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Dattu Subhana Panhalkar Vs. Gajanan Vithoba Bobhate and anr. - Court Judgment

LegalCrystal Citation
Overruled ByHarbanslal Jagmohandas v. Prabhudas Shivlal
SubjectTenancy
CourtMumbai High Court
Decided On
Case NumberSpecial Civil Appln. No. 781 of 1968
Judge
Reported inAIR1971Bom396; (1971)73BOMLR371; 1971MhLJ834
ActsBombay Rents, Hotel and Lodging House Rates Control Act, 1947 - Sections 11-A, 11, 11(1), 11(2), 11(3), 11(4), 12, 12(1), 12(2), 12(3), 12(4), 12(5), 12(6) and 21; Bombay Rents, Hotel and Lodging House Rates Control (Amendment) Act, 1953; Maharashtra Rents, Hotel and Lodging House Rates Control (Amendment) Act, 1963; Transfer of Property Act, 1882 - Sections 12, 106, 106(2) and 108
AppellantDattu Subhana Panhalkar
RespondentGajanan Vithoba Bobhate and anr.
Advocates:M.L. Pendse, Adv.;M.R. Mody, ;R.M. Kothari and ;P.T. Gundaria, Advs. ;B.L. Chabria, Adv.
Excerpt:
- - the 1st respondent failed to pay the rent from december 1963 to 31st may 1965. on that date the landlord gave notice under section 12(2) of the rent act calling upon him to pay the rent or to deliver possession on termination of the tenancy by the end of june 1965. the 1st respondent replied to the notice on 8th june 1965. though the reply had been referred to in the judgments of the courts below and throughout the proceedings a copy of it was not before us and with the consent of counsel we have taken a copy of the translation of that reply on record. before we refer to the arguments on either side and express our view upon the relevant provisions of the law it will be best at this stage to set-forth the relevant provisions which bear upon the two questions referred. explanation.....a) the case focused on the applicability of section 12 (3) (a) of the bombay rents, hotel and lodging house rates control act, 1947 (as amended by mah. act 14 of 1963) - the court ruled that in a proceedings to which, section 12 (3) (a) of the act was otherwise applicable, the tenant, the defendant could prove that a dispute about standard rent existed, without following the procedure in explanation 1 to section 12 - moreover, he could also raise the defence that section 12 (3) (b) and not section 12 (3) (a) was applicable.b) the court ruled that the bombay rents, hotel and lodging house rates control act, 1947 is not code by itself but modifies the general law of the landlord and the tenant in the transfer of property act as section 12 of the rent act restricts the general law against.....
Judgment:
a) The case focused on the applicability of Section 12 (3) (a) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (as amended by Mah. Act 14 of 1963) - The Court ruled that in a proceedings to which, Section 12 (3) (a) of the Act was otherwise applicable, the tenant, the defendant could prove that a dispute about standard rent existed, without following the procedure in Explanation 1 to Section 12 - Moreover, he could also raise the defence that Section 12 (3) (b) and not Section 12 (3) (a) was applicable.

b) The Court ruled that the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 is not code by itself but modifies the general law of the landlord and the tenant in the Transfer of Property Act as Section 12 of the Rent Act restricts the general law against the interests of the landlord thereby giving protection to the tenant.

c) The Court provided that Sub-sections (3) (a) and (3) (b) of Section 12 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 are complementary and should be read together - Further, as Sub-section (3) of the Act is an exception to the general rule in Sub-section (1), it must be strictly construed.

d) The case focused on the applicability of Section 12 (1), (3) (a) and Explanation 1 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 - The Court ruled that Explanation 1 to Section 12 of the Act is only an explanation to Section 12 (1) of the Act and can never apply to Section 12 (3) (a) - Furthermore, Sub- section (3) (a) of Section 12 of the Act ia applicable only where there is no dispute regarding standard rent or permitted increase - Whereas, the Explanation 1 to Section 12 is applicable only when there is a dispute.

e) The case discussed about the applicability of Explanation II to Section 12 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 - The Court ruled that although Explanation II is prefaced by the words 'for the purpose of Sub-section (2) ' it will be equally applicable to the interpretation of words 'standard rent' and 'permitted increase' in Section 12 (3) (a) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, as a notice to demand standard rent under Sub-section (2) of the Act is a condition precedent to institution of suit for ejectment, on the ground of non-payment of rent.

Kotval, C.J.

1. This reference raises important questions as to the construction of Section 12 of the Bombay Rents Hotel and Lodging House Rates Control Act, 1947 (Act 57 of 1947). The Special Civil Application was originally heard by a single Judge. He referred it to a Division Bench and the Division Bench has referred it for decision to a Full Bench upon two Questions which are as follows:--

'1. Whether in a proceeding to which Section 12(3)(a) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, would otherwise apply, the tenant-defendant can prove that a dispute about standard rent exists without following the procedure laid down in Explanation I to Section 12?

2. Can he then also take the defence that Section 12(3)(a) does not apply and Section 12(3)(b) applies?' Since two specific questions have thus been referred but not the whole petition it is really unnecessary to consider the case upon the facts but it will tend to an understanding of the questions that have been referred if we briefly set out the circumstances under which the reference arose.

2. The petitioner is the landlord of a house in Kolhapur. On 1st October 1961 he let it out to Gajanan the respondent No. 1. The agreed rent was Rs. 28/- per month, comprised of Rs. 25/-as rent plus Rs. 3/- as taxes of the Kolhapur Municipality. The 1st respondent failed to pay the rent from December 1963 to 31st May 1965. On that date the landlord gave notice under Section 12(2) of the Rent Act calling upon him to pay the rent or to deliver possession on termination of the tenancy by the end of June 1965. The 1st respondent replied to the notice on 8th June 1965. Though the reply had been referred to in the judgments of the Courts below and throughout the proceedings a copy of it was not before us and with the consent of counsel we have taken a copy of the translation of that reply on record. The 1st' respondent asserted that the entire amount had been paid to the petitioner but that the petitioner had not issued any rent receipts after December 1963. He also alleged that the rent of Rs. 28/-per month was exorbitant and that he would get standard rent determined. He alleged that the premises should not be worth more than Rs. 8/- per month in rent. He also asked what was the standard rent under Section 21 (Sic : Section 11) of the Rent Act. There were other grounds upon which the petitioner had also moved for the eviction of the 1st respondent on the grounds of waste in respect of the Premises let and of being a nuisance to the neighbourhood under Section 108(c) of the Transfer of Property Act, but with these grounds we are not concerned in this reference. Suffice it to say that they have been concurrently negatived by all the courts with the result that only the ground of nonpayment of rent remains to be considered.

3. As regards standard rent the trial Court fixed the standard rent at Rs. 26/- per month, and rejected the stand of the tenant that he had paid all the rent till the end of January 1965. It however considered the fact that the tenant had paid in Court the interim standard rent fixed by the Court and also the fact that Rs. 100/- of the tenant were in deposit with the landlord and therefore the trial Court did not grant the petitioner's claim for eject-ment but merely passed a decree for Rs. 546/- as arrears of rent and directed the petitioner to withdraw the amount in deposit towards the arrears decreed.

