Andhra HC (Pre-Telangana)
Srinivasa Metal Stores Rep. By Its ... vs Chunduru Jogeswararao on 26 December, 1996
Equivalent citations: 1997(4)ALT510
Author: B.S. Raikote
Bench: B.S. Raikote
ORDER B.S. Raikote, J.
1. This is a revision petition preferred by the original tenant being aggrieved by the judgment and order passed by the Principal Subordinate Judge, Tenali dated 1-12-1995 passed on his file in R.C.A.No. 23 of 1987, by which, the judgment and order of the Rent Controller, Tenali, dated 20-11-1987 passed in R.CC.No. 24 of 1985 has been set aside by directing the eviction of the petitioner. The learned Counsel appearing for the petitioner submitted that the judgment of the lower appellate Court was liable to be set aside on the ground that the lower Court misdirected itself while allowing the appeal. He submitted that the Rent Controller has rightly dismissed the eviction petition filed by the respondent-landlord by holding that the respondent/landlord has not proved his bonafide requirement and also the wilful default. On the other hand the learned Counsel for the respondent strenuously supported the order of the lower appellate Court. In order to appreciate the rival contentions on both sides I have to note, summarily, the few admitted facts of the case.
2. It is an admitted fact that the petitioner/tenant filed a suit in O.S. No. 321 of 1983 alleging the illegal dispossession by his landlord Sri C. Subba Rao and obtained an order of injunction and in that suit he was depositing the rent at the rate of Rs. 400/- per month. In the meanwhile during the pendency of the said suit the proceedings were initiated by Sri C. Subba Rao in R.C.C.No. 35/83 for his eviction on the ground that the tenant committed wilful default in paying the rent. Subsequently his son Sri Kundula Venkataswamy filed another eviction petition in R.C.C.No. 24/85 on the file of the same Rent Controller, alleging that due to the family dispute there was a partition between himself and his father Sri C. Subba Rao, and as per the partition the suit premises had fallen to his share and he bonafidely required it. The son also alleged that in spite of the notice issued by him the tenant has not paid the rent, therefore, he committed the wilful default in paying the rent. The tenant/petitioner resisted both the petitions filed by the father as well as by his son contending that he has never committed a default. When his father refused to receive the rent sent by Money order he filed a suit in O.S.No. 321/83 and with the permission of the Court he went on depositing the rent in the said suit. Later he has deposited the rent in the eviction petition filed by the son and at no point of time he has defaulted in paying the rent. He further alleged in his counter that he has been carrying on the business in the suit premises as tenant since the year 1968 and the agreed rent was Rs. 100/- per month and it was Rs. 200/- per month upto the year 1982.Subsequently the father of the petitioner wanted him to vacate the premises for the purpose of remodelling the building. He asked the tenant to enhance the rent and also asked him to pay one year's rent in lump sum and accordingly a sum of Rs. 2,400/- was paid for the period from 9-12-1981 to 9-12-1982 and the same was entered in the day book of the respondent and the same has been signed by the father of the petitioner. Thereafter the father of the petitioner enhanced the rent to Rs. 400/- per month for the period from 9-12-1982 to 9-6-1983 and on that basis the father of the petitioner allowed the tenant to continue in the premises. Meanwhile the building was remodelled in the month of 1983. Thereafter the father of the petitioner started demanding the enhanced rent which the petitioner refused. But the father of the petitioner, was, somehow, trying to evict the petitioner by refusing rent. In those circumstances, he filed a suit in O.S.No. 321 of 1983 and in that suit he was depositing the rent. He further alleged that the landlord's contention that the rent was Rs. 650/- was false. He further contended that the alleged partition set up by the son was only to create an additional ground for eviction and the alleged partition deed Ex.A.1, dated 16-3-1985 was not a genuine partition deed and accordingly contended that there were no bona fides on the part of the landlord. With these allegations the parties went to the trial. The landlords examined P.Ws. 1 to 5 and got marked the documents vide Exhibits A- 1 to A-4 and the tenant examined three witnesses as R.Ws. 1 to 3 and got marked Exs.B-1 to B-25. The Rent Controller on the appreciation of the entire evidence on record held that the agreed rent was only Rs. 400/- per month and not Rs. 650/ - per month as pleaded by the landlord. He further held that admittedly the father of the landlord refused to receive the rent and in those circumstances the tenant filed a suit in O.S.No. 321 of 1983 on the file of the Principal Munsif Magistrate, Tenali and went on depositing the rent in that suit as per the Court order to the knowledge of the landlord and thereafter he has deposited the rent