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Chunilal Shivlal (by His General Power-attorney Holder Sumanlal Chunilal) Vs. Chimanlal Nagindas - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtGujarat High Court
Decided On
Judge
Reported in(1966)7GLR945
AppellantChunilal Shivlal (by His General Power-attorney Holder Sumanlal Chunilal)
RespondentChimanlal Nagindas
Cases ReferredPunjalal v. Bhagwatprasad
Excerpt:
- - the trial court found that the defendant was in arrears of rent from kartak sud 1, samvat year 2014 and was, therefore, not ready and willing to pay the standard rent of the suit premises so as to be entitled to the protection of section 12(1) but inasmuch as the defendant had deposited all the arrears of rent during the pendency of the suit, the defendant could claim the protection of section 12(3)(b). the trial court negatived the applicability of section 12(3)(a) on the ground that the defendant had raised a dispute in regard to the standard rent of the suit premises in his written statement and one of the conditions requisite for the applicability of section 12(3)(a) was, therefore, not satisfied. the lower appellate court agreed with the view taken by the trial court and held.....p.n. bhagwati, j.1. this revision application raises a question as to the true interpretation of section 12(3)(a) of the bombay rents, hotel and lodging house rates control act, 1947, (hereinafter referred to as the rent act). the question is at what stage must a dispute as to the standard rent and permitted increases be in existence in order to repel the applicability of section 12(3)(a). a division bench of this court in ambalal v. babaldas (1962) iii g. l. r. 625 held that on a proper interpretation of section 12(3)(a) and the scheme of the entire section, the dispute in regard to the standard rent or permitted increases contemplated is the one which is in existence 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.....
Judgment:

P.N. Bhagwati, J.

1. This Revision Application raises a question as to the true interpretation of Section 12(3)(a) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, (hereinafter referred to as the Rent Act). The question is at what stage must a dispute as to the standard rent and permitted increases be in existence in order to repel the applicability of Section 12(3)(a). A Division Bench of this Court in Ambalal v. Babaldas (1962) III G. L. R. 625 held that on a proper interpretation of Section 12(3)(a) and the scheme of the entire section, the dispute in regard to the standard rent or permitted increases contemplated is the one which is in existence 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 the one raised subsequently in a written statement with a view to avoiding the operation of Section 12(3)(a). But this view, it is contended, can no longer stand and must be held to be overruled by the subsequent decision of the Supreme Couft in Vora Abbasbhai v. Haji Gulamnabi (1964) V G. L. R. 55 and having Regard to the Supreme Court decision the dispute can be raised at any stage in order to take the case out of Section 12(3)(a). In view of this contention Divan J. before whom the Revision Application originally came up for hearing referred it to a Division Bench and that is how the matter has come before us.

