Allahabad High Court Imposes ₹15 Lakh Cost On 'Unscrupulous' Tenant For Withholding Property For 45-Yrs Without Paying Rent

Last week, the Allahabad High Court imposed a cost of Rs. 15 lakhs on a tenant for withholding property and not paying rent for more that 45 years to the landlady who wanted the property back to start a factory for her newly graduated son.

While dismissing the tenant's petition against appellate authority order directing release of property, Justice Pankaj Bhatia held,

“In the present case, release was sought for establishing business of the son of the landlady, who had graduated sometime in the year 1981 and was unemployed and wanted to set up a manufacturing unit continues to be deprived of his right to fulfill his desire to establish a business of manufacturing over span of almost 40 years, the entire generation of the son is lost. The tenant has not paid rent since 1979, considering the quantum of premises under occupation by the sub tenant of the petitioners, a cost of Rs.15 lakhs is imposed upon the petitioners, which shall be paid by the petitioners jointly and severally…”

Factual Background

Respondent, Kastoori Devi, had rented the premises in question to petitioner, M/s Whorra Brothers. Subsequently, the landlady filed a release application Section 21(1)(a) of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 for release of the property as she wanted to set up a business for her son. The application was opposed by the petitioner and was dismissed in 1992 on grounds that the landlady could not show bonafide need for releasing the property in her favour.

Respondent-landlady filed an appeal against the dismissal of the release application. The appellate authority noted that M/s Whorra Brothers did not carry out any business in the tenanted premises but M/s Whorra Brothers and Company, which had different partners from the former, was in occupation of the premises. It held that the new company coming in lead to vacancy of the property as per Section 12 of the Act.

Allowing the appeal, it was observed that the bonafide need was to be decided by the landlady and not the tenant. Further, it held that the tenant had not tried to find any alternate premises during the pendency of the release application.

The order of the appellate authority was challenged by the tenant, M/s Whorra Brothers, before the High Court on grounds that the appellate authority could not reappreciate the evidence which was already considered by the Prescribed Authority. It was argued that the tenancy of M/s Whorra Brothers and Company had been regularised by way of Section 14 of the Act as they had entered into a partnership agreement in 1970.

Per contra, respondents argued that the averment made by them stating that the two companies were separate entities and that M/s Whorra Brothers and Company came into existence in 1973 was not specifically denied by the petitioner. Respondent also highlighted the fact that the petitioner had not paid rent since 1979 and this fact was not rebutted by it in the rejoinder affidavit.

High Court Verdict

The Court held that while challenging the order of the appellate authority, the petitioner had not pleaded that the two companies were same entities and had not produced any material regarding payment of rent since 1979.

“Abuse of process of law is writ large in the present case,” held Justice Bhatia.

The Court held that appeal being continuation of the earlier proceedings, the appellate court could re-appreciate the evidence for reaching a just conclusion. Noting that there was material on record to show that M/s Whorra Brothers and Company had been registered in 1973, the Court held that its tenancy was not regularised under Section 14 of the Act.

Regarding bonafide need of the landlady, the Court held that the argument against her bonafide need was not available to the petitioner as the property was not being utilised by him, but a sub-tenant, M/s Whorra Brothers and Company.

Dismissing the petition, the Court imposed a cost of Rs. 15 lakhs on the petitioner for the unpaid rent. The Court directed that the premises be vacated by the tenant and handed over to the petitioner within 3 weeks.

“while parting with the said case, this Court records its concern for the manner in which the landlady has been harassed and entire career of her son for establishing commercial undertaking stands jeopardized by an unscrupulous tenant without payment of any rent, who has delayed the proceedings for more than 45 years.”

Case Title: Whorra Brothers v. Smt. Kastoori Devi And Another [WRIT - A No. - 1000097 of 1995]

Counsel for Petitioner : Virendra Mishra, Alok Sinha, Sandeep Dixit

Counsel for Respondent : Piyush Kumar Agarwal, Gaurav Mehrotra, Ms. Alina Masoodi

Click Here To Read/Download Order