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Khadi Gramudyog Trust (Gramodyog) Mandal Vs. Ram Chandraji - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtAllahabad High Court
Decided On
Case NumberCivil Revn. No. 2217 of 1975
Judge
Reported inAIR1977All399
ActsUttar Pradesh Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 - Sections 20 and 20(4); Rent Control Act, 1947 - Sections 3(1)
AppellantKhadi Gramudyog Trust (Gramodyog) Mandal
RespondentRam Chandraji
Appellant AdvocateK.C. Saxena and ;Krishna Gopal Srivastava, Advs.
Respondent AdvocateAmarendra Nath and ;Shanti Bhushan Varma, Advs.
DispositionRevision dismissed
Excerpt:
.....relief can only be sought when the entire amount due from tenant deposited by him including the time barred arrears. - - 19,200. a notice demanding payment of this amount as well as to quit the accommodation was served upon the defendant on 9th july, 1973. in spite of it the defendant did not make any payment towards the rent due for the period january, 1963, to december, 1970. during the pendency of the suit the defendant deposited the rent for the period 1st may, 1973 to 28th february, 1975, together with interest and costs etc. 6. section 3 (1) (a) of the 1947 rent control act, as it stood before the 1954 amendment, provided--(a) that the tenant has wilfully failed to make payment to the landlord of any arrears of rent within a month of the service upon him of the notice of..........made by the tenant in the payment of rent, then irrespective of the fact whether arrears due were time-barred, the tenant should put the landlord in the same position as if no default in payment was made.8. in 1954 the legislature amended clause (a) of section 3 (1) of the 1947 rent control act. in substance, it deleted the word 'any' in the phrase 'any arrears of rent'. in mahipal singh v. mam chand (1963 all lj 496) the amended phrase came up for consideration. it was held that the phrase 'arrears of rent' cannotbe equated with 'arrears of recoverable rent' or 'arrears of enforceable rent'. the expression 'arrears of rent' is wide enough to include even those arrears recovery of which has already become barred by time.9. in behari lal v. babu ram (1964 all lj 458) a division bench.....
Judgment:
ORDER

Satish Chandra, J.

1. The only ground upon which the opposite party pressed the suit for ejectment of the tenant (applicant) was non-payment of rent in spite of a notice of demand. The trial court upheld this plea and decreed the suit for ejectment.

2. The tenant has come to this court in revision under Section 25, Small Cause Courts Act.

3. The findings are that the defendant was a tenant of the accommodation on a monthly rent of Rs. 200 since 1958. The defendant did not pay the arrears of rent for the period 1st January, 1963 to 31st December, 1970, amounting to Rs. 19,200. A notice demanding payment of this amount as well as to quit the accommodation was served upon the defendant on 9th July, 1973. In spite of it the defendant did not make any payment towards the rent due for the period January, 1963, to December, 1970. During the pendency of the suit the defendant deposited the rent for the period 1st May, 1973 to 28th February, 1975, together with interest and costs etc. totalling Rs. 5,972.43. Since he had not paid the arrears of rent for the period January, 1963 to December, 1970, he was not entitled to the benefit of Section 20 (4) of the Rent Control Act of 1972.

4. Mr. Saksena, learned counsel for the applicant submitted that Section 20 (4) did not require the tenant to deposit arrears of rent, the recovery of which had become barred by limitation. The tenant was entitled to relief against eviction even though he had not deposited the rent for the period January, 1963 to December, 1970. Sub-section (4) of Section 20 of the U. P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972, provides--

'In any suit for eviction on the ground mentioned in Clause (a) of Sub-section (2) if at the first hearing of the suit the tenant unconditionally pays or tenders to thelandlord or deposits in court the entire amount of rent and damages for use and occupation of the building due from him (such damages for use and occupation being calculated at the same rate as rent) together with interest thereon at the rate of nine per cent per annum and the landlord's costs of the suit in respect thereof, after deducting therefrom any amount already deposited by the tenant under Sub-section (1) of Section 30, the court may, in lieu of passing a decree for eviction on that ground, pass an order relieving the tenant against his liability for eviction on that ground.'

5. The relevant and material words which require consideration in this case are 'the entire amount of rent and damages...... due from him.' The question is: would the entire amount include arrears of rent, the recovery of which has become barred by time?

6. Section 3 (1) (a) of the 1947 Rent Control Act, as it stood before the 1954 amendment, provided--

'(a) That the tenant has wilfully failed to make payment to the landlord of any arrears of rent within a month of the service upon him of the notice of demand from the landlord.'

7. The phrase 'any arrears of rent' came up for interpretation in this court on a number of occasions. In Sohan Lal Kharbanda v. Dr. Sri Ram Sinha (1967 All LJ 503) it was held that the expression 'arrears of rent' is wide enough to include even those arrears which could not be recovered in a court of law. The reason is obvious. The remedy of a landlord to recover an arrear may be lost by reason of the law of limitation, but the tenant's liability in equity to pay the past rent subsists. By the use of the words 'any arrears' the Legislature emphasised that if a tenant is desirous of preventing the landlord from exercising his right of forfeiture by reason of the default made by the tenant in the payment of rent, then irrespective of the fact whether arrears due were time-barred, the tenant should put the landlord in the same position as if no default in payment was made.