in R.C.C.No. 24/85. He further held that instead of paying the rent to the son as per his notice the tenant went on depositing the rent in the suit in O.S.No. 321 of 1983 which deposit was to the knowledge of the son as admitted by him in his evidence. The Rent Controller consequently held that at the most that would be a case of a default but not a wilful default. He also held that the partition deed set up by the landlord is not genuine and it has been created for the purpose of this case so as to create an additional ground for the son to seek the eviction of the tenant and as such the landlord has not proved the bona fide requirement. In view of these findings the Rent Controller dismissed both the eviction petitions filed by the father in R.C.C. No. 35/83 and by the son in R.C.C.No. 24/85. So far as the eviction petition of the father was concerned it was dismissed on the ground that according to the case set up by the father himself it is the son who has become the landlord and as such there was no jurial relationship of the landlord and the tenant between the father /landlord and the tenant. The father did not challenge the judgment and decree passed in his case in R.C.C.No. 35 of 1983. However, the son only challenged the judgment and decree passed in his case i.e. in R.C.C.No. 24/85.
3. The learned appellate Judge proceeded to consider the case with the following observations:
"8. Actually the advocate for the appellant has not advanced any arguments with regard to the question of the quantum of rent payable by the respondent to the appellant or his father, and bona fide requirement of the building and therefore the findings of the lower Court in these connections are to be upheld. In fact, the lower Court considered these points quite rationally. Further, the lower Court also considered the question of partition between the appellant and his father quite elaborately. But, the main question to be considered in the light of the arguments advanced by the learned Advocate for the appellant is as to whether the respondent has got any right to question such partition between the appellant and his father and as such whether he has got no option except to pay the rents to the appellant or not and whether on that score it is to be held that the respondent committed wilful default in paying the rents and accordingly he is liable to be evicted from the schedule premises."
From the observations in the judgment of the appellate Court, extracted as above, it is clear that the landlord did not challenge the findings of the Rent Controller regarding the question of quantum of rent payable by the tenant and also the findings regarding the bonafide requirement. In other words, the findings regarding the quantum of rent and the bona fide requirement as recorded by the Rent Controller became final. In the light of these admitted facts both the Counsel fairly submitted before me that the only question that arises for my consideration is whether the appellate Court was right in holding that there was wilful default on the part of the tenant or not. It is only with reference to this point both the Counsel addressed their arguments.
4. From the reading of the entire judgment of the lower appellate Court it is clear that the lower appellate Court has held that in view of the judgment of this Court in a decision in "Abdul Raheem v. Srinivasa Dyeing Works, , the tenant having admitted the father as the landlord cannot deny the partition and the tenant's not paying the rent to the son tantamounts to wilful default and accordingly allowed the eviction petition by setting aside the order of the Rent Controller. He further held that the tenant should have paid the rent to the son landlord instead of depositing the same in O.S.No. 321 of 1983. He further held that the tenant harassed the landlord in not paying the rent to the son/landlord directly instead of depositing in the Court and therefore there was a wilful default. But, in my opinion the lower appellate Court has misdirected itself in coming to the said conclusions.
5. The lower appellate Court passed a cryptic order. It did not consider the relevant evidence regarding the alleged wilful default on the part of the tenant. As held by this Court in a decision in "P.Rajanna v. Smt. K. Lalitha Reddy the question of wilful default is a mixed question of law and fact and the same needs to be considered in the revisional jurisdiction of this Court. More so in the instant case, since the appellate Court did not consider the evidence of the respective parties in this behalf.
6. Though the landlord pleaded that the agreed rent was Rs. 650/- per month but the Rent Controller held that there was no evidence regarding the rate of rent at Rs. 650/- per month and ultimately held that the agreed rent was Rs. 400 / - per month. But before the lower appellate Court, as I have already noticed above, the finding of the Rent Controller regarding the quantum of rent of Rs. 400 per month possibly was not challenged. Therefore, I have to proceed with the case on the basis that the agreed rent was at Rs. 400/- per month.
