V.D. Sebastian vs T.A. Samuel on 27 March, 2024

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Kerala High Court

V.D. Sebastian vs T.A. Samuel on 27 March, 2024

The petitioners are the respondents-tenants in R.C.P.No.88 of 2019 on the file of the Rent Control Court (Additional Munsiff- III), Ernakulam, a petition filed by the respondent herein- landlord under Sections 11(2)(b), 11(3) and 11(4)(ii) of the Kerala Buildings (Lease and Rent Control) Act, 1965 seeking eviction of the tenants from the petition schedule building. Before the Rent Control Court, the tenant entered appearance and filed counter. During the pendency of the Rent Control Petition, the landlord filed I.A.No.8734 of 2019, invoking the provisions under Section 12 of the Act, seeking an order directing the tenants to deposit the admitted arrears of rent of Rs.4,75,000/- within a time limit to be stipulated by the court. In that interlocutory application, the tenants filed counter contending that the monthly rent is only Rs.15,000/- and not Rs.25,000/- as claimed by the landlord. The arrears of rent from March 2018 has to be adjusted against the sum of Rs.3,50,000/- due to the tenants from the landlord on account of providing common facilities to villa in plot No.3 purchased by the landlord in Betrons Blossem Villa Project. After considering the rival contentions and taking note of the law laid down on the point, 3 R.C.R.No.57 of 2024 the Rent Control Court passed an order dated 14.08.2020 in I.A.No.8734 of 2019, whereby the tenant was directed to remit the admitted arrears of rent at the rate of Rs.15,000/- from April 2018 to October 2019, within the time limit stipulated in that order. Since the tenants failed to deposit the admitted arrears of rent and to show cause for such non-payment, the Rent Control Court passed an order dated 30.09.2020 in RCP No.88 of 2019, in exercise of its powers under Section 12(3) of the Act, whereby further proceedings in that Rent Control Petition stands stopped and the tenants are directed to put the landlord in vacant possession of the petition schedule building. Challenging the aforesaid order dated 30.09.2020 of the Rent Control Court, the tenants filed RCA No.48 of 2020 before the Rent Control Appellate Authority (Additional District Judge-VIII), Ernakulam, invoking the provisions under Section 18(1)(b) of the Act. That appeal ended in dismissal by the judgment dated 21.12.2023 declining interference. Feeling aggrieved, the petitioners-tenants are before this Court in this Rent Control Revision, invoking the provisions under Section 20 of the Act.

2. On 18.03.2024, when this matter came up for admission, after arguing for some time, the learned counsel for the petitioners sought adjournment to address arguments taking 4 R.C.R.No.57 of 2024 note of the law laid down by this Court in Greenix Ventures Pvt. Ltd. v. P.M.Salim [[2022 (4) KLJ 311] and Nandanam Tiles and Sanitaries Pvt. Ltd. v. Abdul Gaffur [2022 (4) KHC 201].

3. Heard the learned counsel for the petitioners-tenants and also the learned counsel for the respondent-landlord.

4. The learned counsel for the petitioners-tenants would contend that the order passed by the Rent Control Court, in exercise of its powers under Section 12(3) of the Act, is perverse and patently illegal and it is one passed without properly appreciating the contentions raised by the tenants, with specific reference to the amounts due from the landlord on account of providing common facilities to villa plot No.3 purchased by the landlord in Betrons Blossem Villa Project.

5. On the other hand, the learned counsel for the respondent-landlord would contend that such a contention raised by the tenants is legally unsustainable, in view of the law laid down by this Court in Greenix Ventures [2022 (4) KLJ 311], Nandanam Tiles and Sanitaries [2022 (4) KHC 201] and also that in Manikkoth Shaniba v. Kunnoth Ayisha [2022 SCC OnLine Ker 8936].

