Verdict

In the Supreme Court, Civil Appellate
Civil Appeal No. 4275 of 2017

Murlidhar Aggarwal (deceased)
through his legal heir Atul Kumar Aggarwal . . . . . . . . . . . . . . . . Aggarwal(s)
Versus
Mahendra Pratap Kakan (deceased)
through his legal heirs and Others . . . . . . . . . . . . . . . . . . . . . . . . Kakan(s)  

Culminating a legal battle that began 60 years ago, the Hon’ble Supreme Court pronounced a landmark judgement in April 2025 that has far reaching impact on disputes between landlords and tenants under various State Rent Control Acts.    

Background and Facts

• 13th October 1952  –  Ram Agya Singh (Kakan’s predecessor / ‘Kakan’) took 10-year lease of a cinema theatre called Mansarovar Palace in Allahabad [Property] from the property owner Ram Swarup Gupta.
• 26th March 1962  –  Murlidhar Aggarwal (‘Aggarwal’) purchased the Property from owner.
• 1965  –  Aggarwal approached Additional District Magistrate and Additional Commissioner and obtained eviction order under U.P. (Temporary) Control of Rent and Eviction Act of 1947 [1947 Act]. Tenant Ram Agya Singh appealed to U.P. State Govt which cancelled this eviction order. 
• 1974  –  Murlidhar Aggarwal appealed to a single judge bench of  HC which quashed State Govt order. But, this single judge bench order was annulled by a Division Bench of HC. Thus, tenant Ram Agya Singh continued to occupy the Property, even though his 10-year lease had already expired in 1962. 
• 1975  –  Murlidhar Aggarwal made fresh appeal to District Court for eviction of tenant from Property, under new Uttar Pradesh Urban Buildings (Regulation of Letting, Rent and Eviction) Act of 1972 [1972 Act]. Note: 1947 Act was temporary and got replaced by 1972 Act in U.P. and similar such Acts in other states.
• 1983  –  Prescribed Authority (District Magistrate) ordered eviction of tenant. Tenant appealed to Appellate Authority (Additional District Judge UP HC, Allahabad) which annulled Prescribed Authority’s order and allowed Tenant to continue in the property.  
• 1999  –  Murlidhar Aggarwal filed fresh appeal in U.P. High Court and initiated a trial. 
• During the trial, Murlidhar Aggarwal passed away; his legal heir and son Atul Kumar Aggarwal became the Aggarwal who continued to fight for eviction of Kakan-tenant. 
• January 2013  –  U.P. High Court rejected appeal of Aggarwal and allowed Kakan to continue.
• In 2017, Aggarwal appealed to Supreme Court for eviction of Kakan from property.  
• SC pronounced its verdict on this case on 24th April 2025, finally bringing this long-drawn case to an end.

Issues involved in the case

1. On what grounds under the 1972 Act can a tenant be ordered to vacate a property rented or leased by him?
2. What is the concept of ‘bona fide’ need, both tenant’s and owner’s, in an eviction case? And, how to apply this concept while adjudicating on the case? 

While adjudicating upon this case, Supreme Court has provided clarity on interpretation of the following key Sections of the 1972 Act, salient clauses of which are given below for understanding this case:

1. Section 16  –  Allotment and Release of  Vacant Building: The Prescribed Authority (District Magistrate) is empowered to either allot to a tenant or release to a landlord a vacant building in the following situations:  
   a. Landlord has a bona fide i.e. genuine requirement of the property either for his residential occupation or for conducting his business or for objectives of a charitable trust of which he is a trustee. 
   b. Such charitable trust does not discriminate its beneficiaries on basis of religion or caste or place of birth.
   c. Landlord’s property is in dilapidated condition and is to be demolished for re-construction.
   d. Where property is let out for business purpose, the greater the period in which tenant has been doing his business, the lesser justification for property to be released to landlord.
   e. Where tenant has access to another suitable property for doing his business without substantial loss, the greater justification for property to be released to landlord.
2. Section 21  –  Proceedings for release of building under occupation of tenant: The Prescribed Authority (District Magistrate) may order the eviction of tenant from the property under any of the following conditions:
   a. Landlord has bona fide requirement of the property as already explained above in 1. a), b) and c).  
   b. Where tenant has occupied the property before commencement of, or, landlord has purchased it after commencement of the 1972 Act, landlord cannot get possession for a period of 3 years from date of purchase; an eviction  notice to be issued to tenant 6 months prior to lapse of 3 year period.
   c. If property is rented to tenant for non-residential purpose, landlord to pay compensation of 2 years rent.
   d. If tenant is from armed forces and occupying property for residential purpose, he cannot be evicted; in event of such tenant’s death during action, his legal heirs can continue to occupy the property.
   e. If landlord is either active or retired from armed forces, property shall be vacated for his residential purpose; if dead, his widow or family shall get possession of the property. If such landlord owns more than one property, then the eviction order shall apply to any one property only. 
   f. If tenant has bought or has rented another residential property in the same municipal limits, then he will not be able to lay claim on the property which landlord has applied for re-possession. 
   g. Landlord can apply for re-possession within 1 year of his retirement from employment; property can be re-possessed only at the time of actual retirement.