4. In an appeal to the District Court, Kolhapur, all the findings of the trial Judge were upheld and the cross-objection filed on behalf of the tenant seeking to reduce the standard rent to Rs. 16/- per month was rejected. The petition is filed against this decision of the District Court at Kolhapur.

5. When the petition came up before Mr. Justice Bal the question raised before the learned Judge was whether the petitioner landlord was not entitled to a decree for ejectment having regard to the provisions of Section 12(3)(a) of the Rent Act. The Court below had held that the case was governed by Section 12(3)(b) and that therefore they had discretion to allow time for payment of the rent. Mr. Justice Bal noticed the considerable difference of opinion that prevailed in this Court itself on the applicability of Section 12(3)(a) and Section 12(3)(a) and the conditions under which either sub-section would apply. These differences of opinion, it was pointed out to the learned Judge arose from a consideration of the two decisions of the Supreme Court, in , Abbasbhai Alimahomad v. Gulamnabi and in Dhansukhlal Chhaganlal v. Dalichand Virchand. In taking each of the two views the learned Judges of this Court held that one or the other of the above decisions must be deemed to have overruled the con trary view taken in this Court. Under the circumstances Mr. Justice Bal felt that this was a case fit to be referred to a larger Bench. When the case came before a Division Bench consisting of Mr. Justice Patel and Mr. Justice Wagle, they referred the two questions mentioned above for our decision. Before we refer to the arguments on either side and express our view upon the relevant provisions of the law it will be best at this stage to set-forth the relevant provisions which bear upon the two questions referred. Section 12(3)(a) of the Bombay Rents Hotel and Lodging House Rates Control Act, 1947 runs as follows:--

'12. (1) A landlord shall not be entitled to the recovery of possession of any premises so long as the tenant pays, or is ready and willing to pay, the amount of the standard rent and permitted increases, if any, and observes and performs the other conditions of the tenancy, in so far as they are consistent with the provisions of this Act.

2. No suit for recovery of possession shall be instituted by a landlord against a tenant on the ground of nonpayment of the standard rent or permitted increases due, until the expiration of one month next after notice in writing of the demand of the standard rent or permitted increases has been served upon the tenant in the manner provided in Section 106 of the Transfer of Property Act, 1882,

(3) (a) Where the rent is payable by the month and there is no dispute regarding the amount of standard rent or permitted increases, if such rent or increases are in arrears for a period of six months or more and the tenant neglects to make payment thereof until the expiration of the period of one month after notice referred to in Subsection (2), the Court shall pass a decree for eviction in any such suit for recovery of possession.

(b) In any other case, no decree for eviction shall be passed in any such suit if, on the first day of hearing of the suit or on or before such other date as the Court may fix, the tenant pays or tenders in Court the standard rent and permitted increases then due and thereafter continues to pay or tender in Court regularly such rent and permitted increases till the suit is finally decided and also pays costs of the suit as directed by the Court.

(4) Pending the disposal of any such suit, the Court may out of any amount paid or tendered by the tenant pay to the landlord such amount towards payment of rent or permitted increases due to him as the Court thinks fit.

Explanation I: In any case where there is a dispute as to the amount of standard rent or permitted increases recoverable under this Act the tenant shall be deemed to be ready and willing to pay such amount if, before the expiry of the period of one month after notice referred to in Sub-section (2), he makes an application to the Court under Sub-section (3) of Section 11 and thereafter pays or tenders the amount of rent or permitted increases specified in the order made by the Court.

Explanation II:-- For the purposes of Sub-section (2), reference to 'standard rent' and to 'permitted increase' shall include reference to 'interim standard rent' and 'interim permitted increase' specified under Sub-section (3) or (4) of Section 11.'

It must be stated here that originally the section consisted of three sub-sections only but by an amendment made by the Bombay Act 61 of 1953, Sub-section (3) was wholly substituted by the present Sub-section (3) divided into two parts (3) (a) and (3) (b). By the same Act Sub-section (4) was also inserted. Thus the sections stood until the further amendment was made by the Maharashtra Act 14 of 1963 whereby the Explanation to the sub-section was renumbered Explanation I and Explanation II was further added. Explanation II refers to 'Sub-section (3) or Sub-section (4) of Section 11' and those sub-sections were also substituted for Sub-section (3) of Section 11 in the Act at the same time, that is by the Maharashtra Act 14 of 1963 which came into force from the 28th of March 1963.

6. Both in the first Explanation as well as in the second Explanation there is a reference to the provisions of Section 11 particularly Sub-section (3) and Sub-section (4) in the second Explanation. The provisions of Section 11 with which we are concerned are as follows:--

'11. (1) Subject to the provisions of Section 11-A in any of the following cases the Court may, upon an application made to it for that purpose, or in any suit or proceedings, fix the standard rent at such amount as having regard to the provisions of this Act and the circumstances of the case, the Court deems just-- ... ... ... ...

(e) where there is any dispute between the landlord and the tenant regarding the amount of standard rent.' Sub-sections (2), (3) and (4) of Section 11 are as follows: '(2) If there is any dispute between the landlord and the tenant regarding the amount of permitted increases the Court may determine such amount.

(3) If any application for fixing the standard rent or for determining the permitted increases is made by a tenant who has received a notice from his landlord under Sub-section (2) of Section 12, the Court shall forthwith specify the amount of rent or permitted increases which are to be deposited in Court by the tenant, and make an order directing the tenant to deposit such amount in Court, or at the option of the tenant make an order to pay to the landlord such amount thereof as the Court may specify, pending the final decision of the application. A copy of the order shall be served upon the landlord. Out of any amount deposited in Court, the Court may make an order for payment of such reasonable sum to the landlord towards payment of rent or increases due to him, as it thinks fit. If the tenant fails to deposit such amount or, as the case may be, to pay such amount thereof to the landlord, his application shall be dismissed.

(4) Where at any stage of a suit for recovery of rent, whether with or without a claim for possession of the premises, the Court is satisfied that the tenant is withholding the rent on the ground that the rent is excessive and standard rent should be fixed, the Court shall, and in any other case if it appears to the Court that it is just and proper to make such an order the Court may make an order directing the tenant to deposit in Court forthwith such amount of the rent as the Court considers to be reasonably due to the landlord, or at the option of the tenant an order directing him to pay to the landlord such amount thereof as the Court may specify. The Court may further make an order directing the tenant to deposit in Court periodically. such amount as it Considers proper as interim standard rent, or at the option of the tenant an order to pay to the landlord such amount thereof as the Court may specify during the pendency of the suit. The Court may also direct that if the tenant fails to comply with any order made as aforesaid, within such time as may be allowed by it, he shall not be entitled to appear in or defend the suit except with leave of the Court, which leave may be granted subject to such terms and conditions as the Court may specify'.

