Full Judgment Text
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CASE NO.:
Appeal (civil) 3121 of 2000
PETITIONER:
P.M. PUNNOOSE
RESPONDENT:
K.M. MUNNERUDDIN AND ORS.
DATE OF JUDGMENT: 23/07/2003
BENCH:
R.C. LAHOTI & ASHOK BHAN
JUDGMENT:
JUDGMENT
2003 Supp(1) SCR 698
The Judgment of the Court was delivered by
R.C. LAHOTI, J. The landlord-respondents filed an application seeking
eviction of the appellant-tenant from the suit premises on the’ ground
alleged to be available under Clause (I) of sub-Section (2) of Section 10
of the Tamil Nadu Buildings (lease and Rent Control) Act, 1960 (Act No 18
of 1960) (hereinafter referred as ’the Act’ for short). The relevant
provisions read as under :
"10. Eviction of tenants .
(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 his 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
xx xx xx xx
the Controller shall make an order directing the tenant to put the landlord
in possession of the building and if the Controller is not so satisfied, he
shall make an order rejecting the application :
Provided that in any case falling under clause (i) if the Controller is
satisfied that the tenant’s default to pay or tender rent was not willful,
he may, notwithstanding anything contained in section II, give the tenant a
reasonable time, not exceeding fifteen days, to pay or tender the rent due
by him to the landlord upto the date of such payment or tender and on such
payment or tender, the application shall be rejected.
Explanation-For the purpose of this sub-section, default to pay or tender
rent shall be construed as willful, if the default by the tenant in the
payment or tender of rent continued after the issue of two month’s notice
by the landlord claiming the rent.
The Controller allowed the application and directed the appellant-tenant to
be evicted recording a finding that the tenant had committed a willful
default in the payment of rent. The tenant preferred an appeal which was
allowed by the Court of Small Causes, being the appellate authority. The
landlord preferred a revision under section 25 of the Act which has been
allowed. The High Court has set aside the judgment of the appellate
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authority and restored that of the Controller. Feeling aggrieved, the
tenant has filed this appeal by special leave.
The facts in brief, so far as relevant for the purpose of this appeal, are
briefly stated hereinafter. The landlord - respondents, five in number,
purchased the suit property from the predecessor in title under the sale
deed dated 9.1.1987. On the date of purchase, the appellant was tenant in
the suit premises holding the same on a monthly rent of Rs. 400 from the
predecessor in title of the respondents. On purchase of the property by the
respondents the appellant commenced paying rent to the respondents. The
rent for the month of January, 1987 was remitted by the appellant to the
five respondents by way of five money order for Rs. 80 each. Thereafter,
the appellant started remitting the rent to the respondents by money order
of Rs. 400 each payable to the first respondent. There is some controversy
as to the exact amount of the rent paid or tendered but to clearing of such
controversy, we will proceed to notice only such facts as have been found
proved. After remitting the rent for the month of January, 1987, as stated
hereinabove, the appellant-tenant sent seventeen money orders through which
rent up to the month of September. 1988 was paid by the appellant and
received by the respondents. Thereafter, the dispute erupted.
From the judgment of the appellate authority, which is the linal court of
facts, three relevant facts are culled out and reproduced in brief as
follows:
Firstly, even before 1987, when the respondents purchased the suit
property, the predecessor in title of the respondents had initiated several
proceedings against the tenants-appellant seeking eviction of the appellant
but they were all unsuccessful. Secondly, the owners of the property were
liable to remit the water and sewerage taxes of the suit property which, if
not remitted by them, could be remitted or paid by the tenants themselves
which payments, on being notified to the landlord, could be deducted from
out of the amount of rent because if such taxes were not remitted, the
supply of drinking water to the premises could be stopped. Thirdly, tor the
periods November, December, 1988 and January, February, 1989, for four
months, the appellant had sent the rent by money order to the respondents,
relevant documents in which regard were tendered in evidence and exhibited.
From the finding recorded by the High Court, it is clear that on 1.3.1989.
under ext. R-7, an amount of Rs. 400 was remitted by money order which the
respondents refused. Under Ext. R-8 and R-9, each for Rs. 400, the amount
was remitted on 31.3.1989 which too was returned by the respondents.
Admittedly, the appellant did not mention in the money order coupons the
months for which the amount of Rs. 400 each was being remitted by way of
rent.
