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S. Venkataramanaswami Ayyar Vs. S. Abdul Wahab (No. (2)) - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtChennai High Court
Decided On
Reported in(1969)1MLJ137
AppellantS. Venkataramanaswami Ayyar
RespondentS. Abdul Wahab (No. (2))
Cases ReferredIn Kuppuswamy Iyer v. Harinarayanachari
Excerpt:
.....the rent is payable, but subject to the proviso that, if the controller is satisfied that the tenant's default to pay or tender rent was not wilful, he may, notwithstanding anything contained in section 11, give the tenant a reasonable time, not exceeding 15 days, to pay or tender the rent due by him to the landlord upto the date of such payment or tender and on such payment or tender, the application shall be rejected. to find whether the omission to pay rent is intentional, the various attendant circumstances have to be examined, and, in a case like the present one, where what is pleaded by the landlord is a subsequent agreement to pay enhanced rent, the questions whether there could have been any bona fide mistake about the agreement pleaded for enhanced rent and whether there..........as arrears. the learned subordinate judge has overlooked that the mere existence of arrears of rent or default in the payment of rent does not ipso facto entitle the eviction of the tenant under the rent control act. there must be wilful default in the payment of the rent. the learned subordinate judge has failed to address himself to this question and proceeds in the view that, once it is found that the agreement for enhanced rent is true and valid, eviction should follow as a matter of course. in the second appeal, the finding of the courts as to the truth and validity of the agreement has been affirmed by me today. since reported (1969) 1 m.l.j. 122 but that does not necessarily involve my rejection of the petition under section 25, filed by the tenant from the order of.....
Judgment:

M. Natesan, J.

1. This Revision Petition is under Section 25 of the Madras Buildings (Lease and Rent Control) Act (XVIII of 1960) and has been withdrawn to this Court for disposal along with S.A. No. 787 of 1965 Since reported in (1969) 1 M.L.J. 122 as the two are connected. The second appeal arises out of a suit for recovery of arrears of rent, the claim being based on an agreement by the tenant to the increase of rent from Rs. 112.50 to Rs. 200 per month from Masi 1960. The tenant contended that there was no concluded contract to increase the rent to Rs. 200 per month. The District Munsif, Karur, who is also the Rent Controller under the Act, tried the suit for arrears of rent and the application for eviction of the tenant together, and, by consent of the parties, the evidence recorded in the suit was treated as evidence in the proceedings under the Rent Control Act. Eviction was sought on the basis that the tenant committed wilful default in the payment of rent. The agreement, according to the landlord, was in February 1960, and the tenant had to pay rent at Rs. 200 per month from 1st Masi 1960. But even for the very first payment, he sent only a draft for a sum of Rs. 112.50 This was rejected by the landlord. The tenant, without reference to the landlord, proceeded to deposit monthly rents at Rs. 112.50 per month in the Karur Vysia Bank Ltd., and, when a notice was issued by the landlord on 20th February, 1961, a year after the alleged first default, he forthwith sent a draft for the rents due till then, Rs. 1,350. The landlord states that he accepted the same without prejudice to his contentions. For future months the tenant sent rents at the rate of Rs. 112.'50 per month and they were also accepted by the landlord without prejudice to his claim. The suit for arrears of rent was instituted on 5th February, 1963, when three years were about to elapse after the repudiation, the arrears being the difference which the landlord claimed that he was entitled to. The petition for eviction was filed long after in August, 1963. The District Munsif, Karur, who decreed the suit, upheld the contention of the landlord that there was wilful default in the payment of rent and ordered eviction as prayed for. The appeal from the order of the Rent Controller was laid by the tenant before the Subordinate Judge, the Appellate authority, and the appeal from the decree for arrears of rent came up before the District Judge, Tiruchirapalli. As the tenant agreed to abide by the decision in the District Court, the Rent Control Appeal was disposed by the learned Subordinate Judge after the decision of the learned District Judge.

2. Notwithstanding the agreement to abide by the decision of the District Court, I find that the question of arrears was argued on the merits over again before the learned Subordinate Judge. The learned Subordinate Judge set before himself for determination in the appeal only the question whether the agreement dated 8th February, 1960 is true and vaild. He found that the agreement is true and valid. Without further discussion as to the effect of the finding, he dismissed the tenant's appeal before him. Here the learned Subordinate Judge has overlooked one crucial aspect for consideration in the appeal before him. The tenant had, no doubt, agreed to abide by the decision of the District Court even in the rent control appeal before the Subordinate Judge. Actually, the order of the learned District Judge on the application for transfer of the appeal before him to the Subordinate Judge, to be heard along with the appeal under the Rent Control Act, runs thus:

In view of the stand taken by the respondent (tenant) that he is prepared to abide by the decision of this Court in respect of the C.M.A. that is pending before the Sub-Court, it is unnecessary to transfer this appeal to the Sub-Court.

