their Lordships noticed the conditions incorporated in the agreement itself, which provided for renewal of the lease and held that those conditions having not been fulfilled, the mere acceptance of rent after expiry of period of lease did not signify assent to the continuance of the lease. 8 In the instant case, as we have noticed earlier, two notices to quit were given on 10th February, 1979 and 17th March, 1979. The suit was filed on 2-6-1979. The tenant offered and the landlord accepted the rent for the months of April, May and thereafter. The question is whether this by itself constitute an act on the part of the landlord showing an intention to treat the lease as subsisting. In our view, mere acceptance of rent did not by itself constituted an act of the nature envisaged by Section 113, Transfer of Property Act showing an intention to treat the lease as subsisting. The fact remains that even after accepting the rent tendered, the landlord did file a suit for eviction, and even while prosecuting the suit accepted rent which was being paid to him by the tenant. It cannot, therefore, be said that by accepting rent, he intended to waive the notice to quit and to treat the lease as subsisting. We cannot ignore the fact that in any event, even if rent was neither tendered nor accepted, the landlord in the event of success would be entitled to the payment of the arrears of rent. To avoid any controversy, in the event of termination of lease the practice followed by courts is to permit the landlord to receive each month by way of compensation for the use and occupation of the premises, an amount equal to the monthly rent payable by the tenant. It cannot, therefore, be said that mere acceptance of rent amounts to waiver of notice to quit unless there be any other evidence to prove or establish that the landlord so intended. In the instant case, we find no other fact or circumstance to support the plea of waiver. On the contrary the filing of and prosecution of the eviction proceeding by the landlord suggests otherwise.” 27. In the report published as 2006 (1) SCC 228, C. Albert Morris vs K. Chandrasekaran it was observed as under:- “26 “ Much argument was advanced on the receipt of the rent by the landlord after the cancellation of the lease. The consensus of judicial opinion in this country is that a mere continuance in occupation of the demised premises after the expiry of the lease, notwithstanding the receipt of an amount by the quondam landlord would not create a tenancy so as to confer on the erstwhile tenant the status of tenant or a right to be in possession. “ 32 “ We are, therefore, of the opinion that mere acceptance of rent by the landlord, the first respondent herein, from the tenant in possession after the lease has been determined either by efflux of time or by notice to quit would not create a tenancy so as to confer on the erstwhile tenant the status of a tenant or a right to be in possession. We answer this issue accordingly.” 

28. Similar view has been expressed in the decisions reported as 2005 (5) SCC 543 Shanti Prasad Devi Vs. Shankar Mahto, 129 (2006) DLT 338 Central Bank of India Vs. Lalit Kumar Bhargava, 118 (2005) DLT 52 Yashbir Sharma Vs. Mrs. Sulakshna Lal, 104 (2003) DLT 158 Delhi Jal Board Vs. Surendra P.Malik, 2002 (5) AD (Delhi) 7 FCI Vs. Kuljinder Pal Singh Dhillon and 99 (2002) DLT 139”Sh.Prithvi Raj Bhalla Vs. Industrial Cables (India) Ltd. 

29. It would be interesting to note that in the decision reported as (1973) 2 SCC 388, Bari Lal vs. Municipal Corporation of Indore the tenant continued in possession for nearly 5 years after expiry of the lease and yet was held to be not holding over. Status held was of a tenant by sufferance. Meaning thereby that mere time duration of occupation post tenancy coming to an end by efflux of time is not a very determinative factor.