2. In order to appreciate how the question arises, it is necessary to state briefly a few facts giving rise to the Revision Application. Prior to the termination of his tenancy on 31st March 1958 the defendant was a tenant of the plaintiff in respect of certain premises, hereinafter referred to as the suit premises, situate in the Town of Surat. The contractual rent of the suit premises was Rs. 191- per month and according to the plaintiff, the defendant was also liable to pay permitted increases at the rate of Rs. 21- per month. The defendant fell in arrears of rent from Kartak Sud 1, Samvat Year 2014, and the plaintiff, therefore, addressed a notice dated 10th March 1958 to the defendant terminating the tenancy of the defendant on 31st March 1958 and calling upon the defendant to pay up the arrears of rent within one month from the receipt of the notice. The defendant did not reply to the notice nor did he comply with the requisitions contained in the notice. The plaintiff, therefore, ultimately filed Civil Suit No. 442 of 1958 in the Court of the Civil Judge, Junior Division, Surat, on 25th April 1958 claiming to recover arrears of rent and possession of the suit premises from the defendant. There were two grounds on which possession of the suit premises was sought by the plaintiff. The first ground was that the suit premises were required for the immediate purpose of demolition ordered by the Municipality within the meaning of Section 13(1) (hhh) of the Rent Act, but this ground does not survive for it was rejected by both the Courts below and it has not been pressed before us on behalf of the plaintiff. The second ground was the one which formed the main subject matter of controversy between the parties and that ground was non-payment of rent. The plaintiff urged that the defendant was in arrears of rent from Kartak Sud 1, Samvat Year 2014, and though the plaintiff had given the notice dated 10th March 1958 under Section 12(2), the defendant had neglected to make payment of the arrears of rent within one month from the receipt of the notice and the defendant was, therefore, not entitled to the protection of sec 12(1) and a decree for eviction was bound to go against the defendant by reason of non-compliance with Section 12(1) or in any event under Section 12(3)(a). The defendant disputed that he was in arrears of rent from Kartak Sud 1, Samvat Year 2014, and alleged that he had paid rent upto Ashad Vad Samvat Year 2014 and was always ready and willing to pay the standard rent and permitted increases and was, therefore, entitled to the protection of Section 12(1). The defendant raised a dispute in the written statement in regard to the standard rent of the suit premises and contended that the contractual rent of Rs. 19 per month was excessive and that the standard tent should be fixed at Rs. 12 per month. The defendant also denied that the plaintiff was entitled to recover any amount from the defendant by way of permitted increases. During the pendency of the suit the defendant deposited in the trial Court various amgunts aggregating to Rs. ' 705/-which were sufficient to cover all the arrears of rent even if they were calculated at the rate of Rs. 19 per month from Kartak Sud 1, Samvat Year 2014, and on the strength of this deposit, urged that in any event the defendant was entitled to the protection of Section 12(3)(b). The trial Court on a consideration of the evidence recorded in the suit determined the contractual rent of Rs. 19 per month to be the standard rent of the suit premises but held that the plaintiff was not entitled to recover any amount from the defendant by way of permitted increases. The trial Court found that the defendant was in arrears of rent from Kartak Sud 1, Samvat Year 2014 and was, therefore, not ready and willing to pay the standard rent of the suit premises so as to be entitled to the protection of Section 12(1) but inasmuch as the defendant had deposited all the arrears of rent during the pendency of the suit, the defendant could claim the protection of Section 12(3)(b). The trial Court negatived the applicability of Section 12(3)(a) on the ground that the defendant had raised a dispute in regard to the standard rent of the suit premises in his written statement and one of the conditions requisite for the applicability of Section 12(3)(a) was, therefore, not satisfied. The trial Court accordingly refused to pass a decree for eviction against the defendant and dismissed the plaintiff's suit in so far as the claim for recovery of possession of the suit premises was concerned. The plaintiff thereupon preferred an appeal in the District Court, Surat. The lower appellate Court agreed with the view taken by the trial Court and held that the defendant had failed to pay the rent from Kartak Sud 1, Samvat Year 2014, and that the rent was, therefore, in arrears for a period of over six months at the date of the notice under Section 12(2), but since the defendant had raised a dispute in regard to the standard rent in the written statement it could not be said that there was no dispute in regard to the standard rent and the conditions of Section 12(3)(a) were, therefore, not satisfied and the defendant was accordingly entitled to claim the protection of Section 12(3)(b) by complying with the requirements of that section and inasmuch as the defendant had complied with the requirements of Section 12(3)(b), no decree for eviction could be passed against the defendant. The lower appellate Court accordingly confirmed the decree passed by the trial Court and dismissed the appeal. This led to the filing of the present Revision Application by the plaintiff.

