Karnataka High Court
Sri K Manju vs Sri B Purushottam on 6 January, 2023
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 6th DAY OF JANUARY, 2023
BEFORE
THE HON'BLE MR. JUSTICE ANANT RAMANATH HEGDE
REGULAR SECOND APPEAL NO.1269/2016
BETWEEN:
Sri K.Manju
S/o Sri Krishnaraje Urs,
Aged about 37 years,
R/at Door No.1036/20B,
"Spoorthy", 4th Main,
Vidyaranyapuram,
Mysuru - 570 007.
Represented by GAP Holder
Sri Krishna Urs M.N.
S/o late Mallaraje urs,
Aged about 65 years,
R/at Door No.1036/20B,
"Spoorthy", 4th Main,
Vidyaranyapuram,
Mysuru - 570 007.
... Appellant
(By Sri Chandrashekar P and
Sri Utkarsh Bellad, Advocates)
AND:
Sri B.Purushottam
S/o Sri K.Bheemaiah,
Aged about 58 years,
Door No.4504/2B/L2,
Thibbadevi Temple road,
Mysuru - 570 007.
... Respondent
(By Sri P.Nataraju Advocate for C/R
Sri B.L.Sanjeev, Advocate)
2
This appeal is filed under Section 100 of the Code of
Civil Procedure praying to allow this appeal and set aside
the judgment and decree dated 30.04.2016 passed by the
learned III Addl. District Judge at Mysore in
R.A.No.370/2014 (Old No.391/2013) confirming the
judgment and decree dated 03.10.2013 passed by the
learned IV Addl. First Civil Judge at Mysore in
O.S.No.367/2008 and thereby dismissing the suit in
O.S.No.367/2008 filed by the plaintiff.
This appeal is coming on for dictating further
judgment this day, the court delivered the following :
JUDGMENT
Heard the learned counsel appearing for the appellant and also the learned counsel for the respondent.
2. In this regular second appeal under Section 100 of the Code of Civil Procedure, 1908, the defendant in O.S. No.367/2008 on the file of IV Addl. Civil Judge, Mysuru is questioning the concurrent judgments and decrees of the trial court and first appellate court. The trial court granted the decree for ejectment in favour of the plaintiff/landlord and the first appellate court confirmed it.
3. The plaintiff is the landlord and the defendant is the tenant. The relationship of landlord and tenant is evidenced in undisputed registered lease deed dated 3 17.04.2004 (Ex.P.64). The tenure of the lease is 30 years 5 months from the date of execution of lease deed.
4. The plaintiff would contend that Rs.18,000=00 is the rent per month. The lease deed also provided for 10% of escalation of rent on every three years. The lease further provided for termination of lease in the event of breach of conditions. Default of rent for three months is one of the conditions which enabled the landlord termination of lease and to seek ejectment.
5. The plaintiff issued a notice to the defendant alleging arrears of rent between 22.09.2007 to 16.01.2008. According to the plaintiff, in addition to the lease agreement dated 27.12.2003, there was one more agreement which is styled as addendum to the lease agreement. This addendum is dated 17.04.2004. Plaintiff contends that the addendum changed the monthly rent of Rs.18,000.00 per month to daily rent of Rs.600.00 per day.
6. The defendant resisted the suit and denied he being in arrears. Also denied the execution of addendum 4 to the lease agreement. The defendant prayed for dismissal of the suit. On 07.02.2011 i.e., during the pendency of the suit, the defendant paid a sum of `3,01,158/- towards arrears of rent. The plaintiff would contend that he has accepted the said amount as damages. The trial Court has decreed the suit on the ground that the plaintiff has established the breach on the part of the defendant. The first appellate court dismissed the appeal. Hence this second appeal.
7. This court vide order dated 18.01.2022 has admitted the appeal to consider the following substantial question of law :-
"Whether the trial Court and the appellate Court were justified in granting the decree for ejectment when the forfeiture of the lease was for non payment of rent and during the pendency of the suit, a sum of `3,09,820/- being the arrears of rent along with interest was paid by the defendant in the light of Section 114 of the Transfer of Property Act, 1882 ?"
5
8. Learned counsel for the appellant raised the following contentions :-
The defendant has been paying rent as agreed every month and defendant is not in arrears of rent when the termination notice was issued. The tenure of lease is upto the year 2034 as such the suit is premature. The plaintiff has accepted Rs.3,01,158/- during pendency of the suit, as such he has waived his right to claim the possession of the property from the tenant.
Section 114 of the Transfer of Property Act (for short 'the TP Act') would enable the Court to relieve the defendant from forfeiture of tenancy, as such, the trial court ought to have dismissed the suit invoking Section 114 of the TP Act.
9. Learned counsel for the respondent in support of his contentions would raise the following contentions :-
The lease agreement provided for termination of lease and enabled the landlord to seek ejectment of the tenant in the event of tenant being an arrears of rent for more than three months. The payment of monthly rent agreed under the original lease agreement was later 6 altered in terms of addendum and the defendant/tenant was required to pay daily rent of Rs.600.00 a day, every day at 5.00 p.m. and there is default on the part of the defendant in paying the rent and the defendant never paid the daily rent and remained defaulter. Assuming he was required to pay the rent on monthly basis, he was in arrears of rent for the month of October 2007 to Decemabr 2007 and thereby violated the terms of the lease.
