Andhra HC (Pre-Telangana)
Vinukonda Venkata Ramana vs Mootha Venkateswara Rao And Anr. on 20 August, 2001
Equivalent citations: 2001(5)ALT479, AIR 2002 ANDHRA PRADESH 52, 2002 A I H C 826, 2002 SCFBRC 93, (2003) 2 JCR 427 (AP), (2001) 2 RENCR 548, (2001) 5 ANDH LT 479, (2001) 2 RENCJ 548, (2001) 6 ANDHLD 27
Author: S.B. Sinha
Bench: S.B. Sinha, Goda Raghuram
JUDGMENT S.B. Sinha, C.J.
1. Whether default on the part of the tenant to pay all arrears of rent due in respect of the building upto the date of petition or default to continue to pay or deposit any rent which may subsequently become due in respect of the building, would automatically entitle the landlord to obtain an order from the Rent Controller directing the tenant to put the landlord in possession of the building is the question involved in these applications.
2. A learned single Judge of this Court in the order of his reference dated 4.8.1997 in C.R.P. No. 4040 of 1995 referred the following questions to a Division Bench :
(1) Whether the eviction petition is not maintainable when the entire amount of arrears of rent has been paid and there was no amount due as on the date of filing of the eviction petition. In Dakaya v. Anjani, , the Supreme Court following the earlier judgment pf the Supreme Court in S. Sundaram Pillai etc. v. V.R. Pattabhiraman, , held that if the payment has been made before the institution of the suit, the cause of action for instituting the suit will vanish. On the other hand, a Full Bench of this Court in P.N. Rao v. K. Radhakrishnamacharyulu, , held that there is nothing in Section 10(2)(i) of the A.P. Buildings (Lease, Rent and Eviction) Control Act which enables the tenant to contend that the right to sue for eviction is lost merely because he pays or tenders the rent due by him subsequently and that it is not correct to say that in order to succeed in the petition for eviction, there must be a subsisting liability on the date of eviction petition and it cannot be contended that the eviction petition was not maintainable merely because the landlord received the rent prior to the eviction petition. The question, therefore, arises whether this Full Bench judgment can be said to be impliedly overruled by the aforesaid judgments of the Supreme Court.
(2) In coming to the conclusion that the tenant has committed willful default and he is, therefore, liable for eviction, the lower appellate Court has taken into consideration the defaults allegedly made by the tenant subsequent to the filing of the eviction petition. There is a conflict of views on the question whether default made subsequent to the filing of the eviction petition can be made a ground for ordering eviction. In the decisions reported in V.V. Krishna Vara Prasad v. S. Surya Rao, 1997 (1) APLJ 129 ; Malleddi Prakasarao v. Margani Prem Gowri Devi, 1996 (1) ALD 159 ; N. Ananda Rao v. P. Naga Anjeswara Rao, , three learned single Judges of this Court have taken the view that default subsequent to the filing of petition also can be taken into account of ordering eviction, whereas in the decisions reported in Chikkam Satyanarayana v. Samisetti Subba Rao, 1994 (1) An WR 291 : P. Rajanna v. K. Lalitha Reddi, and Sona Optics v. Shyam Sunder Bhargava, 1997 (1) ALD 628. It was held that failure to pay rent by the tenant after filing of eviction petition cannot be a ground for passing the order of eviction under Section 10(2)(i) of the Act. This conflict of views has to be also resolved by a Division Bench.
(3) The third question which arises for decision is, in the absence of a specific provision in the A.P. Buildings (Lease, Rent and Eviction) Control Act whether additional evidence can be received in a revision filed under Section 22 of the Act.
3. Again a Division Bench of this Court in turn referred the matter to a Full Bench by an order dated 17.12.1997 observing :
One of the points referred to the Division Bench by the learned single Judge is whether the judgment of a Full Bench of this Court in P.N. Rao v. K. Radhakrishnamacharyulu, , is impliedly overruled by the judgments of the Supreme Court in Dakaya v. Anjani, and S. Sundaram Pillai etc. v. V.R. Pattab-hiraman, .
In view of this, we consider it appropriate that the matter should be heard by a Full Bench. Therefore, we direct the Registry to place this matter before the Hon'ble the Chief Justice for appropriate orders.
4. For answering the above question, we may notice the fact of the matter from C.R.P. No. 4040 of 1995 as regards the issue of willful default in brief.
