LexMUNICIPAL COUNCIL, UDAIPUR versus MAHENDRA KUMAR
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[2008] 5 S.C.R. 552 y A MUNICIPAL COUNCIL, UDAIPUR V. MAHENDRA KUMAR (Civil Appeal No. 2546 of 2004) B MARCH 27, 2008 ' (DR. ARIJIT PASAYAT AND LOKESHWAR SINGH > .. PANTA, JJ.) Leave and Licence: c Enhancement of licence fee - Shop belonging to Municipal Council - Given for 11 months under an agreement -After expiry period, notice to occupant offering him to occupy premises on higher amount - Suit for perpetual injunction by occupant to restrain the owner from enhancing the amount D and from getting him evicted - HELD: Property being of local authority, High Court wrongly considered the agreement to be ..... a lease overlooking the provisions of Rajasthan Municipality Act, 1959 - Besides, in view of s. 38 of Specific Relief Act, after contract is determined, suit for specific performance is not E maintainable - In the interest of justice rent enhanced as specified in judgment - Rajasthan Municipality Act, 1959 - Specific Relief Act, 1963 - s. 38 - Deeds and Documents - Interpretation of ,_ F The appellant-Municipal Council gave a shop to the respondent for 11 months on a monthly payment of Rs.175/- under an agreement dat~d 8.11.1980. The ),.. appellant issued a notice dated 6.6.1986 making an offer to the respondent to occupy the suit premises on payment of Rs.6,000/- per year. The respondent filed a suit, f G inter alia, for perpetual injunction restraining the appellant >- from enhancing the rent and getting the premises vacated. The trial court decreed the suit. The first appellate court modified the decree by allowing a one time 10% increase ~ of the a'mount, and enhancement, if any, thereafter by H 552 \. MUNICIPAL COUNCIL, UDAIPUR v. 553 MAHENDRA KUMAR consent of the respondent. The High Court dismissed the A second appeal. In the appeal filed by the Municipal Council, it was contended for the appellant that the property being of the local authority and the Fajasthan Rent and Premises B (Control of Rent and !viction) Act, 1950 not being ~ -4. applicable to the suit premises, the High Court erred in enlarging the scope of the dispute as to whether the agreement was a licence or lease and holding that the appellant unilaterally increased the rent. Disposing of the appeals, the Court c HELD: 1.1 The property being of th.e local authority, the Rent Control Act did not have any application. The High Court considered the agreement to be a lease overlooking the fact that under the Rajasthan Municipality D -4 _., Act, 1959, no lease could be made without following the procedure prescribed under the Rules made hereunder. [para 13-14] [558-F, G] 1.2 It is significant that validity of the notice dated. 6.6.1986 fixing the rent was not challenged in the suit. The E said notice contained a reference and was said to have been based on the order No.F5(293)LB/77/2183-2730 dated 10.8.83 of the Local Self Government which permitted fixing of rent in a particular manner. It was not the stand of the respondent that the order of the Local F 'x Self Government was not binding and/or that the same was without any authority; [para 9-1 O] [557-B, G] 1.3 It is to be noted that even the original agreement in clause 8 permitted the Council to issue such orders from time to time in relation to the conditions. Once there G is no dispute about the power of enhancement, the ~ question of enhancing the rent once by 10% and thereafter to enhance it on consent of both the parties is ' clearly without any foundation. Since the power of enhancement has been considered on the basis of clause H 554 SUPREME COURT REPORTS [2008] 5 S.C.R. A 8, the question of restraining it to a one-time exercise is ~ clearly without any foundation as the clause itself permits >- issue of orders "from time to time". [para 16-17] [559-8, C, D, E] B 2. In the background of the scope of Section 38 of the Specific Relief Act, the first appellate court and the High Court were not justified in granting relief to the > • respondent. There is no dispute that the plaintiff can seek for performance only of an agreement which is subsisting. The plaintiff cannot maintain a suit for c specific performance after the contract is determined. [para 12, 17] [559-E, F; 558-8-C] Percept O'mark (India) (P) Ltd. v Zaheer Khan and Anr. 2006 (4) sec 227 - relied on. D 3. The controversy can be looked at from another angle. The agreement was for a period of 11 months. For conti
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