Andhra HC (Pre-Telangana)
Arnavaz Rustom Printer Mumbai And ... vs N.D. Thadani And Another on 8 June, 2001
Equivalent citations: 2001(4)ALD652, 2001(4)ALT509, 2001 A I H C 3944, (2001) 2 RENCR 298, (2001) 4 ANDHLD 652, (2001) 4 ANDH LT 509, (2001) 2 RENCJ 579
ORDER
1. In this revision petition under Section 22 of Andhra Pradesh (Lease, Rent and Eviction) Control Act, 1960 (hereinafter called 'the Act') the landlords are petitioners. They sued the respondents (hereinafter called, 'the tenants') for eviction from a residential premises by filing RC No.224 of 1984 under Section 10(2)(i) of the Act alleging that the tenants committed chronic default in paying the monthly rent. The learned II Additional Rent Controller, Hyderabad, by order dated 25-8-1993 in RC No.224 of 1984 allowed the petitioner and directed the tenants to handover the premises to the landlords. In the ensuing tenants appeal under Section 20 of the Act, the learned Additional Chief Judge and appellate authority under the Act reversed the order of the Rent Controller and dismissed the rent control petition. Hence, this revision.
2. The case of the landlords has a chequered carrier spanning over a period of almost thirty years. For the purpose of this case, it is only necessary to notice the case of the landlords in brief. The premises bearing No.4-1-1079 (the premises for brevity) belongs to one Sri B.B. Mehta who died in 1980 leaving behind his two daughters, who succeeded to the property. During his lifetime late Mehta entered into oral lease with the tenants on a monthly rent of Rs.160/-. Since then the tenants were irregular in paying the rents and were avoiding to pay the rents on one pretext or the other. First floor of the building was constructed after 1957 and therefore a notice of termination was issued and a suit being OS No.375 of 1974 was filed on the file of the Court of III Assistant Judge, City Civil Court Hyderabad for recovery of possession of the first floor portion and also for recovery of rent and mesne profits at the rate of Rs. 160/- per month for the period commencing from 1-5-1973 till the end of February, 1974. The suit was contested by the tenants inter alia on the ground that the rent for the first floor was Rs.80/- whereas the rent for garage-cum-shop portion on the ground floor was Rs.80/- and claiming of Rs.160/- is not according to conditions of lease. The tenants also objected the suit on the ground mat the first floor was constructed prior to 26-8-1957 and therefore the provisions of the Rent Control Act would only apply and the suit is not maintainable. Be that as it may, after regular trial, the suit was decreed for recovery of money of an amount of Rs.1,600/- being arrears of rent for a period of ten months as noticed hereinabove. The other relief for eviction was rejected on the ground that the building was constructed prior to 1957 and therefore the suit is not maintainable. Late Mehta carried the matter in appeal in AS No.34 of 1977 on the file of the Court of Additional Chief Judge, City Civil Court (Temporary). Hyderabad. There was a cross-appeal by the tenants being AS No.332 of 1977 aggrieved by the decree for payment of arrears of rent. The appellate Court dismissed the appeal filed by late Mehta and allowed the appeal of the tenants holding that having regard to pecuniary jurisdiction, it is only Small Causes Court which can entertain a suit.
3, Late Mehta preferred two Second Appeals before this Court being SA No.843 of 1978 (against AS No.332 of 1977) and SA No.844 of 1978 (against AS No.34 of 1977). This Court by judgment dated 24-12-1981 allowed the landlords Second Appeals holding that the first floor potion was constructed after 26-8-1957 and therefore the provisions of the Rent Control Act would not apply and that the rent payable is Rs.160/- per moth for the entire first floor portion and that garage and shop portion in the ground floor did not form part of the lease. Accordingly, the entire suit of late Mehta OS No.375 of 1974 was decreed. The tenant preferred SLP 10344 of 1980 before the Supreme Court of India against SA No.844 of 1978 which arose out of the first appeal filed by the landlords, but did not prefer any appeal insofar as SA No.843 of 1978 which arose out of the tenants' first appeal being AS No.332 of 1977. The Hon'ble Supreme Court stayed the eviction of the tenants on condition of the tenants depositing rents at the rate of Rs.160/- per month before the Rent Controller promptly every month.