3. When the Revision Application came up for hearing before Divan J. it was conceded on behalf of the plaintiff, as it is conceded before us now, that if the case of the defendant did not fall within Section 12(3)(a), the defendant was not liable to be evicted for he had complied with the conditions of Section 12(3)(b) and was entitled to protection under that section. But the argument of the plaintiff was that the case was covered by Section 12(3)(a) and the plaintiff was therefore, entitled to a decree for eviction against the defendant. Now there are four conditions which must be satisfied to attract the applicability of Section 12(3)(a) and they are: (1) the rent must be payable by the month; (2) there must be no dispute regarding the amount of standard rent and permitted increases; (3) such rent or increases must be in arrears for a period of six months or more; and (4) the tenant must have neglected to make payment thereof until the expiration of a period of one month after the notice under Section 12(2). There was no dispute that conditions (1), (3) and (4) were satisfied in the present case. The rent was admittedly payable by the month; the defendant had failed to pay rent from Kartak Sud 1, Samvat Year 2014, according to the finding of the lower appellate Court which finding being one of fact must be regarded as beyond challenge in revision and the rent was, therefore, in arrears for a period of over six months on 10th March, 1958 when the notice under Section 12(2) was given and despite the notice under Section 12(2) the defendant had neglected to make payment of such arrears within a period of one month from the date of service of such notice. The only dispute was as regards the fulfilment of the second condition. There was admittedly no dispute in regard to the standard rent or permitted increases upto the date of the tiling of the written statement and the dispute was raised for the first time only in the written statement but the argument of the defendant was that the raising of the dispute in the written statement was sufficient to constitute non-fulfilment of the second condition so as to take the case out of Section 12(3)(a). This argument was clearly unsustainable in view of the decision of a Division Bench of this Court in Ambalal v. Babaldas (supra) where it has been held that the dispute in regard to the standard rent or permitted increases contemplated is the one which is in existence 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 the one raised subsequently in a written statement with a view to avoiding the operation of Section 12(3)(a). It was apparent that if this decision was good law, the second condition would have to be held to be fulfilled and the case of the defendant would directly fall within Section 12(3)(a). The defendant however urged that this decision was no longer good law in view of the subsequent decision of the Supreme Court in Vora Abbasbhai v. Haji Gulamnabi (supra) and in view of the Supreme Court decision it must be held that even if a dispute in regard to standard rent or permitted increases were raised for the first time in the written statement, that would be sufficient to avoid the operation of Section 12(3)(a). The question which, therefore, arose before Divan J. was whether the decision of this Court in Ambalal v. Babaldas (supra) must be held to be overruled by the Supreme Court decision in Vora Abbasbhai v. Haji Gulamnabi (supra) in so far as this point was concerned. Another question was also raised before Divan J. and that was in regard to the scope and ambit of the power of this Court to interfere in the present Revision Application. The question was whether the amended Section 29(2) of the Rent Act governed the decision of the Revision Application or the Revision Application fell to be decided by reference to Section 115 of the Code of Civil Procedure. If the Revision Application was to be decided in the light of Section 115 of the Code of Civil Procedure, it was apparent that the Revision Application would fail for admittedly no question touching the jurisdiction of the Court was involved in the Revision Application. It was only if the amended Section 29(2) of the Rent Act was applicable that this Court could interfere and set aside the decision of the lower appellate Court on the ground that the lower appellate Court had committed an error of law in applying Section 12(3)(b) when the proper section applicable was Section 12(3)(a). Now there was a decision of Vakil J. sitting as a single Judge in Punamchand Joshi v. Ramjibhai Magcmlal Civil Revision Applications Nos. 13 and 26 of 1962 dated 2nd December, 1965 (now reported at (1966) VII G. L. R. 807), in which the view was taken that the amended Section 29(2) of the Rent Act was retrospective in operation and governed not only Revision Applications filed subsequent to the amendment but also Revision Applications pending at the date of the amendment and according to this decision, the amended Section 29(2) applied to the present Revision Application notwithstanding that it was filed prior to the amendment, but the validity of this decision was also questioned before Divan J. The learned Judge, therefore, having regard to the importance of the questions raised before him, referred the Revision Application to a Division Bench.

