Case Title: Krishnaprasad A AND L Doreswamy
Case No: HOUSE RENT REV. PETITION NO.10/2022
Date of Order: 11-08-2023
INTRODUCTION
The Karnataka High Court recently restated that the legal rights of parties are solidified from the moment legal proceedings are begun, such as initiating a lawsuit. Any subsequent occurrences that take place after the commencement of legal action do not impact the court’s authority.
FACTS
The person requesting, known as the petitioner, leased out their property to the individual being addressed, referred to as the respondent, who is a lawyer. The monthly rent was set at Rs. 3,400, and a security deposit of Rs. 10,00,000 was also collected. The petitioner and the respondent were initially friends, and the lease agreement was drawn up at the respondent’s request. This agreement spanned a three-year duration. As time went on, the respondent faced difficulties in paying the rent, so an arrangement was made to deduct the rent from the security deposit until 2013.
The petitioner had plans to move into the property after retiring and thus asked the respondent to vacate the premises. Despite assurances, the respondent did not leave even after the lease term concluded. As a result, the petitioner initiated legal action for eviction.
Upon review, the Trial Court determined that the legal relationship of landlord and tenant existed between the parties. However, it ruled that the eviction petition was not acceptable under Section 2(3)(e)(1) of the Karnataka Rent Act due to jurisdiction issues.
Disagreeing with this decision, the petitioner lodged an appeal. The petitioner argued that the determination of a fair rent by the Rent Controller should only be used as a reference in cases involving rent increases and should not be the determining factor for jurisdiction matters.
COURT’S ANALYSIS
The High Court re-evaluated the case and determined that the Trial Court made a mistake by invoking a specific section of the Rent Act. The Court emphasized that the parties’ rights are established when the lawsuit is filed and dismissed the respondent’s efforts to remove jurisdiction through subsequent actions.
The Court emphasized that the respondent’s decision to establish a fair rent after filing for eviction did not change the situation.
The Court clarified the distinction between a mortgage and a lease for money advanced or deposit made. In a lease of this kind, there is no debtor-creditor relationship between the landlord and tenant. Instead, the tenant agrees to provide a deposit in lieu of monthly rent, with the understanding that the landlord will hold the deposit until the tenant leaves.
Given these points, the Trial Court should not have applied the particular section of the Karnataka Rent Act and went in the wrong direction. The Judge asserted that the issue of standard rent does not apply here, as there is a clear contract between the parties that involves no rent payment but only a premium amount. The Trial Court’s conclusion about lacking jurisdiction due to the mentioned Act was flawed.
The Court also observed the respondent’s actions, including failure to pay the premium and making contradictory statements about vacating the premises. In light of this analysis, the petition was approved, and the respondent was instructed to vacate the premises within 60 days. Additionally, the petitioner was directed to pay Rs.10,00,000, which was initially given as a premium to the respondent upon vacating the premises.
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Written by- Shreya Sharma
