Madras High Court
Latha vs L.Thangaraj on 3 August, 2012
Author: G.Rajasuria
Bench: G.Rajasuria
IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated: 3.8.2012 Coram: THE HONOURABLE MR JUSTICE G.RAJASURIA C.R.P.NPD.No.1178 of 2012 and M.P.No.1 of 2012 1.Latha 2.K.P.Sadhanandan ... Petitioners vs. L.Thangaraj ... Respondent Civil revision petition filed against the judgement and decree dated 18.1.2012 passed by the VIII Judge, Court of Small Causes, Chennai, in R.C.A.No.194 of 2009 confirming the order dated 23.4.2009 passed by the XVI Judge, Court of Small Causes, Chennai, in R.C.O.P.No.192 of 2008. For Petitioners : Mr.T.N.Sugesh For Respondent : No appearance ORDER
Animadverting upon the judgement and decree dated 18.1.2012 passed by the VIII Judge, Court of Small Causes, Chennai, in R.C.A.No.194 of 2009 confirming the order dated 23.4.2009 passed by the XVI Judge, Court of Small Causes, Chennai, in R.C.O.P.No.192 of 2008, this civil revision petition is filed.
2. The parties, for the sake of convenience are referred to hereunder according to their litigative status and ranking before the Rent Controller.
3. A summation and summarisation of the germane facts absolutely necessary for the disposal of this civil revision petition would run thus:
(i) The respondent herein/landlord filed the RCOP.No.192 of 2008, invoking Section 10(2)(i) of the Tamil Nadu Buildings (Lease and Rent Control) Act, seeking eviction on the ground of 'wilful default' precisely averring that there was non-payment of rent with effect from February 2007 to December 2007, so to say, for a period of 11 months at the rate of Rs.1,400/- per month.
(ii) The matter was contested.
(iii) During enquiry, the landlord examined himself as P.W.1 and marked Exs.P1 to P3. The petitioner No.2 herein/tenant examined himself as R.W.1 and marked Exs.R1 to R6.
(iv) Ultimately, the Rent Controller ordered eviction on the ground of 'wilful default' in paying the rents.
(v) As against the said order, the tenants preferred the appeal R.C.A.No.194 of 2009 for nothing but to be dismissed by the rent control appellate authority confirming the order of eviction passed by the Rent Controller.
4. Being aggrieved by and dissatisfied the order and judgement of the respective Courts below, this civil revision petition is focussed by the tenants on various grounds.
5. The learned counsel for the revision petitioners/tenants, placing reliance on the grounds of revision would develop his arguements, by pointing out that even though the tenants could not produce rent receipts evidencing payment from February 2007 to July 2007, yet they could produce money order receipts showing that they paid rent from August 2007 onwards; however, the Courts below held that there was wilful default in paying the rents.
6. The learned counsel for the petitioners/tenants would also submit that it is an admitted fact that a sum of Rs.20,000/- was paid by the tenants to the landlord towards advance and the monthly rent was only Rs.1400/-. As per law, more than a months' rent should be refunded by the landlord from out of the advance amount or he should adjust the excess rental advance towards the arrears of rent and accordingly if viewed, from February 2007 till July 2007 there could be no 'wilful default' at all.
7. Earlier the learned counsel for the respondent herein/landlord appeared and argued that there was no specific request from the tenants for such adjustment of excess advance amount towards the arrears. Subsequently, time was granted for him to produce decisions, but he has not produced any precedents to buttress or fortify his view.
8. On the other hand, in this regard, the learned counsel for the petitioners/tenants produced the following decisions of the Honourable Apex Court as well as this Court:
(i) The decision of the Supreme Court reported 1996(II) CTC 78 K.NARASIMHARAO V. T.M.NASIMUDDIN AHMED;
(ii) The decision of the Supreme Court reported in (1989)2 Supreme Court Cases 686 MODERN HOTEL, GUDUR V. K.RADHAKRISHNAIAH AND OTHERS;
(iii) The decision of this Court reported in (2000)II M.L.J.202 MAHALINGAM V. PICHAIAMMAL;
(iv) The decision of this Court reported in 2010(3) C.L.T.880 B.VENKATESAN V. M.K.SELVARAJ.
9. The point for consideration is as to whether the findings by both the Courts below that there was 'wilful default' in payment of rent by the tenants is tenable and that too, in the wake of admitted advance amount remaining with the landlord?
