Full Judgment Text
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PETITIONER:
DAMADILAL AND OTHERS
Vs.
RESPONDENT:
PARASHRAM AND OTHERS
DATE OF JUDGMENT07/05/1976
BENCH:
GUPTA, A.C.
BENCH:
GUPTA, A.C.
CHANDRACHUD, Y.V.
SARKARIA, RANJIT SINGH
CITATION:
1976 AIR 2229 1976 SCR 645
1976 SCC (4) 855
CITATOR INFO :
R 1977 SC2262 (9)
D 1979 SC1121 (7)
R 1981 SC1956 (1)
RF 1982 SC1043 (14,19)
APR 1985 SC 796 (12,17,19,21,25,26,31,35)
R 1987 SC 117 (50)
D 1991 SC 899 (12)
E&A 1991 SC2053 (16,17,18)
ACT:
Madhya Pradesh Accommodation Control Act, 1961-S.
.12(1)(a) and (f)-Scope of-Death of tenant-Heritable
interest in the premises-Legal repreentatives-If could claim
statutory tenancy-If concept applicable in India-Statutory
tenant-If could sub-let the premises.
Rent-Payment-If could be made by cheque.
Procedure-Lower appellate court overlooked material
evidence-Finding, if bad in law-High Court-If could reverse.
HEADNOTE:
Section 12(1) of the Madhya Pradesh Accommodation
Control Act, 1961, enacts that notwithstanding anything to
the contrary contained in any other law or contract 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
grounds given in the section. The ground given in cl. (a) is
that the tenant has neither paid nor tendered the whole of
the arrears of the rent legally recoverable from him within
two months of the date on which the notice had been served
on him by the landlord and the ground in cl. (f) is that the
accommodation let for non-residential purpose is required
bona fide by the landlord for the purpose of continuing or
starting his business.
The appellants brought a suit under s. 12(1)(a) and (f)
of the Act for ejectment of their tenants. The suit was
dismissed by the trial court on the ground (i) that since
the dispute as to the amount of rent payable by the tenants
had not been determined during the pendency of the suit
under s. 13(2) no order for eviction could be made; (ii)
that there was no bona fide requirement of the premises by
the appellants for their own business and (iii) that the
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refusal by the appellant to accept the arrears of rent by
cheque was valid because tendering by cheque was not valid
tender in the absence of an agreement to that effect.
The first appellate court decreed the suit. During the
pendency of the second appeal in the High Court the tenants
died. The High Court allowed substitution of their legal
representatives over-ruling the appellants’ objection that
the deceased tenants were mere statutory tenants and that
the right to resist ejectment on the basis of the Rent
Control Act was merely a personal right which was not
heritable. On merits, the High Court held that (i) offer of
rent by cheque amounted to valid tender by the tenant and
(ii) the appellants had failed to prove their case of bona
fide requirement of the premises for their own use.
Dismissing the appeal,
^
HELD: There is no force in the contention that the
defendants who were statutory tenants had no heritable
interest in the demised premises and on their death the
right to prosecute the appeal in the High Court had not
survived to their heirs and legal representatives. The
predecessors-in-interest of the respondents had a heritable
interest in the premises and consequently the respondents
had the right to prosecute the appeal in the High Court.
[655A]
(1) (a) The concept of statutory tenancy under the
English Rent Acts and under the Indian statutes rests on
different foundations. The term statutory tenancy which is
used for referring to a tenant whose tenancy has been
terminated and who would be liable to be evicted but for the
protecting statute, is
646
borrowed from the English Rent Acts. Courts in England have
held that a statutory tenant has no estate or property in
the premises he occupies because he retains possession by
virtue of the Rent Acts and not as being entitled to a
tenancy. But in this country it is not possible to proceed
on the basis that a tenant whose contractual tenancy has
determined but who is protected against eviction by the
statute, has no right of property but only personal right to
remain in occupation without ascertaining what his rights
are under the statute. [654H: 653A-C]
Anand Nivas (Private) Limited v. Anandji Kalyanji Pedhi
JUDGMENT:
v. Sri Kishan & Anr., [1973] 1 S.C.R. 850; Roe v. Russel,
[1928] 2 K.B. 117; Haskins v. Lewis [1931] 2 K.B. 1(9);
Keeves v. Dean [1923] (93) L.J.K.B. 203 (207) and Boyer v.
Warbey [1953] 2 Q.B. 234, referred to.
