Gujarat High Court
Trustees Of E.M. High School Trust And ... vs Kulumben Gulamnabi Momin on 4 July, 1995
Equivalent citations: (1996)1GLR521
JUDGMENT J.N. Bhatt, J.
1. A mere demand of taxes relating to the super-structure built by the tenant on a rented land and failing to pay such taxes to the local authority and the State Government paid by the landlord and thereafter claiming the same alongwith arrears of rent in a notice would be sufficient to take out the case out of provisions of Section 12(3)(a) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (the Rent Act' for short), is the main issue in focus in this revision.
2. The petitioners are the purchasers of the demised premises from the original plaintiffs-landlords and the respondent Nos. 1 to 3 are the heirs of the original defendant-tenant and respondent No. 4 was the partner of partnership firm, respondent No. 5 and respondent No. 6 is original defendant No. 6. Thus, all the respondents are the original defendants. The parties are hereinafter referred to as landlord-trust and the defendant-tenants for sake of convenience and brevity.
3. The landlord-trust had let out a portion of the land admeasuring 90' x 110' at the rent of Rs. 25/- per month on 1-10-1953 and a lease deed was also executed. It was initially for a period of 10 years with an option of renewal for a further period of 10 years. The plaintiff-trust has initiated the legal battle by filing Regular Civil Suit No. 124 of 1971 for the purpose of ejectment on the grounds of (i) nonpayment of rent [Sec. 12(3)(a)] and (ii) sub-letting or transfer and assignment by the heirs of the original defendant-tenant to the original defendant No. 6. Thus, the land which is hereinafter referred to as the demised property was let to original defendant-tenant for the purpose of constructing and running a service station by installing a petrol pump. Pursuant to the lease deed, the original defendant-tenant had installed a petrol pump on the said land. The tenant was in arrears of rent and he had, according to the case of the plaintiff-trust, sub-let the super-structure alongwith the demised land to original defendant No. 6 without consent and permission of the trustees. Therefore, a notice was sent to the tenant.
4. The notice Ex. 75 under Section 12(2) of the Rent Act was sent by the plaintiff-trust demanding arrears of rent from the tenant from 1-6-1968 to 30-9-1968 at the rate of Rs. 25/- per month and from 1-10-1968 to 30-5-1970 at the rate of Rs. 40 per month. Taxes were claimed and demanded in the notice. An amount of Rs. 944/- was demanded by way of arrears of rent for the period of 24 months and an amount of Rs. 613/- was claimed by way of taxes. The notice was not replied. No dispute was raised within a period of one month after service of the notice. Possession was also sought on the ground of sub-letting in the notice.
5. The suit came to be filed which was opposed by the defendants. Defendant Nos. 1, 2 and 3 filed their composite written statement. According to the case of the defendants, the contentions and averments made in the plaint were false as there was no case of sub-letting. It was denied that rent was in arrears as demanded. Validity of the notice was also questioned. Original defendant Nos. 4 and 5 had not' filed written statement. Thus, the claim made in the suit on the ground of nonpayment of rent and sub-letting was countered and dispute of standard rent was raised by defendant Nos. 1,2 and 3.
6. In view of the facts and circumstances and the pleadings of the parties, issues came to be settled. The trial Court, on appreciation of the facts and circumstances and the evidence on record, found that the defendants are liable for eviction. That the suit came to be decreed by the trial Court. The trial Court held that notice is legal and valid and the defendants are tenants in arrears of rent. The trial Court fixed the contractual rent as the standard rent. The trial Court also held that the plaintiff-trust is entitled to eviction on the ground of sub-letting. The suit came to be decreed on both the grounds.
7. Being dissatisfied with the judgment and decree recorded in the aforesaid suit by the trial Court, original defendant Nos. 1 to 5 challenged its legality and validity by filing Civil Appeal No. 91 of 1980 in the District Court of Kheda at Nadiad. The appeal came to be partly allowed. The judgment and decree passed by the trial Court in so far as it related to possession of the demised property came to be reversed. In short, the plaintiffs suit for possession came to be dismissed while allowing the appeal. The finding of the trial Court with regard to standard rent was confirmed. According to the appellate Court, the defendant-tenants are not liable for eviction under Section 12(3)(a) of the Rent Act as the case is governed by the provisions of Section 12(3)(b) of the Rent Act. The trial Court held that since notice under Section 12(2) of the Rent Act demanded arrears of rent, provisions of Section 12(3)(b) would be attracted. Since the tenants had deposited the amount of standard rent regularly during the course of the suit and the appeal, ejectment decree cannot be granted in favour of the plaintiff-trust as per the view of the District Court. The appellate Court relied on decisions of this Court. There is no dispute about the fact that the defendant-tenants regularly deposited and paid the amount of standard rent during the pendency of the proceedings before the trial Court and before the appellate Court.