4. Of the two questions arising in the Revision Application, that relating to the scope and ambit of the jurisdiction of the High Court was not pressed on behalf of the defendant and it was conceded by Mr. C. G. Shastri, learned advocate appearing on behalf of the defendant, that the decision of Vakil J. in Punamchand Joshi v. Ramjibhai Maganlal laid down the correct law and he did not wish to challenge the correctness of that decision. We must, therefore, proceed on the basis that the amended Section 29(2) of the Rent Act is retrospective in operation and governs Revision Applications filed prior to the amendment and the present Revision Appli cation must therefore be decided in the light of the extended jurisdiction conferred under the amended Section 29(2) of the Rent Act. This Court has under the amended Section 29(2) jurisdiction to interefere with the decision of the lower appellate Court if that decision is found to be con trary to law and since the challenge of the plaintiff is grounded on an error of law alleged to have been committed by the lower appellate Court, this Court is competent to entertain the challenge and to set aside the decision of the lower appellate Court if the challenge is well founded.

5. That takes us to the next question which was the main question debated between the parties and which really necessitated the reference to the Division Bench. Before we proceed to examine this question it is necessary to understand its precise scope and extent. 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 Ambalal v. Babaldas (supra) which, has placed a certain construction on Section 12(3)(a) continues to be good law after the decision in Vora Abbasbhai v. Haji Gulamnabi (supra) and whether in view of the latter decision a different construction is required to be placed on Section 12(3)(a). In order o arrive at a proper determination of this question it is necessary first to ascertain the ratio of the decision in Ambalal v. Babaldas (supra) and to see what were the reasons which guided the Court in ' reaching that decision. In Ambalal v. Babaldas (supra) the question directly arose as to what is the stage at which dispute in regard to the standard rent or permitted increases must be raised in order to take the case out of Section 12(3)(a) and Shelat J. (as he then was) delivering the judgment of the Court answered the question by saying :

On a proper interpretation of Sub-section (3)(a) and the scheme of the entire section, it appears to us that the dispute in regard to the standard rent or permitted increases contemplated is the one which is in existence at the date of the notice or at any rate before the expiry of one month after its service and not the one raised subsequently in a written statement with a view to avoid the operation of Sub-section (3)(a)....

The reasons which prevailed with the Court in reaching this conclusion may be stated in the words of the learned Judge himself as follows:

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 in 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). It is clear that the object of enacting Sub-section (3)(a) was to give an absolute right to a landlord to possession in a gross case where the tenant is in arrears of rent for a period of six months or more, where he has no excuse not to pay as such rent is not in dispute and where he yet neglects to pay such arrears, although he is given a locus penitentiae to pay up the arrears by a notice under Sub-section (2) before a month expires from the date of service of such notice.

It will be seen from this extract from the judgment that the reasoning of the Court was based almost entirely on the use of the words 'such rent' and 'thereof in Section 12(3)(a). One of the conditions of Section 12(3)(a) required that 'such rent' must be in arrears for six months or more at the date of the notice under Section 12(2) and in the light of the preceding words 'such rent' meant rent which was payable by the month and in respect of which there was no dispute. It was, therefore, necessary in order to attract the applicability of Section 12(3)(a) that the dispute must not be in existence at the date of the notice under Section 12(2). The other condition of Section 12(3)(a) provided that there should be neglect on the part of the tenant to make payment 'thereof until the expiration of one month from the date of service of the notice under Section 12(2) and the word 'thereof in the context stood for 'such rent', that is, rent payable by the month, not in dispute as regards standard rent or permitted increases and in arrears for six months or more. The neglect for a period of one month from the date of service of the notice contemplated by Section 12(3)(a) was in respect of payment of rent which was 'monthly and not in dispute as regards the standard rent or permitted increases' and which was 'in arrears for six months or more'. This condition therefore required for its fulfilment that there should be no dispute as regards the standard rent or permitted increases for the entire period of one month from the date of service' of the notice under Section 12(2). If a dispute in regard to the standard rent or permitted increases were raised prior to the expiration of the said period of one month, the neglect would no longer be a neglect in respect of payment of rent of which it could be said that there was no dispute as regards the standard rent and permitted increases and it would not be possible to say that there was neglect in respect of payment 'thereof that is, of such rent until the expiration of the said period of one month. The Court therefore held, relying primarily on the words 'such rent' and 'thereof that in order to attract the operation of Section 12(3)(a) there should be non-existence of the dispute not only at the date of the notice under Section 12(2) but that such non-existence must continue upto the date of expiration of a period of one month from the date of service of the notice under Section 12(2). If there is non-existence of the dispute right upto the expiration of a period of one month from the date of service of the notice under Section 12(2), the condition of Section 12(3)(a) which requires that there should be no dispute as regards the standard rent or permitted increases would be satisfied and the case would fall within that section. It was for this reason that the Court said that the dispute in regard to the standard rent and permitted increases contemplated in Section 12(3)(a) is the one which is in existence at the date of the notice or at any rate before the expiry of a period of one month after its service and not the one raised subsequently in a written statement with a view to averting the operation of Section 12(3)(a).