5. The tenant-petitioner filed the C.R.P. aggrieved by the order of eviction by the learned appellate authority on the ground of willful default in payment of rent. Originally landlady filed the eviction petition inter alia alleging that the tenant committed default in payment of rent from July, 1984. The learned Rent Controller found after elaborate discussion that landlady failed to establish the willful default on the part of the tenant as the landlady herself refused to receive the rent sent through money orders. The learned appellate authority did not take into account the receipts passed by the landlady relating to the period earlier to July, 1984 as the default alleged relates to the later period. The tenant-petitioner did not produce any evidence to show that he sought for the particulars of the bank account of the landlady. There is no documentary evidence on record to show that the rents from July, 1984 to January, 1986 were ever tendered by the respondent to the landlady subsequent to Ex. R. 24 and that they were refused. No documentary evidence is adduced by the tenant to show that he sent the rent, subsequent to June, 1984 either by money order or D.D. The appellate authority found that the tenant did not tender rent continuously for a period of more than 1 1/2 years from July, 1984. The reason for the tenant not tendering rent from July, 1984 till 6-2-1986 was not explained by the tenant. The tenant not explaining the reasons for not paying the rent amounts to committing default in payment of rent wilfully.
6. The learned counsel appearing on behalf of the petitioners- tenants inter alia submitted that for the purpose of passing a decree for eviction, the tenant inter alia must be a willful defaulter. The concept of willful default being well-known in law, the acceptance of rent by the landlord prior to the institution of the suit would not only render the suit not maintainable, but would also constitute waiver on the part of the landlord. It was submitted that such willful default must be committed by the tenant not only prior to the institution of the suit, but also during the tenancy thereof in terms of Section 11 of the A.P. Buildings (Lease, Rent and Eviction) Control Act, 1960 (for short 'Rent Control Act'). It was submitted that a default during the pendency of the suit, pursuant to or in furtherance of in terms of Section 11 of the Rent Control Act cannot be a subject to a subsequent event which would automatically entitle the landlord to obtain a decree for eviction although as a fact, the tenant may not be a willful defaulter before the institution of the suit.
7. Strong reliance in this connection has been placed on the decisions in Dakaya v. Anjani, ; S. Sundaram v. V. R. Pattabhiraman, ; C. Chandramohan v. Sengottaiyan, 2000 (2) ALD 13 (SC) : (AIR 2000 SC 508) ; K.A. Ramesh v. Susheela Bat, ; T. Thamasamma v. Govt. of A.P., 1992 (2) APLJ 45 ; D.L. Sathyanarayana v. K. Radhakrishnaiah, 1994 (1) APLJ 328 : P. Venkateswarlu v. Motor & General Traders, .
8. Mr. Veerabhadraiah, the learned counsel appearing on behalf of the respondents on the other hand would submit that regard being had to the fact that terms of Section 10 of the Act shows several rounds whereupon the landlord can maintain a suit for eviction on his tenant; default being one of them, acceptance of rent by itself would not debar the landlord in obtaining the decree. The learned counsel would contend that the Apex Court while deciding the later cases did not notice the earlier larger Bench decision in Mangilal v. Sugan Chand, .
9. Mr. Veerabhadraiah, learned counsel has taken us through the Full Bench decision of this Court in P.N. Rao v. K. Radhakrishnamacharyulu, and urged that as in the case of subletting or transferring the premises despite cancellation thereof by the tenant prior to institution of the suit, a cause of action would survive, and the same should be applied even in a case of default. The learned counsel would argue that the decision of the Apex Court in Dakaya (supra) is not a good law having been rendered per incuriam. For the same reasons, the subsequent decision of the Apex Court in Dakaya (supra) had merely been followed without referring to the three- Judge Bench decision and the same, cannot be said to be good law.
10. The learned counsel in this connection has drawn our attention to a Full Bench decision of this Court in Ushodaya Enterprises Ltd. v. Commissioner of Commercial faxes, (FB), wherein it has been observed that the High Court can legitimately follow the earlier decision which is backed by reasoning and it need not follow the later decision.
11. Sections 10(1), 10(2)(i) and Section 11 of the Act read thus :
10. Eviction of tenants.--(1) A tenant shall not be evicted whether in execution of a decree or otherwise except in accordance with the provisions of this section or Sections 12 and 13.
Provided that where the tenant denies the title of the landlord or claims right of permanent tenancy, the Controller shall decide whether the denial or claim is bona fide and if he records a finding to that effect, the landlord shall be entitled to sue for eviction of the tenant in a Civil Court and the Court may pass a decree for eviction on any of the grounds mentioned in the said sections, notwithstanding that the Court finds that such denial does not involve forfeiture of the lease or that the claim is unfounded.
