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Labhabhai Vithaldas Vs. Laxmidas Vithaldas - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtGujarat High Court
Decided On
Judge
Reported in(1963)4GLR567
AppellantLabhabhai Vithaldas
RespondentLaxmidas Vithaldas
Cases ReferredAllanur v. Balchand
Excerpt:
- - if we adopt the view that the demand of rent under section 12(2) of the act must strictly conform to this definition and not otherwise the notice would be bad. to hold that in view of the wording of section 12(2) of the act if the landlord should decide all these points and that if he makes a mistake the notice itself would become bad is in my opinion not the intention of the legislature. the contention that the notice in the present case is bad because in the notice rent was demanded at rs......1940 the rent at which they were first let or(iv) in any of the cases specified in section 11 the rent fixed by the court.sub-sections (1) and (2) of section 12 of the act read as follows:(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 pro- visions 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.....
Judgment:

V.B. Raju, J.

1. The first point urged in this revision application is that when a notice under Section 12(2) of the Bombay Rents Hotel and Lodging House Rates Control Act 1947 which will hereinafter be referred to as the Act is given for the payment of arrears of rent not at the rate of contractual rent but at a rate higher than standard rent the notice itself becomes invalid and in such a case no suit can be filed as provided in Section 12(2) of the Act. In order to decide this question it is necessary to refer to the relevant provisions of the Act Section 7 of the Act reads as follows:

Except when the rent is liable to periodical increment by virtue of an agreement entered into before the first day of September 1940 it shall not be lawful to claim or receive on account of rent for any premises any increase above the standard rent unless the landlord was before the coming into operation of this Act entitled to recover such increase under the provisions of the Bombay Rent Restriction Act 1939 or the Bombay Rents. Hotel Rates and Lodging House Rates (Control) Act. 1944 or is entitled to recover such increase under the provisions of this Act.

Section 5(10) of the Act defines standard rent as follows:' 'Standard rent in relation to any premises means:

(a) where the standard rent is fixed by the Court and controller respectively under the Bombay Rent Restriction Act 1939 or the Bombay Rents Hotel Rates and Lodging House Rates (Control) Act 1944 such standard rent; or

(b) where the standard rent is not so fixed subject to the provisions of Section 11.

(i) the rent at which the premises were let on the 1st day of September 1940 or (ii) where they were not let on the first day of September 1940 the rent at which they were last let before that day or

(iii) where they were first let after the first day of September 1940 the rent at which they were first let or

(iv) in any of the cases specified in Section 11 the rent fixed by the Court.

Sub-sections (1) and (2) of Section 12 of the Act read as follows:

(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 pro- visions 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.

Explanation to Section 12 of the Act reads as follows:

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 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.

2. The scheme of the Act is to provide that recovery of any amount in excess of standard rent or permitted increases is illegal. It also provides that no suit can be filed by landlord for the recovery of possession on account of the fact that rent is in arrears unless a notice is given that rent is in arrears and the suit must be filed after the expiry of one month next after notice in writing. But the Act itself recognises that there can be a dispute as to the standard rent and has therefore enacted the explanation to Section 12.

In cases where the standard rent is fixed by the Court and therefore there can be no dispute as to the amount of standard rent there is no difficulty. In cases where the standard rent is not fixed by the Court there can be a dispute as to the amount of standard rent or permitted increases recoverable under the Act. Nevertheless as provided in Section 12(2) no suit can be instituted by a landlord against a tenant on the ground of non-payment 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. The words standard rent and permitted increases are used in the subsection in view of the provisions of Section 7 of the Act whereby the recovery of rent in excess of the standard rent and permitted increases is illegal. The contention that the notice itself must correctly state the amount of standard rent before it can be a valid notice cannot be accepted because if there is a dispute as to the amount of standard rent the landlord can- not If foresee what ultimately will be determined by the Court as the standard rent. The words standard rent and permitted increases are used in Sub-section (2) of Section 12 of the Act in view of the provisions contained in Section 7 of the Act. But these words are not important and they do not affect the validity of the notice. It is true that the expression standard rent is defined in Sub-section (10) of Section 5 of the Act which has been quoted above but the wording of Sub-section (2) of Section 12 does not mean that that amount should be specified in the notice given under Sub-section (2) because as I have already stated there can be a dispute as regards the standard rent also as regard the period during which the amount has not been paid. Merely because there are such disputes a notice given under Sub-section (2) of Section 12 of the Act would not become invalid so as to take away the right of the landlord to institute a suit one month after the notice.