6. Now let us see whether this conclusion of the Division Bench in Ambalal v. Babaldas (supra) or the reasoning behind it is in any manner affected by the decision of the Supreme Court in Vora Abbasbhai v. Haji Gulamnabi (supra). The facts of the case before the Supreme Court were that the tenant was in arrears of rent for a period of more than six months and the landlord, therefore, gave a notice dated 1st December 1956 to the tenant under Section 12(2) calling upon the tenant to pay up the arrears of rent. The tenant replied to the notice on 7th December 1956 and in his reply he contended that the contractual rent was excessive. The tenant also preferred an application on 5th January 1957 praying for fixation of the standard rent under Section 11(1). Thereafter, whilst the application for fixation of the standard rent was pending, the landlord filed a suit for ejectment against the tenant on 27th January 1957. The tenant in the written statement filed by him in answer to the suit reiterated his contention that the contractual rent was excessive and submitted that the standard rent should be fixed by the Court. On these facts the question arose whether the case fell within Section 12(3)(a) or Section 12(3)(b). Now the rent was admittedly payable by the month and was in arrears for a period of over six months at the date of the notice under Section 12(2) and the defendant had neglected to make payment of the same until the expiration of the period of one month from the date of service of the notice and conditions (1), (3) and (4) of Section 12(3)(a) were, therefore, satisfied. But the point in controversy was as to whether the second condition which required that there should be no dispue as regards the standard rent or permitted increases was fulfilled. Mr. Chatterjee who appeared on behalf of the plaintiff contended that the dispute concerning standard rent or permitted increases contemplated by Section 12(3)(a) is one which must have been raised before service of the notice under Section 12(2) and since there was admittedly no dispute in regard to the standard rent or permitted increases at the date of service of the notice under Section 12(2) by the landlord on the tenant, the second condition was satisfied and the case was governed by Section 12(3)(a). This contention of Mr. Chatterjee was rejected by the Supreme Court and in rejecting that contention Shah J. delivering the judgment of the Supreme Court made the following observations which were strongly relied upon by the defendant in the present case:

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.