7. Section 11 as it was originally enacted also consisted of three subsections and the third sub-section as it originally stood is somewhat material for our purposes in order to explain certain decisions which were given under it. It was as follows:--

'If any application for fixing the standard rent or for determining the permitted increases is made by a tenant who has received a notice from his landlord under Sub-section (2) of Section 12, the Court shall forthwith make an order specifying the amount of rent or permitted increases to be paid by the tenant pending the final decision of the application and a copy of such an order shall be served upon the landlord'.

This sub-section was deleted and the present Sub-sections (3) to (6) were substituted, as we have said, by the Maharashtra Act 14 of 1963 with effect from 28th March 1963. Sub-sections (3) and (4) as they now stand are of great importance in the context of the questions referred to us.

8. Now the attempt on the part of the landlord throughout these proceedings has been to brine his case under the provisions of Section 12(3)(a). That sub-section makes it mandatory upon the Court to pass a decree if certain conditions are fulfilled where as the Courts below have held that the present case falls under the provisions of Section 12(3)(b). It is therefore necessary to consider in some detail the provisions of Section 12 and to analyse its several requirements. Subsection (1) of Section 12 lays down a general principle that a landlord shall not be entitled to recover possession of any premises so long as the tenant pays or is ready and willing to pay the amount of the standard rent and permitted increases, if any, and also continues to perform and observe the other conditions of the tenancy consistent with the Act. In several of the authorities this statement of the principle is referred to as a protection afforded to the tenant. We would only indicate here the nature of the protection for a correct understanding of the rest of the provisions of the section. The Rent Act is not a Code of law by itself. Its provisions merely seek to modify the general law. It imposes certain conditions or limitations upon the general law governing landlord and tenant as laid down in Section 106 and the subsequent sections of the Transfer of Property Act. The general law of landlord and tenant has not been abrogated by the Act. The general law continues to apply but in order to achieve its avowed object, viz., 'to amend and consolidate the law relating to the control of rents and repairs to certain premises, of rates of hotels and lodging houses and of evictions' the Rent Act has modified the general law and imposed certain stringent conditions under which alone tenants can be evicted from the premises occupied by them. The provisions of Section 12 are really therefore restrictions upon the general law and to the extent that they restrict the general law against the interests of the landlord only it may be said that they afford protection to the tenant. In this sense alone will we also continue to refer to the several provisions of the Act as 'protection' afforded to the tenant.

9. The first sub-section to Section 12 therefore confers upon the tenant a general immunity or 'protection' against ejectment so long as he pays or is ready and willing to pay the rent and permitted increases and observes and performs the other conditions of the tenancy in so far as they are consistent with the provisions of the Act. The expression used in the sub-section 'ready and willing to pay' may at this stage be emphasized. It is the same expression which has been referred to in the Explanation I to the section. Therefore Sub-section (1) will have to be construed in the light of Explanation I to the section.

10. So far as Sub-section (2) of Section 12, is concerned all that it provides is that the landlord is prohibited from instituting a suit on the ground of non-payment of the standard rent or permitted increases unless he has given notice in writing demanding the standard rent or permitted increases and one month has expired after the notice. This is so to say a locus poeni-tentiae and therefore a further 'protection' afforded to the tenant. By virtue of Sub-section (2) he gets a second chance or opportunity to pay the defaulted arrears of standard rent or permitted increases.

11. Then we come to the important provisions of Sub-section (3) as it now stands. Sub-sections (3) (a) and (3) (b) are complementary and should be read together. Both the sub-sections deal with a case where the tenant has defaulted in the payment of rent or| permitted increases and the notice contemplated in Sub-section (2) has already been served upon him and the one month's period mentioned therein has expired. The main difference between Sub-section (3) (a) and Sub-section (3) (b) is that Sub-section (3) (a) makes it mandatory upon the Court to pass a decree for eviction if the conditions laid down therein are fulfilled. The crucial words are 'the Court shall pass a decree for eviction'. By contrast Sub-section (3) (b) is couched in negative language and as we shall presently show from its provisions, gives a wide discretion to the Court. It begins by saying '...no decree for eviction shall be passed in any such suit if...' and then lays down the conditions which should be fulfilled if the tenant has to escape a decree for eviction. In laying down the conditions a wide discretion is given to the Court to relax the conditions.

12. Under Sub-section (3) (a) four conditions are laid down (1) that the rent is payable monthly; (2) that there is no dispute regarding the amount of standard rent or permitted increases; (3) that such rent or increases should be in arrears for a period of six months or more and (4) that the tenant neglects to make payment thereof until the expiration of the period of one month after notice referred to in Subsection (2). If these conditions are fulfilled then it is clear that the mandatory requirement of Sub-section (3) (a) is that a decree shall be passed. Obviously therefore Sub-section (3) (a) is a very special case, special because of the very gross circumstances created by the conduct of the tenant. Sub-section (3) (a) provides an exception to the general rule laid down in Sub-section (1). Being an exception to the general rule Sub-section (3) (a) must necessarily be strictly construed and the Courts must insist that its several conditions are strictly fulfilled. Secondly it may be noted that this is the only case contemplated in the whole of Section 12 where the Court is left with no option but to pass a decree. We may also in this connection incidentally refer to a minor amendment made by Section 5 (1) of the Maharashtra Act 14 of 1963. Previously in Sub-section (3) (a) the words were 'Court may pass a decree' but these were substituted by the words 'Court shall pass a decree'. Notwithstanding the use of the word 'may' in the original Sub-section (3) (a) of Section 12 this Court had already taken the view as far back as 1956 that the word 'may' in Section 12(3)(a) is used in its compulsory, obligatory sense and means 'shall' or 'must', and therefore the Court is bound to pass a decree for eviction as soon as it is satisfied that the requirements of Section 12(3)(a) of the Act are satisfied. The amendment therefore made in 1963 merely gave effect to that decision. (see ), Kurban Hussen v. Rati-kant).

13. The next thins to notice about Sub-section (3) (a) is that the question of the tenant's willingness or readiness to pay the amount of the standard rent and permitted increases as contemplated in Sub-section (1) of Section 12 does not count at all, so far as the applicability of Sub-section (3) (a) is concerned. This is of some importance because of the argument that has been advanced in this case that the Explanation I to Section 12 applies to Section 12(3)(a).