8. The only question which crops up for consideration and adjudiction at this juncture is-as to whether in the set facts of the present case, demand of taxes alongwith arrears of rent would not attract provisions of Section 12(3)(a).
9. The learned Advocate appearing for the defendant-tenants has supported the judgment and decree of the trial Court. It is contended that since demand for taxes was made in the notice Ex. 75 under Section 12(2) of the Rent Act, provisions of Section 12(3)(a) would not be attracted. This submission was upheld by the appellate Court.
10. There cannot be a dispute about the proposition of law that if the rent is not payable by month and if liability for payment of taxes in respect of demised property is on the tenant, one of the material conditions of provisions of Section 12(3)(a) that rent must be payable by month, will not be satisfied. This proposition is made very clear by this Court in the decision rendered in Vanlila Vadilal v. Mahendrakumar, 1975 [XVI] GLR 71. It is held by this Court in the said decision that education cess was payable by the tenant and it was part of rent it being not payable by month and, therefore, the case was not governed by the provisions of Section 12(3)(a) of the Rent Act. This view was also upheld by this Court in a Division Bench decision rendered in Dayalal Gangaram v. Bhupatrai, reported in 1977 [XVIII] GLR 349. The decision in Vanlila's case (supra) is confirmed and upheld in the aforesaid Division Bench decision. Subsequently also, the same view is confirmed by this Court in other decisions, but reference may be made of a decision relied on behalf of the defendant-tenants. This Court in Naranbhai Nathabhai v. Modhia Panalal Maganlal, 1982 GLH 723 also upheld the said view. It can very well be seen from the proposition of law expounded and enunciated in the aforesaid decisions of this Court that if demand is made for taxes and education cess, provisions of Section 12(3)(b) and not Section 12(3)(a) apply. Thus, if demand of education cess or taxes is made alongwith arrears of rent in a notice under Section 12(3)(a), the case is governed by the provisions of Section 12(3)(b).
11. Unfortunately, the appellate Court misappreciated the mere statement in the notice under Section 12(2) that taxes should by paid by the tenant. It is true that in the suit notice Ex. 75 under Section 12(2), demand is made for taxes of the local authorities and education cess amounting to Rs. 613/-. Considering this aspect, it appears that the learned appellate Judge failed to appreciate that demand of such taxes and education cess had been made by the plaintiff-trust not as part of the rent but the demand came to be made alongwith demand of arrears of rent in the notice under Section 12(2) of the Rent Act as the liability for payment of taxes and cess in relation to the super-structure on the part of the tenant was not satisfied and observed by the defendant-tenants. Therefore, the plaintiff-trust in its wise approach paid up the arrears of taxes payable by the tenant in respect of the super-structure made by him on the rented land. It is nowhere found from the record that taxes or education cess were attributable or relatable to the land demised under the lease deed Ex. 74. Not only that, demand for taxes and education cess made in the notice is in relation to the super-structure made by the tenant on rented land. What was rented is land with right of raised super-structure for the purpose of installation of service station of petrol pump. It is not in dispute that petrol pump came to be installed by the tenant on the land hired by him. Thus, the super-structure belonged to the tenant raised on the lease-hold land. It is also, amply clear from the lease deed Ex. 74 dated 1-10-1953 that rent was fixed at the rate of Rs. 25/- per month in relation to the land admeasuring 90' x 110'. It is specifically covenanted in the lease deed vide Clause 6 that the tenant will be exclusively liable for payment of local, municipal and Government taxes in respect of the super-structure, viz., petrol pump. Thus, it is vey clear that the super-structure belonged to the tenant on a rented land and he being the owner of the super-structure is liable to pay all kinds of taxes, municipal as well as Government and obviously, the plaintiff-trust has not demanded arrears of taxes in the notice Ex. 75 as part of the rent. It is very clear from the notice that assessment of tax in respect of super-structure was made and liability for payment of taxes was not observed and fulfilled by the tenant qua the super-structure raised by him at his own cost. With the result, the plaintiff-trust, with a view to avoid future legal complications, went on paying such taxes for which the exclusive liability was on the part of the tenant unconcerned with the liability of rent which was fixed under the lease deed at the rate of Rs. 25/- per month. Simply because the plaintiff-trust in its wisdom and obviously for the purpose of obviating any legal complications in respect of the land belonging to it, paid certain municipal taxes and education cess for and on behalf of the tenant, cannot be characterised as forming part of the rent. Unfortunately, this aspect was lost sight of by the learned Appellate Judge which has resulted into miscarriage of justice in refusing to pass a decree for eviction under Section 12(3)(a) of the Rent Act.