The narrow controversy which survived for decision before the Controller
was : What was the period for which the tenant was in arrears? The amount
which was remitted in the month of December, 1988 was claimed by the
appellant to have been tendered on account of arrears for the month of
November, 1988 while, according to the respondents, such tender was without
any specific directions and the same was appropriated by the landlords as
against the rent for the month of October, 1988 which, according to them,
was due and payable by the appellant.
The application for eviction before the controller was filed on 17.4.1989.
In the written statement, the appellant took the plea that vide Exts. R-2,
R-3, R-4, R-6, and R-l, respectively dated
2.8.1988,20.8.1988,20.9.1988,25.10.1988 and 18.12.1988, the amount of Rs.
400 each was remitted. It was submitted that by these money orders, rent
uplo the month of October, 1988 was paid. Another money order of Rs. 400
was sent on 31.12.1988, marked as Ext. R-5, whereby, according to the
tenant-appellant, rent for the month of December, 1988 was paid. As to the
month of November, 1988, the submission of the tenant-appellant was that
though rent for the month of November, 1988 was also remitted by money
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order, but receipts thereof were not traceable and, therefore, to be on
safer side, the tenant-appellant offered to deposit the same in the court.
In the eviction application dated 17.4.1989 vide para 6, it is alleged that
the tenant-appellant did not pay rent from 1.11.1988 to 31.3.1989 amounting
to Rs. 2,000. However, in the same para, it is alleged at the end that so
far as the liability incurred by the tenant-appellant or willful default in
payment of rent is concerned, it is for the period between 1.11.1988 and
28.2.1989 for which he is liable to be evicted.
On 1.3.1989, the appellant remitted by money orders, ext. R-7, R-8 and R-9,
an amount of Rs. 400 each which money orders the landlord-respondents
refused to accept. On 12.4.1989, under notice, Ext. R-10, the appellant
sent a Demand Draft dated 10.4.1989 for Rs. 1200/- towards rent for
January, 1989 to March, 1989. The registered letter containing the demand
draft and bearing was received back by the appellant along with an
endorsement "not found". On 12.6.1989, the appellant sent another
registered letter containing a cheque of Rs. 2000 being rent for the
months; of January to May, 1989 and the same was received by the
respondents. The cheque was also encashed.
Prior to the filing of the application for eviction, there was an exchange
of notices through lawyers between the parties. The contents of notice
dated 1.2.1989 sent by the respondents’ lawyer to the appellant shows that
the respondents had sent as cheque for Rs. 477.85 ps. by way of
reimbursement for the amount of water tax paid by the appellant. There was
yet another claim for Rs. 191.10 ps. made by the appellant from the
respondents on account of water tax and sewage tax paid by the appellant
for which the respondents insisted that the original receipts and not xerox
copies thereof be sent to the respondents so as to make the payment. At the
end of the letter, the respondents mentioned that the rent sent by the
appellant in the month of December, 1988 and received by the respondents on
31.12.1988 would relate to the month of October, 1988 and, therefore, the
appellant would remain in default of payment of rent for November, 1988 by
a subsequent letter dated 3.10.1989, the respondents disputed their
liability for payment of taxes and also made a demand for refund of the
amount paid by the respondents to the appellant on that account.
The facts as to the payment of taxes and dispute relating thereto have been
only incidentally stated as that controversy is not supposed to be resolved
in this appeal nor dose it arise for decision herein.
A perusal of the counter affidavit filed by the landlords in this Court
shows that present one is not the case wherein the appellant is sought to
be held a ’wilful defaulter’ by reference to the Explanation appended to
sub-section (2) of Section 10 of the Act. The singular question arising for
decision in this appeal is whether the appellant can be held to have
wilfully defaulted in payment or tender of rent within the meaning of
Section 10[2] of the Act and, therefore, whether the High Court was
justified in reversing the judgment of the appellate authority.
The provisions of Section 10[2] of the Act came up for consideration before
a three Judge Bench of this Court in S. Sundaram Pillan and Ors. v. V.R.
Pattabiraman and Ors., [1985] 1 SCC 591. On a review of decision this Court
held that wilful default would mean a deliberate and intentional default
knowing full well the legal consequences thereof. The use of the words
’wilful default’ in the provision is suggestive of the legislative intent
that default, in order to be wilful, must be intentional, deliberate,
calculated and conscious with full knowledge of legal consequence flowing
there from So is the view taken by this Court in Chordia Automobiles v. S.
