K. C. Agrawal, R. B. Misra, JJ. - (1.) THIS special appeal is directed against the judgment of Brother B. N. Lokur, J. dated December 22, 1971, allowing the writ petition of respondents 1 to 9. By the said judgment the application made by Suresh Chandra, the appellant, under Section 7-A of the U. P. (Temporary) Control of Rent and Eviction Act, 1947 (briefly stated as the Act) was rejected and the orders passed by the Commissioner dated 23rd September, 1969 and that of the Rent Control and Eviction Officer dated 24-1-1968 were quashed.
(2.) THE facts are these : A six door shop, owned by the respondents 1 to 9 was let out by them to one Rameshwar Prasad. THE respondent 1 to 9 filed a civil suit for eviction of Rameshwar Prasad on the ground that he had illegally sub-let the shop to his three sons Nand Lal, Gopi Nath and Shri Nath. THE suit was decreed with the findings that Rameshwar Prasad had illegally sub-let the aforesaid shop to his three sons without the consent of the landlords. THEreafter the Assistant Rent Control and Eviction Officer reported to the District Magistrate that the aforesaid shop is vacant and could be allotted to three persons by splitting it up in three portions. THE District Magistrate approved the report on May 23rd 1958 in pursuance of which Area Rationing Officer (R. C.) issued intimation of allotment to Nand Lal, Shrinath and Suresh Chandra. In this letter it was further mentioned that out of six doors, the space occupied by 3 doors had been allotted to Nandlal where as one door to Shrinath and two doors to Suresh Chandra. THE respondents 1 to 9 having come to know of the aforesaid allotment order filed an application for its review on the ground that the shop was required by them for their own use and occupation. THEy alleged that the allotment order made in favour of the aforesaid three persons was illegal. THE application made by them was allowed by the District Magistrate on 7th July, 1958 and cancelled the allotment order dated 23rd May, 1958 in favour of Nand Lal, Shrinath and Suresh Chandra. By this order, the District Magistrate further directed that the shop would be released in favour of respondent nos. 1 to 9. Feeling aggrieved, Nandlal, Shri Nath and Suresh Chandra filed a representation for the review of the aforesaid order dated 7th July, 1958 cancelling the allotment order dated 24th May, 1958 in their favour. THE main ground taken in the review application was that the Distt. Magistrate did not have any power to pass the order dated 7th July, 1958. THE District Magistrate allowed this application on August 19, 1958 and recalled the order dated 7th July, 1958 on the ground that the same was without jurisdiction. He, however, directed the Rent Control and Eviction Officer to examine the case of Gopi Nath and Suresh Chandra for allotment afresh. After the report was submitted by the Area Rationing Officer (R. C.) the District Magistrate finally passed an order dated 22nd December, 1958 allotting three door shop to Nandlal, one door shop to Srinath and two door shop to Suresh Chandra. Dissatisfied with this order of allotment, respondent nos. 1 to 9 preferred a writ petition in this Court. THE writ petition was subsequently numbered as writ petition No. 320 of 1959. THE writ petition was allowed to be withdrawn on the 18th May, 1964 by Hon'ble G. C. Mathur, J. on the ground that the parties had come to terms. THE order passed by Hon'ble G. C. Mathur J. is as follows :- " On May 11, 1964 an application was made by counsel for both the parties stating that the 'parties had arrived at a compromise and an ordinary copy of compromise was filed along with that application. Learned counsel for the parties stated today that in pursuance of this compromise money has already been paid by the contesting respondents to the petitioner. THEy pray that this writ petition may now be allowed to be withdrawn. Accordingly this writ petition is dismissed as withdrawn. THEre will be no order as to costs. Learned counsel for the parties will sign the compromise which they had filed on May 11, 1964. Sd/- G. C. M. 18-5-1964" Under the compromise, which was filed in this Court Shrinath, who was allotted one door shop by the District Magistrate was given one more door from the two door shop allotted to Suresh Chandra and Beharilal son of Nandlal, who had died during the pendency of the writ petition, was allowed two door shop in place of three door shop allotted by the District Magistrate and the remaining two door shop was given to the respondent nos. 1 to 9, the landlord. After the decision of the above writ petition, Suresh Chandra filed an application under Section 7-A of the Act on July 6, 1964 before the Rent Control and Eviction Officer with a request that the landlords respondents 1 to 9 were in unauthorised occupation of the portion which had been allotted to him by the District Magistrate on 24th December, 1958 and, therefore, respondents 1 to 9 be dispossessed and that the possession of that portion be given to him. In this application he had stated that as the writ petition filed by respondents 1 to 9 had been dismissed by the High Court on 18th May, 1964, the allotment order passed by the District Magistrate on 24th December, 1958 became operative and in pursuance of that order he was entitled to the possession of the portion of the shop in occupation of the respondents 1 to 9. The application was resisted by respondents 1 to 9. They alleged that in the aforesaid writ petition a compromise was entered into between the parties in pursuance of which they were entitled to retain possession of two door shop and, therefore, the application made by Suresh Chandra was mis-conceived and was liable to be rejected. It was also mentioned that Suresh Chandra was also a party to the aforesaid compromise and, therefore, the same was binding on him. The assertion of the respondents 1 to 9 that the appellant had entered into a