1. The appellant has been the tenant of the respondent for the past ten years. As he did not pay rent for August and September 1916 the respondent, on 1st February 1947, filed an application under the Rent Control Act for eviction. Very shortly afterwards, on 6th March 1947, the appellant filed an application before the Rent Controller under the same Act for fixing a fair rent. An order of eviction was obtained by the respondent on 15th September 1917; but no action could be taken by him in execution of that order, because the appellant immediately filed an appeal and obtained on 3rd October 1947 a stay order. On 1st November 1947, on the appellant's application, a fair rent was fixed at Rs. 41-4-0 from 1st October 1916 as against the contractual rent of Rs. 30, the order being passed 'without prejudice to the order of eviction and the order that might be passed in the appeal,' In pursuance of the order of the Rent Controller fixing the fair rent at Rs. 41-4-0, the appellant, on 5th November 1947 sent cheques for Rs. 536-4-0 and Rs. 60 to the respondent. On 21st November 1947, the respondent accepted these cheques for the amounts due to him under the Rent Controller's order; but he stated in acknowledging the receipt that he accepted the cheques without prejudice to the order of eviction and as damages for use and occupation. He presented the cheques to his bank four days later, on 25th November 1947. Soon realising that he had made a tactical mistake in accepting these cheques, the respondent sent the appellant a cheque on 9th December 1947 for the amount that he had received a few weeks earlier. The question for consideration before Govinda Menon J. in C. M. A. No. 91 of 1949, which has been raised before us again in this Letters Patent appeal, is whether in view of the acceptance of money sent by the appellant as rent, the appellant is to be regarded by virtue of the provisions of Section 116, T. P. Act, as a tenant of the respondent from month to month and, therefore, entitled under the Rent Control Act to continue in possession. Govinda Menon J. held that Section 116, T. P. Act, had no application and dismissed the appeal.
2. In his judgment, the learned Judge considered in detail the various authorities cited before him as to the effect of the acceptance of rent from a tenant. The cases have not been read to us in appeal; because the correctness of the principles laid down by the learned Judge and the effect of the decisions discussed by him are not now in dispute. If there had been an act by the tenant which entitled the landlord to bring the tenancy to an end and the landlord thereafter accepts rent, his action is construed as a waiver of his rights arising out of the forfeiture. Similarly, if after the issue of a notice to quit but before the period determining the lease has expired, the landlord accepts rent, it may be construed as a waiver of the right that has accrued to him upon the issue of notice to quit. Where, however, the period fixed by the notice has expired, the tenancy is at an end; and no money accepted after the termination of the tenancy operates as a waiver or gives the tenant any right to continue in possession. Since the learned Judge considered the various authorities on the effect of receiving rent after the determination of the lease, the authoritative decision of the Court of appeal in Clarke v. Grant, 1949 1 ALL. E. R. 768 has been received, which sets at rest once and for all any doubt that existed as to the law on that question. Lord Goddard C. J. said :
'The learned Deputy Judge hold that the notice to quit had been waived. If one may say so with respect to the learned Deputy Judge, he fell into the error of confusing an acceptance of rent after a notice to quit with an acceptance of rent after notice that an act of forfeiture has been committed. If a landlord seeks to recover possession of property on the ground that breach of covenant has entitled him to a forfeiture, it has always been held that acceptance of rent after notice waives the forfeiture, the reason being that is the case of a forfeiture the landlord has the option of saying whether or not he will treat the breach of covenant as a forfeiture. The lease is voidable, not void, and if the landlord accepts rent after notice of a forfeiture it has always been held that he thereby acknowledges or recognises that the lease is continuing. With regard to the payment of rent after a notice to quit, however, that result has never followed. If a proper notice to quit has been given in respect of a periodic tenancy, such as a yearly tenancy, the effect of the notice is to bring the tenancy to an end just as effectively as if there has been a term which has expired. Therefore, the tenancy having been brought to an end by a notice to quit, a payment of rent after the termination of the tenancy would not operate in favour of the tenant if it could be shown that the parties intended that there should be a new tenancy.'
The learned Judges overruled Hartell v. Blackler, 1920 2 K.B. 161: 89 L. J. K. B. 838 and held that the rule applying to a case of accepting rent after the termination of tenancy is the same as that laid down by Lord Mansfield as early as 1775 in Doe d Cheny v. Batten, (l775) 1 Cowp. 243:
'The question therefore is quo animo the rent was received, and what the real intention of both parties was?'