14. Next we turn to Section 12(3)(b) and the contrast in the language is that Sub-section (3) (b) begins with the words '...no decree for eviction shall be passed in any such suit if' and then lays down the several conditions. Sub-section (3) (b) only applies to cases other than those falling under Sub-section (3) (a). That is clear from its opening words 'In any other case' by which we understand any case not falling within Sub-section (3) (a). The conditions for the coming into effect of Sub-section (3) (b) are (1) that the tenant pays or tenders in Court the standard rent and permitted increases (2) on the first day of hearing of the suit or on or before such other date as the Court may fix; (3) that the standard rent and permitted increases must be the amount 'then due': (4) that the tenant thereafter continues to pay or tender in Court regularly such rent and permitted increases till the suit is finally decided and (5) that the tenant also pays the costs of the suit 'as directed by the Court'. These words 'as directed by the Court' have already been construed by the Supreme Court in as meaning that 'the tenant is under an obligation to pay the costs if the Court so directs but not otherwise'. Two things may be noted about this sub-section. First, that the sub-section virtually gives a discretion to the Court because it provides that the tenant will pay or tender the rent in arrears and the permitted increases on the first day of the hearing of the suit or 'on or before such other date as the Court may fix'. It is here that the Court has a wide discretion to grant time to pay up the amount due from the tenant. Secondly, the question of readiness and willingness to pay as contemplated by Sub-section (1) of Section 12 nowhere enters into consideration where the applicability of Section 12(3)(b) is being considered, the emphasis being only on the fact of payment or tender.

15. Sub-section (4) of Section 12 merely gives power to the Court to pay out of any amount paid or tendered by the tenant, to the landlord such amount towards payment of rent or permitted increases due to him as the Court thinks fit. This is merely an ancillary power given to the Court once the rent is paid or deposited in Court.

16. Then we come to the important provisions of the Explanation I. It lays down four conditions and if the four conditions are fulfilled a certain consequence follows. The four conditions are fl) that there should be a dispute as to the amount of standard rent or permitted increases recoverable under the Act; (2) that the tenant shall have made an application to the Court under Sub-section (3) of Section 11 for fixing the standard rent or determining the permitted increases; (3) before the expiry of the period of one month after notice referred to in Sub-section (2); and (4) that the tenant thereafter continues to pay or tender the amount of rent or permitted increases specified in the order made by the Court. If these four conditions are fulfilled by the tenant then the Explanation says that 'the tenant shall be deemed to be ready and willing to pay such amount'. By the use of the words 'the tenant shall be deemed to be ready and willing to pay such amount' clearly a legal fiction has been created. If before the expiry of one month from the date of the notice the tenant applies under Section 11(3) and thereafter pays or tenders the amount of rent or permitted increases, the tenant who had previously disputed the rent and/or permitted increases, would still be considered to be ready and willing to pay them though in fact he had disputed them. This is a further safeguard or 'protection' to the tenant in that even though the tenant may have disputed the standard rent and/or the permitted increases, even though he may not have paid them in spite of the notice under Sub-section (2), if within a month after the notice he makes an application under Section 11(3) he would still be considered ready and willing to pay the rent and permitted increases. Three points may here be noted as regards this Explanation. It uses the expression 'the tenant shall be deemed to be ready and willing to pay such amount'. These words 'ready and willing to pay' do not occur in any other provision of the section except in Sub-section (1) of Section 12. Therefore the Explanation is merely an Explanation to Section 12(1) and whereas Sub-section (1) of Section 12 contemplates a case of genuine or real readiness and willingness to pay, the Explanation contemplates by statutory provision a fictional case of readiness and willingness to pay. Some of the authorities refer to the Explanation as laying down a rule of evidence and others that it creates a conclusive presumption. We would, however, refer to it as creating a legal fiction. Secondly it is at once clear upon the terminology of the Explanation that it can never apply to a case under Sub-section (3) (a) because the whole basis of the applicability of the Explanation is the existence of a dispute as to the amount of standard rent or permitted increases whereas the essential pre-condition to the applicability of Sub-section (3) (a) is that 'there is no dispute'. Sub-section (3) (a) clearly therefore applies only where there is no dispute as to the standard rent or permitted increases while the Explanation applies only when there is a dispute. Since the ambits to the two provisions are distinct and indeed contradictory the Explanation can never apply to the sub-section. It was urged before us that at any rate the Explanation I would apply to Sub-section (3) (b). That is a moot point and unnecessary to decide for the purpose of the questions referred to us and we would make it expressly clear here that we do not wish to decide that point, though we have pointed out above that there are no words used in Sub-section (3) (b) contemplating 'readiness and willingness to pay' such as are used in the Explanation and in Sub-section (1) of Section 12.

17. As regards the Explanation II, it says that 'For the purposes of Sub-section (2) reference to 'standard rent' and to 'permitted increase' shall include reference to 'interim standard rent' and 'interim permitted increase' specified under Sub-section (3) or (4) of Section 11'. The important clause in this Explanation upon which some argument on behalf of the landlord was based was the opening clause 'For the purposes of Sub-section (2)'. It was argued that because of the use of these express words the Explanation II is merely an Explanation to Sub-section (2) of Section 12 and no more. It cannot apply to any other provision of Section 12. In other words, it cannot be utilised for construing the words 'standard rent' and 'permitted increases' in Sub-sections (3) (a) and (3) (b). The whole purpose of this argument on behalf of the landlord is to demonstrate that Sections 11(3) and 11(4) have nothing whatsoever to do with the provisions of Section 12(3). Sub-sections (3) (a) and (3) (b) of Section 12 throughout use the expression 'standard rent or permitted increases' or refer to them, but those sub-sections nowhere refer to 'interim standard rent' and 'interim permitted increases'. On that omission an argument could be advanced that therefore Sub-sections (3) (a) and (3) (b) apply irrespective of the fixation of interim standard rent and interim permitted increases under Section 11(3). The answer to that argument on behalf of the tenant is to rely on Explanation II. Therefore as a necessary corollary to their main argument it had to be argued on behalf of the landlord that the Explanation II is an Explanation only so far as Sub-section (2) of Section 12 is concerned and no more and it cannot apply to Sub-section (3) (a) of Sub-section (3) (b). We may at once deal with this argument here so as to clear the way for a further consideration of the effect of Section 11 upon Section 12.

18. Though no doubt the Explanation II begins with the words 'For the purposes of Sub-section (2)' it is clear that Sub-section (2) is an essential pre-condition or step which a landlord must take before he can possibly file a suit under Sub-section (3) (a) or Sub-section (3) (b), and obtain a decree upon the conditions therein specified. Therefore if the law merely specified that at that stage the standard rent and permitted increase would include interim standard rent and interim permitted increase then by Explanation II it would necessarily follow that, that would be the meaning of the words 'standard rent' and 'permitted increase' throughout the further proceedings that have to be taken on the basis of the notice. Indeed, the notice though a notice under Section 12(2) is in terms referred to in Sub-section (3) (a) and the provisions of Sub-section (2) are brought into play in Sub-section (3) (a). It has also been settled by the Supreme Court now that a notice demanding standard rent is a condition precedent to the institution of a suit in ejectment on the ground of non-payment of rent. Vide the recent decision of the Supreme Court in Civil Appeal No. 110 of 1966 decided on 17-12-1968 (SC), Shah Navinchandra Thakarlal v. Jitendra Narsingrao Jodh. We hold therefore that although the Explanation II is prefaced by the words 'For the purposes of Sub-section (2)' it will equally be applicable in the interpretation of the words 'standard rent' and 'permitted increase' in Sub-section (3) (a) of Section 12. We only refer to Sub-section (3) (a) because that sub-section alone falls to be construed for our purpose and we would leave open the question whether the Explanation II can apply to the other provisions of Section 12.