8. In 1954 the legislature amended Clause (a) of Section 3 (1) of the 1947 Rent Control Act. In substance, it deleted the word 'any' in the phrase 'any arrears of rent'. In Mahipal Singh v. Mam Chand (1963 All LJ 496) the amended phrase came up for consideration. It was held that the phrase 'arrears of rent' cannotbe equated with 'arrears of recoverable rent' or 'arrears of enforceable rent'. The expression 'arrears of rent' is wide enough to include even those arrears recovery of which has already become barred by time.

9. In Behari Lal v. Babu Ram (1964 All LJ 458) a Division Bench reiterated that the amendment of Clause (a) in 1954 did not change the position and the principle laid down in Sohan Lal's case (1957 All LJ 503) was still applicable. In that case I observed that the object and intent of Clause (a) to Section 3 (1) is not to provide a foundation for the landlord's right to recover arrears of rent. It provides the basis for preventing the tenant's eviction. The term 'arrears of rent' would include rent for which a decree has been passed though its execution may have become time-barred, 'because passing of a decree does not extinguish the debt. It does not discharge the liability to pay the debt. I further observed--

'In view of Section 4, Transfer of Property Act, the provision of the Indian Contract Act are applicable supplementary to transfers based on contracts like sales, mortgages, leases. Under Section 108(c), Transfer of Property Act, a tenant is bound to pay the rent to the lessor. Section 37, Contract Act, says that a party to contract must perform his promise unless the performance is excused or dispensed with 'under the provisions of this Act, or of any other law'. An obligation created by contract subsists until discharged. The discharge can be by satisfaction, rescission (Section 64, Contract Act), novation (Section 62) or assignment (Section 40). It can under the Contract Act also be effected by the promisee dispensing with or remitting its performance (Section 63 Contract Act) or the contract becoming void (Section 66, Contract Act).

The 'other law' must 'be such as to nullify the obligation itself, e. g., the Insolvency Acts or the Rule of Damdupat under the Hindu Law (see AIR 1946 Nag 210). The Limitation Act is not such a law. It bars only the remedy of suit.'

10. In Bombay Dyeing and . v. State of Bombay : (1958)ILLJ778SC the Supreme Court ruled that it is settled law that the statute of limitation only bars the remedy but does not extinguish the debt, except in cases provided for by Section 28 of the Limitation Act, which does not apply to a debt. Under Section 25(3) of the Contract Act a barred debt is good consideration for afresh promise to pay the amount. Section 60 of the Contract Act provides that when a debtor makes a payment without any direction as to how it is to be appropriated, the creditor has the right to appropriate it towards a barred debt. In several cases it has been held that, a creditor is entitled to recover the debt from the surety, even though a suit on it is barred against the principal debtor. See Mahant Singh v. U. Ba Yi (AIR Gopala Aiyar ((1918) ILR 33 Mad 308) and Dil Mahomed v. Sain Das (AIR 1927 Lah 396). Similarly, when a creditor has a lien over good.s by way of security for a loan, he can enforce the lien for obtaining satisfaction of the debt, even though an action thereon would be time-barred: Narendra Lal v. Tarubala Dassi (AIR 1921 Cal 67).

11. The law in this respect is the same as in England, vide Halsbury's Laws of England (Hailshams Edn.) Vol. 20, page 602, para 756-- as well as in the United States -- see American Jurisprudence. Vol. 34, page 314.

12. In Corpus Juris Secundum. Vol. S3, page 922, it has been stated :--

'The general rule, at least with respect to debts or money demands, is that a statute of limitation bars, or runs against the remedy and does not discharge the debt or extinguish or impair the right, obligation, or cause of action.'

13. Clause (a) of Section 3 (1) of the 1947 Rent Control Act provided a conditional protection to the tenant. The purpose and object of Clause (4) of Section 20 of the 1972 Act is similar. It affords relief against liability for eviction subject to the condition that the tenant pays the entire amount of rent due from Mm. The word 'Entire' clarifies the legislative intent that whatever amount has not been paid should be paid or deposited to enable the tenant to pray that he be relieved against liability for eviction.

14. Mr. Saxena, learned counsel for the petitioner, relied upon a decision of the Supreme Court in New Delhi Municipal Committee v. Kalu Ram (Civil Appeal No. 988 of 1968, decided on 20th April 1976) : : AIR1976SC1637 . In that case Section 7(1) of the Public Premises (Eviction of Unauthorised Occupants) Act came up for consideration. It provided:--

'7 (1) Where any person is in arrears of rent payable in respect of any public premises, the estate officer may, byorder, require that person to pay the same within such time and in such instalments as may be specified in the order.'