10. As on 21.09.2007, Rs. 6,41,400/- was due to from the defendant in terms of the agreed lease deed. The payments made in the month of October, November and December 2007 covered the payments up to 21.09.2007 as the payments were adjusted to the arrears of October - 2005, February - 2006 and September - 2007. Thus the defendant was in arrears in the month of October to December, 2007 and the plaintiff has rightly issued a notice terminating the tenancy and thereafter he has filed a suit.
11. The trial Court and the first appellate Court have rightly held that the defendant has committed the 7 breach of the agreed terms and conditions and accordingly prayed for dismissal of the appeal.
12. This court has considered the contentions raised at the bar.
13. Learned counsel for the appellant in support of his contention would also place the reliance of the decision of the Hon'ble Apex Court in the case of R.S.Lala Praduman Kumar Vs. Virendra Goyal (dead) by his Legal representatives and others reported in AIR 1969 Supreme Court 1349 and would contend that the trial court and the first appellate court failed to exercise the jurisdiction vested with the trial court under Section 114 of the TP Act.
14. This Court has considered the contentions raised at the Bar. The First Appellate Court is of the view that whether the addendum was really entered between the parties or not is not of much consequence. Considering the bank statement of the plaintiff, to which the defendant has defendant credited the rent amount, the first appellate 8 court concluded that the defendant has defaulted in paying rent for the 117 days.
15. This Court has also perused the record at Ex.P.62. From Ex.P.62 it is apparent that the rent for the month of October - 2005, February - 2006 and September
- 2007 are not paid by the defendants. The payments made in the month of October, November and December - 2007, by the defendant are adjusted towards arrears according to the plaintiff. According to the plaintiff by the time the suit was filed, the rent for the period of October, November and December - 2007 was not yet paid. The First Appellate Court has taken note of the fact that Rs. 6,41,400/- would be the rent payable by the defendant in terms of the registered lease deed up to 29.01.2007. The First Appellate Court has taken a view that the rent for 03 months which was in arrears, was paid in the month of October, November and December - 2007. Based on these findings the First Appellate Court is of the view that the defendant was in arrears for 117 days, by the time notice was issued by the plaintiff for terminating the tenancy. 9
16. Though it is a pure question of fact, this Court has perused the records and does not find any infirmity with the finding recorded by the First Appellate Court that the defendant was in arrears of rent. It is also relevant to note that defendant himself admitted in the cross- examination that he was in arrears of rent for a period of 117 days. This being the position absolutely, there is no difficulty in holding that the defendant was in arrears for 117 days.
17. In the light of the substantial question of law framed by this Court the next point that requires to be considered is that whether the defendant is entitled to relief under Section 114 of the TP Act.
18. The learned counsel for the appellant would place reliance the judgment in the case of R.S.Lala Praduman Kumar Vs. Virendra Goyal (dead) by his Legal representatives and others, referred supra. This Court has considered the ratio in the light of facts in the aforementioned case. From the facts of the said case, it is seen that, the defendant in the said suit, in addition to various defences raised also took a contention that he is 10 ready to pay the arrears of rent and he has also sought the relief under Section 114 of the TP Act.
19. The Trial Court found that the amount paid by the defendant is not in conformity with the requirement of Section 114 of the T.P. Act and accordingly, refused to relieve the tenant from forfeiture of tenancy. Before the First Appellate Court, the defendant/appellant in the said case, paid the entire amount and in addition, paid the excess amount. Considering these facts the First Appellate Court exercised the power under Section 114 of the T.P. Act and relieved the defendant from forfeiture of tenancy. In the backdrop of these facts the Hon'ble Supreme Court has held that the First Appellate Court can also exercise the power under Section 114 of the T. P. Act.
20. Now, the point for consideration is whether the defendant has made out the case for grant of relief under Section 114 of T.P. Act.
Section 114 of T.P. Act would read as under :-
"Section 114. Relief against forfeiture for non-payment of rent. - Where a lease of immovable property has determined by 11 foliature for non-payment of rent, and the lossor sues to eject the lessee, if, at the hearing of the suit, the lessee pays or tenders to the lessor the rent in arrear, together, with interest thereon and his full costs of the suit, or gives such security as the Court thinks sufficient for making such payment within fifteen days, the Court may, in lieu of making a decree for ejectment pass an order relieving the lessee against the forfeiture and thereupon the lessee shall hold the property leased as if the forfeiture had not occurred.