It was contended on behalf of the defendant that in view of these observations the first part of the conclusion of the Division Bench in Ambalal v. Babaldas (supra), namely, that the dispute in regard to the standard rent or permitted increases must be in existence at the date of the notice under Section 12(2) must be held to be expressly overruled and if the first part of the conclusion was overruled, the second part, namely, that the dispute contemplated is the one which must be in existence at any rate prior to the expiry of one month from the date of service of the notice and not the one subsequently raised in the written statement, could not stand, since both parts were based on a common reasoning and overruling of one part must, therefore, by necessary implication carry with it the overruling of the other. The argument was that when the first part of the conclusion was overruled, the reasoning behind it must be deemed to have been rejected as invalid and if the reasoning was rejected as invalid the second part of the conclusion based upon the same reasoning must also fall to the ground. The premise on which this contention was founded was that the first part of the conclusion in Ambalal v. Babaldas (supra) was overruled by the observations of the Supreme Court quoted above and this premise was accepted as correct by Divan J. in his referring judgment. But with the greatest respect to the learned Judge, we do not think this premise is well-founded. We see nothing in these observations which has the effect of overruling any part of the decision in Ambalal v. Babaldas (supra) so far as the construction of Section 12(3)(a) is concerned. As a matter of fact these observations are wholly and completely in accord with the conclusion ' reached in Ambalal v. Babaldas. These observations were made in reference to the contention of Mr. Chatterjee that 'the dispute concerning standard rent contemplated by Clause (b) Clause (b) here seems to be a printer's devil for Clause (a) of Sub-section (3) is one which must have been raised before service of the notice under Section 12(2) and in rejecting this contention, the only proposition asserted by the Supreme Court was that in order to avoid the operation of Section 12(3)(a) it is not necessary that the dispute must be in existence at the date of service of the notice under Section 12(2). This was the limited proposition laid down by the Supreme Court in these observations and it was no different from that formulated in Ambalal v. Babaldas (supra). Ambalal's Case did not decide that in order to take the case out of Section 12(3)(a) the dispute in regard to the standard rent must necessarily be in existence at the date of service of the notice or else the case would fall within that section. If that had been the effect of the decision in Ambalal's Case, then surely it would have been in conflict with the observations of the Supreme Court. But what Ambalal's Case decided was that in order to attract the applicability of Section 12(3)(a) there must be non-existence of the dispute at the date of the notice and such non-existence must continue right upto the expiration of one month from the date of service of the notice so that if the dispute is raised at any time prior to the expiration of the said period of one month, the operation of Section 12(3)(a) would be excluded. The latest point of time at which, according to Ambalal's Case, the dispute in regard to the standard rent must be raised in order to avoid the operation of Section 12(3)(a) is the expiry of one month from the date of service of the notice. Ambalal's Case did not say that the dispute concerning standard rent must be raised before service of the notice in order to repel the applicability of Section 12(3)(a). The dispute may be raised at any time prior to the expiration of one month from the dale of service of the notice or in other words, the dispute must be in existence at the date of the notice or at any rate prior to 'the expiry of one month after service of the notice'. If the dispute is in existence prior to 'the expiry of one month after service of the notice' though subsequent to the date of the notice, that would be sufficient, according to Ambalal's Case to oust the operation of Section 12(3)(a). It is, therefore, not correct to say that Ambalal's Case decided in the first part of its conclusion that the dispute in regard to standard rent must be in existence at the date of the notice and that the said part must be held to be overruled by the observations of the Supreme Court in Vora Abbasbhai's Case. The fallacy lies in splitting up the conclusion in two parts and regarding each part as embodying a distinct and independent conclusion liable to be tested by reference to the observations of the Supreme Court. There are no two independent parts of the conclusion but the conclusion is one and single and it is that in order to exclude the operation of Section 12(3)(a) the dispute must be in existence at the latest before the expiry of one month after service of the notice'. The words 'at any rate' used by the Division Bench clearly bring out this meaning. And if this be the true ratio of the decision in Ambalal's Case, there is nothing in the observations of the Supreme Court which conflicts with it. It may be noted that in the case before the Supreme Court the dispute was in fact raised before the expiry of one month from the date of service of the notice and therefore according to the ratio of Ambalal's Case the operation of Section 12(3)(a) was excluded but Mr. Chatterjee tried to bring the case within Section 12(3)(a) by contending, contrary to the decision in Ambalal's Case, that the dispute must be raised at the latest before service of the notice and this contention was rejected by the Supreme Court. This contention was, as a matter of fact, contrary to the Explanation to Section 12 which contemplates raising of a dispute within a period of one month from the date of service of the notice and that is why presumably the Supreme Court observed that the tenor of the section was against that interpretation. The observations of the Supreme Court cannot, therefore, be regarded as having the effect of overruling the decision in Ambalal's Case and Ambalal's Case must still be regarded as good law.