(b)Tenancy has its origin in contract. A contracual
tenant had an estate or property in the subject matter of
the tenancy and heritability is an incident of tenancy. It
cannot be assumed that with the determination of the
tenancy, the estate must necessarily disappear and the
statute can only preserve his status of irremovability and
not the estate he had in the premises in his occupation.
[653D]
(c) The definition of a tenant contained in s. 2(i)
makes a person continuing in possession of a premises after
the determination of his tenancy a tenant, unless a decree
or order for eviction had been made against him, thus,
putting him on par with a person whose contractual tenancy
still subsists. [653]
(d) Section 14 which deals with restrictions on sub-
letting read with the definition contained in s. 2(i) makes
it clear that the so-called statutory tenant has the right
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to sub-let in common with contractual tenant and this is
because he also has an interest in the premises occupied by
him. [654D]
(2)(a) The High Court rightly held that the cheques
sent to the appellants amounted to valid tender of rent. It
is well-established that a cheque sent in payment of a debt
on the request of the creditor, unless dishonoured, operates
as a valid discharge of the debt and if the cheque was sent
by post and was met on presentations the date of payment is
the date when the cheque was posted. [655B-D]
(b) Rent is payable in the same manner as any other
debt and the debtor has to pay his creditor in cash or other
legal tender, but there can be no dispute that the mode of
payment can be altered by agreement. In the contemporary
society it is reasonable to suppose payment by cheque as
implied unless the circumstances of a case indicate
otherwise. [655C]
(3) The High Court was within its jurisdiction in
setting aside the finding of the lower appellate court and
restoring that of the trial court on the question of bona
fide requirement of the premises by the appellants. The
lower appellate court overlooked a very material part of the
evidence bearing on the question. It is well-established
that if a finding of fact is arrived at ignoring important
and relevant evidence the finding is bad in law. [651B-C]
Radha Nath Seal v. Haripada Jana & Ors. AIR 1971 S.C.
1049, followed.
Madan Lal Puri v. Sain Das Berry AIR 1973 S.C. 585;
Mattulal v. Radhey Lal AIR 1974 S.C. 1956; and Sarvate T. B.
v. Nemi Chand 1966 M.P.L.J. 26, refered to.
&
CIVIL APPELLATE JURISDICTION: Civil Appeal 885/1968.
(From the judgment and order dated 6-11-1967 of the
Madhya Pradesh High Court in Second Appeal No. 913 of 1965).
647
S. V. Gupte, R. P. Pandey and S. S. Khanduja, for the
appellants.
F. S. Nariman, J. B. Dadachanji, P. C. Bhartari, K. L.
John for the respondents.
The Judgment of the Court was delivered by
GUPTA, J. Damadi Lal, Sheo Prasad and Tirath Prasad who
were members of a Hindu Joint Family brought a suit for
ejectment on July 31,1962 against their tenants Begamal and
Budharmal on the grounds mentioned in clauses (a) and (f) of
section 12(1) of the Madhya Pradesh Accommodation Control
Act, 1961. The relevant provisions are in these terms:
"Sec. 12. Restriction on eviction of tenants.-(1)
Notwithstanding anything to the contrary contained in
any other law or contract, 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 only, namely-
(a) That the tenant has neither paid nor tendered
the whole of the arrears of the rent legally
recoverable from him within two months of the date on
which a notice of demand for the arrears of rent has
been served on him by the landlord in the prescribed
manner;
x x x x x
x x x x x
(f) that the accommodation let for non-residential
purposes is required bona fide by the landlord for the
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purpose of continuing or starting his business or that
of any of his major sons or unmarried daughters if he
is the owner there of or for any person for whose
benefit the accommodation is held and that the landlord
or such person has no other reasonably suitable non-
residential accommodation of his own in his occupation
in the city or town concerned."
Plaintiffs’ case under section 12(1)(a) was that the
defendant tenants had defaulted in paying rent for the
period October 1, 1961 to May 31, 1962 and did not also pay
or tender the amount in arrears within two months of the
service of the notice of demand. Clause (f) of section 12(1)
was invoked on the allegation that the accommodation let was
required bona fide by the plaintiffs for the purpose of
starting their own business. Before the suit was instituted
the plaintiffs had determined the tenancy from May 31, 1962
by a notice dated May 7 1962. The house in dispute which is
in Bazar Chowk in District Satna was let out to the
defendants at a monthly rent of Rs. 275/- for the purpose of
their business. The plaintiffs reside in village Nadan,
Tahsil Maihar, where they carry on their business.