19. Both Explanation I and Explanation II of Section 12 refer to the provisions of Section 11 and we may now deal with those provisions in so far as they impinge upon the construction of Section 12. Sub-section (1) gives the general power to the Court to fix the standard rent and permitted increases in certain cases which are specified in Clauses (a) to (e) of that sub-section. We are not concerned with any of the clauses except Clause (e) which refers to a case 'where there is any dispute between the landlord and the tenant regarding the amount of standard rent'. Sub-section (2) of Section 11 similarly gives power to the Court to determine the amount of permitted increases 'if there is any dispute between the landlord and the tenant' regarding it. The word 'dispute' in both the sub-sections fixes the nature of the dispute referred to in Sub-section (3) (a) and in Explanation I of Section 12.

20. Then we turn to Sub-sections (3) and (4) of Section 11. Both these sub-sections deal with the fixation of standard rent. Sub-section (3) in addition deals with the fixation of permitted increases but not Sub-section (4), because it only speaks of a suit for recovery of rent. That is the first distinction between the two sub-sections. The second distinction is that Sub-section (3) contemplates a case of an application being made simpliciter to the Court for fixing the standard rent or for determining the permitted increases whereas Sub-section (4) contemplates a prior suit for recovery of rent. The third distinction is that under Sub-section (3) the tenant has to make an application but under Sub-section (4), the tenant must be granted relief against excessive rent if 'the Court is satisfied that the tenant is withholding the rent on the ground that the standard rent is excessive and standard rent should be fixed'. Thus Sub-section (3) of Section 11 gives the tenant a right to apply for fixation of the standard rent or for determination of the permitted increases and Sub-section (4) gives him an independent remedy in a suit for recovery of rent.

21. The conditions for the applicability of Sub-section (3) of Section 11 are: (1) that the tenant shall have applied for fixation of the standard rent or for determination of the permitted increases and (2) that the tenant must be a person who has received a notice from his landlord under Sub-section (2) of Section 12. If these conditions are fulfilled the court is bound to 'forthwith specify the amount of rent or permitted increases which are to be deposited in Court by the tenant'. The Court has also to make an order directing the tenant to deposit such amount in Court or at the option of the tenant to make an order to pay to the landlord such amount thereof as the court may specify, pending the final decision of the application. If the amount is deposited in Court by the tenant power is given to the Court to order payment of such reasonable sum to the landlord towards payment of rent or increases due to him, as the court thinks fit. If the tenant fails to pay the landlord or to make the deposit his application is liable to be dismissed.

22. Sub-section (4) of Section 11 is couched in a somewhat peculiar language. It contemplates as a basic condition to its application a suit for recovery of rent, and provides that at any stage of such a suit whether with or without a claim for possession of the premises, if the court is satisfied that the tenant is withholding the rent on the ground that the rent is excessive and standard rent should be fixed, the court shall, and in any other case if it appears to the court that it is just and proper to make such an order the court may make an order directing the tenant to deposit in court forthwith such amount of the rent as the court considers to be reasonably due to the landlord, or at the option of the tenant an order directing him to pay to the landlord such amount thereof as the Court may specify. The other provisions are merely ancillary to the main power to make an order directing the tenant to deposit or pay. The rent so fixed is referred to as 'interim standard rent'. No such word is used in Sub-section (3) but it is clear that even upon the provisions of Sub-section (3) the amount which the tenant is directed to deposit in court or pay to the landlord is interim standard rent or interim permitted increases. This is clear when read in the light of the Explanation II to Section 12 which was added at the same time that these two sub-sections were added to Section 11 i. e., on 28th March 1963 by the Maharashtra Act 14 of 1963.

23. We have already said that Sub-section (4) contemplates a suit for recovery of rent and provides 'where at any stage of a suit for recovery of rent, whether with or without a claim for possession of the premises...'. The words 'whether with or without a claim for possession of the premises' are of some significance. As we have shown, the tenant has a right by his written statement in such a suit to dispute the recovery of rent by raising a dispute as to the standard rent. Now it is conceivable therefore that the landlord aiming at getting possession of the premises and not so much concerned with the money part of his claim represented by the arrears of rent, may merely file a suit for possession, no doubt on the ground that the tenant is in arrears of rent, but he may not claim the rent or any decree on the basis of the arrears. Such a suit will not obviously answer the requirement of Sub-section (4) 'where at any stage of a suit for recovery of rent' because no recovery of rent is asked for. In such a case no doubt the tenant would be deprived of his remedy under Sub-section (4) and would have to go for fixation of the standard rent or permitted increases only under Sub-section (3) of Section 11. We stress this point here because it helps to fix the scope of Sub-section (3). We shall presently show that this is precisely what happened in a case reported in 70 Bom LR 714 = AIR 1968 Bom 1109 Dhansukhlal v. Dalichand Virchand, before the Supreme Court.

24. Now the Courts below have held that the present case is governed by Sub-section (3) (b) of Section 12 and since the tenant deposited Rs. 546/- they held that it could not be said that the defendant was not ready and willing to pay and therefore have granted him relief under Section 12(3)(b) and negatived the prayer of the landlord for possession of the premises. The contention on behalf of the landlord, supplemented by the argument advanced by Mr. Mody appearing on behalf of one of the interveners, has been that the Courts below were in error in holding that the case is governed by Section 12(3)(b) and that they should have held that the case is governed by Section 12(3)(a). The contention is that once notice has been given as required by Sub-section (2) of Section 12, the only mode of raising a dispute would be by the tenant taking action under Explanation I which prescribes, that the tenant should apply under Section 11(3) 'before the expiry of the period of one month after notice referred to in Sub-section (2)', and thereafter continue to pay or tender the amount of rent or permitted increases specified in the order made by the Court. But he contended that in the present case the tenant never made any application under Section 11(3), and he did not raise any dispute at all. At any rate, it must be held that there was no dispute as contemplated by Section 12(3)(a). It is really a case of no dispute and Section 12(3)(a) applies. So far as Section 11(4) is concerned, it was sought to be brushed aside by saying that it was merely procedural. It confers no right upon the tenant to apply at all, but merely gives a general power to the Court to pass certain orders. It also does not contemplate a dispute within the meaning of Sub-section (3) (a) or (3) (b). Alternatively it has been contended that the dispute referred to in Section 12(3)(a) cannot have reference to a so-called dispute under Section 11(4).

25. The whole argument proceeds upon the basis that Section 11(4) cannot apply or affect any provision of Section 12. It also presumes that the Explanation I to Section 12 applies to Section 12(3)(a).