R.C.R.No.57 of 2024

6. Section 12 of the Act deals with payment or deposit of rent during the pendency of proceedings for eviction. As per Section 12(1), no tenant against whom an application for eviction has been made by a landlord under Section 11, shall be entitled to contest the application before the Rent Control Court under that Section or to prefer an appeal under Section 18 against any order made by the Rent Control Court on the application, unless he has paid or pays to the landlord, or deposits with the Rent Control Court or the Appellate Authority, as the case may be, all arrears of rent admitted by the tenant to be due in respect of the building up to the date of payment or deposit, and continues to pay or to deposit any rent which may subsequently become due in respect of the building, until the termination of the proceedings before the Rent Control Court or the Appellate Authority, as the case may be. As per Section 12(2), the deposit under sub-section (1) shall be made within such time as the court may fix and in such manner as may be prescribed and shall be accompanied by the fee prescribed for the service of notice referred to in sub-section (4). As per the proviso to Section 12(2), the time fixed by the court for the deposit of the arrears of rent shall not be less than four weeks from the date of the order and the time fixed for the deposit of 6 R.C.R.No.57 of 2024 rent which subsequently accrues due shall not be less than two weeks from the date on which the rent becomes due. As per Section 12(3) of the Act, if any tenant fails to pay or to deposit the rent as aforesaid, the Rent Control Court or the Appellate Authority, as the case may be, shall, unless the tenant shows sufficient cause to the contrary, stop all further proceedings and make an order directing the tenant to put the landlord in possession of the building. As per Section 12(4), when any deposit is made under sub-section (1), the Rent Control Court or the Appellate Authority, as the case may be, shall cause notice of the deposit to be served on the landlord in the prescribed manner, and the amount deposited may, subject to such conditions as may be prescribed, be withdrawn by the landlord on application made by him to the Rent Control Court or the Appellate Authority in that behalf.

7. Section 12(1) of the Act enjoins a tenant, against whom an application for eviction has been made by a landlord under Section 11, to pay to the landlord, or deposit with the Rent Control Court, all arrears of rent admitted by the tenant to be due in respect of the building, up to the date of payment or deposit, and continue to pay or deposit any rent which may subsequently become due in respect of the building, until the 7 R.C.R.No.57 of 2024 termination of the proceedings before the Rent Control Court, in order to contest that application for eviction before the Rent Control Court. Similarly, Section 12(1) of the Act enjoins a tenant, in order to prefer an appeal under Section 18 of the Act against any order made by the Rent Control Court on an application made by a landlord under Section 11, to pay the landlord, or deposits with the Appellate Authority, all arrears of rent admitted by the tenant to be due in respect of the building up to the date of payment or deposit, and continues to pay or to deposit any rent which may subsequently become due in respect of the building, until the termination of the proceedings before the Appellate Authority.

8. The liability of a tenant under Section 12(1) of the Act, against whom an application for eviction has been made by a landlord under Section 11, or who prefer an appeal under Section 18 of the Act, against any order made by the Rent Control Court on an application made by a landlord under Section 11, is limited to all arrears of rent admitted by the tenant to be due in respect of the building, up to the date of payment or deposit, and he shall continue to pay or deposit any rent which may subsequently become due in respect of the building, until the termination of the proceedings before the Rent 8 R.C.R.No.57 of 2024 Control Court or the Appellate Authority, as the case may be.

9. The object of the provisions of Section 12(1) of the Act is to deny the defaulting tenant the right to contest the application for eviction before the Rent Control Court, or to prefer an appeal under Section 18 of the Act against any order made by the Rent Control Court on an application made by a landlord under Section 11, unless he pays to the landlord, or deposits with the Rent Control Court or the Appellate Authority, as the case may be, all arrears of rent admitted by him to be due in respect of the building, up to the date of payment or deposit, and continues to pay or to deposit any rent which may subsequently become due in respect of the building, until the termination of the proceedings before the Rent Control Court or the Appellate Authority, as the case may be.

10. In J. Ramkumar v. Ashok Jacob [2022 (1) KHC 495 : ILR 2021 (4) Kerala 876], a Division Bench of this Court in which one among us [Anil K. Narendran, J] was a party, held that Section 12 of the Act imposes certain obligations on the tenant to pay or deposit admitted rent, during the pendency of the proceedings for eviction under Section 11, before the Rent Control Court, and also the proceedings in an appeal filed under Section 18, before the Appellate Authority, against such an order 9 R.C.R.No.57 of 2024 of eviction. Section 12(3) of the Act also provides for the consequences, which were to follow, for committing default in fulfilling those obligations. Section 12(3) of the Act deals with the consequences flowing as a result of the failure on the part of the tenant to pay or deposit admitted rent. Before the consequences under Section 12(3) can ensue, the conditions specified in Section 12(1) and (2) have to be satisfied. Section 12(3) mandates that if any tenant fails to pay or deposit the admitted rent as provided under Section 12(1) and (2), the Rent Control Court or the Appellate Authority, as the case may be, shall, unless the tenant shows sufficient cause to the contrary stop all further proceedings and make an order directing the tenant to put the landlord in possession of the building. Therefore, if the Rent Control Court or the Appellate Authority, as the case may be, is satisfied about the cause shown by the tenant, it will not make any order under Section 12(3) of the Act, stopping further proceedings and directing the tenant to put the landlord in possession of the building.