12. It is true that the case will not be governed by the provisions of Section 12(3)(a) if conditions of Section 12(3)(a) are not satisfied. One of the conditions is that rent must be payable by month and obviously, taxes and education cess if are not payable by month, along with rent, then, in that case, the case would be governed by Section 12(3)(b) and not by Section 12(3)(a). This view is consistently taken by this Court in various judgments. When liability for payment of taxes or cess is not attributable to the rented property or accruable in relation to the demised premises, how would it form part of the rent? There cannot be a straight-jacket formula that irrespective of other provisions like liability, relationship, once demand for taxes is made alongwith rent, the case would be taken out of Section 12(3)(a) and will be governed only and only by Section 12(3)(b). The learned Appellate Judge should have considered that liability for payment of taxes and cess was on the part of the tenant in respect of only super-structure which was not part and parcel of the lease-hold property. The plaintiff is the owner of the land and land was let with right to instal a petrol pump by raising a super-structure on the rented land. The said super-structure is constructed by the original defendant-tenant pursuant to the lease deed between the parties at his own costs and he is, therefore, liable for payment of taxes in respect of that super-structure. Simply because the tenant who has raised the super-structure fails to satisfy, his statutory obligations and since super-structure is constructed on the rented land belonging to the plaintiff, with a view to obviating legal complications and due to failure on the part of the tenant who is owner of the superstructure, having paid amounts of taxes and cess and demanding the same in the notice under Section 12(2) cannot change the statutory proposition as in such a case, it would never constitute part and parcel of rent being unconcerned and unconnected with the demised property. No such covenant is made in the lease deed. No such thing is emerging from the evidence on record. Therefore, in the opinion of this Court, with due respect, the learned appellate Judge has committed serious illegality which has resulted into miscarriage of justice which is required to be put in proper legal shape by exercising powers of this Court under Section 29(2) of the Rent Act.
13. There is no dispute about the fact that notice under Section 12(2) dated 16-6-1978 at Ex. 75 was received by the tenant and no reply is sent. No dispute is raised within one month from the receipt of the notice. No application for fixation of standard rent under Section 11 was made. Rent demanded in the notice was for more than six months (in the present case, it was for 24 months). In order to attract provisions of Section 12(3)(a), the following conditions are required to be satisfied:
(a) rent is payable by month;
(b) there is no dispute about standard rent and permitted increases;
(c) there are arrears of rent or 10:50 AM 5/1/2008 permitted increases for a period of six months or more;
(d) notice under Section 12(2) demanding such arrears is served upon the tenant;
(e) the tenant fails to pay or tender such arrears within one month from the date of receipt of notice under Section 12(2).
Having regard to the facts and circumstances and the pleadings, all the statutory requirements are established. With the result, original defendant-tenant is liable for eviction and the plaintiff-trust is entitled to ejection decree on the ground of non-payamentof rent under Section 12(3)(a) of the Rent Act.
The findings and the ultimate conclusion recorded by the learned Appellate Judge are, therefore, required to be quashed and set aside.
14. Now, a question would arise as to whether landlord is entitled to ejection v decree on the ground of Section 13(1)(e) of the Rent Act? The trial Court granted decree on the ground of sub-letting which came to be reversed in appeal filed by original defendant Nos. 1 to 5. The appellate Court has taken the view that the facts and circumstances do not remotely suggest the element of sub-letting attracting the provisions of Section 13(1)(e) read with Section 15 of the Rent Act. In the opinion of the appellate Court, the plaintiff-trust has not been able to satisfy that the heirs of the original tenant have sub-let, transferred or assigned their interest in any manner in respect of the suit land. In this connection, it will be necessary to refer to the lease deed between the tenant and the alleged sub-tenant, original defendant No. 6. It is, therefore, clear from the lease deed entered into between the tenant and defendant No. 6 that the super-structure in the form of petrol pump raised by the tenant is not sub-let, transferred or assigned to original defendant No. 6. The partnership firm was the owner of the petrol pump and the right, title and interest in respect of the land on which the petrol pump is constructed is not shown to have been transferred or assigned in any manner to original defendant No. 6. This finding is also reinforced by the testimonial connection on record. Therefore, the finding of the learned appellate Judge that the plaintiff-trust is not entitled to eviction decree on the ground of Section 13(1) read with Section 15 is required to be confirmed, being justified. In the circumstances, that part of the judgment and decree is required to , be confirmed.
15. Having regard to the facts and circumstances narrated hereinabove, this Court has no hesitation in finding that the original plaintiff-trust is entitled to ejection decree against the defendants on the ground of non-payment of rent under Section 12(3)(a) of the Rent Act. Accordingly, the suit is required to be decreed for possession on this ground. Decree is hereby passed in favour of the plaintiff against the defendants for possession on the ground of non-payment of rent under Section 12(3)(a) reversing the finding of the appellate Court. Rest of the impugned judgment and decree would obviously remain undisturbed. In the circumstances of the case, there shall be no order as to costs. Having regard to the request for postponement of execution of the decree for possession, it is hereby directed that the decree for possession in relation to the demised property shall not be executed till 31st October 1995 on usual terms and conditions and undertaking to be filed within the month from today.