7. It was then contended on behalf of the defendant that in any event the decision in Ambalal's Case in regard to the construction of Section 12(3)(a) must be held to be overruled by the decision of the Supreme Court in the more recent case of Ratilal Nazar v. Ranchhodbhai Shankerbhai : AIR1966SC439 In this case the Supreme Court decided the appeal on a consideration of Section 115 of the Code of Civil Procedure but certain observations were made by Mudholkar J. delivering the judgment of the Court on which the strongest reliance was placed on behalf of the defendant. The appellant before the Supreme Court was a tenant of certain premises belonging to the respondent. The contractual rent was Rs. 50/- per month. According to the landlord, the tenant was required, under the terms of the tenancy, to pay, in addition to rent, municipal taxes and electric charges for the electricity consumed by him. The tenant did not pay rent from June 1, 1956, for a period of over six months, in consequence of which the landlord gave a notice dated February 20,1957 terminating his tenancy and demanding payment of arrears of rent and other charges. As the tenant did not vacate the premises or pay the arrears of rent due from him, the landlord instituted a suit on April 1, 1957 for recovery of possession and arrears amounting to Rs. 838-11-0. This amount included rent in arrears, proportionate electric charges, municipal taxes and notice charges. In his written statement the tenant contended that the rent of Rs. 50 per month was inclusive of municipal taxes and electric charges. The tenant then applied for leave to amend the written statement and by an amendment which was allowed by the trial Court, the tenant contended that the contractual rent was excessive and the standard rent should be fixed at Rs. 30/- per month. The dispute in regard to the standard rent was thus raised for the first time in the amended written statement. The trial Court held that the standard rent was Rs. 50/- per month inclusive of municipal taxes and electric charges and since, at the first hearing of the suit, the tenant had deposited a sum larger than the amount due to the landlord according to this rate, the trial Court refused the relief for possession to the landlord under Section 12(3)(b). On appeal, the learned Principal Judge of the City Civil Court held that the tenant was bound to pay municipal taxes and electric charges and there was a bona fide dispute between the parties about the standard rent, but upon a construction placed by him on the provisions of Section 12, the learned Judge held that the case fell under Section 12(1) read with the Explanation and not under either Clause (a) or Clause (b) of Sub-section (3) of Section 12 and since the tenant had not complied with the conditions of Section 12(1) or the Explanation, the landlord was entitled to a decree for eviction against the tenant. The revision application of the tenant was summarily rejected by the High Court. The tenant thereupon appealed to the Supreme Court and the contention of the tenant was that he was entitled to the protection of Section 12(3)(b) since there was a dispute in regard to the standard rent and the case was covered by the decision of the Supreme Court in Jashwantrai Malukchand v. Anandilal Bapalal : [1965]2SCR350 where it was held that if there is a dispute in regard to the standard rent, the case would fall within Section 12(3)(a). Referring to this contention, Mudholkar J. said and these were the observations relied on strongly on behalf of the defendant:

prima facie the decision of this Court supports the contention of the appellant No doubt, by an erroneous construction of the relevant provisions the Principal Judge of the City Civil Court granted relief of possession to the respondent to which he would not have been entitled had the provision been rightly construed.

The defendant contended that these observations clearly showed that, according to the Supreme Court, on a correct construction of the provisions of Section 12, the landlord was not entitled to the relief of possession against the tenant and the tenant was entitled to the protection of Section 12(3)(b) despite the fact that the dispute in regard to the standard rent was raised for the first time only in the amended written statement and these observations had, therefore, the effect of overruling the decision in Ambala's Case. But this contention plausible though it may seem, is not well-founded. If we look at the judgment of the Supreme Court, it is clear that the Supreme Court decided the appeal on the limited ground that the High Court's jurisdiction to interfere with the decision of the learned Principal Judge was circumscribed by the provisions of section 115 of the Code of Civil Procedure and, therefore, even if the construction placed by the learned Principal Judge was erroneous, the High Court was not entitled to interfere in revision and the limitation placed on the powers of the High Court under Section 115 of the Code also circumscribed the power of the Supreme Court to interfere under Article 136 of the Constitution. In this view taken by the Supreme Court as to its jurisdiction, it was altogether unnecessary for the Supreme Court to consider whether the construction placed on the provisions of Section 12 by the learned Principal Judge was erroneous and whether, on the facts of the case, the

tenant was entitled to the protection of Section 12(3)(b). The Supreme Court did not, therefore, inquire into the merits of the question and observed after referring to the earlier decisions on the limited scope of the revisional jurisdiction under Section 115 of the Code of Civil Procedure:

We are bound by these decisions and therefore it is not open to us to examine the merits of the contention advanced by Mr. Peerzada.