11. It is clear from the plain language and also the legislative intent of Section 12 of the Act that, it is not for the Rent Control Court or the Appellate Authority, as the case may be, to pass an order under Section 12(3), stopping further 10 R.C.R.No.57 of 2024 proceedings and directing the tenant to put the landlord in possession of the building, once the time limit fixed for payment or deposit of admitted rent runs out, and the tenant defaulted payment or deposit of rent in terms of the order passed under Section 12(1) and (2). Though it is not for the Rent Control Court or the Appellate Authority, as the case may be, to issue any separate notice to the tenant to enable him to show sufficient cause for not paying or depositing the admitted arrears of rent, as held by the Division Bench in Narayanan v. Vinod [2004 (3) KLT 955] and approved by the Full Bench in Shaji M. v. SNDP Skhayogam No.610, Allapuzha [2020 (2) KHC 574], the Rent Control Court or the Appellate Authority is not expected to pass an order forthwith, stopping further proceedings and directing the tenant to put the landlord in possession of the building, under Section 12(3).

12. Before passing an order under Section 12(3) of the Act, the Rent Control Court or the Appellate Authority, as the case may be, should normally adjourn the hearing of the case to a date beyond the date fixed for payment or deposit of admitted rent, thereby allowing reasonable time to the tenant to show sufficient cause for not paying or depositing the admitted rent, if he has committed default in payment of the same, within the 11 R.C.R.No.57 of 2024 time limit stipulated in the order passed under Section 12(1) and (2). Such an opportunity to be afforded to the tenant to show sufficient cause is not an empty formality. The principles of natural justice would mandate that the Rent Control Court or the Appellate Authority should afford such an opportunity to the tenant before passing an order under Section 12(3).

13. In J. Ramkumar [2022 (1) KHC 495], this Court held that the consequences provided under Section 12(3) of the Act follow when there occurred a default by the tenant in complying with the direction in an order passed under Section 12(1) and (2), for deposit or payment of the admitted arrears of rent. On the date stipulated for effecting such payment, by virtue of that order, the tenant becomes fully aware that, unless sufficient cause has not been shown for the default committed, the consequence of stoppage of the proceedings and direction to put the landlord in possession of the building, under Section 12(3) would follow automatically. There is no necessity to alert the tenant by issuing any specific notice in this regard, calling upon him to show sufficient cause. On the other hand, providing of a further opportunity after the last date stipulated for effecting payment or deposit of admitted rent, is mandatory. If no sufficient cause is shown within such extended date to which the 12 R.C.R.No.57 of 2024 rent control petition is posted, it is absolutely within the authority and competence, and is the natural consequence that, the Rent Control Court or the Appellate Authority, as the case may be, should stop the proceedings and direct the tenant to put the landlord in possession of the building. As held by the Full Bench in Shaji M. [2020 (2) KHC 574], such a procedure, if followed, would be sufficient compliance for providing reasonable opportunity satisfying the statutory requirement contained in Section 12(3) of the Act.

14. In J. Ramkumar [2022 (1) KHC 495], this Court concluded that the consequences provided under Section 12(3) of the Act follow when there occurred a default by the tenant in complying with the direction in an order passed under Section 12(1) and (2), for deposit or payment of the admitted arrears of rent. On the date stipulated for effecting such payment, by virtue of that order, the tenant becomes fully aware that, unless sufficient cause has not been shown for the default committed, the consequence of stoppage of the proceedings and direction to put the landlord in possession of the building, under Section 12(3) would follow automatically. As held by a Division Bench in Venugopalan v. Raphael [1974 KLT 640] and reiterated in Davy v. Indu [1999 (3) KLT 434] even assuming that for 13 R.C.R.No.57 of 2024 purpose of execution an order under Section 12(3) of the Act can be equated with and treated as the same, as one under Section 11 of the Act, the consequence enjoined by an order under Section 12(3) for failure to deposit the admitted arrears in time can not be vacated or obliterated by payment at any subsequent stages or periods. The law laid down by a Three-Judge Bench of the Apex Court in Nasiruddin v. Sitha Ram Agarwal [(2003) 2 SCC 577] is to the effect that, where the statute does not provide either for extension of time or to condone the default in depositing the rent within the stipulated period, the court does not have the power to do so.