3. It is contended by the Learned Counsel for the applicant that if the standard rent is not fixed by the Court the notice must state the contractual rent and reliance is placed on Harivallabh v. Meghji 8 Sau. Law Reporter 348 where the learned Judges of the Saurashtra High Court repelled the contention that the expression standard rent or permitted increases in Sub-section (2) of Section 12 of the Act meant the standard or permitted increases as ultimately fixed by the Court and that the demand in notice must conform to that figure. Such an interpretation would lead to an impossible position in that the landlord would be required to approach the Court immediately after letting out the premises for fixation of the standard rent. The learned Judges also observed as under:

Standard rent occurring in Section 12(2) does not mean the standard rent which may be fixed by the Court under the provisions of Section 11 but is the agreed or contractual rent though it may be that in the exercise of its powers under Section 11 in fixing the standard rent in the course of the suit the Court may reduce it on any of the grounds specified in Clauses (a) to (e) of Section 11(1). But the fact that the rent may be reduced does not mean that the notice of demand would become invalid if the rent demanded therein is not equivalent to the standard rent ultimately fixed by the Court. To require the landlord to demand by the notice rent at this both figure is to set an impossible condition and in our opinion such a construction of the expression is not in consonance with the scheme of Section 12.

4. The learned Judges of the Saurashtra High Court referred to the definition of standard rent in Section 5(6) of the Saurashra Rent Act and observed that according to the definition standard rent is a rent of the suit premises at which the premises was first let after 1-1-1941 and that the definition of standard rent itself contemplates that the standard rent is the contractual rent subject to the provisions of Section 11 that is to say the contractual rent remains the standard rent until the Court fixes the standard rent under Section 11. The learned Judges therefore held that in cases where the standard rent is not fixed a notice under Section 12(2) shall mention the figure of the contractual rent and that if this is not done the notice will be defective and would not entitle the landlord to file a suit.

With great respect it is difficult to agree with this reasoning. The Act does not contemplate two different standard rents one according to fixation by landlord and the other according to the fixation by the Court. In the Act there is only one standard rent and the definition of Standard Rent is given in Sub-section (10) of Section 5 of the Act. If we adopt the view that the demand of rent under Section 12(2) of the Act must strictly conform to this definition and not otherwise the notice would be bad. The object of using the expression standard rent and permitted increases in Section 12(2) of the Act is not to provide a test for the validity of a notice but the expression has been used in view of the wording of Section 7 of the Act and in view of the fact that the recovery of the amount in excess of the standard rent and permitted increases is illegal and is also an offence under Section 18 of the Act. The object of Section 12(2) of the Act is to give an opportunity to a tenant in arrears by requiring that the landlord should give a notice to the tenant that he is in arrears and by further providing that in case there is a dispute in regard to the amount of arrears the tenant should go to the Court according to the procedure laid down in Section 12 of the Act It is the fact of the notice which is important under Section 12(2) and not the correct- ness of the contents of the notice. It is not for the landlord to take the position of a Judge and determine the standard rent as defined in Section 5(10) of the Act. To take the position that the landlord should place himself in the position of a Judge for ascertaining the standard rent and that if he makes a mistake the notice itself would become invalid is in my humble opinion unreasonable. There can be even disputes as to what the contractual rent is. There can be disputes as to what rent at which the premises were let on 1st of September 1940 was. There can be disputes as to whether the premises were let on 1st September 1940 or they were let before that date or after that date All these points have to be considered by the Court and not by the landlord. To hold that in view of the wording of Section 12(2) of the Act if the landlord should decide all these points and that if he makes a mistake the notice itself would become bad is in my opinion not the intention of the legislature. The expression standard rent and the permitted increases in Section 12(2) is used as already observed because of the wording of Section 7 of the Act. That portion of Sub-section (2) of Section 12 of the Act is not material for deciding whether the notice is valid or not. The contention that the notice in the present case is bad because in the notice rent was demanded at Rs. 100/- per month instead of the contractual rent of Rs. 15/- per month must therefore be rejected.

5. The second and third points urged are that the notice must also terminate the tenancy at the end of year of the tenancy under Section 106 of the Transfer of Property Act and that the tenancy being of immovable property for manufacturing purposes should be terminated by six months notice. But having regard to the decision in Allanur v. Balchand 3 G.L.R. 182 where I have held that this view is not sound it is not necessary to discuss this question again and no reasons have been advanced before me for the re-consideration of that view. The application is therefore rejected with costs.


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