Clearly this does not mean that, if the appeal before the District Court is dismissed, the appeal under the Rent Control Act has also to be dismissed straightaway. The decision in the District Court can only be as to the truth and validity of the agreement and the liability of the tenant to pay the difference in rent claimed as arrears. The learned Subordinate Judge has overlooked that the mere existence of arrears of rent or default in the payment of rent does not ipso facto entitle the eviction of the tenant under the Rent Control Act. There must be wilful default in the payment of the rent. The learned Subordinate Judge has failed to address himself to this question and proceeds in the view that, once it is found that the agreement for enhanced rent is true and valid, eviction should follow as a matter of course. In the second appeal, the finding of the Courts as to the truth and validity of the agreement has been affirmed by me today. Since reported (1969) 1 M.L.J. 122 But that does not necessarily involve my rejection of the petition under Section 25, filed by the tenant from the order of eviction.

3. Under Section 10 of the Act, the Controller can direct a tenant to put his landlord in possession of the building, if the tenant has not paid or tendered the rent due by him in respect of the building, within 15 days after the expiry of the time fixed in the agreement of tenancy with his landlord or in the absence of any such agreement, by the last day of the month next following that for which the rent is payable, but subject to the proviso that, if the Controller is satisfied that the tenant's default to pay or tender rent was not wilful, he may, notwithstanding anything contained in Section 11, give the tenant a reasonable time, not exceeding 15 days, to pay or tender the rent due by him to the landlord upto the date of such payment or tender and on such payment or tender, the application shall be rejected. It is relevant to refer, in this connection, to Section 11 (3) which provides that, where there is any dispute as to the amount of rent to be paid or deposited under Sub-section (1)., the Controller or the Appellate Authority, as the case may be, shall, on application made to him either by the tenant or by the landlord, and after making such inquiry as he deemed necessary, determine summarily the rent to be so paid or deposited. Though the Rent Controller has addressed himself to the question whether there is wilful default in the payment of rent, the Appellate Authority, as pointed out above, has not examined that question. This question of wilful default was not in issue in the appeal before the learned District Judge and the decision of the learned District Judge in the matter would be relevant and bind the parties in the appeal under the Rent Control Act to the extent to which the decision went and no further. It has, therefore, become necessary to examine this aspect of the question, as, in the absence of any finding as to wilful default on the part of the tenant, no eviction could be ordered.

4. The matter is now before me in revision under Section 25 of Madras Act XVIII of 1960. Though the jurisdiction is revisional and therefore not as wide in scope as an appellate jurisdiction, this Court, in this revisional jurisdiction has to satisfy itself not only as to the legality or regularity of the proceedings or orders before the Courts below but also as to their propriety. Apart from the fact that the question whether there is wilful default or not is not a pure question of fact, the jurisdiction under Section 25 of the Act to examine the propriety of an order necessarily involves, the power to canvass the correctness of the order and examine the circumstances in which it has been passed, the propriety of the order being something different from its legality or regularity. The powers under Section 25 are wider than those of this. Court in revision under Section 115 Civil Procedure Code.

5. On the finding I have given in the second appeal, it is now concluded that there has been an agreement between the parties as to the enhancement of rent, To arrive at a finding that the tenant is in wilful default, the mere fact that the tenant is in arrears of rent would not be enough and the Court has to consider whether mere has been intentional violation of a clear obligation to pay the rent. To find whether the omission to pay rent is intentional, the various attendant circumstances have to be examined, and, in a case like the present one, where what is pleaded by the landlord is a subsequent agreement to pay enhanced rent, the questions whether there could have been any bona fide mistake about the agreement pleaded for enhanced rent and whether there are reasonable grounds for inferring the existence of a bona fide dispute in the matter of the enhancement have to be examined. As it is the state of mind of the tenant, with reference to the default, that has to be found, no direct evidence can be had on the matter, and, if there are circumstances from which the Court can reasonably infer that there was really no intention to withhold deliberately the rents which the tenant knew were due and payable, the Court will not infer wilful default. In Kuppuswamy Iyer v. Harinarayanachari (1956) 69 L.W. 72, Rajagopala Ayyangar, J., observed:

The question whether the default is wilful involves the determination of the state of mind of the tenant and is thus primarily a question of fact. Of course, this has to be gathered from the circumstances, as no direct evidence is possible in regard to this matter. But in considering it one has to take note of the fact that the condition that the default in the payment of rent should be ' wilful ' has been introduced by way of Amendment in the place of a provision which permitted eviction on mere default. Therefore, if there are circumstances from which it can be gathered that there was really no intention deliberately to withhold the payment, I am of the opinion that there cannot be any wilful default which is necessary to constitute a ground for eviction under the Act as now amended. In other words, the distinction has to be drawn between more failure to pay and a wilful default in payment.