The trial court by its judgment and decree dated
November 11, 1964 dismissed the suit for eviction. There was
some dispute between
648
the parties as to the rate of rent; ultimately the
plaintiffs admitted that the rent was fixed at Rs. 175/- per
month with effect from August 1, 1961 by the Rent Control
Authority and a sum of Rs. 1200/-, which was the amount in
arrears, had been tendered to the plaintiffs by cheque on
May 26, 1962 which the plaintiffs refused to accept. The
trial court was of opinion that the refusal was valid
because "tendering by cheque is no valid tender" unless
there was an agreement that payment by cheque would be
acceptable and that the defendants were therefore defaulters
within the meaning of section 12(1)(a). However, in view of
the dispute as to the amount of rent payable by the tenants,
which was not determined during the pendency of the suit as
required by section 13(2), the trial court held that no
order for eviction under section 12(1)(a) could be made in
this case and passed a decree for Rs. 1200/- in favour of
the plaintiffs.
On the question of the plaintiffs’ requirement of the
premises for their own business, the trial court found
itself unable to accept the evidence adduced on behalf of
the plaintiffs. Of the witnesses examined by the plaintiffs
on the point, the evidence of P.Ws. 1, 3 and 4 was not
relied on because none of them was considered to be an
independent witness and, further, because it was apparent
from their evidence that what they said was what they were
tutored to say by the plaintiffs. The other three witnesses
were plaintiffs Damadi Lal and Tirath Prasad (P.W.2 and P.W.
6 respectively) and Radhey Sham (P.W. 5), a son of plaintiff
Sheo Prasad. They were also disbelieved because of the
following reasons. Damadi Lal tried to give the impression
that plaintiffs had no business except the cloth business
and the grocery shop at Nadan. He tried to conceal that they
had a moneylending business and also agricultural lands.
Tirath Prasad stated that the main source of income of the
family was from the moneylending business. Tirath Prasad
also disclosed that the plaintiffs had already a partnership
business in cloth at Satna though Damadi Lal and P.W. 5
Radhey Sham did not admit this. It also appears in evidence
that the plaintiffs had yet another cloth business at a
place called Ramnagar which was managed by Radhey Sham. The
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plaintiffs claimed that they would start a business at
Satna, but Damadi Lal’s evidence is that they had no income
or saving. Tirath Prasad also said that their income was not
even sufficient for their maintenance. Admittedly,
plaintiffs had in their possession one room in the house
which was let out to the defendants. The plaintiffs did not
adduce any evidence to show how the said accommodation was
unsuitable or insufficient for them to start their own
business. It was also admitted that the plaintiffs had filed
a suit for ejectment on an earlier occasion, but the
defendants having agreed to pay increased rent the suit was
not proceeded with. According to the defendants the present
suit was not instituted on the defendants’ refusal to
increase the rent further to Rs. 500/-a month.
For the above reasons the trial court did not accept
the case of bona fide requirement holding that P.W. 2, P.W.
5 and P.W. 6 were in the habit of suppressing the truth to
suit their own purpose.
649
On appeal by the plaintiffs, the first appellate court
reversed the decision of the trial court and decreed the
suit. The appellate court agreed with the trial court that
sending a cheque did not amount to a valid tender of rent
and, as the tenants did not apply under section 13(2), they
were not entitled to protection against eviction on the
ground of default. As regards the plaintiffs’ case of
requirement, the court found, that the criticism of the
plaintiffs’ witnesses was not justified. The appellate court
thought that the fact that Tirath Prasad was carrying on a
cloth business at Satna which Damadi Lal had kept back from
court was irrelevant in view of the plaintiffs’ claim that
some members of the family wanted to start a new business at
Satna. According to the appellate court the further fact
that P.W. 5 Radhey Sham was running a cloth business at
Ramnagar was indicative of the growing need of the
plaintiffs’ family. The room in the plaintiffs’ possession
in the disputed house was not found suitable or sufficient
for a wholesale business that the plaintiffs intended to
start. Referring to the trial court’s finding that the
plaintiffs had no money to start a new business at Satna,
the court found that the evidence did not support this. The
appellate court therefore held that the plaintiffs required
the premises for their own business.