4. It may be noticed that while things stood thus, the Supreme Court in Motor General Traders v. State of A.P., AIR 1984 SC 121, struck down Section 32(b) of the Act. The Government of Andhra Pradesh thereafter issued a Notification under Section 26 of the Act exempting the buildings fetching rent of Rs.1,000/- and above and/or buildings which are less than 10 years old from the purview of the Rent Control Act. Therefore, the landlords filed eviction petition RC No.224 of 1984 alleging that the tenants committed default in payment of rents with effect from 1-5-1973 and the tenants are irregular in payment of rents. The tenants did not deposit rents regularly before the Rent Controller inspite of the directions of the Hon'ble Supreme Court and the landlords are not aware as to the exact dates on which the tenants deposited the rents in the Court. The landlords have received an amount of Rs.17,020/- only towards rent from the date of tenancy and still the tenants are due an amount of Rs.28,280/- towards rent. It is alleged that the tenants are depositing rents as and when they like once in four or five months and not filing the Bank challans in the Court. Therefore, they prayed for eviction.
5. The tenants in their counter denied that the rent is Rs.160/- per month. From this point of view there is no default in payment of rents as the rent is Rs.80/- per month. It is also alleged in the counter that the second respondent deposited rents regularly and therefore he is not a wilful defaulter.
6. The learned Rent Controller examined PW1 on behalf of the landlords and RW1 on the behalf of tenants. Exs.Pl to P4 were marked for the landlords and Exs.R1 to R106 were marked for the tenants. On a consideration of the oral and documentary evidence, the learned Rent Controller came to a conclusion that the tenants failed to deposit the rents as directed by the Supreme Court in SLP that the respondent set up a false plea of rent being Rs.80/- per month only and therefore they are guilty of wilful default in paying the monthly rent. Accordingly, eviction was ordered. In the tenants' appeal before the Court of the Additional Chief Judge, City Small Causes Court, the plea of the tenants that the landlords did not specify the period for which there is alleged wilful default found acceptance. The appellate authority held that the landlords ought to have issued a notice to the tenants demanding amount towards arrears of rent and in the absence of such notice, it is not possible to hold the tenants guilty of wilful default for specific period.
7. In this appeal, Mr. Vilas V. Afzulpurkar, learned Counsel for the petitioners/landlords, submits that before invoking jurisdiction of the Rent Controller for evicting the tenants on the ground of wilful default, the law does not contemplate issuing a prior notice, that the tenants committed wilful default in payment of rent and the appellate authority misdirected itself in coming to the conclusion that the tenant has not committed wilful default. The learned Counsel submitted that the tenants have deposited rents only after the landlords obtained an order of attachment before judgment in the civil Court for recovery of arrears of rent and that the tenants admitted wilful default in the reply (Ex.105) to the legal notice (Ex.104) issued by the landlords. The learned Counsel further submits that if the tenants deposited rents in the State Bank of Hyderabad as required under the Rules, but fails to produce the bank challans in the office of the Rent Controller, the same would not amount to deposit of rents in the Court of Rent Controller as required under Rule 5 of the Andhra Pradesh (Lease, Rent and Eviction) Control Rules, 1961 (hereinafter called, 'the Rules'). The learned Counsel placed strong reliance on the decision in S. Sundaram Pilla v. V.R, Pattabhiraman, , ffari Prasad Badruka v. T. Laxmi, and Chordia Automobiles v. S. Moosa, . The learned Counsel also invited the attention of this Court to the evidence of the first respondent as RW1 wherein he admitted that he has committed default in payment of rents to a tune of Rs.4,260/- by 31-5-1984.
8. Ms. Jayasri Saradhi, learned Counsel for the respondents/tenants submits that the tenants have been paying rents in the bank as directed by the Supreme Court and as they were not aware of the procedure for filing the challans in the Court of Rent Controller, the same was not done. The tenants cannot be said to be guilty of wilful default. She submits that mere default in payment of rents is not a ground for ordering eviction of the tenants and only when there is a wilful default on the part of the tenant it is a ground for eviction. She further submits that the tenants cannot be said to be guilty of wilful default unless and until there is an order of the Rent Controller directing the tenants to deposit the rents. She relied on the judgment of the Supreme Court in Inter-State Transport Agency v. Bibi Habiba Khatoon, .
9. In the light of the rival contentions the only point that arises for consideration is whether there is wilful default on the part of the tenants.