26. We cannot accept these contentions. We have already pointed out while considering the provisions of Section 12 that the areas of the two provisions contained in Section 12(3)(a) and Explanation I are totally different. The pre-condition to the applicability of Section 12(3)(a) is that 'there is no dispute regarding the amount of standard rent or permitted increases'. Section 12(3)(a) thus postulates a case 'where there is no dispute' whereas the Explanation I postulates a case 'where there is a dispute' and we cannot understand under these circumstances how the one provision can possibly apply to the other.

27. Secondly there is to be found in the Explanation I the expression 'ready and willing to pay' and the Explanation provides that if the tenant applies within one month of the notice referred to in Sub-section (2) of Section 12, 'the tenant shall be deemed to be ready and willing to pay'. When the Explanation I uses this expression it obviously refers to the self-same expression in Section 12(1) which gives immunity to the tenant from ejectment so long as the tenant pays or is ready and willing to pay the amount of standard rent and permitted increases. It is clear, therefore, that the Explanation I is merely an Explanation to Subsection (1) of Section 12. What is more important, however, is that no such expression such as 'ready and willing to pay' occurs in Sub-section (3) (a). In fact the conditions postulated in Sub-section (3) (a) are such that there can be no question of readiness and willingness of the tenant to pay; Sub-section (3) (a) of Section 12 postulates a case where the tenant does not dispute the standard rent and yet neglects to make payment of the standard rent or permitted increases until the expiration of the period of one month after notice. Obviously those conditions are the very antithesis of readiness and willingness to pay. This is an additional reason, therefore, why the Explanation I can never be attracted to the case under Section 12(3)(a). The contention advanced taking advantage of the Explanation I that unless the tenant makes an application under Section 11(3) (that being the only mode in which he could establish his readiness and willingness to pay,) he must be held to have neglected to make the payment, cannot be accepted.

28. In our opinion, Sub-section (3) (a) of Section 12 contemplates a category of cases which is unique and that category of cases is separately provided for and separately treated in Sub-section (3) (a) alone. The conditions are four in number and if those conditions are fulfilled then the consequence also is equally distinctive. The Court is bound to pass a decree for eviction and no option or discretion is left to the Court. The conditions are as we have already indicated that the rent should be payable monthly; that there should be no dispute regarding the standard rent and permitted increases; that the standard rent or permitted increases should be in arrears for a period of six months or more and lastly that the tenant should have neglected to have paid them until the expiration of one month from the notice under Sub-section (2). Now if all the conditions are to be fulfilled there is no doubt that in the present case there was a dispute raised. The two courts below actually fixed the standard rent at the rate of Rs. 26/- per month when the contractual rent agreed upon was Rs. 28/- per month. Such a case cannot fall under Section 12(3)(a).

29. In just such a case as this the Supreme Court also came to the conclusion that the provisions of Section 12(3)(b) would be attracted and not of Section 12(3)(a). We have already referred to the decision in . In that case the facts were these: The defendant was the plaintiff's tenant on a monthly rental of Rs. 70/-. On 1st December 1956 the plaintiff served a notice on the defendant to deliver possession of the premises alleging that he had failed to pay rent since 1st Oct. 1955. This notice was received by the defendant on 3rd Dec, 1956. The defendant by his reply dt. 7th December 1956 contended that he had paid rent at the agreed rate till 1st April 1956 and that he was entitled to get credit for Rs. 200/- being the costs incurred by him for the electric installation in the premises. It was only on 5th January 1957 that the tenant moved the Court under Section 11(1) of the Bombay Rent Act praying for an order fixing the standard rent of the premises occupied by him and also for an order under Section 11(3) specifying interim rent. The plaintiff was informed of this application by the defendant on 7th January 1957 and on 8th January 1957 the defendant deposited in Court Rs. 500/- to the credit of the plaintiff. Nevertheless the plaintiff filed a suit on the 27th January 1957 and on 14th February 1957 the defendant tenant applied to the court for an order specifying the rate at which interim rent could be deposited. On 28th March 1958 the Civil Judge fixed the standard rent at Rs. 50/- per month and in view of the deposit made by the tenant dismissed the plaintiff's claim for a decree in ejectment. The district Court in appeal confirmed the finding and held that the defendant has complied with the requirements of Section 12(3)(b). In revision, however, the High Court of Gujarat reversed the decision of the Courts below, holding that the tenant had not complied with the requirements of Section 12(3)(b) because he had not deposited in Court the amount of standard rent at the rate determined by the order of the District Court and had not paid even the interim rent at the rate fixed by the Court of first instance and that he had not paid costs of the suit which he was bound under Section 12(3)(b) to pay. In appeal by special leave it was contended that the requirements of Section 12(3)(b) had been fulfilled. The Supreme Court upheld this contention (Vide paragraph 13) as follows:--

'The claim made by the defendant fell within the terms of Section 12(3)(b) and not Section 12(3)(a). The defendant had contended by his reply dated December 7, 1956 to the notice served by the plaintiff, that the contractual rent was excessive; he had then raised the same contention in the application filed for fixation of standard rent and in his written statement filed in the suit. There is nothing in Section 12 to support the contention raised by Mr. Chatterjee on behalf of the plaintiff that the dispute concerning standard rent contemplated by Clause (b) of Sub-section (3) is one which must have been raised before service of the notice under Section 12(2). The entire tenor of the section is against that interpretation'.

No doubt in this case the Supreme Court did find that the District Court was apparently in error in assuming that by tendering in Court rent at the rate specified in the order dated 14th February 1957 the requirement of Section 12(3)(b) regarding payment or tender of standard rent was satisfied. They pointed out that standard rent for the purpose of Section 12(3)(b) (as it then stood) was such rent as was already determined or may be finally determined under Section 11(1) but that the amount deposited by the defendant pursuant to the order of the Court was not less than the amount fixed by the trial Court. Therefore the error if any of the District Court was a minor error which the High Court could not have jurisdiction to correct in exercise of the powers under Section 115 of the Code of Civil Procedure. But the observations which we have quoted clearly go to indicate that the construction which we have put upon the effect of Sections 12(3)(a) and 12(3)(b) read in the light of Section 11(4) is the correct construction. Explanation I is not the only mode in which the tenant's readiness and willingness to pay can be established. It is no doubt one mode and if fulfilled will give the tenant protection under Section 12 itself, but there is nothing in the provisions of Section 12 to indicate that the tenant cannot raise a dispute such as is contemplated in Section 12 when he comes to be sued in the court for recovery of rent by raising the issue as to standard rent in his written statement in answer to the suit. In our opinion, the cumulative effect of Section 11(4) read with the provisions of Section 12 squarely will be that he can do so.