Dissatisfied with this decision, the defendants
preferred a second appeal to the High Court. During the
pendency of the second appeal in High Court both the
defendants died. Budharmal died on or about January 27, 1966
and his legal representatives were brought on record and
substituted in his place without objection. Begamal died on
March 2, 1967 and his heirs applied for being brought on
record in his place as appellants. The plaintiffs made an
application praying for an order that the appeal had abated
as a consequence of the death of both the defendants. In
this application the plaintiffs contended that Budharmal and
Begamal were "merely statutory tenants and their right to
resist ejectment on the basis of Madhya Pradesh
Accommodation Control Act was merely a personal right" which
was not heritable and had "not devolved upon their heirs".
By its order dated July 26, 1967 the High Court allowed the
application for substitution made by Begamal’s heirs
overruling the plaintiffs’ objection.
Ultimately on November 6, 1967 the High Court allowed
the appeal setting aside the decree of the lower appellate
court and restoring that of the trial court dismissing the
suit. The High Court found that the defendants were not in
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arrears of rent. Differing from both the courts below the
High Court held that the cheque which the defendants had
sent to the plaintiffs in payment of the amount in arrears
within a month of the service of the writ of summons on him
amounted to a valid tender of rent as required by section
13, and in view of section 12(3) no order for eviction could
be made. Section 12(3) provides that no order for eviction
of a tenant shall be made on the ground of default if the
tenant makes payment or deposits rent as required by section
13. This is what the High Court held on the validity of
tender of rent by cheque:
"The question is as to whether, instead of
presenting the cash, if a cheque is sent to the
landlord, that is sufficient tender of the arrears of
rent or not........In the highly deve-
650
loped society, payment by cheque has become more
convenient mode of discharging one’s obligation. If a
cheque is an instrument which represents and produces
cash and is treated as such by businessmen, there is no
reason why the archaic principle of the common law
should be followed in deciding the question as to
whether the handing over of the cheque is not a
sufficient tender of the arrears of rent if the cheque
is drawn for that amount. It is no doubt true that the
issuance of the cheque does not operate as a discharge
of the obligation unless it is encased, and it is
treated as a conditional payment, yet, in my view, this
is a sufficient tender of the arrears if the cheque is
not dishonoured. In the present day society, I am of
the view, an implied agreement should be inferred that
if the payment is made by a cheque, that mode of
payment would be accepted."
On the ground of bona fide requirement, the High Court found
that there was no evidence to show that the plaintiffs had
sufficient funds to start the wholesale business for which
they sought to get possession of the disputed premises. This
is a point which has a bearing on the guanines of the
plaintiffs’ claim. The High Court took note of the fact that
the plaintiffs made an attempt to keep back from the Court
that they were carrying on business at two more places, one
at Satna, and another at Ramnagar. In this connection the
High Court also referred to the defendants’ case that the
plaintiffs sought to increase the rent from Rs. 275/- to Rs.
500/- a month and that when the defendants had the rent
reduced by the Rent Controller to Rs. 175/- per month, the
present suit was filed. The High Court found that these
circumstances which the trial court took into consideration
were ignored by the lower appellate court. The High Court
accordingly held that the plaintiffs had failed to prove
their case of bona fide requirement, set aside the decree of
the appellate court, and restored that of the trial court
dismissing the suit.
Before us, Mr. Gupte for the plaintiff-appellants
raised three contentions:(1) Begamal and Budharmal both of
whom were statutory tenants had no heritable interest in the
demised premises and, on their death, the right to prosecute
the appeal in the High Court did not survive to their heirs
and legal representatives; (2) payment by cheque was not a
valid tender of rent and accordingly the suit should have
been decreed on the ground of default; and (3) the High
Court had no jurisdiction in second appeal to reverse the
finding of the first appellate court on the question of
reasonable requirement which was a finding of fact.
In support of his first contention Mr. Gupte relied on
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two decisions of this Court, Anand Nivas (Private) Ltd. v.
