Forum For Landlord-Tenant Dispute Determined By Law In Force When Suit Is Filed, Not When Tenancy Ends: Allahabad High Court

The Allahabad High Court has held that the forum competent to decide a landlord-tenant dispute is determined by the law in force on the date the suit is instituted, and not by the law prevailing when the tenancy was terminated or the cause of action arose.

Justice Dr. Yogendra Kumar Srivastava observed that where a landlord-tenant dispute is instituted after the enforcement of the Uttar Pradesh Regulation of Urban Premises Tenancy Act, 2021 and is otherwise governed by that Act, the Court of Small Causes has no jurisdiction to entertain it.

The Court added that merely because tenancy had earlier been determined by a notice under Section 106 of the Transfer of Property Act, 1882 does not save the jurisdiction of that Court or displace the bar under Section 38(1) of the Act, 2021.

Section 38(1) of the Uttar Pradesh Regulation of Urban Premises Tenancy Act, 2021 opens with a non-obstante clause and bars the jurisdiction of civil courts over disputes falling within the substantive and remedial framework of the Act, except to the extent the Act itself provides otherwise.

Justice Dr. Yogendra Kumar Srivastava held,

“Service of a notice under Section 106 merely determines the contractual tenancy and furnishes the landlord with a cause of action to seek eviction. It neither determines the forum competent to adjudicate the ensuing dispute nor creates, preserves or enlarges the jurisdiction of any particular court. The forum before which such right is to be enforced is governed by the law in force on the date the proceedings are instituted and not by the law under which the cause of action arose.”

The dispute concerned two shops near Shanti Bhavan, Railway Road, Hapur, let out by the landlord's predecessor-in-interest to Manohar Lal, the predecessor-in-interest of the revisionists. Alleging default in payment of rent, the landlord served a notice under Section 106 of the Transfer of Property Act, 1882, and thereafter instituted S.C.C. Suit No. 3 of 2021 before the Judge, Small Causes Court, Hapur, seeking eviction along with arrears of rent and damages.

Manohar Lal died during the pendency of the suit and the revisionists were substituted as his legal representatives. They moved an application under Order VII Rule 11 CPC for rejection of the plaint, urging that since the suit was filed after the Act of 2021 came into force, the Court of Small Causes lacked jurisdiction. It was argued that the plaint in any event disclosed no cause of action against them. The trial court rejected the application.

A second application raising the same objection was also rejected by order. Both orders were challenged in revision under Section 25 of the Provincial Small Cause Courts Act, 1887.

The Court observed that the Trial Court had proceeded on the premise that once the contractual tenancy stood determined under Section 106, the dispute continued to be governed by the Transfer of Property Act, 1882, so that the enforcement of the Act of 2021 changed neither the forum nor the governing legal regime. It also noted the Trial Court's view that since the plaint itself asserted the inapplicability of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972, there was no occasion to consider whether the Act of 2021 applied.

Holding the Act of 2021 to be a special and self-contained enactment which creates substantive rights and a specialised adjudicatory mechanism, the Court held that the requirement of a written tenancy agreement under Section 4 is regulatory and evidentiary in character. It held that its absence does not by itself exclude the Act or take away the Rent Authority's jurisdiction where the relationship of landlord and tenant is admitted or otherwise capable of being established.

The Court further held,

“The jurisdiction of a court is determined by the law in force on the date on which the proceedings are instituted unless the statute expressly provides otherwise. The date on which the cause of action accrued or the tenancy stood determined is relevant only for the accrual of the right to sue; it does not determine the forum competent to entertain the proceedings.”

Noting that the suit had been filed on 20^th August 2021, by which date the Act of 2021 was already in force, the Court held that the contrary view would allow the statutory bar to be defeated by timing.

“Any other interpretation would enable litigants to circumvent the legislative mandate embodied in Section 38(1) simply by issuing a notice under Section 106 prior to institution of the proceedings, thereby frustrating the object of the Act in creating an exclusive statutory mechanism for adjudication of landlord-tenant disputes”

Rejecting the Trial Court's reliance on the Transfer of Property Act, 1882 as the source of continuing jurisdiction, the Court held,

“The Transfer of Property Act regulates the substantive incidents relating to the creation and determination of leases; it neither confers nor preserves the jurisdiction of any particular forum.”

The Court held that the Trial Court had missed the distinction between the law governing determination of a tenancy and the law governing the forum competent to decide disputes arising from it. It held that the Trial Court's findings on maintainability in both orders suffered from a manifest error of law.

On the separate objection that the plaint disclosed no cause of action against the substituted legal representatives, the Court found no infirmity in the Trial Court's view. It held that on an application under Order VII Rule 11 CPC the Court must confine itself to the plaint and the documents relied upon by the plaintiff. It held that legal representatives brought on record step into the shoes of the deceased and represent his estate in the litigation.

Accordingly, both revisions were allowed and the orders were set aside insofar as they held the suit maintainable before the Court of Small Causes.

Case Title: Manoharlal (Deceased) and 4 others v. Jagdish Prasad Goel

Counsel for Revisionist :- Utpal Chatterji

Counsel for Opposite Party :- Ashish Kumar Singh

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