10. Be it noted that the learned Counsel for the tenants, having regard to the admission made RW1 as well as clinching documentary evidence, does not dispute that there is default in payment of rents on the part of the tenants. However, she strenuously contends that there is no "wilful default" on the part of the tenants in paying rents. According to her, the tenants were paying amounts in the Bank and they did not deposit the challans in the Court of Rent Controller and therefore the provisions of Section 10(2)(i) of the Act are not attracted to the facts of this case. She does not dispute the facts and therefore it is not necessary to again examine the case from the point of the findings recorded by the learned Rent Controller as well as the appellate authority. What is required to be examined in this case is (i) whether a notice is required to be given under the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960 by the landlords to the tenants before filing case on the ground of wilful default and (ii) whether Rule 5 of Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Rules, 1961 is mandatory. Answer to these two questions would enable to decide the point for consideration.
11. Before dealing with the questions required to be examined, it is necessary to notice the provisions of Section 11 of the Act which reads as under :
11. Payment or deposit of rent during the pendency of proceedings for eviction :--
(1) No tenant against whom an application for eviction has been made by a landlord under Section 10, shall be entitled to contest the application before the Controller under that section or to prefer any appeal under Section 20 against any order made by the Controller on the application, unless he has paid to the landlord or deposits with the Controller or the appellate authority, as the case may be, all arrears of rent due in respect of the building up to the date of payment or deposit and continues to pay or deposit any rent which may subsequently become due in respect of the building, until the termination of the proceedings before the Controller or the appellate authority, as the case may be.
(2) The deposit of rent under subsection (1) shall be made within the time and in the manner prescribed.
(3) Where there is any dispute as the amount of rent to be paid or deposited under sub-section (1) the Controller or the appellate authority, as the case maybe, shall on application made to him either by the tenant or by the landlord, and after making such inquiry as he deems necessary, determine summarily the rent to be so paid or deposited.
(4) If any tenant fails to pay or to deposit the rent as aforesaid, the Controller 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.
(5) The amount deposited under subsection (1) may, subject to such conditions as may be prescribed, be withdrawn by the landlord on application made by him in that behalf to the Controller or the appellate authority, as the case may be.
12. The above provision deals with two situations. As per sub-section (1) of Section 11 a tenant is entitled to contest the 'Rent Control Case' for eviction on the ground of default only if he pays to the landlord or deposits before the Rent Controller or the appellate authority all arrears of rent due in respect of a building upto the date of payment and continues to pay the rent subsequently becoming due. Sub-sections (3) and (4) deals with different situations in that, if there is dispute as to depositing rents the Rent Controller determines the rent payable by the tenant during the pendency of the proceedings and as per sub-section (4) if the tenant fails to deposit the rent as ordered by the Rent Controller under sub-section (3) it is permissible for the Rent Controller to stop all further proceedings and make order directing the tenant to pay to the landlord. Sub-section (5) deals with withdrawal of rents deposited by the tenants either under sub-section (1) or sub-section (4). In either case, the rent has to be deposited in accordance with the Rules prescribed. Rule 5 of the Rent which is relevant reads as under:
5. Manner of Eviction from demised premises in certain cases :--(1) Where any person fails or refuses to vacate and deliver possession of the demised premises under Section 4, the Estate Officer in case of a building, and the Mandal Revenue Officer in case of a land shall serve an order of eviction in the manner prescribed on the person in occupation of the demised premises or on his agent requiring him to vacate and deliver possession thereof within such time as may be specified in such order and after the receipt of such order the person in occupation of the demised premises shall vacate the same and deliver possession thereof to the Estate Officer or as the case may be to the Mandal Revenue Officer within such time as may be specified in such order.
(2) Where the person in occupation of the demised premises fails to vacate the premises within the time specified in sub-section (1) the Estate Officer, or as the case may be the Mandal Revenue Officer, may take possession of the demised premises from the person in occupation thereof and where any such officer is resisted in the exercise of such power or discharge of such duty, the Magistrate having jurisdiction shall, on a written requisition from such officer direct any police officer not below the rank of a Sub-Inspector to render such help as may be necessary to enable the officer to exercise such power or discharge such duty.
