Section 227 – The High Court cannot pursue factual issues as an appellate body: Supreme Court

The Supreme Court, in a judgment delivered on February 23, ruled that the High Court, while exercising the powers of a supervisory court under Section 227 of the Constitution of India, cannot act in as an appellate body to reassess the evidence.

The High Court, under Section 227, can only interfere with the decisions of a forum of inquiry where its findings are perverse i.e.

  1. erroneous due to disregard of material evidence, or
  2. Be conclusions that are contrary to the evidence, or
  3. Based on inferences that are inadmissible in law.

A bench comprising Judges Vineet Saran and Aniruddha Bose allowed an appeal against the order by the Delhi High Court, which it said had exceeded its limited scope of interference as a supervisory court.

Factual background

The respondents operated a pharmacy from a store (“premises in question”) owned by the appellant-landlord. The appellant brought eviction proceedings before the Delhi Supplementary Rent Controller under Section 14 of the Delhi Rent Control Act 1958, alleging that certain parts of the premises in question had been sub- leased to three doctors and two other businesses without the owner’s consent. The Controller of Complementary Rents rejected the request on the grounds that the Appellant could not establish that the premises were sublet for the benefit of doctors and businesses. The appeals court accepted that the facts of the case disclosed a sublease. Based on the same decision, he reversed the rent controller’s decision and authorized the eviction. Invoking authority under Section 227 of the Constitution of India, the defendant applied to the Delhi High Court, which found against the appellant-owner.

Submissions raised by the appellants

Senior Counsel, Mr. Dhruv Mehta appearing with Lawyer, Mr. Jeevesh Nagrath on behalf of the landlord argued that where the last forum of inquiry found that there was subletting of the premises in question, the High Court exercising its supervisory jurisdiction should not have set it aside. It was claimed that the findings of the Appeals Tribunal were based on evidence and should not have been interfered with by the High Court exercising power under Section 227. Mr Mehta relied on a series judgments dealing with the nature and extent of occupation in a leased property by persons who are not tenants but induced by them who would attract the misdeeds of subletting.

Conflicts raised by the respondents

Senior Counsel, Rana Mukherjee, appearing on behalf of the respondents relied on several judgments to argue that the onus is on the landlord to prove the sublease. He argued that full control of entering and leaving the premises belonged to the tenant and not to the doctors.

Analysis by the Supreme Court

The Court determined the scope of the issue in this case, namely whether or not the High Court’s decision to quash the eviction order made by the Appeals Tribunal suffered from an element of perversity. It was observed that there is no dispute as regards the occupation of part of the establishment in question by medical practitioners. The High Court noted that it is required to intervene in the appellate court’s decision only where its findings are found to be abusive. The Apex Court agreed with the High Court’s comments on the extent of the review court’s interference in the inquiry forum’s decision.

“The High Court was aware of the restrictive nature of jurisdiction under Section 227 of the Constitution of India.”

However, the Apex Court was of the opinion that the High Court had overstepped the mark in reassessing the evidence, while taking into account the perversity of the Appeals Tribunal’s findings.

“In our view, the High Court, in exercising its jurisdiction under Section 227 of the Constitution of India in the judgment under appeal, has gone deep into the factual arena for disagreeing with the latest survey forum.”

The Supreme Court noted that once admitted that the doctors occupied part of the premises in question, the onus was on the respondents to refute the allegation of subletting. On reading the evidence on file, it was found that the doctors had individual cabins and telephone connections on the premises. He held that there was no perversity in the order of the Court of Appeal, in fact the finding of the High Court was itself perverse.

“There was no perversity in the Court of Appeal’s order on the basis of which the High Court could have intervened. In our view, the High Court tested the legality of the Tribunal’s order through the prism of an appellate body and not as a supervisory tribunal in deciding the claim under Section 227 of the Constitution of India. It is unacceptable. The High Court’s finding that the appellate body’s decision was abusive and the manner in which such a finding was reached were themselves abusive.”

The Court ordered the Respondents to pay the Appellant rent at the rate of Rs. 30,000/month from 14.11.2018 until they vacate the premises. He ordered the respondents to vacate the premises in question within 53 weeks. In the meantime, they were not to create third-party rights. They were asked to submit an affidavit pledging to vacate the premises no later than 28.02.2023. They were also asked to make an additional payment of Rs. 1 lakh in one month and Rs. 12 lakh in six months.

Case name: M/s. Puri Investments v. M/s. Young Friends And Co. And Ors.

Reference: 2022 LiveLaw (SC) 279

Case No. and Date: Civil Appeal No. 1609 of 2022 | February 23, 2022

Corum: Judges Vineet Sarani and Aniruddha Bose

Summaries

Article 227 of the Constitution of India, 1950 – Jurisdiction of Review – Scope of interference of Court of Review in decisions of forum of inquiry is limited – Supreme Court held that High Court overstepped this limit – in its exercise of scrutinizing the evidence to find perversity in the appellate court’s order, there was a reassessment of the evidence itself by the High Court – the High Court, in the exercise of its jurisdiction under Section 227, had gone deep into the factual arena for disagreeing with the latest forum of inquiry – the High Court tested the legality of the Tribunal’s order through prism of an appellate body and not as a supervisory court exercising powers under Section 227 of the Constitution of India.

Click here to read/download the judgment

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