6. Now, to examine the circumstances of this case to find whether there has been wilful default in the payment of the difference between the sum of Rs. 200 per month as per the oral agreement on 8th February, 1960 and the then prevailing rent of Rs. 112.50 per mensem. On the finding of the Courts below as to the truth of the agreement which has been accepted here there is default. That from the very beginning there has been a dispute between the parties about the defendant's liability for enhanced rent, is clear from the fact that even immediately after 8th February, 1960 on which date it is found that there was an agreement between the parties, the defendant had not remitted rent at Rs. 2000 but only sent a draft for Rs. 11250. This of course was not accepted .But immediately before, the tenant sent drafts for two sums for the arrears of rent at the rate of Rs. 112.50 per month up to Thai 1960 and an extra amount of Rs. 150. The landlord, in his application for eviction, states that the tenant has set up an entirely different tenancy, as if the agreement for payment of rent at the rate of Rs. 200 per mensem was not only in respect of the property in question already under lease but also that the lease included two upstairs rooms in the occupation of others . That there has been really a dispute between the parties about the scope of the terms of the agreement, is manifest from the fact that, notwithstanding the failure of the defendant to send the agreed rent, the plaintiff did not take any action for nearly three years. When the third year was about to expire, the landlord files the suit for recovery of arrears of rent in the civil Court and approaches the Rent Controller for eviction of the defendant some months after, after the dispute had been squarely put in issue in the civil suit. We have to bear in mind that originally the rent was Rs. 150 per month and admittedly it was subsequently reduced to Rs. 112-50 per mensem. The plaintiff's case is that on 8th February, 1960 the defendant agreed to pay rent at Rs. 200 per month from Masi 1960 onwards. In his deposition, he would state that the defendant offered to pay rent at Rs. 175 per month for the property already leased alone, but that he did not accept the same. The plaintiff would state that he never demanded higher rent at any time before 8th February, 1960, and that he wanted a solatium just to accept the enhanced rent of Rs. 200 per month. He admits in his deposition that every time he had been writing about the agreement, the defendant was denying the same. About the defendant's case that he wanted the two upstairs rooms also to be given possession, the admission of the landlord is that the defendant wanted the tenants of the two upstairs rooms to vacate and the rooms to be given to him. The plaintiff states that the agreement for payment of rent was concluded even before the defendant wanted these two upstairs rooms. But a reference to the deposition of P.W. 2, Natesan Pillai, admittedly the mediator, leaves one with a different impression. According to P.W. 2's version, he first had a discussion in the matter with the defendant, and after settling the matters with the defendant he took the defendant to P.W. 1. P.W. 2 admits that, when he asked for enhanced rent, the defendant wanted the two upstairs rooms also for his occupation. It is the version of P.W. 2 that, when the defendant asked for the vacant possession of the upstairs rooms, P.W. 1, said that he would consider it as and when the rooms fell vacant. In the connected second appeal, I have examined the defendants case as to the negotiation's that took place on 8th February, 1960, particularly with reference to the letters, Exhibits A-7 and B-8. The record, examined as a whole, leaves one with the impression that the truth lies mid-way and that there is an exaggerated defence put forward by the defendant. It may be that, having set out his terms to P.W. 2, the defendant was not very articulate in presence of the plaintiff, due to the plaintiff's status. But the plea of the defendant is not one of want of mutuality or absence of consensusad idem but a wholesale denial of the agreement. In the absence of a specific defence in that regard, it was not for the Court to examine any such plea. But the thing is clear that the placing of the defendant in possession of the two upstairs rooms must have played a prominent and important part in the negotiations that took place on 8th February, 1960, and that there was some kind of obligation, whether as a term of the contract for enhancement of the rent or otherwise, for the plaintiff to put the defendant in possession of the two upstairs rooms. It is the admitted fact that, even at the time of the suit, the occupants of the upstairs rooms had not surrendered possession of the rooms even to the plaintiff. The agreement was admittedly oral, and P.W. 2 says that, when he settled the terms with the defendant, none else was present. The defendant, in his evidence, states that P.W. 2 suggested to him that he could pay higher rent, if the two upstairs rooms were given to him. According to the defendant, he did not give any final consent to P.W. 2 with regard to the rent. P.W. 1 had stated, in attempting to explain away Exhibit B-8 that he wanted the defendant to take possession of the upstairs rooms on his behalf. As pointed out by me in the judgment in the second appeal Since reported in (1969) 1 M.L.J. 122 the language of the letters, Exhibits A-7 and B-8 does not support it, and the defendant, in his deposition, states that P.W. 1 asked him to take possession of the rooms for his own benefit and not for the benefit of the plaintiff. The following answers elicited from the defendant in cross-examination are significant:

It is not correct to say that Exhibit B-8 is sent to me to help P.W. 1 to get vacant possession of the upstairs rooms for my benefit....It is not correct to say that when the rent was fixed at Rs. 200 per mensem for the suit premises (it was not) for upstairs rooms also.

7. One thing emerges from the evidence of the parties, oral and documentary, that there has been a dispute between the parties, the defendant contending that the enhanced rent should be considered on delivering of vacant possession of the two upstairs rooms to him by the plaintiff, while the plaintiff took the stand that without any reference to the upstairs rooms the rent was fixed at Rs. 200 per month. In the absence of proper pleas and the limited scope of the second appeal, I have confirmed the findings of the Courts below. But the fact that the civil Court holds that rent payable right through from Masi 1960 has been enhanced to Rs. 200 per month, cannot, having regard to all the aspects of the case, make the non-payment of arrears of rent a wilful default. There has been a dispute between the parties and it cannot be said that the same is not bona fide. The hesitancy of the plaintiff to straightaway seek eviction before the Rent Controller itself, in a way, confirms that view. It is only long after the institution of the suit for arrears of rent and three years after the repudiation and default that the petition for eviction was filed Here Section 11 (3) of the Act has a bearing. It is provided that, where there any dispute as to the amount of rent to be paid or deposited under Sub-section (1), the Controller or the Appellate Authority, as the case may be, shall, on application made to him either by the tenant or by the landlord, and after such inquiry as he deemed necessary, determine summarily the rent to be so paid or deposited. The dispute in this case between the parties set out by the defendant cannot be wholly false and the defence put forward cannot be said to be one just to drag on the pro-Wines In the second appeal I have remarked that there is room for honest misunderstanding on both sides. The fact that an exaggerated defence has been raised cannot make the existing dispute farcical and frivolous. The other question as to the validity of enhancement of the rent by about 80 per cent mooted and decided in the connected second appeal, is not also a flimsy one. There was no additional accommodation and the Court had to consider whether the enhancement of rent was valid under the Rent Control Act. Certainly the dispute, both of law and fact, is genuine and it called for careful consideration and adjudication by the civil Court. It must therefore, be held that the non-payment of the difference in rent will not amount to wilful default, entitling the landlord to an order of eviction.

8. A point was made that there was default in the payment of the admitted rent of Rs. 112. 50 per month. After the return of the draft for Rs. 112.50, the defendant had been without reference to the plaintiff, depositing the rents for a year in the Karur Vyasia Bank Ltd. Once a demand was made therefor, the defendant sent the amount accrued without delay. No doubt it was accepted by the plaintiff without prejudice to his contentions and thereafter the defendant continued to send the admitted rent to the plaintiff. In his deposition, the plaintiff has stated hat the defendant has been fairly regular after the eviction order in the previous eviction petition. He admits, in his deposition, that till the date of his giving evidence there were no arrears at the rate of Rs. 112.50 per month. No doubt, this Court has held that, merely because the rent due for one month had been improperly refused when tendered, it does not mean that the rent for the succeeding month is neither due nor payable and that a duty is cast on the tenant to make payment or tender every month. The present Act prescribes the mode for the deposit of rent and discharge of the tenant's obligation, where the landlord refuses to accept the rent tendered. In the instant case, with reference to the admitted part of the rent, it looks as if the landlord was prepared to waive the prior default, reserving his claim for the balance of rent due. The acceptance of the rents paid out of time without prejudice in the context appears to be, without prejudice to claim the difference as for more than two years after the acceptance of the delayed payment, no action for eviction was taken, and in the meanwhile the admitted rent was being received. The non-payment of rent on the due dates in the intervening period after the return of the first draft for Rs. 112.50, cannot, in the circumstances of the case, be held to constitute a wilful default.

9. It follows that the order of the Rent Controller, confirmed on appeal by the Subordinate Judge, has to be set aside and the petition for eviction dismissed. There will be an order accordingly dismissing the petition for eviction. Of course, this Court is not concerned with any default subsequent to the decision of the civil Court. The Civil Revision Petition is allowed. The parties will bear their respective costs throughout.


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