(3) Where the demised premises is a building of which possession is to be taken this Act and the same is found locked, the Estate Officer may either cause the premises sealed or in the presence of two or more witnesses break or caused it to be broken open by its door, gate or other barriers and enter the premises :
Provided that-
(a) no entry shall be made into or possession taken of a building before sunrise or after sunset;
(b) where any building is forced open an inventory of the articles found in the premises shall be taken in the presence of two or more witnesses.
13. A reading of sub-sections (1) and (3) of Section 11 read with sub-rules (3) and (4) of Rule 5 makes it clear that every tenant after depositing rent in the State Bank of Hyderabad shall deliver a copy of the challans for the deposit of the rent returned by the bank to the Rent Controller and on such delivery of challans the Rent Controller shall take necessary action for the service of the notice of depositing on the landlords within seven days thereof. There cannot be any doubt that service of notice of deposit on the landlord is to enable the landlord to withdraw the amount as per Section 11(5) of the Act.
14. Having regard to the provisions of Section 11 of the Act and Rule 5 of the Rules, it is not possible to agree with the submission of the learned Counsel for the tenants that the concept of wilful default comes into picture only when there is an order of the Rent Controller. In Bibi Habiba Khatoon's case (supra) the Hon'ble Supreme Court dealing with the case arising under Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947 held as under :
........The consequence of non-compliance with a direction made under Section 15 of the Act is contained in Section 15(1) of the Act. The Court could order the defence against ejectment to be struck off and to place the tenant in the same position as if he had not defended the claim to ejectment in the matter or cause in which the direction was made. For non-compliance of the directions in the second appeal, recourse could not be had to seeking ejectment under Section 11 of the Act. Delay in the deposit of rent is not covered by Section 11 of the Act, particularly after the rent was withdrawn without demur by the landlord. The trial Court, the first appellate Court and the High Court fell in error in not noticing the distinction between the remedies available under Section 11 of the Act and those available for non-compliance with the directions under Section 15 of the Act.
15. Under the Bihar Act the consequence of non-compliance with the directions made under Section 15 (1) of the Act to deposit the rent is only striking of defence of the tenant and nothing more. In A.P. Act sub-section (4) of Section 11 makes it a mandatory for the Rent Controller to order eviction of the tenant forthwith. That being the distinction in two Acts, I am afraid. I cannot agree with the learned Counsel for the tenant that failure to deposit rent by the tenant cannot be a ground for eviction.
16. The answer to the question whether Rule 5 of the Rules is mandatory, should be in the affirmative. The law has taken sufficient care to deal with the situation where the tenant is required to pay/ deposit rents either before the original authority or the appellate authority. The mere fact that a tenant had been depositing rents in the bank, but failed to deliver copies of challans to the learned Rent Controller is by itself amounts to wilful default. A learned single Judge of this Court has considered this aspect of the matter in detail in Hari Prasad Badruka's case (supra) wherein it was held:
.......The amounts deposited into the bank by the respondents (tenants) are not in accordance with the said agreement. Exs.R2 to R67 show that rents were deposited in the next month i.e., after the expiry of the due date fixed for payment such deposit for a long time cannot but be taken as wilful default because no explanation is given by RW1 for not depositing the rent before the date fixed as the grace period as per Section 10(2) of the Act. By reason of the failure of the respondents in depositing the challans into Court for a long time after deposit of money (rent) in Bank and for not issuing notice of deposit to him, the petitioner is deprived of the benefit of the money deposited and hence it is as good as the rent not being tendered till the challan is filed into Court and notice thereof is given to the landlord which should be construed as 'wilful default' in payment of rent.
17. The learned Additional Chief Judge, City Small Causes Court, observed that when there is a default in payment of rents, as directed by the Supreme Court, the landlords ought to have issued a notice. I am afraid, this Court cannot agree with the same. A.P, Rent Control Act does not contemplate prior notice to the defaulting tenant. In Tamil Nadu Buildings (Lease and Rent Control) Act 1960 such a provision was incorporated by way of explanation to Section 10(2) which was added by Amendment Act 23 of 1973. Interpreting Tamil Nadu Act, a three-Judge-Bench of the Supreme Court in S. Sundaram 's case (supra) has explained 'wilful default' in the following terms :
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. Taking for instance a case where a tenant commits default after default despite oral demands or reminders and fails to pay the rent without any just or lawful cause, it cannot be said that he is guilty of wilful default because such a course of conduct manifestly amounts to wilful default as contemplated either by the Act or by other Acts referred to above.