(2) A landlord who seeks to evict his tenant shall apply to the Controller for a direction in that behalf. If the Controller, after giving the tenant a reasonable opportunity of showing cause against the application, is satisfied-
(i) that the tenant has not paid or tendered the rent due by him in respect of the building within fifteen days after the expiry of the time fixed in the agreement of tenancy with the landlord or in the absence of any such agreement, by the last day of the month next following that for which the rent is payable, or
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 to the amount of rent to be paid or deposited under Sub-section (1) the Controller or the appellate authority, as the case may be, 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 Sub-section (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 decision of the Apex Court in Mangilal (supra) was rendered under Madhya Pradesh Accommodation Control Act. Section 4-A of the Accommodation Act was in the following terms :
No suit shall be filed in any Civil Court against a tenant for his eviction from any accommodation except on one or more of the following grounds-
(a) that the tenant has failed to make payment to the landlord of any arrears of rent within one month of the service upon him of a written notice of demand from the landlord.
13. The Apex Court noticed the distinction in phraseology used therein vis-a-vis analogous provisions contained in Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 and the West Bengal Premises Act, 1956. It was held that in the later Acts, the protection given to tenants was more extensive and therein, a provision has been made that the tenant who is in arrears of rent may be given time to pay the arrears even after the institution of the suit. In terms of the law enacted by the State, not only a satisfaction is required to be recorded by the Rent Controller to the effect that the tenant had not paid or tendered the rent in respect of the building within 15 days after the expiry of the time fixed in the agreement of tenancy with the landlord or in the absence of any such agreement, by the last day of the month next following that for which the rent is payable. A non obstante clause has been inserted by reason of the proviso that despite Clause (i) of Sub-section (2) of Section 10, where the Controller is satisfied that the tenant's default to pay or tender rent was not willful, he may, notwithstanding anything in Section 11, give the tenant a reasonable time, not exceeding fifteen days, to pay or tender the rent due by him to the landlord up to the date of such payment or tender and on such payment or tender, the application shall be rejected.
14. The Apex Court itself noticed having regard to the phraseology used in the Madhya Pradesh Accommodation Act that only a limited protection was granted to the tenant and further the tenant must be diligent and regular enough in the matter of payment of rent. The Apex Court observed :
That is all. Indeed, while it is open to a Legislature to give wide protection to even defaulting tenants, it does not follow from it that whenever it gives protection it must be deemed to have given him the protection of the widest amplitude.
15. On the other hand, what is willful, what constitutes a willful default is now well settled in the decisions in T. Thamasamma v. Govt. of A.P., (supra) (sic); D.L. Sathyanarayana v. K. Radhakrishnaiah, (supra) ; P. Venkateswarlu v. Motor and General Traders, (supra).
16. In S. Sundaram v. V.R. Pattabhiraman, (supra), the Apex Court upon referring to Dictionaries--A Dictionary of Law by L.B. Curzon. Words and Phrases. Volume 45, Webster's Third New International Dictionary, Black's Law Dictionary states :
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 not guilty of willful default because such a course of conduct manifestly amounts to willful default as contemplated either by the Act or by other Acts referred to above.
17. On the other hand in Dakaya's case, following the decision in S. Sundaram (supra), the Apex Court clearly held :
This Court in the aforesaid case of S. Sundaram Pillai has indicated that default per se cannot be construed as willful and keeping in mind the beneficial purpose of the Rent Act to protect the eviction of the tenant. If the payment has been made before the institution of the suit, the cause of action for instituting the suit will vanish. In the instant case, immediately on receipt of demand of payment of rent, the tenant initially sent a sum of Rs. 375/- by money order and thereafter a bank draft for Rs. 1125/- covering the entire period of default from September, 1988 to November, 1988, was sent to the landlady. It, therefore, appears to us that there was no occasion to proceed on the footing that there was a wilful default for which an order for eviction of the tenant was to be passed. As the tenant had already sent the Bank Draft covering the entire default, there was also no occasion for the Rent Controller to direct deposit of arrears within the stipulated period. In our view, the Rent Controller, the first appellate Court, and the High Court have failed to appreciate the incidents of tendering the entire amount under default before the institution of the suit. As a result, the Courts below have erroneously proceeded on the footing that there had been a wilful default for which the landlady was entitled to a decree for eviction.