7. The case as pleaded by the landlords was that the suit schedule property was a joint family property till the alleged partition that took place on as per the registered partition deed dated 23-3-1985. From this it follows that the father of the petitioner/landlord admittedly was the original landlord according to both the parties prior to the partition as he was kartha of the joint family. The father/landlord is examined as P.W.I in the case. It is the case of the tenant that the father/landlord prior to the partition refused to receive the rent sent by money order and there was a threat to his dispossession therefore, he filed a suit in O.S.No. 321/83 and started depositing the rent in the said suit with the permission of the Court. In his evidence P.W. 1, the father, has clearly admitted that "prior to filing of the suit in O.S. No. 69/83,1 have refused to receive the amount sent by him by money order. I do not know if he is depositing rents in O.S.No. 321 /83." From this evidence it is clear that P.W. 1 has refused to receive the rent sent by money order but, however, he has further stated that he was not aware of depositing the rent in that suit. This denial of the knowledge of deposit is patently false because the tenant admittedly deposited the rent with the permission of the Court to which P.W. 1 was the sole defendent at that time. In fact P.W. 2 who is his son has admitted in his cross-examination, that Ex.P-24 is the certified copy of the petition and order on I.A.No. 334/85 in O.S.No. 321/83 on the file of the Principal Munsif Court, Tenali. It is on this LA. and on the basis of this order the tenant was permitted to deposit the rent in the Court. From this fact it is clear that the tenant was forced to deposit the rent in the Court since the landlord refused to receive the same. It is also further admitted on the part of the landlords that even the son landlord also was impleaded to that suit in O.S.No. 321/83. In his cross-examination P.W.2 the son admits that "I know that, the respondent has been depositing the rent of Rs. 400 per month into the Court." But, however, the Counsel for the landlord submitted that the tenant should have deposited the rent by invoking the provisions of Section 8 of the Rent Control Act. Therefore, such a deposit made in the suit filed by the tenant was a wrong deposit and as such it is a case of default on the part of the tenant. But this argument is not acceptable. It is no doubt true that it is provided in Section 8 of the Rent Control Act that where a landlord refuses to accept or evades the receipt of any rent the tenant may by notice in writing, require the landlord to intimate within ten days from the date of the notice by him, a bank into which rent may be deposited by the tenant to the credit of the landlord. But this Court in a decision in "Sathyanarayana v. Narsimloo 1985 (2) ALT 169 has held that the said provision is only directory but not mandatory. In a case where the tenant has not followed the said procedure the wilful default cannot be inferred on his part. Clarifying this principle embedded in Section 8 of the Rent Control Act this Court observed that "6...........................
Thus, Sub-sections (2) to (5) of Section 8 in my opinion enable the tenant to adopt various steps mentioned therein in case of refusal by the landlord to accept the rent. The word used in Sub-section (2) is 'may'. Similarly, in Sub-section (5) also the expression 'May' is used. No doubt in Sub-sections (3) and (4) the word "shall" is used. But, even then, having regard to the purpose of Section 8, I hold that these Sub-sections are directory and not mandatory. They contemplate a procedure to be followed by the tenant in the case of non-acceptance of the rent by the landlord. The non-observance of these steps does not necessarily lead to the inference of wilful default. It may at best show a default in the sense that the rent is not paid. But, the question whether it is wilful is a question of fact and non-observance of Section 8 of the law does not necessarily lead to an inference of wilful default."