Yet again it was held:
If we analyse the various concomitants of the Explanation, the position seems to be that-
(a) there should be a default to pay or tender rent;
(b) the default should continue even after the landlord has issued two months' notice claiming the arrears of rent;
(c) if, despite notice, the arrears are not paid the tenant is said to have committed a wilful default and consequently liable to be evicted forthwith.
18. In Chordia Automobiles (supra) the explanation to Section 10(2)(i) of the Act was again considered. Following Sundaram Pillai's case (supra) the Supreme Court held as under:
Wilful default means an Act consciously or deliberately done with open defiance and intent not to pay the rent. In the present case the amount of rent defaulted firstly is on account of the fact that the agent of the landlord did not come to collect the rent for some reason. Further, notice of default contained the disputed rent. This fact coupled with the fact that eviction suit was filed before maturing a case of wilful default in terms of the explanation to the proviso of Section 10(2). The dispute of rent admittedly was genuine. Further, we find the conduct of the appellant throughout in the past being not of a defaulter or irregular payer of rent. Thus, all these circumstances cumulatively come to only one conclusion that the appellant cannot beheld to be a wilful defaulter.
19. As already observed, the terms wilful default is not defined in the A.P. Rent Control Act. Indeed in Sundaram Pillai's case (supra) the Supreme Court surveyed Rent Control Acts of various States and observed that Section 10(2) of the A.P. Act is only provision which confers the tenant from eviction under certain circumstances and referred to the proviso to Section 10(2) of the Act. The Act does not specifically require the landlord to give notice to tenant who has not paid rent within the stipulated time. Therefore, the learned appellate Judge was clearly in error in coming to such conclusion.
20. Mr. Vilas V. Afzul Purkar has also urged before that since the beginning of the tenancy, the tenants have not paid rents they are habitually committed default. He would urge, that in such circumstances, supine 'indifference' on the part of the tenant to pay rents should be presumed and such conduct should be treated as wilful default. The learned Counsel invited the attention of this Court to Apex Courts decision in Shama Prashant Raje v. Ganpatrao, , wherein the Supreme Court defined phrase 'habitual in arrears' in the following terms :
If a tenant, notwithstanding the obligation of paying the rent by the 10th day of each English calendar month continuously makes a default of paying the rent for the first month by two months thereafter, and pays the rent in similar manner, then he must be held to be habitually in arrears with the rent in question. This being the position, the fact that the rent for September to November, 1984 was paid in December only after the distress warrant was issued and that, again from December 1984 to March, 1985 the rent had not been paid and was deposited within the 10th of next month, as stipulated in the lease agreement, would constitute the tenant to be habitually in arrears within the meaning of clause 13(3)(ii) of the Control Order. The appellate authority under the Control Order was obviously in error in interfering with the well reasoned conclusion of the Controller on this score, and the High Court was fully justified in correcting the said error by interfering with the finding of the lower appellate authority on the question of applicability of clause 13(3)(ii) to the case in hand.
21. As rightly submitted by Sri Vilas V. Afzul Purkar, the landlords are making attempts 1973 onwards to recover possession as well as recover arrears of rent. The tenancy started in 1973 and since then the dispute started relating to payment of rent as well as eviction. In such a situation, tenants admittedly committed default in payment of rent, but justified on the ground that he was not aware of the procedures for delivering the copies of the bank challans. In my considered opinion a tenant who failed to pay the rents regularly as required under the Act, but still seeks protection of the Act should be treated as habitually in arrears of rent and a presumption should be drawn that without any further proof such a tenant who is habitually in arrears must be held to have committed wilful default liable for eviction under Section 10(2)(i) of the Act. In such a case its traversity of justice to compel the landlord to either issue prior notice to the tenant or to specify the period of default for payment of rents. The law should conclusively presume that the tenant is habitually in arrears and is guilty of wilful default.
22. For these reasons, I am not able to agree with the submission made by Smt. Jayasri Saradhi, learned Counsel for the respondents, that the respondents are not wilful defaulters.
23. For the above reasons, the civil revision petition is allowed. The impugned order of the Court of Additional Chief Judge, City Small Causes Court is set aside and the order passed by the Rent Controller is confirmed ordering eviction of the respondents/tenants from the petitioner schedule premises.