18. The aforementioned decision has been followed by a Division Bench of the Apex court in C. Chandramohan (supra) wherein upon consideration of the provisions of the Tamil Nadu Buildings (Lease and Rent) Control Act, 1960 the Apex Court observed :
From a combined reading of Clause (i) of Sub-section (2) of Section 10 the proviso and the Explanation. It is manifest that it is only when the Rent Controller is satisfied that a tenant's default to pay or tender the rent is willful, he can order eviction of the tenant. The question of willful default to pay or tender rent to a landlord by a tenant is a mixed question of law and fact. Where the findings recorded by the Appellate Authority are illegal, erroneous or perverse, the High Court, having regard to the ambit of its revisional jurisdiction under Section 22 of the Act, will be well within its jurisdiction in reversing the findings impugned before it and recording its own findings.
It is true that the applications under Section 8(5) of the Act filed by the respondents for permission to deposit the rent of the premises were dismissed by the Rent Controller and the result of the appeals filed against those orders before the Appellate Authority was no different, as such the monthly rent deposited in those proceedings cannot be a valid payment or tendering of rent to the appellant.........Having accepted the rent deposited, the appellant cannot legitimately contend that the respondents committed default in payment of rent for that period. That being the position, on the date the appellant filed eviction petitions against the respondents, cause of action on the ground of willful default in payment of rent was not subsisting in claim their eviction from the premises.
19. We are, therefore, of the opinion that having regard to the aforementioned decisions of the Apex Court, the law laid down by this Court in P.N. Rao's case cannot be said to be good law in the light of the discussions made hereinabove. It is also required to take into consideration the effect of any given situation that the landlord may waive his right to maintain the suit for eviction not only by reason of unequivocal acceptance of rent but also by reason of his other conduct.
20. Now, we shall consider the provisions of Section 11 of the Rent Control Act. Section 11 of the Act has been enacted so as to enable the landlord to continue to receive the rents despite during the institution of the suit. The willful default must be strictly on the part of the tenant. Furthermore, we are of the view that non- payment and non-deposit of rent in terms of Section 11 may lead to the consequences incorporated under Sub-section (4) of Section 11. Therefore, it would have been obligatory on the part of the landlord to file an appropriate application whereupon only a direction to the tenant for handing over the possession of the tenanted premises can be granted to the landlord. The question as to whether at all or to what extent, the tenant should be granted protection from being evicted depends upon the legislative policy of each State. No law, therefore, can be laid down in absolute terms without reference to the protection afforded to the tenant by the Statute of the State.
21. In K.A. Ramesh (supra), the Apex Court while interpreting the provisions of Rent Control Act clearly held :
We fail to appreciate how this contention can be pressed into service on the peculiar facts of this case. As we have seen earlier, the eviction proceedings have themselves become infructuous once the bank draft dated 2nd February, 1989 for the full amount of arrears was already got encashed by the respondents. That apart, even if there was any default pending such proceedings, it was open to the respondents to enforce the statutory right available to them under Section 11(1) read with Section 11(4) of the Act for getting all further proceedings stopped before the Rent Controller and for asking immediate decree for possession, and/or in appeal of the appellant-tenants to request the appellate Court to dismiss the appeal and put the respondent-landlords forthwith in possession on account of such default. Nothing of this sort was done by the respondents. If they had tried to enforce this right, the appellants would have got an opportunity to show to the Trial Court or the Appellate Court, as the case may be that there was sufficient cause for not passing such an order under Section 11(4) of the Act. The opportunity never became available to the appellants as the respondents did not invoke this provision. It can, therefore, easily be said that the respondents waived this right available to them under the Statute presumably because they themselves were satisfied on getting full payment of arrears of rent by encashing the bank draft dated 2nd February, 1989. Consequently, even this contention cannot be of any assistance to the respondents.
22. The decision of the Apex Court in Dakaya (supra) being directly on the point, must prevail over the other decisions of the Apex Court which dealt with some other statutes interpreted the provisions of the Act with which we are concerned in this case. As such the said decision is binding on us in terms of Article 141 of the Constitution of India.
23. Our answers to the questions are as follows :
1. The Full Bench decision of this Court in P.N. Rao v. K. Radhakrishnamacharyulu. , is no longer a good law having regard to the decision of the Apex Court in Dakaya v. Anjani, .
2. The question whether default made subsequent to the filing of the eviction petition can be made a ground for ordering eviction is answered in affirmative subject to the fulfillment of conditions laid down in Section 11 of the Act.
3. There is no bar in taking additional evidence in revision filed under Section 22 of the Act.
24. The C.R.Ps. are disposed of accordingly. However, a landlord can always file an application in terms of Sub-section (4) of Section 11 of the Act. No costs.