From this decision it is clear that whenever the landlord refuses to receive the rent, depositing the rent by invoking provisions of Section 8 of the Act was one such mode provided to tender the rent. In the instant case the tenant has adopted another mode of depositing the rent in the suit filed by him in O.S.No. 321/83 to the knowledge of the landlords. In fact, a similar situation arose in a case decided by the Supreme Court in a decision in Keshhardeo v. Purushottamdas, . That was a case in which after notice from the landlord the tenant deposited the rent in the name of the firm. The deposit was not withdrawn by the landlords. The landlords contended that the deposit was not one made Under Section 22 (2) of West Bengal Premises Tenancy Act (12 of 1956), they further contended that the tenant wilfully and negligently made a false statement inasmuch as the plaintiffs were not a firm and therefore such deposit was invalid. The High Court of Calcutta held that such a deposit was invalid and as such there was a wilful default on the part of the tenant. The said judgment is reported in a decision in "Purshattamdas Bhiwaniwala. Overruling the said judgment the Hon'ble Supreme Court held in (3) supra that "4. As we are of the opinion that the deposit of rent is valid for the purposes of West Bengal Premises Tenancy Act it would be open to the respondents to withdraw the amount deposited by the appellant without prejudice to any contention, save the validity of deposit of rent for the purposes of West Bengal Premises Tenancy Act that they may desire to raise in the suit.
5. The appeal is allowed to the extent herein indicated with no order as to costs." (Emphasis is supplied by me)
8. Moreover the Counsel for the landlord submitted that after the partition when the son landlord P.W. 2 issued a notice directing the tenant to pay the rent to him the tenant could not have continued to deposit the rent in O.S. No. 321/83. Therefore, there is default on the part of the tenant in paying the rent. The explanation of the tenant in his deposition as P.W. 1 (sic. R.W.1) is as follows:
"On 6-7-83 I went to P.W. 1 to pay rent. He refused to accept it. So I sent the rent by money order to P.W. 1. It was also refused. Then I deposited that rent in the suit. Till to-day I have been depositing rents into-Court. I applied for permission to deposit rents in O.S.No. 321/83. Subsequently I received a notice of alleged partition between P.W. 1 and P. W. 2. It is false. The alleged partition deed is only a make-believe affair. There was no such partition at all. P.W. 2 alone is maintaining the fancy shop even till to-day."
From this evidence and from the counter filed by him before the Rent Controller the specific defence of the tenant was that the alleged partition deed was not a genuine document and it was created only to have an additional ground to the son/landlord for eviction on the basis of bona fide requirement. Rent Controller accepted his plea by holding that the partition deed was a make-believe document and it was never acted upon but the lower appellate Court by following the judgment of this Court in a decision in "Abdul Raheem v. Srinivasa Dyeing Works" (1 supra) was of the opinion that the tenant having admitted father as the landlord cannot deny the partition. It is no doubt true in "Abdul Raheem v. Srinivasa Dyeing Works" (1 supra) in para 14 it is held that ".............the tenant has no right to challenge the partition between V.V.Subba Rao and his soil or has no right to question the right of V.V.Subba Rao to transfer the right to collect rents in favour of the partnership firm."
But, the facts of the case are distinguishable from the facts of this case. In that judgment the tenant mischievously deposited the amount in State Bank of India, Machilipatnam Branch, without informing such deposit to the landlord and in those circumstances the learned single Judge of this Court held that there was mischievous intention on the part of the tenant to harass the landlord by denying partition and to build up a defence that he deposited the rent in the Bank. But in the instant case to the knowledge of the father who was the defendent in the suit rents were being deposited by the tenant as per the order of the Court permitting him to deposit in the Court. Even after he was intimated of the partition by both the father and the son he continued to deposit the same in the said suit being of the bona fide opinion that the partition may be fictitious only to create an additional ground to the landlord to evict the tenant and hence no malice or any intention to harass