30. To hold otherwise would be to render nugatory the provisions of Sub-section (4) of Section 11. Both Subsections (3) and (4) deal with the fixation of interim standard rent. These provisions were made so that the interim standard rent would be speedily determined. The Supreme Court in Abbasbhai's case, has itself indicated that the issue should normally be taken up first for decision so that the landlord may not remain without the fruits of his property pending the dispute as to standard rent. The whole purpose of Subsection (4) is that that dispute should be determined and determined speedily in the interest of both the landlord and the tenant. It is that interim standard rent which now by virtue of Explanation II has to be paid under Subsection (3) (b) of Section 12 by the tenant. It cannot be therefore that the tenant has no remedy under Section 11(4).

31. Next it was sought to be contended that the word 'dispute' occurring in Sub-section (3) (a) is limited to such a type of dispute as is contemplated in Explanation I to Section 12, namely a dispute which must be a dispute raised within one month of the notice as contemplated in Section 12(2) or in any event, it is a dispute which must have been raised prior to the suit at least by a letter or other writing. If the tenant does not do this and the landlord has served a notice upon his tenant upon the provisions of Sub-section (2) of Section 12 and the tenant has allowed one month to expire from the date of service of the notice then the landlord would get a vested right to a decree in his favour. This contention was sought to be advanced on the basis of a decision of the Gujarat High Court in (1966) 7 Guj LR 945, Chuni-lal Shivlal v. Chimanlal Nagindas, where it was held that in order to avoid the operation of Section 12(3)(a) of the Bombay Rent Control Act the dispute in regard to standard rent or permitted increases must be raised at the latest before the expiry of one month from the date of service of the notice under Section 12(2) and it is not enough to raise a dispute for the first time in the written statement. In coming to this conclusion the Gujarat High Court relied upon an earlier decision of the same Court in Ambalal v. Babaldas, . So far as Chunilal's case, (1966) 7 Guj LR 945 is concerned, the Division Bench did not examine afresh the decision in Ambalal v. Babaldas but merely proceeded to apply it. It only considered one additional argument namely the argument that Amba-lal's case had been impliedly overruled by the decision of the Supreme Court in . The question as posed by the Division Bench at page 949 was as follows:--

'The question is not as to what is the correct construction to be placed on Section 12(3)(a) but it is a more narrow and limited question, namely whether the decision in (Supra) which has placed a certain construction on Section 12(3)(a) continues to be good law after the decision in (Supra) and whether in view of the latter decision a different construction is required to be placed on Section 12(3)(a)'.

With respect we may say that we are not in agreement with the decision in Ambalal's case itself as to the construction of Section 12(3)(a) and therefore Chunilal's case (1966) 7 Guj LR 945 which merely followed Ambalal's case also does not commend itself to us. The ratio of the decision in Ambalal's case has been reproduced at page 950 of 7 Guj LR in Chunilal's case. The construction which was put upon Sub-section (3) (a) of Section 12 in Ambalal's case was as follows: (see ):

'In order that Sub-section (3) (a) may apply four conditions are, as stated earlier, necessary. The words, 'such rent' in Sub-section (3) (a) are used with reference to the preceding words, viz. 'monthly rent' in respect of which there is no dispute. Then follow two more conditions, viz., that such rent is in arrears for six months or more at the date of the notice and further that there is neglect on the part of the tenant to make payment 'thereof' even after the lapse of one month after the date of service of the notice. It may be observed that the neglect contemplated by Sub-section (3) (a) is in respect of payment 'thereof', that is of such rent monthly, and not a dispute as regards the standard rent or permitted increases and which is in arrears for six months or more. It follows, therefore, that such arrears of six months or more must be due at the date of the notice because in order to avoid Sub-section (3) (a), the tenant has to pay such arrears before the expiry of one month from the date of the notice under Sub-section (2)'.

The basis of this reasoning is that the words 'such rent' in Sub-section (3) (a) of Section 12 qualify 'monthly rent'. We are unable to accept this construction. Sub-section (3) (a) provides 'where the rent is payable by the month and there is no dispute regarding the amount of standard rent or permitted increases, if such rent or increases are in arrears for a period of six months or more and the tenant neglects to make payment thereof ... ... the Court shall pass a decree for eviction ... ...'. The expression is not merely 'if such rent or increases are in arrears', but the composite expression is 'if such rent or increases are in arrears for a period of six months or more'. Now in the opening clause there are two subjects referred to (1) 'rent which is payable' and (2) 'the amount of standard rent or permitted increases'. The Gujarat view holds that by the subsequent clause 'if such rent or increases are in arrears for a period of six months' by the use of the word 'rent' is implied the monthly rent, that is to say the first subject of the opening clause. On the other hand it seems to us that by the use of the words 'such rent or increases' it is made to refer back to the second subject viz. 'the amount of standard rent or permitted increases'. The word 'thereof' used later in the sub-section again refers back to the same 'standard rent or permitted increases' and not to the monthly rent. It was because it held that the words 'such' are used with reference to the preceding words 'monthly rent' (and not as we hold that the words 'such rent' are used with reference to the preceding words 'the amount of standard rent' etc.) that the Gujarat High Court said that the dispute in regard to the standard rent or permitted increases contemplated is the one which must exist at the date of the notice under Section 12(2) or at any rate before the expiry of one month from the date of its service and not a dispute raised subsequently in a written statement with a view to avoiding the operation of Section 12(3)(a). Since we are unable to accept that construction we are unable to accept the ratio of the decision in the above two cases. We cannot accept the contention therefore that the word 'dispute' in Section 12(3)(a) is, limited only to a dis-pute raised within one month of the notice as contemplated in Section 12(2). Such a view we have already said would also render the provisions of Section 11(4) almost nugatory.

32. We may also add that both the Gujarat view as well as the decision of the Supreme Court in were cases prior to the amendment of Section 11 and the addition of Sub-sections (3) and (4) to Section 11 by the Maharashtra Act 14 of 1963 with effect from 28th March 1963 and whatever doubt may have subsisted under the former Sub-section (3) of Section 11, after the addition of Subsections (3) and (4) to Section 11 and the inclusion of Explanation II in Section 12, such doubt has been removed. There can be no doubt after this amend-nent that the tenant can if necessary by his written statement ask for the fixation of standard rent if the other conditions of Sub-section (4) are ful-filled. By virtue of the Explanation II the words 'standard rent and permit-ted increases' used in Section 12(2) and as we have shown used in Section 12(3) would also equally apply to interim standard rent and interim permitted increases. The effect of all these provisions is to give to the tenant a further right to apply for the fixation of standard rent in the event of a suit. If so, he has been given a right to dispute the standard rent and that dispute is the dispute contemplated in Section 12(3)(a) of the Act. Therefore even if the tenant raises a dispute in answer 'to a suit for recovery of rent, it would be a dispute within the meaning of Sub-section (3) (a) and would take it out of the provisions of Sub-section (3) (a) because so long as there is a dispute Sub-section (3) (a) will not apply. As regards the theory of a vested right accruing in favour of the landlord once a notice under Section 12(2) is served and one month expires, the contention is solely based upon certain remarks of the Supreme Court in the decision in Manorarna S. Masure-kar v. Dhanlaxmi G. Shah, . (See the second last paragraph). The passage relied upon is as follows :--

'The landlord is vested with the right to recover possession of the premises if the rent is in arrears for a period of six months or more, 'the tenant neglects to make payment thereof until the expiration of the period of one month after notice referred to in Sub-section (2),' and the other conditions of Sub-section (3) are satisfied'.