10. At the outset itself, I would like to fumigate my mind with the following decisions of the Hon'ble Apex Court, cited on the petitioners/tenants' side and certain excerpts from those decisions would run thus:
(i) The decision of the Supreme Court reported 1996(II) CTC 78 K.NARASIMHARAO V. T.M.NASIMUDDIN AHMED, certain excerpts from it would run thus:
"7. Section 7 of Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 reads as under:
7. Landlord not to claim or receive anything in excess of fair rent or agreed rent. (1) Where the Controller has fixed or refixed the fair rent of a building
(a) the landlord shall not claim, receive or stipulate for the payment of (i) any premium or other like sum in addition to such fair rent, or (ii) save as provided in Section 5 or Section 6, anything in excess of such fair rent:
Provided that the landlord may receive, or stipulate for the payment of an amount not exceeding one month's rent by way of advance;
(b) save as provided in clause (a), any premium or other like sum or any rent paid in addition to, or in excess of, such fair rent, whether before or after the date of the commencement of this Act, in consideration of the grant, continuance or renewal of the tenancy of the building after the date of such commencement, shall be refunded by the landlord to the person by whom it was paid or at the option of such person, shall be otherwise adjusted by the landlord:
Provided that where before the fixation or refixation of the fair rent, rent has been paid in excess thereof, the refund or adjustment shall be limited to the amount paid in excess for the period commencing on the date of the application by the tenant or landlord under sub-section (1) of Section 4 of sub-section (3) of Section 5, as the case may be, and ending with the date of such fixation or refixation.
(2) Where the fair rent of a building has not been so fixed
(a) the landlord shall not claim, receive or stipulate for the payment of, any premium or other like sum in addition to the agreed rent:
Provided that the landlord may receive, or stipulate for the payment of an amount not exceeding one month's rent by way of advance;
(b) save as provided in clause (a), any sum paid in excess of the agreed rent, whether before or after the date of the commencement of this Act, in consideration of the grant, continuance or renewal of the tenancy of the building after the date of such commencement, shall be refunded by the landlord to the person by whom it was paid or, at the option of such person, shall be otherwise adjusted by the landlord.
(3) Any stipulation in contravention of sub-section (1) or sub-section (2) shall be null and void. (emphasis supplied) The provisions in sub-sections (1) and (2) are similar and provide for cases where fair rent has been fixed or not fixed, as the case may be. Sub-section (3) declares any stipulation in contravention of sub-section (1) or sub-section (2) to be null and void. In this case, it is admitted that fair rent of the building had not been fixed and, therefore, sub-section (2) applies. Clause (a) of sub-section (2) enacts that a landlord is entitled to claim and receive only the agreed rent, which was Rs 150 per month in this case. The proviso to clause (a) permits the landlord to receive by way of advance an amount not exceeding one month's rent only i.e. Rs 150 in the present case. Clause (b) provides for the situation where any sum is paid by the tenant to the landlord in excess of the agreed rent save as provided in clause (a), i.e., any sum paid in excess of the agreed rent and an amount not exceeding one month's rent by way of advance. Clause (b) enacts that the amount in excess of the sum which the landlord is permitted to take under clause (a) shall be refunded by the landlord to the person by whom it was paid, i.e., the tenant, or at the option of the tenant, shall be otherwise adjusted by the landlord. In other words, clause (b) requires that the excess amount paid to the landlord has to be refunded by the landlord to the tenant unless the tenant exercises the option of requiring the landlord to otherwise adjust the excess amount. It is clear that this excess amount available with the landlord is only for the benefit of the tenant, the liability to refund the amount to the tenant being immediate unless the tenant exercises the option to get it adjusted otherwise. The character of the excess amount undoubtedly is that it is the tenant's money in the hands of the landlord for return to the tenant or for adjustment towards the dues of the tenant, at the tenant's option. Any other stipulation in contravention to it has no legal effect being null and void.
9. There is no illegality attaching to the payment of the excess amount by the tenant to the landlord and a legally enforceable right clearly flows from the provision to the tenant. The pari delicto principle is, therefore, clearly excluded for the purpose of envisaging the consequences of an excess amount being taken by the landlord from the tenant because the provision requires the landlord to refund that excess amount. The corresponding provisions in the Bihar Act are different which import the pari delicto principle. This difference in the language of the provisions of the two enactments distinguishes the cases under the Bihar Act.
