1990 (12) TMI 328 - SC - Indian Laws

Summary

Issues Involved:
1. Validity of the limited-tenancy permission under Section 21 of the Delhi Rent Control Act, 1958.
2. Alleged fraudulent suppression of material facts by the appellants.
3. Jurisdiction of the High Court to reassess factual findings under Section 39 of the Act.
4. The applicability of the doctrine of collateral challenge to the limited-tenancy permission.

Detailed Analysis:

1. Validity of the Limited-Tenancy Permission under Section 21:
The appellant-landlords sought special leave to appeal against the High Court of Delhi's judgment, which invalidated the limited-tenancy permission granted under Section 21 of the Delhi Rent Control Act, 1958. The High Court held that the initial permission was marred by fraudulent suppression of material facts and was merely an ex-post facto sanction of a subsisting tenancy. The High Court relied on the case of Subhash Kumar Lata v. R.C. Chhiba to support its view that an order obtained by fraud could be challenged in defense against execution.

2. Alleged Fraudulent Suppression of Material Facts:
The respondents argued that the appellants were not the owners of the premises and that the permission under Section 21 was vitiated by fraud due to the suppression of the fact that the premises were not available for letting. They contended that they had been inducted into possession as tenants from 5.3.1978, and thus, the basic jurisdictional requirement for the grant of permission under Section 21 was absent. The Rent Controller and the Appellate Tribunal rejected these contentions, but the High Court accepted them, holding that the permission was a nullity due to fraud on the statute.

3. Jurisdiction of the High Court to Reassess Factual Findings:
The appellants argued that the High Court, in exercise of its jurisdiction under Section 39, which permits an appeal only on a substantial question of law, could not reappreciate evidence and upset the finality of the factual findings of the Rent Controller and the Appellate Tribunal. The High Court's interpretation of the receipt dated 5.3.1978, which indicated a lease, was considered a question of law. The High Court held that a consideration promised is as valid as one paid, and thus, the stipulation to pay rent was sufficient to bring about a contract of tenancy.

4. Applicability of the Doctrine of Collateral Challenge:
The appellants contended that the respondents should have challenged the validity of the limited-tenancy during its subsistence and not as a collateral plea in the course of execution. The High Court's reliance on Subhash Kumar Lata's case, which allowed such a collateral challenge, was contested. The Supreme Court noted that earlier and later cases, such as J.R. Vohra v. Indian Export House Pvt. Ltd., held that a tenant must approach the Rent Controller during the currency of the limited-tenancy to challenge the permission. The doctrine of collateral challenge was deemed inappropriate for a decision presumed to be valid until set aside.

Conclusion:
The Supreme Court allowed the appeal, setting aside the High Court's judgment and restoring the order of the Rent Control Tribunal, which affirmed the Rent Controller's order granting possession to the appellants. The Court emphasized that the remedy for challenging the limited-tenancy permission should be sought during its subsistence and not as a collateral attack during execution. The parties were left to bear their own costs in the appeal.