This case was decided directly under Section 12(3)(a) of the Bombay Rent Act but the remarks relied upon were made under peculiar circumstances. Section 12(3)(a) as we have pointed out above is subject to four conditions namely that the rent must be payable monthly, that there must be no dispute regarding the amount of standard rent or permitted increases, that such rent or increases should be in arrears for a period of six months or more and last-ly that the tenant should be in arrears until the expiration of the period of one month after the notice. Now in the case before the Supreme Court it was already established that all these requirements had been fulfilled and yet the tenant was seeking to establish that she was readv and willing to pay the rent before the institution of the suit and that she was entitled to protection under Sub-section (1) of Section 12. The whole argument succinctly put was (at page 139) as follows:--

'It is to be noticed that the rent was in arrears for a period of more than six months. The tenant neglected to make payment of the arrears of rent within one month of the service of the notice by the landlord under Sub-section (2) of Section 12. The rent was payable by the month, and there was no dispute regarding the amount of the rent. The case was, therefore, precisely covered by Sub-section (3) (a) of Section 12. Nevertheless the appellant submitted that as she was ready and willing to pay the rent before the institution of the suit, she could claim protection under Sub-section (1) of Section 12.'

It was in that context and after first holding that the requirements of Subsection (3) (a) of Section 12 were duly fulfilled, that the Supreme Court said that the landlord is vested with the right to recover possession of the premises. Of course if all the conditions of Section 12(3)(a) are fulfilled then a vested right would arise but we do not think that the vested right can arise when any one of the conditions of Subsection (3) (a) of Section 12 is not fulfilled nor does the Supreme Court say so. Therefore the remarks referred to do not lay down that as soon as the notice is served and one month expires a vested right arises in favour of the landlord.

33. For the contention advanced on behalf of the landlord that having regard to the provisions of Section 12 the only mode of raising a dispute is by application under Section 11(3) as contemplated in Explanation I, reliance was placed on the decision of the Supreme Court in Shah Dhansukhlal Chhaganlal v. Dalichand Virchand Shroff, . The passage relied on is at page 717 (of Bom LR) = (at page 1112 of AIR):--

'Section 12(1) must be read with the Explanation and so read it means that a tenant can only be considered 'to be ready and willing to pay' if, before the expiry of the period of one month after notice referred to in Subsection (2), he makes an application to the Court under Sub-section (3) of Section 11 and thereafter pays or tenders the amount of rent or permitted increases specified by the Court. We have already noted that the tenant made no payment within the period of one month of the notice of ejectment and although in his written statement he raised a dispute about the standard rent he made no application in terms of Section 11(3) of the Act. The readiness and willingness to pay has therefore to be 'judged in the light of the facts of the case. Where as here a suit is filed on the ground that the tenant was in arrears for a period of more than 6 months and although raising a dispute as to the standard rent or permitted increases recoverable under the Act, the tenant makes no application in terms of Section 11(3) he cannot claim the protection of Section 12(1) by merely offering to pay or even paying all arrears due from him when the court is about to pass a decree against him.'

34. No doubt the passage says that the tenant can only be considered to be ready and willing to pay if he applies in terms of the Explanation but Dhansukhlal's case, was not at all concerned with the provisions of Section 12(3)(a). The only plea that was considered in that case was whether the tenant was entitled to protection under Section 12(1) and it was while considering that plea and in the context of that plea that this passage occurs. As a matter of fact in Dhansukhlal's case, the Assistant Judge had held that Section 12(3)(b) of the Rent Act applied to the case but the tenant had not fulfilled the conditions laid down by Section 12(3)(b) (see page 715) and in the arguments before the High Court they themselves observed that 'it was common ground between the parties before the Assistant Judge that the case of the defendant fell within Section 12(3)(b) of the Rent Act' (See page 716). It was only an additional point taken before the Supreme Court that the tenant was also entitled to the protection under Section 12(1) which point of course was negatived. Then Their Lordships proceeded to consider whether Section 12(3)(b) had been complied with by the tenant and in the second last paragraph of the iudgment (at page 718) they confirmed the view taken bv the Assistant Judge and the High Court that the tenant had not complied with Section 12(3)(b). Therefore this decision can be no authority for any interpretation or construction of Section 12(3)(a). In fact upon the concession of the parties Section 12(3)(a) never applied to that ease and never fell to be considered. We do not think therefore that the remarks referred to above can be invoked in aid of any construction of Section 12(3)(a).

35. Another contention raised was that the correct date on which the existence or non-existence of the dispute had to be judged is really the date of institution of the suit. This argument is sought to be based upon an un-reported judgment of the Supreme Court in Civil Appeal No. 361 of 1966, Ram-chandra Narsay and Co. v. Wamanrao V. Shenoy decided on 13-3-1969 and reported in the Unreported Supreme Court Judgments Vol. I 1969 page 233 = (reported in AIR 1969 NSC 72). The remarks at page 336 on the third point were relied on. A mere perusal of the judgment shows that in that case there was an assignment of the arrears of rent and it was sought to be urged that on assignment the rent ceased to be rent and became a debt in law rendering Section 12(3)(b) inapplicable and it was in the context, that Mr. Justice Hegde made the said remarks (at page 336) that 'on the date the suit was instituted there was valid cause of action for evicting the appellant. What the Court has to consider in every case is whether the suit was validly instituted'. These remarks in the circumstances of the case cannot possibly be taken as a general interpretation of Section 12(3)(a).

36. Coming to the decisions of this court several decisions were cited by either side in support of their contentions. Some of these are referred to in the two differing judgments of this Court, particularly the decision of the Division Bench in Special Civil Appln. No. 459 of 1965, decided on 14/15-12-1965 (Bom) and of another Division Bench taking the contrary view in Special Civil Appln. No. 512 of 1966, decided on 2-4-1968 (Bom). There are also a number of decisions of single Judges of this court. It is unnecessary to go into the details of these judgments. Most of them are based on one or the other of the views which we have discussed above. So far as we are con-cerned. we are clear that the tenant can raise a dispute as to the standard rent even after the suit is filed by his written statement and that would be a dispute for the purposes of Section 12 and that the dispute contemplated in Section 12(3)(a) is not limited to the dispute within one month of the notice under Section 12(2) as required by, Explanation I. We have stated our reasons for this conclusion and we do not think it necessary to consider each of the cases cited individually. We answer both the questions in the affirmative. The papers will now be sent back to the Division Bench dealing with constitutional matters and the costs of this reference will also be subject to such orders as they may choose to pass.

37. Answered in the affirmative.


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