Moosa and Ors., [2000] 3 SCC 282. Sundaram Pillai’s case (supra) came up
for consideration of this Court in Raja Muthukone (dead) by Lrs. v. T.
Gopalasami and Anr., [2002] 4 SCC 204. This Court held that on a cumulative
reading of the provisions of Section 10(2) (I), the provision and the
Explanation appended to sub-Section (2), the following consequences follows
:
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"(1) Where no notice is given by the landlord in terms of the Explanation ,
the Controller, having regard to the four conditions spelt out by us has
the undoubted discretion to examine the question as to whether or not the
default committed by the tenant is willful. If he feels that any of the
conditions mentioned by us is lacking or that the default was due to some
unforeseen circumstances, he may give the tenant a chance of locus
poenitentiae by giving a reasonable time, which the statute puts at 15
days, and if within that time the tenant pays the rent, the application for
ejectment would have to be rejected.
(2) If the landlord chooses to give two months’ notice to the tenant to
clear up the dues and the tenant does not pay the dues within the
stipulated time of the notice then the Controller would have no discretion
to decide the question of willful default because such a conduct of the
tenant would itself be presumed to be willful default unless he shows that
he was prevented by the sufficient cause or circumstances beyond his
control in honouring the notice sent by the landlord."
The explanation appended to sub-Section (2) of section 10 if the Act enacts
a rule of evidence. After the issuance of two month’s notice claiming the
rent, the default by tenant shall be construed as willful raising a
presumption in that regard and it will be for the tenant to show
availability of sufficient cause or circumstances beyond his control to
escape from the consequence of default. The landlord is not prevented from
initiating proceedings for eviction on the ground of default under Section
10(2) (1) of the Act, without serving a notice under the Explanation but in
that case it will be for the landlord to make out a case of wilful default
by tenant failing which the Controller may exercise his discretion under
the proviso giving the tenant a reasonable time, not exceeding fifteen days
for payment or tender.
As already stated hereinabove, the present one is not a case of the
landlord-respondents having served a notice of demand on the appellant and,
therefore, the question of holding the appellant a willful defaulter by
reference to the Explanation above-said does not arise. It is still open to
the landlords, though a demand notice did not precede the initiation of the
proceedings, to plead that the tenant had willfully defaulted in payment of
rent.
The facts and circumstances of the case and the manner in which the finding
was recorded by the Controller and reversed by the appellate authority
indicate that the rent was being paid or tendered by money orders soon
after the purchase of the property by the respondents and therein the month
for which the payment of rent was being tendered by money order was not
being stated by the appellant. The principle dispute centered around the
payment of rent for the months of October, 1988. There was a controversy as
to whether the amount for this month was paid or tendered or not and.
therefore the appellant, to be on safer side, had tendered a fresh amount
of Rs 400 in the court along with the written statement. Though in the
notice dated 1.2.1989, the respondents through their counsel have taken a
stand that the rent remitted in the month of December, 1988, was being
appropriated towards arrears for the month of October, 1988, however, a
perusal of the three decisions rendered upto the High Court does not show
the respondents having adduced any evidence in proof of the factum of such
appropriation. The statement made in the notice as to appropriation remains
an assertion made in the notice but not substantiated by evidence.
There appears to be a bona-fide dispute as to the quantum of arrears, that
is, as to what was the exact amount of rent paid by the tenant appellant to
the landlord-respondents and consequent upon which payment the liability
for how many number of months came to be extinguished. The facts found
indicate the tenant-appellant remitting the amount of rent by money orders
before and after and even during the pendency of the proceedings and some
of the money orders having been refused by the landlord - respondents. The
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present one is a fit case where the Controller should have exercised his
power under proviso to sub-Section (2) of Section 10 of the Act by passing
an order thereunder and giving the tenants-appellant a reasonable time, not
exceeding 15 days, to pay or tender the rent due by him to the landlord
upto the date of such payments of rent. If such order was complied with by
the appellant-tenant, then the application for eviction should have been
rejected. The learned Controller has erred in not passing that order.