15. The failure of the tenant to deposit the admitted arrears of rent becomes a 'default' in terms of Section 12(3) of the Act once the Rent Control Court or the Appellate Authority records its satisfaction in an order under Section 12(3) that the tenant failed to show sufficient cause for non-payment of the admitted arrears of rent. On such satisfaction being recorded the consequence of stoppage of the proceedings and the direction to put the landlord in possession of the building would follow automatically. The default committed by the tenant in depositing the rent in terms of the order under Section 12(1) and (2) cannot be condoned by the Rent Control Court or the Appellate 14 R.C.R.No.57 of 2024 Authority, while passing an order under Section 12(3), by permitting the tenant to pay the admitted arrears of rent after such an order.

16. The judgment of this Court in J. Ramkumar [2022 (1) KHC 495] was under challenge before the Apex Court in SLP(C)No.18301 of 2021. After having heard the learned counsel for the parties, the Apex Court was not inclined to interfere with the order of this Court and accordingly, the special leave petition, along with connected matters, was dismissed by the order dated 18.11.2021.

17. The question as to whether the Rent Control Court or the appellate authority can extend the time limit for deposit of admitted arrears of rent, after an order passed under Section 12(3) of the Act, invoking the provisions under Section 23(1)(j) of that Act, came up for consideration before this Court in Greenix Ventures [2022 (4) KLJ 311]. After referring to the statutory provisions, the Division Bench of this Court in which one among us [Anil K. Narendran, J.] was a party, held that in an order passed under Section 12(3) of the Act, which is one passed on being satisfied that the tenant has not shown sufficient cause for non-payment of the admitted arrears of rent, in terms of the order under Section 12(1) read with Section 12(2) of the Act, the 15 R.C.R.No.57 of 2024 Rent Control Court or the Appellate Authority cannot enlarge the time limit originally granted for payment of the admitted arrears of rent, invoking the provisions under Section 23(1). Since, on passing such an order under Section 12(3) of the Act, the consequence of stoppage of proceedings and the direction to put the landlord in possession of the building follow automatically, no such extension is legally impermissible, either by the Rent Control Court or the Appellate Authority.

18. In Gopala Panicker Baiju and another v. Mallika [2018 (5) KHC 95] a Division Bench of this Court held that the relevant factors from which 'arrears of rent' can be inferred are the rate of rent and period of default. In the said decision, it has been held that neither Section 11(2)(b) nor Section 12 of the Act recognises or permits any kind of set off, adjustment or counter claim by the tenant towards arrears of rent or admitted arrears. Paragraph 8 of the said decision reads as follows:

"8. In this context, it is to be borne in mind that any kind of set off or adjustment towards arrears of rent cannot be accepted, while considering an application under Section 12 of the Act, as such counter claims require enquiry and adjudication. Neither Section 11(2)(b) nor Section 12 recognises or permits any kind of set off, adjustment or counter claim by the tenant towards arrears of rent or admitted arrears. The enabling provision which permits set 16 R.C.R.No.57 of 2024 off towards rent is Section 17(2) of the Act and the same is permissible, where an order to that effect is passed by the Accommodation Controller, on satisfaction of the failure on the landlord to attend to maintenance and necessary repairs of the building." (underlined supplied)

19. Following the law laid down in Gopala Panicker Baiju [2018 (5) KHC 95], a Division Bench of this Court, in which one among us [Anil K. Narendran, J.] was a party, held in Nandanam Tiles and Sanitaries (P) Ltd. v. Abdul Gaffur [2022 (4) KHC 201] that the only enabling provision which permits set off towards rent is Section 17(2) of the Act and the same is permissible where an order to that effect is passed by the Accommodation Controller on satisfaction of the failure of the landlord to attend to maintenance and necessary repairs of the building.

20. In Manikkoth Shaniba v. Kunnoth Ayisha [2022 SCC OnLine Ker 8936] a Division Bench of this Court in which one among us [Anil K. Narendran, J.] was a party, held that the application filed by the tenant for adjustment of rental advance against the admitted arrears of rent is legally impermissible.

21. Viewed in the light of the law laid down in the decisions referred to supra, conclusion is irresistible that the grounds raised by the petitioners-tenants to challenge the order 17 R.C.R.No.57 of 2024 dated 30.09.2020 of the Rent Control Court in RCP No.88 of 2019 whereby the proceedings in that petition stands stopped, in exercise of the powers under Section 12(3) of the Act, are legally untenable and the challenge made against that order was rightly rejected by the Appellate Authority in the judgment dated 21.12.2023 in R.C.A.No.48 of 2020.

In the result, this Rent Control Revision fails and the same is accordingly, dismissed.

Sd/-

ANIL K. NARENDRAN, JUDGE Sd/-

HARISANKAR V. MENON, JUDGE AV/1/4

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