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Rent : Compromise once acted upon cannot be nullfied

In Km. Anshu Jain And Others vs Suresh Prakash Garg And Others, a compromise was reached between the landlord/respondents and the father of the appellant wherein he was allowed to occupy a portion of a property during his lifetime for a fixed rent. On his death, his heirs challenged the eviction claiming the requirement of the landlord not being bonafide and sought to nullify the compromise settlement. The appeal was filed before the Allahabad High Court after the contention of the tenants have been rejected by the small causes court.

The HC observed that there is no quarrel with the law that in cases where protection under a Rent Act is available, no eviction can be ordered unless ground seeking eviction is made out, even if parties had entered into a compromise and that the invalidity on that count can even be raised in execution. However, as mentioned in the judgment of Hon'ble Supreme Court rendered in the case of Raghunath Prasad Pande vs. State of Karnataka and others 2018 (5) SCC 594 and in the case of Rajasthan State Industrial Development and Investment Corporation and another vs. Diamond & Gem Development Corporation Limited and another 2013 (5) SCC 470, once the compromise decree has been acted upon, a party cannot be permitted to go back from the same and the same is not liable to be set aside.

Where a person knowingly accepts the benefit of a contract, or conveyance, or of an order, he is estopped from denying the validity of, or the binding effect of such contract, or conveyance, or order upon himself. This rule is applied to ensure equity. 

Clearly it is not a case where the original tenant is coming forward with a case that some fraud was played upon him and the compromise is contrary to statutory provisions. On the other hand, the terms of the compromise further indicate that the compromise was, in fact, executed at the cost of the landlord carving out a new shop out of a larger shop and handing over the same to the original tenant and by incurring loss towards rent as well as, the rent of the tenant was continued to be Rs. 18/- per month during lifetime of the original tenant Raj Bahadur Jain. In other words, the compromise was continuously acted upon by the parties. Thus, now the legal heirs cannot come forward and say that they are the statutory tenant and this compromise was nullity as they were not a party or that it is contrary to law.

In such view of the matter, there is no good ground to interfere in the orders impugned herein in exercise of powers under Article 226 of the Constition of India.

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