the landlords could be attributed to him. As I ha-ve already noted above the trial Court did record a finding in favour of the tenant that a partition deed was fictitious document created for the purpose of affecting the tenant. The said suit was filed by (sic. against) the father as a kartha of the joint family and the son cannot say that he was not aware of the suit, since admittedly the alleged partition has taken place only during the pendency of the suit. The said suit was filed in the year 1983 whereas the. alleged partition took place nearly after two years on 16-3-1985, therefore, having regard to these circumstances the plea of the landlord/son cannot be accepted that he was not aware of the suit. It is also an admitted fact that subsequently the son got himself impleaded in that O.S.No. 321/83. The learned Counsel for the petitioner brought to my notice the fact that the son/landlord has already withdrawn the said amount from the Court. However, the Counsel for the landlord submitted that no doubt the landlord has withdrawn the said amount but it was under protest. Moreover the son has admitted in his evidence to the effect that "I know that the respondent has been depositing the amount of rent of Rs. 400/- to the Court". In these circumstances it is clear that the rent was being deposited in the Court to the knowledge of both father and the son and for the best reasons known to them they have not withdrawn the same till the later date. In these circumstances it cannot be held that there was any wilful default on the part of the tenant. In fact a similar case arose in a decision of the Supreme Court in " R.R.R. Gopala Rao v. N.G. Seshararao, . That was a case which went to the Supreme Court from this Court and the Hon'ble Supreme Court was considering Section 10 (2) of the A.P. Buildings (Lease, Rent and Eviction) Control Act (15 of 1960). In that case, on the basis of an alleged agreement to sale the tenant did not pay or tender the rent to the landlord. But, the landlord denying the existence of such an oral agreement filed a suit for eviction on the ground of wilful default. The tenant did not pay the rent from December, 1977 (on which date the alleged agreement took place) to May 1978. Since the tenant did not pay that rent, concurring with the judgment of the lower Courts this Court held that the tenant was in wilful default and accordingly passed the decree for ejectment. The Hon'ble Supreme Court considering the effect of the proviso to Section10 (2) of the said Act and by overruling judgment of this Court clarified what is wilful default by observing that:
"4.........The proviso is couched in negative form to reduce the rigour of the substantive provision in Section10 (2) of the Act. An act is said to be wilful if it is intentional, conscious and deliberate. The expressions 'wilful' and 'wilful default' came up for consideration before this Court in Section Sundaram Pillai v. R. Pattabiraman . After extracting the meaning of these expressions from different dictionaries (See: pp. 659 and 660) this Court concluded at P. 661 as under:
"Thus a consensus of the meaning of the words 'wilful default' appears to indicate that default in order to be wilful must be intentional, deliberate, calculated and conscious with full knowledge of legal consequences flowing therefrom".
Since the proviso with which we are concerned is couched in negative form the tenant can prevent the decree by satisfying the Controller that his omission to pay or tender the rent was not wilful. If the Controller is so satisfied he must give an opportunity to the tenant to make good the arrears within a reasonable time and if the tenant does so within the time prescribed, he must reject the landlord's application for eviction."
After noticing this position of law and after also noticing the fact that a suit for specific performance filed by the tenant on the basis of the alleged agreement to sale was dismissed and the appeal was pending, the Hon'ble Supreme Court held that:-
"This is not a case of a tenant who has failed to pay the rent without any rhyme or reason. He was not averse to paying the rent but he genuinely believed that he was under no obligation to do so as he had a prior right to purchase the property. We are, therefore, of the opinion that this is a case in which the Controller should have invoked the proviso and called upon the appellant to pay the arrears from December 1977 to May 1978 within a certain time. Failure to do so has resulted in miscarriage of justice. We are, therefore, of the opinion that the ejectment decree cannot be allowed to stand."
