1963 (2) TMI 63 - HC - Indian Laws

Summary

Issues Involved:
1. Whether a contract of tenancy in violation of a general or special order issued by the District Magistrate under Section 7(2) of the U.P. (Temporary) Control of Rent and Eviction Act is void under Section 10 read with Section 23 of the Contract Act.

Issue-wise Detailed Analysis:

1. Nature of the Contract and Relevant Provisions:
The primary issue revolves around the validity of a tenancy contract entered into in violation of orders issued by the District Magistrate under Section 7(2) of the U.P. (Temporary) Control of Rent and Eviction Act. The court examined the provisions under Section 7(1) and 7(2) of the Act, which require landlords and tenants to inform the District Magistrate about vacancies and empower the District Magistrate to issue orders regarding the letting of accommodations. The court clarified that these orders could be general or special, and a landlord's failure to comply could result in prosecution and punishment under Section 8 of the Act. However, the Act does not explicitly render such tenancy contracts void.

2. Application of the Contract Act:
The court then analyzed the issue under the Indian Contract Act, particularly Sections 10 and 23. Section 10 states that all agreements are contracts if made by the free consent of competent parties for a lawful consideration and with a lawful object, and are not expressly declared void. Section 23 defines what considerations and objects are lawful, stating that they are unlawful if forbidden by law, defeat the provisions of any law, are fraudulent, involve injury to others, or are opposed to public policy.

3. Analysis of Lawfulness:
The court determined that neither the consideration (payment of rent) nor the object (use of the accommodation) in the tenancy agreement was unlawful. The U.P. (Temporary) Control of Rent and Eviction Act does not forbid the letting of accommodations; it merely restricts the landlord's choice of tenant. The court emphasized that an order by the District Magistrate is not equivalent to a law within the meaning of Section 23 of the Contract Act. Therefore, entering into a tenancy contract in violation of such an order does not inherently render the contract void.

4. Previous Case Law:
The court referred to previous judgments, including Ram Lal v. Shiv Mani Singh, which held that letting out an accommodation before an allotment order is issued is not void, though it may subject the landlord to prosecution. The court also discussed the case of Shyam Sunder Lal v. Lakshmi Narain Mathu, where it was held that such contracts were void as they defeated the purpose of the Act and were against public policy. However, the court disagreed with this view, noting that the Act's provisions would not be defeated as the District Magistrate could still evict the tenant under Section 7-A.

5. Interpretation of "Law" under Section 23:
The court clarified that "law" in Section 23 refers to juridical statute law, not administrative orders. The court cited AIR 1939 Rang 305 (FB) to support this interpretation, stating that the term "law" should be understood in a limited sense, covering statute law and possibly statutory rules, but not administrative orders.

6. Public Policy and Lawful Object:
The court concluded that the agreement of tenancy was not opposed to public policy. The objective of the agreement was to secure accommodation for the tenant and rent for the landlord, both of which are lawful. The court emphasized that the agreement did not involve any unlawful consideration or object, and thus, under Section 10 of the Contract Act, the agreement constituted a valid contract.

Conclusion:
The court unanimously answered the question in the negative, holding that a contract of tenancy entered into in violation of a general or special order issued by the District Magistrate under Section 7(2) of the U.P. (Temporary) Control of Rent and Eviction Act is not void under Section 10 read with Section 23 of the Contract Act. The tenancy agreement remains valid despite the violation, although the landlord may face prosecution for non-compliance with the order.