compromise with them on 18th May, 1964 was denied as false by him in the rejoinder. The appellant alleged that he was not a party to the compromise, and, therefore, the said compromise was not binding on him. The Rent Control and Eviction Officer found that Suresh Chandra was not bound by the compromise as he was not a party to it. He further held that as the allotment order had not been set aside, the appellant was entitled to get possession. The respondents 1 to 9 went up in revision against the aforesaid order of the Rent Control and Eviction Officer. The Additional Commissioner agreeing with the Rent Control and Eviction Officer dismissed the revision. In the revision, however, the respondents 1 to 9 were permitted to file some additional evidence to show that S. N. Kacker, had been engaged by Sri Suresh Chandra as his counsel. On the basis of these papers respondents 1 to 9 claimed before the Additional Commissioner that as the compromise was filed on the 18th May, 1964 by Shri S. N. Kacker under his signature the said compromise would be deemed to have been entered into on behalf of Suresh Chandra as well. As stated above, the Additional Commissioner did not find any merit in the case of the respondents 1 to 9 that Suresh Chandra had entered into any compromise with them in the writ petition No. 320 of 1959. On this finding the revision filed by respondent nos. 1 to 9 was dismissed. Aggrieved by the dismissal of the revision, the respondents 1 to 9 preferred the writ petition giving rise to the present appeal. The writ petition was allowed on 22nd December, 1971 by brother B. N. Lokur on the findings that Shri S. N. Kacker had been engaged by Shri Suresh Chandra in writ petition No. 320 of 1959 on his behalf and that Shri Kacker had authority to enter into the compromise on his behalf in the said writ petition. On this view the writ petition filed by respondents 1 to 9 was allowed and the orders of the Rent Control and Eviction Officer as well as of the Additional Commissioner were quashed. Suresh Chandra, the appellant has filed this appeal against the aforesaid judgment of the learned Single Judge.
(3.) SHRI Shanti Bhushan, counsel appearing for the appellant has raised a number of grounds in support of the appeal. The first ground was that the compromise entered into between the respondents 1 to 9 and the appellant and others being against the statutory provisions of Section 7 of the Act was void and was, therefore, not binding on the appellant. This submission was made by him on the assumption that Suresh Chandra was also a party to the said compromise, although it may be stated that it was strongly urged by him that Suresh Chandra had neither engaged SHRI S. N. Kacker as his counsel nor had actually he signed the compromise and, therefore, he was not a party to the compromise and the same was liable to be ignored. The object of the Act, as may be gathered from its preamble, is to provide for the continuance during a limited period of powers to control and letting and the rent of residential and non-residential accommodation and to prevent the eviction of tenants therefrom. Section 3 of the aforesaid Act provides for restrictions on eviction of tenants. Section 5 deals with the control of rent. Section 7, which is the material section for us, provides for control on letting. Clause (a) of subsection (1) of Section 7 enjoins upon every landlord to intimate in writing to the District Magistrate within 7 days after an accommodation becomes vacant by his ceasing to occupy it or by the tenant vacating it. Sub-section (2) of Section 7 provides that the District Magistrate by general or special order require a land-lord to let or not to let to any person any accommodation which is or has fallen vacant or is about to fall vacant. It may be noted that the power conferred on the District Magistrate under sub-section (2) of Section 7 is in an absolute terms. Here the District Magistrate is fully entitled to allot the premises vacated by a tenant to an applicant for allotment or to release the same to the land-lord, if he desires to occupy by the same for his bonafide requirement. The purpose of conferring power on the District Magistrate to control letting was that the accommodation available for citizens were much less than needed for occupation, and as there were apprehensions that the landlords could take undue advantage of the paucity of accommodation and could let out the same on exhorbitent rent the Legislature conferred the power of allotment on the District Magistrate. In exercise of this power the District Magistrate could allot the premises to the persons genuinely needing the same for their occupation. Section 7 does, therefore, deprive a landlord of his right to let out the premises or even to use it for himself whenever he so desires. The public policy behind the Act was to vest the control of letting in the District Magistrate so that he could exercise the same for the benefit of the general public. Section 23 of the Indian Contract Act lays down that the construction or object of an agreement which is forbidden by law would be considered to be illegal. The principle behind the above provision is that if anything is done against the public law or public policy that would be illegal inasmuch as the interest of public would suffer in case a contract against public policy is permitted to stand. The principle of public policy as is said is "EX DOLO MALONON ORILUR AGELO." No Court will lend its support to a man who founds his cause of action upon an arbitrary or illegal act. It is true that it is inherent and inalienable right of every man to make a contract and get it enforced through a court but this light is however, subject to the condition that parties cannot incorporate any provision in a contract that are illegal and violative of public policy. In American Jurisprudence, Volume 17, defining the scope of 'public policy' it has been