21. To claim the relief under Section 114 of T.P. Act, the defendant must pay arrears of rent, interest and the cost, pertaining to the said proceedings. Admittedly, in the defendant has not paid the interest and the cost. Moreover, one more distinguishing factor in this case, as compared to the case cited by the appellant, the defendant in his written statement has not taken the defence that he is ready to pay arrears, cost and interest. Even before the First Appellate Court, the defendant has not come forward to pay the interest on arrears and cost of the proceedings. Even before this court he has not taken a plea that he is 12 ready to pay the interest on arrears and cost of the proceedings. From the language employed in Section 114 of the T.P. Act, it is apparent that the Court has discretion under Section 114 of T.P. Act to relieve the defendant from forfeiture tenancy, provided conditions contained therein are met. Those conditions are already referred above. As noticed the defendant has not complied the conditions. Under these circumstances, this Court is of view that the defendant has not made out a case for relief of grant under Section 114 of T. P. Act.
22. It is also relevant to note that the defendant was a defaulter by the time suit was filed. Till the matter was referred to Lok-Adalath, he has not come forward pay the arrears of rent accrued prior to the suit and arrears accruing during the pendency. The arrears of rent were offered only when the matter was referred to the Lok- Adalath. It is also relevant to note that the defendant has made payment only on 05.02.2009. Under these circumstances, this Court is of the view that the defendant has not made out a case for grant of relief under Section 13 114 of the T.P. Act to relieve the tenant from the forfeiture.
23. The learned counsel for the appellant would also submit that the plaintiff has accepted the rent amount paid by the defendant during the pendency of the suit. As such, it is urged that he has waived his right to seek ejectment. Section 112 of the T. P. Act, deals with the waiver of forfeiture and the same reads as under.
24. Section 112 of TP Act would read as under:
"Waiver of forfeiture:- A forfeiture under Section 111, clause (g), is waived by acceptance of rent which has become due since the forfeiture, or by distress for such rent, or by any other act on the part of the lessor showing an intention to treat the lease as subsisting:
Provided that The lessor is aware that the forfeiture has been incurred:
Provided also that, where the rent is accepted after the institution of a suit to eject the lessee on the ground of forfeiture, such acceptance is not a waiver."14
25. The second proviso to Section 112 of the T.P. Act is explicitly clear. The rent if accepted after the institution of the suit for ejectment, by the lessor, such an acceptance of rent does not amount to waiver. There is no dispute that the defendant has paid the arrears only during the pendency of the suit. Under these circumstances, the act of the plaintiff accepting the rent from the defendant cannot be treated as a waiver. It is also relevant to note that the plaintiff has accepted the said amount as damages and not as rent as claimed by the defendant. The plaintiff has accepted the said amount without prejudice to his contention. Thus there is no waiver of forfeiture.
26. It is also noticed that the Trial Court has not considered the case of the defendant under Section 114 of the T.P. Act. However, the First Appellate Court has taken note of the contention of the defendant relating to the Section 114 of T.P. Act, though the contention in this regard is not specifically raised in the written statement. The First Appellate Court has assigned by reasons as to why the appellant is not entitled for the relief under Section 114 of the T. P. Act.
15
27. For the reasons assigned above, the substantial question of law framed by this Court has to be answered in favour of the respondent and against the appellant. Accordingly, the appeal is dismissed.
28. However, this court has to consider one more aspect in this matter. Admittedly the defendant is running a fuel station in the leased property. The fuel station requires a considerable investment. In case the defendant is ordered to vacate the premise immediately, the defendant would certainly put to certain hardship. The reasons are obvious. The shifting/relocation of the fuel station involves co-ordination and permission from several departments of the government which by nature of things is a time consuming and tedious process. Shifting of fuel station cannot happen overnight. Under these circumstances, this court is of the view that a reasonable time, on certain terms is to be granted to the defendant/ appellant to vacate the premises.
29. Considering the fact that the tenure of lease was for a period of thirty years and five months which would have ended in 2034, and also considering the fact 16 that defendant assures to pay the rent regularly till he vacates the premises, this court is of the view that the defendant shall vacate the premises immediately after expiry of two years six months from the date of this judgment. The other terms are;
a) The defendant shall continue to pay the rent payable to the plaintiff in terms of the agreement dated 17.04.2004 with all escalations of rent as agreed.
b) The monthly rent shall be paid on or before 5th of every month.
c) The defendant shall credit the arrears of rent accrued during the pendency of the proceeding, to the bank account of the plaintiff within a period of two months from this day.
d) The defendant shall continue to pay the rent for the next two years six months every month without any default.
e) In the event of any default to pay the two months' rent on or before 5th day of every succeeding month, or if the defendant does not credit the arrears of 17 rent if any accruing during the pendency of the proceedings, the plaintiff is at liberty to execute the decree, as if there is not time provided for vacating the premises.
30. Learned counsel for the appellant Sri P.Chandrashekar would submit that during the pendency of the suit, the defendant has entered into partnership and the said partnership is running the said fuel station. It is made clear that the decree also binds the partnership firm which has come into existence during pendency of the proceedings.
Hence the following:
ORDER
(i) Appeal is dismissed.
(ii) The judgment and decree dated 30.04.2016 in R.A. No.370/2014 on the file of the III Addl. District Judge at Mysuru is confirmed subject to the conditions set out in paragraph No.29 (a) to (e) referred above.18
(iii) Registry to send back the records to the first appellate Court immediately.
(iv) No order as to cost.
Sd/-
JUDGE
SN/KJJ