It is true that the revisional jurisdiction conferred on the High Court
under section 25 of the Act is not as narrow as one under Section 115 of
the Code of Civil Procedure; nevertheless a finding of fact arrived at by
the appellate authority cannot be lightly interfered with by the High Court
acting like a court of appeal and re-appreciating the evidence. A perusal
of the order of the High Court show the High Court proceeding on an
erroneous assumption that the tenant had admitted default and there was an
admission in the written statement filed by the tenant that he had
defaulted in payment of rent for the month of November, 1988 and in view of
such admission, it was for the tenant to prove that the default was neither
wilful nor wanton nor deliberate. To say the least, the above-said
observation of the High Court is a misreading of the written statement. The
various averments made in the written statement are to be read in their
entirety and not in isolation. We have carefully perused the written
statement filed by the tenant-appellant before the Controller. The
appellant has nowhere admitted himself to be in arrears. What the appellant
has stated is that in spite of the plea taken in the written statement that
the rent for the month of November, 1988 was remitted by money order
inasmuch as the M.O. receipts were not traceable, the amount was being
tendered once again with the written statement so as to get rid of the
alleged default. The totality of the conduct of the tenant-appellant, as
inferred from the dealings between the parties and the documentary and oral
evidence adduced, show that the appellant has always made an effort at
paying or tendering the rent and the delay or default, if any, attributable
to the appellant-tenant is bonafide and cannot be said to be willful in any
case.
Placing reliance on a recent decision of this Court in E. Palanisamy v.
Palanisamy (dead) by Lrs. and Ors., [2003] 1 SCC 123 and various decisions
of the Madras High Court, the learned counsel for the respondents submitted
that once the tenant is shown to have been in default, when it is for him
to prove that the default was not willful. It is submitted by the learned
counsel for the respondents that in E. Palanisamy’s case (supra), this
Court has referred to the provisions of Section 8 of the Act and held that
where the landlord is alleged to have refused or avoided accepting the
tender or payment of rent, then the appropriate remedy of the tenant is to
have recourse to Section 8 of the Act and pay or tender the rent in the
manner contemplated by section 8 of the Act, failing which the deposit of
rent before the Controller would not ensure for the benefit of the tenant
and the effect of default shall not be washed out.
We have carefully perused the judgment relied on by the learned counsel and
we are of the opinion that the same has no applicability to the facts of
the present case. In E. Palanisamy’ case (supra), the proceedings for
eviction were initiated after issuing a default notice to the tenant which
was served on the tenant and the tenant had responded by denying any
default on his part in payment of rent. The question whether in the facts
and circumstances of the case, a tenant could be said to have committed
wilful default did not arise for consideration of the Court. The submission
made by the parties centered around Section 8 of the Act only. The
appellate authority observed in its decision that even after the petition
had been filed by the landlords, the tenant did not think of offering the
rent to the landlords. In this background, the court held that where the
applicability of Section 8 is attracted, it has to be strictly complied
with by the tenant before he can seek benefit under the said provision
regarding deposit of rent in the court.
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So far as the several decisions from the High Court cited by the learned
counsel for the respondents are concerned, without burdening this judgment
by dealing with individual judgments, suffice it to observe that the law
laid down therein has to be read in the background of the facts of each
case. Whether the tenant has committed a wilful default or not would depend
on the facts and circumstances of a given case, the issue being primarily
one of fact.
In the case at hand, we are of the opinion that the High court, in exercise
of revisional jurisdiction, was not justified in interfering with and
reversing the findings arrived at by the appellate authority and the
reversal recorded by the High Court stands vitiated by misreading of the
written statement.
The learned counsel for the appellant-tenant stated at the Bar (hat all the
arrears of rent have been cleared and still if there are found to he any
arrears, the appellant undertakes to clear the same within a period of two
months from today, without raising any other objection to the liability of
the tenant to pay the same. In view of that statement, we do not think that
the order of eviction passed by the High Court can be sustained.
The appeal is allowed. The order of eviction passed by the High Court is
set aside. The appellant shall remain liable to clear all the arrears of
rent up to date, as stated by the learned counsel for the appellant before
us. If there have been any defaults in between or during the pendency of
the proceedings consequent upon which the appellant-tenant has incurred a
fresh liability for eviction, the landlord -respondents shall be free to
initiate proceedings in that regard and such right of theirs is not waived
by this decision.
The costs shall be borne by the parties a incurred throughout.