Supreme Court has also referred to its own verdicts in following similar cases for interpretation of the above Sections of the 1972 Act:

• Joginder Pal v/s Naval Kishore Behal (2002) 5 SCC 397
• Dwarkaprasad v/s Niranjan and Anr. (2003) 4 SCC 549
• Mohd. Ayub and Anr. v/s Mukesh Chand (2012) 2 SCC 155
• Ganga Devi v/s District Judge, Nainital and Ors. (2008) 7 SCC 770
• Bhagwan Dass v/s Jiley Kaur (Smt) and Anr. 1991 Supp (2) SCC 300
• Sushila v/s IInd Addl. District Judge, Banda and Ors. (2003) 2 SCC 28
• Nidhi v/s Ram Kripal Sharma(D.) Thru LRs (2017) 5 SCC 640
• Sheshambal (D.) Thr. LRs. v/s Chelur Corporation Chelur Building and Ors. (2010) 3 SCC 470

Analysis and Judgement

1. Aggarwal’s ‘bona fide’ requirement of property for his and subsequently his legal heir’s occupation has been established beyond doubt by the  following facts:
   a. Aggarwal had business interests other than this property, as was repeatedly argued by Kakan and accepted by lower courts, but the total income from all these businesses was not sufficient for sustaining Aggarwal’s dependent family which included his physically handicapped son.
   b. Mere indulgence of Aggarwal in other business interests in order to support his family does not preclude him from having bona fide requirement of the property. In other words, Aggarwal could not have been idle while waiting for re-possessing his property.
   c. Kakan could not establish any deceit or malintent in Aggarwal’s bona fide need for property for him and his family, as contended by Kakan and illogically accepted by Appellate Authority.
2. Kakan himself had been doing the several other businesses including cinema houses in various cities in U.P. In comparison to Aggarwal, Kakan was financially better placed as was established by the quantum of annual income tax paid by him.
3. Property was leased to Kakan in 1952. As against the 10-year lease period that had lapsed in 1962, Kakan has occupied the property for a period of 31 years as of 1983. 
4. Appellate Authority had reversed the Prescribed Authority’s eviction order of 20th December1983 solely on the basis of Aggarwal’s statement that he had no other business interests; Appellate Authority did not consider the fact that the other businesses of Aggarwal did not provide him with sufficient income for his and his family’s sustenance.
5. Appellate Authority wrongly concluded that though Kakan-tenant had several other businesses, these businesses were running at a loss and the subject property was the only gainful business for Kakan and that Kakan would be put to additional hardship in event of eviction from the property. 
6. During his tenancy in the property, there is no evidence of Kakan having made any attempt to look for alternative accommodation. This becomes a determining factor for deciding bona fide requirement of Aggarwal. In the present case, Kakan had not made any attempt for alternative accommodation.
7. Appellate Authority accepted Kakan’s argument that after the death of original Aggarwal, the legal heirs of Aggarwal had no bona fide requirement of the property. Whereas, Section 21 (7) empowers the legal heirs to continue the litigation by substituting need of deceased Aggarwal with their own needs. In present case, Aggarwal’s legal heir is a physically handicapped person with no reliable business to carry out.
8. In conclusion, following principles are to be given due consideration in any tenancy dispute.
   a. Bona fide requirement of landlord to be viewed with a liberal approach.
   b. Hardships of tenant and landlord to be weighed and evaluated.

Supreme Court has set aside U.P. High Court order of 9th January 2013 and has allowed re-possession of the property by Aggarwal. Kakan has been given time up to 31st December 2025 to vacate property.

For full text of the judgment:
https://api.sci.gov.in/supremecourt/2013/15114/15114_2013_17_1501_60927_Judgement_24-Apr-2025.pdf