Accordingly the appeal filed by the tenant was allowed. The principle laid down by the Hon'ble Supreme Court in that case applies to the facts of this case in all force. In this case also as admitted by the father landlord, he refused to receive the money order sent by the tenant towards the rent prior to the filing of the suit. From the evidence on record it is further clear that the tenant did deposit the rent in that suit to the knowledge of the father landlord and subsequently to the knowledge of the son landlord who was impleaded in the suit. From the facts of this case, it is clear that the tenant was not averse to pay the rent, but genuinely believed that he was under no obligation to pay the rent to the son because the alleged partition was only a make believe partition. At any rate, he did deposit the rent to the suit continuously from the date of filing of the suit, till he started depositing the rent in the Rent Control proceedings initiated by the son. The learned Counsel for the respondent/landlord contended that nothing prevented him from tendering the rent to the tenant instead of depositing in the suit in O.S.No. 321/83 or depositing in the Rent Control proceedings vide R.C.C.No. 24/85 filed by the son, but the fact remains that the tenant has been paying rent right from the year 1983 to this date regularly and absolutely there are no arrears due to be paid by him, at the rate of Rs. 400/- per month. Therefore, it cannot be said that there is any default on the part of the tenant at any point of time, and nothing prevented them from withdrawing the said deposit being made in the Court. In fact, according to me, the mischief is on the part of the landlords in not withdrawing the amounts only to create a ground for eviction. It is worthy of noting at this stage the evidence of P.W. 3 an Accountant in the shop of the landlords who deposed that the respondent was the tenant of the tiled house at a rent of Rs. 400/- per month. He further adds that "But in accounts of P.W. 1, rent is shown as Rs. 200/- only as per receipt. To escape Municipal Taxes, no receipt was being issued for the Rs. 200/-. I know the son of P.W. 1 (petitioner)." From this fact it is clear that absolutely there are no bona fides on the part of the landlord in maintaining false accounts noting only Rs. 200/- per month in the accounts books and not noting the other balance of Rs. 200/-, but however, the said witness justified his statement by stating that "I write accounts as per the dictates of my employer of course I know it is an offence to write false accounts. It is the practice for trade professionals to maintain false accounts. I used to see receipts some times." If such are the landlords in this case, it is difficult for me to accept their case that they were not aware of the fact that the tenant was depositing the rent to the suit account to which they were partners. Having regard to the entire circumstances of this case, I am not persuaded to accept the plea of the landlord that there was any default on the part of the tenant in paying the rent.
9. At this stage the learned Counsel for the landlord relying on the judgment of this Court in "K. Varalakshmamma v. M. Masthan Rao, 1 contended that the tenant not paying the rents after notice issued by the landlord but paying such rent belatedly it was a case of wilful default. I am afraid even this contention cannot be accepted. At the outset, it may be noted that the facts of that case are distinguishable from the facts of this case. In that case a notice was issued by the landlords as well as Official Receiver asking the tenant to pay the rent to the landlord but the tenant filed one application Under Section 9 (3) of the Act and waited till the disposal of that application. That application was allowed to be pending for a very very long time and after a long delay the Court permitted him to deposit the rent and this Court held that mere pendency of the application filed by the tenant would not in any way help the tenant to commit the wilful default in payment of rents. In the instant case right from the year 1983 the tenant has been depositing the rent in the Court to the knowledge of the landlords. In the instant case as I have already noted above, after refusal of the money order by the landlord, the tenant immediately filed a suit and started depositing the rent in the suit. P.W. 1 father admitted that he did refuse such a money order and this is not a case in which the tenant did not deposit the rent in the Court at all, on one pretext or the other, and (but) in fact such a deposit has been continuous. Therefore, it cannot be said in the instant case that it was a belated payment in any sense of the term. It is also in the evidence of the tenant that "Since I have been depositing rents in my suit, I did not deposit rents again in the instant case. It is true that I gave notice on 12-9-86 informing that I am depositing rent for one month from 9-8-86 to 9-9-86 in this case. I have been depositing rents every month thereafter. It is not true that by not depositing rents in this case even after notice, I have rendered myself wilful defaulter. "From this fact also it is clear that till 5th July, 1986 he deposited the entire rent in the suit and thereafter he has been depositing the rent in R.C.C. No. 24/85 filed by the son w.e.f. 9-8-86. As I have already stated above even as on today the rents are regularly being deposited. Assuming for the sake of the argument that the tenant's depositing the rent in the suit was a matter of default, but from that fact it cannot be further held that it is a 'wilful default'. As held by the Hon'ble Supreme Court in (5) supra the wilful default must be intentional, deliberate, calculated and conscious with the full knowledge of legal consequences flowing therefrom. In the instant case the alleged default is not wilful default as per the law declared by the Hon'ble Supreme Court. As held by this Court in "S. Venkateswarlu and Anr. v. K.S. Krishna Murthy, 1982 APHN 34 a clear distinction has got to be maintained between default and wilful default. "It is not merely sufficient if there is a default in payment of rents: it should be wilful default." Following the principle laid down both in (5 supra) and (7 supra) I hold in this case that even if it is assumed that there is a default on the part of the tenant it is not a wilful default and hence he is not liable for eviction on that ground.
10. For the above reasons, I set aside the judgment and order of the lower appellate Court and dismiss the eviction petition filed by the respondent landlords with costs. Accordingly, the revision petition is allowed.