13. In the present case, excluding from consideration the tenant's claim for adjustment of the amount of Rs 1000 spent on repairs and the amount of Rs 750 sent by demand draft on receipt of the notice, the amount of Rs 2850 with the landlord as the excess amount of advance paid by the tenant to the landlord, was alone sufficient to negative the landlord's claim of ejectment. The arrears of rent from July to November 1990 were only Rs 750, while the excess amount of advance was Rs 2850, far in excess of the arrears. The landlord was bound to immediately refund that excess amount even before the arrears accrued, and he not having made the refund was bound to adjust it towards the rent due from the tenant. On these facts, the tenant could certainly not be held to be a wilful defaulter in the payment of rent. The High Court is, therefore, right in deciding against the landlord."
(ii) The decision of the Supreme Court reported in (1989)2 Supreme Court Cases 686 MODERN HOTEL, GUDUR V. K.RADHAKRISHNAIAH AND OTHERS, certain excerpts from it would run thus:
"7. The receipt of Rs 6500 by the landlord was, therefore, contrary to law and opposed to public policy. A sum of Rs 1500 has already been adjusted in the manner indicated in the petition for eviction and the fact that a sum of Rs 5000 was still held by the landlord was admitted therein. On the facts appearing on the record it is thus clear that the landlord held a higher amount than the rent due on the date when the petition for eviction was filed on the plea of wilful default of payment of rent. The stipulation of holding the excess amount of Rs 5000 free of interest to be refunded under a valid receipt after the expiry of the lease period is the null and void stipulation and the amount of Rs 5000 in the hands of the landlord was an amount held by the landlord on account of the tenant on the date of filing of the petition for eviction.
10. Mr Rao building upon the ratio of these two decisions rightly contended before us that when the landlord had Rs 5000 on tenant's account with him which he was holding for years without paying interest and against the clear statutory bar there could be no justification for granting a decree of eviction on the plea of arrears of rent. In view of the fact that the stipulation that the amount would be refundable at the end of the tenancy is null and void under Section 7(3) of the Act, the amount became payable to the tenant immediately and the landlord with Rs 5000 of the tenant with him could not contend that the tenant was in default for a smaller amount by not paying the rent for some months."
(iii) The decision of this Court reported in (2000)II M.L.J.202 MAHALINGAM V. PICHAIAMMAL, certain excerpts from it would run thus:
"12. In view of the law declared by the Honourable Supreme Court, it has to be held that landlady has no cause of action to file application for eviction on the ground that tenant has committed default in paying rent. As stated earlier, landlady has taken advance of 60 months rent, though law permits to take advance of only one month rent. Excess advance is liable to be adjusted in the rent payable by tenant as and when becomes due even without any demand from tenant. If that be so, landlord cannot expect payment of rent for the alleged period of default. If landlord cannot demand any rent for that period, notice issued by her intimating default also will be invalid and of no legal consequence. On the date when notice was issued, no rent was due nor payable by tenant. If notice issued is invalid merely because tenant did not pay rent within a period of two months, he also cannot be deemed as defaulter. Appellate authority has not taken into consideration the above legal position while confirming the order of eviction."
(iv) The decision of this Court reported in 2010(3) C.L.T.880 B.VENKATESAN V. M.K.SELVARAJ, certain excerpts from it would run thus:
"24. At this juncture, it is just and necessary to point out that in order to come to the conclusion that there was a usufructuary mortgage, no clinching evidence was produced. Merely based on te averments in the counter, it appears both the courts below construed as though there was a usufructruary mortgage etc. In the meantime, I cannot also accept the contention of the landlord that the said amount was paid only as security. If any amount is paid in connection with the lease, it should only be construed as premium/advance and if it exceeds one month rent, certainly the tenant is entitled to get it adjusted towards the arrears of rent and in such eventuality, it would not amount to wilful default in paying the arrears, even if rents have not been paid regularly. If viewed, accordingly, in this case, there is no wilful default in paying rent by the tenant. . . . . . ".
A mere perusal of the aforesaid judgements would clearly display and demonstrate that the landlord who is bound to refund the excess amount should adjust the advance amount towards arrears, if any.
11. In this case, even for arguement sake it is taken that there were arrears of rent from February 2007 till December 2007, so to say, for 11 months, the total amount comes to Rs.15,400/- which is far below the excess advance amount available with the landlord. In such a case, the landlord was not at all justified in approaching the Court with the compliant that there was 'wilful default' in paying the rents by the tenant.
12. The above points have not been taken note of by both the Courts below and as such, interference by this Court in the revision is required. Accordingly, the order and judgement of both the Courts below are set aside.
13. In the result, the civil revision petition is allowed. However, there is no order as to costs. Consequently, connected miscellaneous petition is closed.
Msk To
1. The VIII Judge, Court of Small Causes, Chennai.
2. The XVI Judge, Court of Small Causes, Chennai