If the contract came to an end, as Mr. D. Ramaswami lyengar for the appellant says it did, upon the passing of the order for eviction, we have to ascertain what the intention of the parties thereafter was. There can be no manner of doubt that the respondent was not willing that the appellant should continue in possession on the same rent as before. The appellant stated in his application for fixing a fair rent that the respondent had been demanding rent which was double that originality paid by him and that was why he was asking the Rent Controller to fix a fair rent. Moreover, as soon as the respondent became entitled to file an application for eviction of the tenant on the ground that be had failed to pay his rent by the end of the succeeding month, he availed himself of his legal right and filed, as already stated, an application for the eviction of the appellant on 1st February 1947. It is however argued that by virtue of the pro-visions of Section 116, T. P. Act, an irrebuttable presumption arises that he received these cheques as rent and that therefore a fresh tenancy from month to month came into being. It is not denied that the weight of authority is that if after the termination of a tenancy a landlord accepts rent, he must be deemed to have consented to a new tenancy on a year to year basis on the same terms as before, the reason being that when money is tendered as rent it can be received only as rent and that therefore if the landlord does receive it, he shows by his action that he has accepted it as rent, even though he may say in accepting it that he does so without prejudice or as damages for use and occupation. A recent decision of the Federal Court in Kai Khushroo v. Bai Jerbai, reiterates that principle although that case could be distinguished by the fact that there the rent was received unconditionally, though the learned Judges of the Federal Court did not base their decision on that narrow ground. Even if we assume for a moment that Section 116, T. P. Act, can be applied to tenancies terminated by the Rent Control Act, it is clear in this case that the money was not received as rent. The respondent had long been attempting to enforce a higher rent and took the first opportunity, as already stated, of evicting the tenant; but he was unable to do so under the Rent Control Act until an order of eviction had been made and enforced by the Rent Controller. It is quite certain in the correspondence between the parties that the respondent never for a moment departed from that attitude or showed the slightest intention of consenting to the appellant's continuing as his tenant. He was prevented by the stay order from obtaining possession; and if he did not accept payments ho would have received no rent for years on end. We have been shown no decision that goes as far as to say that however clear it may be that money was not received as rent, yet one must necessarily resume that it was. Moreover, the rent tendered and received was not the rent due under the original contract; but the fair rent fixed by the Rent Controller.
3. It is unnecessary to pursue this matter further; for we entirely agree with the learned Judge that the Transfer of Property Act can have no application to a state of affairs governed by the Rent Control Act. As the learned Judge pertinently pointed out, one cannot divorce Section 116, T. P. Act from the other provisions of that Act; and when Section 116 speaks of the determination of the lease, it must have reference to a determination of the lease such as is contemplated in Section 111, T. P. Act, which sets out the various methods by which a lease may be determined. It is conceded here, as before the learned Judge, that the lease was not determined in any of the ways set out in Section 111.
4. The Rent Control Act does not concern itself with the termination of leases. It gives the tenant (as defined in that Act) a right to continue in possession as long as he pays his rent regularly. If the rent is not paid regularly then whether the lease has been determined or not the land-lord has a right to evict the tenant. Mr. D. Ramaswami Aiyangar for the appellant argues that despite the provisions of the Rent Control Act, the month to month tenancy originally entered into must be considered to have been continued right up to the date of eviction, since no notice to quit had been sent to the tenant. We do not agree that such a useless formality was at all necessary. The landlord permitted the tenant to remain in possession without sending him a notice to quit, only because he knew that under the Rent Control Act he had no right to evict him until the tenant defaulted in the payment of rent. There is a passage in the Federal Court decision above referred to at page 128 which would indicate that the provisions of Section 116, T. P. Act, have no application to matters arising under the Rent Control Act. Mukerjee J. delivering the leading judgment, with which the other learned Judges agreed, stated:
'It may be pointed out that in cases of tenancies relating to dwelling houses to which the Rent Restriction Acts apply the tenant may enjoy a statutory immunity from eviction even after the lease has expired. The landlord cannot eject him except on specified grounds mentioned in the Acts themselves. In such circumstances, acceptance of rent by the landlord from a statutory tenant, whose lease has already expired, could not be regarded as evidence of a new agreement of a tenancy and it would not be open to such a tenant to urge, by way of defence, in a suit for ejectment brought against him, under the provisions of Rent Restriction Act, that by acceptance of rent a fresh tenancy was created which had to be determined by a fresh notice to quit.'
Reference is therein made to Davies v. Bris-tow, 1920 3 K. B. 428: 123 L. T. 655 and Morison v. Jacobs, (1945) 1 K. B. 577 : (1945) 2 ALL E. R. 430 to the same effect, the former of which was referred to by Govinda Menon J.
5. Although it is not necessary for us to base our decision on any ground other than the above, it seems to us that at the time when rent was accepted by the respondent, the appellant was still a tenant; because the appellant was not then a trespasser, in view of the fact that he was lawfully in possession by virtue of the stay order passed on 3rd October 1947. If he was law-fully in possession, then he was tenant within the meaning of the Rent Control Act. This was clearly how the appellant in his notices under-stood the situation. When he sent the cheques, he said in Ex. A. 3.
'As fixed by the Joint Rent Controller, Madras.... I am sending herewith enclosed a cheque-for. Rs. 536-4-0 and also one other cheque for Rs. 60 being the rent for August and September 1946.' In reply to a letter acknowledging the cheques, on 28th November 1917, the appellant's advocate said:
'That the rent for the premises No. 37 Devaraja Mudali St. has been fixed by the Rent Controller and accordingly my client has sent the above cheques towards the rents due as per order of the Rent Controller; that your client can only receive the amount towards the rent due for the premises and not as damages for use and occupation.'
By these letters he was asserting what we feel to be the truth, that pending the appeal he was a statutory tenant, entitled to remain in possession and under an obligation to pay rent.
6. For the above reasons we are satisfied that by the acceptance of the two cheques on 2lst November 1947, the appellant did not acquire any fresh nigh to continue in possession of the suit premises.
7. The appeal is dismissed with costs. By consent, the appellant is given one month's time to leave the premises.