15. It was held that the word 'payable', though of indefinite import, must be construed in the context in which it occurs. 'Payable' generally means that which should be paid. If the person in arrears raises a dispute as to the amount, the Estate Officer, in determining the amount payable, cannot ignore the misting laws. If the recovery of any amount is barred by limitation, it is difficult to hold that the Estate Officer could still insist that the said amount was payable. Section 7 only provided a special procedure for the realisation of rent in arrears and does not constitute a source or foundation of right to claim a debt otherwise time-barred. The court relied on a Privy Council decision in Hans Raj Gupta v. Official Liquidator of the Dehradun-Mussoorie Electric Tramway Co. Ltd. , and ultimately held that the word 'payable' in Section 7 in the context, in which it occurs means legally recoverable. If any arrear was barred by time, the same could not be recovered under Section 7(1).

16. In the case of Hans Raj Gupta the Privy Council considered the phrase 'money due' occurring in Section 186 of the Companies Act, 1913. It held that the words 'any money due from him or from the estate of the person whom he represents to the company' occurring in Section 186 must be confined to money due and recoverable in a suit by the company and they do not include any moneys which at the date of the application under Section 186 could not have been so recovered. Lord Russell, speaking for the judicial committee, observed that Section 186 was a section with an ancestral history. It is concerned only with moneys due from a contributory. It is a section which creates a special procedure for obtaining payment of moneys. It is not a section which purports to create a foundation upon which to base a claim for payment. It creates no new rights and the power of the court to order payment is discretionary. It may refuse to act under the section, leaving the Liquidator to sue in the name of the company, and it will readily take that course in any case in which it is made apparent that the respondent under this procedure, if continued, would be deprived of some defence or answer opento him in a suit for the same moneys. The provisions of Section 186 were held to be in pari materia with Section 101 of the English Act of 1862.

17. It will thus be seen that the word 'due' was held to have a special connotation in the context of the situation that the provision provided a special procedure for recovery of money without creating any new right and that the provision was discretionary. The court may well refuse to act under it. The word 'due' occurring in Section 20 (4) of the Rent Control Act of 1972 has entirely a different context. It occurs in a section which provides, not an alternative procedure for recovery of arrears of rent, but which confers upon the tenant a right to relief against eviction. This right is founded upon the condition that the rent due must be paid. It confers no discretion on the tenant. The provision is explicit and mandatory. Unless the condition is fulfilled, the right to relief against eviction does not accrue.

18. This, coupled with the fact that a time-barred arrears of rent continues to remain an undischarged debt, clearly means that the phrase 'entire amount of arrears of rent due' would include arrears of rent, recovery of which has become time-barred within meaning of Clause (4) of Section 20.

19. Mr. Saksena invited my attention to the decision of the Karnataka High Court in Satyendra Kumar v. M. V. Ramchandra Murthey (1975 Ren CJ 371) (Kant). This decision, though on a different point, in its turn refers to Virupaxayya Rudrayya Allimatih v. Anusuya-bai ((1967) 1 Mys LJ 231). In the latter ease it was held--

'It is evident that the object of provision of Section 29 is to secure prompt payment of rent by the tenant to the landlord during the pendency of proceedings for eviction under the Act and to discountenance any attempt on the part of the tenant from stopping the payment. A tenant who wants to avail the benefit of the Mysore Act is placed under an obligation to the prompt payment of rent and it is therefore, a penal provision. That 'being so the words 'rent due' used in Sub-section (1) of Section 29 must be construed strictly unless the statute makes an express provision directing the tenant to pay even time-barred rent and no liability can be imposed on the tenant to pay arrears of rent which has becometime-barred. Further it it is to be construed that the words 'rent due' include time-barred rent as well, it would lead to an incongruous situation. As already observed the object of the provision of Rule 29 is to secure prompt payment of rent by the tenant to the landlord during the pendency of the proceeding for eviction under the Mysore Act. It is clear that the disability is imposed by Sub-section (1) of Section 29 of the Act from contesting any proceeding without making deposit 'as laid down therein on a tenant against whom an obligation has been cast under Section 29'.

Now Section 21 of the Act provides that an order for eviction will be made if the tenant has not paid rent 'legally recoverable'. Then again in Sub-section (2) (b) of that section relief against forfeiture of tenancy is provided for the tenant who pays arrears of rent 'legally recoverable'. In the main proceeding, therefore, rent which the landlord would be entitled to is the rent which is legally recoverable. In other words he is not entitled to rent which is legally not recoverable or time-barred. If it is construed that the words 'rent due' in Sub-section (1) of Section 29 include time-barred rent also, the resultant position would be that the benefit conferred upon the landlord in the pending proceeding, viz., under Section 29, would be even more than what he would be entitled to under his main application for eviction, i. e., under Section 21. Thus having regard to the scheme of the Mysore Act, the words 'arrears of rent due' occurring 'in Sub-section (1) of Section 29 should be construed with due regard to the place and the context in which they are found. If so construed it means rent legally due and recoverable by action and does not include rent which is barred by the law of limitation.'

20. It will be seen that the main provision was that right to relief from eviction was available if the tenant pays rent legally recoverable. There is no such restriction on the liability to pay rent in the Rent Control Act of 1972 of this State Here the tenant has to pay the entire amount of rent due, and not merely that portion which is legally recoverable. This case is hence distinguishable.

21. In the result the revision fails and is accordingly dismissed with costs.


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