observed in paragraph 175 that "the courts have, however, frequently approved Lord Brougham's definition of public policy as the principle which declares that no man can lawfully do that which has a tendency to be injurious to the public welfare. This principle, it has been said, may be termed "the policy of the law or the public policy in relation to the administration of the law." Public policy comprehends only the protection and promotion of public welfare, including....." These observations would indicate that public policy is that principle of law under which freedom for contract or private dealings are restricted by law for the good of the community. The very meaning of public policy is the interest of persons other than the parties. Accordingly, if in any contract the parties have stipulated for something inhibited by the law, the contract will not be considered to be legal. Applying these principles to the facts of the instant case it would be found that Section 7, as stated above, was made for public welfare and if the parties were given the freedom to curtail the power of the District Magistrate conferred on him by Section 7 of the Act, the very object for which Section 7 was enacted would be defeated. As Section 7 is meant for the public benefit, any contract entered into between the parties curtailing the powers of the District Magistrate would be void. A similar controversy came up for consideration before the Supreme Court in the case of Shri Krishna v. Additional District Magistrate Kanpur, AIR 1975 SC 1525. in this case on a shop falling vacant the landlord applied for its release. Applications for its allotment were also made by others. On 17-9-1962 the Additional District Magistrate, who was dealing with the allotment proceedings refused to release the shop to the landlord and allotted the same to one Raghunath Prasad Mehrotra. As the landlord had already entered into possession of the shop, Raghunath Prasad filed an application under Section 7-A(l) of the Act for possession. The application was allowed exparte on 15-11-1962. The shop was got vacated and actual possession was delivered to the allottee in pursuance of the aforesaid order under Section 7(1)(a) on 16-11-1962. It may, however, be noted that before the filing of the application by the allottee for possession under Section 7-A, the landlord had filed a suit challenging the allotment order of the Additional District Magistrate. The suit was subsequenly compromised. Thereafter, the landlord filed an application for review of the order dated 15-11-1962 by which the application made by the allottee under Section 7-A was allowed. The main ground taken in the application for review was that the allottee had obtained the order dated 15-11-1962 by suppressing the fact of compromise entered in suit no. 132 of 1962. The application was rejected by the Rent Control and Eviction Officer. The landlord filed a writ petition in this court and thereafter a special appeal, which were also dismissed. He, thereafter, went to the Supreme Court by special leave. Dealing with the question of validity of the compromise entered into between the landlord and the tenant the Supreme Court observed that "So long as the Act and the Rules continued in force the control of letting vested in the District Magistrate and not in the parties. By a compromise the parties could not curtail the powers of the District Magistrate. It was unlawful and against the public policy of the law to do so. The public policy behind the Act and the Rules is to vest the control of letting in the District Magistrate for the benefit of the general public to be more precise such members thereof who were in need of accommodation on rent. In our opinion, therefore, respnodent no. 3 committed no fraud in ignoring the void compromise when he applied for eviction of the applicant under Section 7-A of the Act and for delivery of actual physical possession to him." The law enunciated by the Supreme Court in the above case applies with full force to the facts of the present case. Shri Bashir Ahmad, attempted to distinguish the case on the ground that the terms of compromise in the instant case are different from those in the case before the Supreme Court. We have carefully examined the terms of the compromise and are unable to find anything which could distinguish the Supreme Court case. In the present case as well the District Magistrate did not release the shop in favour of the respondents 1 to 9 for which they had applied before him. By the compromise the parties decided to give two room shop to him. This could not be done by the parties by privately agreeing to release a portion of the premises to the respondents 1 to 9. As stated above, the power of allotment exclusively vests in the District Magistrate under the Act and cannot be taken by the parties upon themselves. If an agreement like the present one is considered as valid, the effect could be that the parties could avoid the provisions of Section 7 by entering into such agreements. Consequently, we find that the application made by Suresh Chandra appellant under Section 7-A for possession of two door shop allotted to him by the District Magistrate on 23-12-1968 was rightly allowed by the Rent Control and Eviction Officer. The objection of the respondents 1 to 9 that they were not entitled to get possession on the basis of the compromise mentioned above was rightly not accepted as the same was a contract expressly prohibited by law. It is a settled law that no court will entertain an action or defence based on any such illegal contract. Since the contract is void for illegality, it is void as to all the parties. Illegality of this nature could be insisted upon even by the appellant who was although not a party to it. In this view of the matter we find that the writ petition filed by the respondents 1 to 9 for the enforcement of the compromise was liable to be rejected,;