The words which we have underlined above clearly show that the Supreme Court did not examine the merits of the question which was sought to be raised before them but disposed of the appeal merely on the ground of jurisdiction. It is no doubt true that the Supreme Court made the aforesaid observations relied upon on behalf of the defendant but these observations were, in the context, mere expression of prima facie opinion which did not constitute the decision of the Court. They were not expression of opinion of the Supreme Court on the question of construction of Section 12 and particularly Sub-section (3)(a) of that section. If the Supreme Court had intended to express an opinion on this question of construction despite its view that it was not open to it to do so, the Supreme Court would have dealt with the various arguments bearing upon the construction of Section 12 and examined whether on a true construction of Section 12(3)(a), the dispute contemplated is the one which must be in existence prior to the expiry of one month from the date of service of the notice under Section 12(2) or it can be raised at any time prior to the passing of the decree, for example, the written statement. The Supreme Court would not have contented itself by merely setting out its conclusion, leaving the reasoning to be gathered by implication. As a matter of fact we do not know what arguments were advanced before the Supreme Court on the question of construction: we do not know whether it was urged on behalf of the landlord that the dispute having been raised for the first time in the amended written statement, the operation of Section 12(3)(a) was not excluded. It is, therefore, not possible to regard these observations as expression of opinion of the Supreme Court on the question as to when the dispute in regard to the standard rent must be raised in order to avoid the operation of Section 12(3)(a). But even if these observations be read as embodying the opinion of the Supreme Court on this question of construction, such opinion has no binding effect. Obviously it does not constitute the ratio decidendi of the case. It is also not an obiter dictum for obiter dictum is an opinion expressed by the Court 'which opinion is expressed after careful consideration of all the argu-ments and which is deliberately and advisedly given'. Vide Jaswantlal v. Nichhabhai (1964) V G. L. R. 161 at 169. These observations cannot, therefore, be regarded as overruling the decision of this Court in Ambalal's Case.

7.1 It is, therefore, clear that Ambalal's Case still continues to be good law ' and as a matter of fact the following observations of Raghubar Dayal J. in Punjalal v. Bhagwatprasad (1963) IV G. L. R. 37, namely:

The landlord became entitled to recover possession when the tenant failed to pay rent and this right in him is not taken away by any other provision in the Act seem to lend support to the decision in Ambalal's Case in so far as it lays down that there must be non-existence of the dispute as regards the standard rent or permitted increases at the date of expiration of the period of one month after the notice under Section 12(2). These observations have also been relied upon by Diwan J. in the referring judgment as overruling the view taken in Ambalal's Case that even where a case falls under Section 12(3)(a) but the tenant pays or is ready and willing to pay the standard rent and permitted increases before the institution of the suit, the tenant can claim the protection of Section 12(1) but that question does not arise for consideration in the present case and we do not therefore deem it proper to express any opinion on the same. We may however point out that the question whether a tenant can claim the protection of Section 12(1) by paying up the arrears of rent before the institution of the suit in a case falling within Section 12(3)(a) was not before the Supreme Court and it would not be right to construe any observations made by the Supreme Court while dealing with a totally different question as containing an expression of opinion of the Supreme Court on the aforesaid question.

8. We are, therefore, of the view that, as laid down in Ambalal 's Case, in order to avoid the operation of Section 12(3)(a), 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 this view of the matter the case must be held to be covered by Section 12(3)(a) and the plaintiff must be held to be entitled to a decree for eviction against the defendant. There will, therefore, be a decree for eviction against the defendant. The defendant will hand over possession of the suit premises to the plaintiff on or before 1st December 1966. There will be no order as to costs of the Revision Application.


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