Anandji Kalyanji Pedhi & Ors. and Jagdish Chander Chatterjee
and Ors. v. Sri Kishan & Anr. The statute considered in
Anand Nivas’ case was Bombay
651
Rents, Hotel and Lodging Rates Control Act, 1947 as amended
in 1959. The question there was, whether a tenant whose
tenancy had been terminated had any right to sublet the
premises. Of the three learned Judges composing the Bench
that heard the appeal, Hidayatullah and Shah JJ. held that a
statutory tenant, meaning a tenant whose tenancy has
determined but who continues in possession, has no power of
subletting. Sarkar J.delivered a dissenting opinion. Shah J.
who spoke for himself and Hidayatullah J. observed in the
course of their Judgment:
"A statutory tenant has no interest in the
premises occupied by him, and he has no estate to
assign or transfer. A statutory tenant is, as we have
already observed, a person who on determination of his
contractual right, is permitted to remain in occupation
so long as he observes and performs the conditions of
the tenancy and pays the standard rent and permitted
increases. His personal right of occupation is
incapable of being transferred or assigned, and he
having no interest in the property there is no estate
on which subletting may operate."
It appears from the Judgment of Shah J. that "the Bombay Act
merely grants conditional protection to a statutory tenant
and does not invest him with the right to enforce the
benefit of any of the terms and conditions the original
tenancy". Sarkar J. dissenting held that word ’tenant’ as
defined in the Act included both a contractual tenant-, a
tenant whose lease is subsisting as also a statutory tenant,
and the latter has the same power to sublet as the former.
According to Sarkar J. even if a statutory tenant had no
estate or property in the demised premises, the Act had
undoubtedly created a right in such a tenant in respect of
the property which he could transfer. Jagdish Chander
Chatterjee’s case dealt with the Rajasthan Premises (Control
of Rent and Eviction) Act, 1950, and the question for
decision was whether on the death of a statutory tenant his
heirs succeed to the tenancy so as to claim protection of
the Act. In this case it was held by Grover and Palekar JJ.,
relying on Anand Nivas’ case, that after the termination of
contractual tenancy, a statutory tenant enjoys only a
personal right to continue in possession and on his death
his heirs do not inherit any estate or interest in the
original tenancy.
Both these cases, Anand Nivas and Jagdish Chander
Chatterjee, proceed on the basis that a tenant whose tenancy
has been terminated, described as statutory tenant, has no
estate or interest in the premises but only a personal right
to remain in occupation. It would seem as if there is a
distinct category of tenants called statutory tenants having
separate and fixed incidents of tenancy. The term ’statutory
tenancy’ is borrowed from the English Rent Acts. This may be
a convenient expression for referring to a tenant whose
tenancy has been terminated and who would be liable to be
evicted but for the protecting statute, but courts in this
country have sometimes borrowed along with the expression
certain notions regarding such tenancy from the
652
decisions of the English courts. In our opinion it has to be
ascertained how far these notions are reconcilable with the
provisions of the statute under consideration in any
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particular case. The expression ’statutory tenancy’ was used
in England in several judgments under the Increase of Rent
and Mortgage Interest (War Restrictions) Act, 1915, to refer
to a tenant protected under that Act, but the term got
currency from the marginal note to section 15 of the Rent
and Mortgage Interest (Restrictions) Act, 1920. That section
which provided inter alia that a tenant who by virtue of
that Act retained possession of any dwelling house to which
the Act applied, so long as he retained possession, must
observe and would be entitled to the benefit of all the
terms and conditions of the original contract of tenancy
which were consistent with the provisions of the Act,
carried the description in the margin "conditions of
statutory tenancy". Since then the term has been used in
England to describe a tenant protected under the subsequent
statutes until section 49(1) of the Housing Repairs and Rent
Act, 1954 for the first time defile ’statutory tenant’ and
’statutory tenancy’. ’Statutory tenant’ was define as a
tenant "who retains possession by virtue of the Rent Acts
and not as being entitled to a tenancy, and it was added, "
statutory tenancy’ shall be construed accordingly". This
definition of ’statutory tenancy’ has been incorporated in
the Rent Acts of 1957 and 1965. In England "statutory
tenancy" does not appear to have had any clear and fixed
incidents; the concept was developed over the years from the
provisions of the successive Rent Restrictions Acts which
did not contain a clear indication as to the character of
such tenancy. That a statutory tenant is entitled to the
benefit of the terms and conditions of the original contract
of tenancy so far as they were consistent with the
provisions of the statute did not, as Scrutton L. J.
observed in Roe v. Russell, "help very much when one came to
the practical facts of life", according to him "citizens are
entitled to complain that their legislators did not address
their minds to the probable events that might happen in
cases of statutory tenancy, and consider how the legal
interest they were granting was affected by those probable
events". He added, "....it is pretty evident that the
Legislature never considered as whole the effect on the
statutory tenancy of such ordinary incidents as death,
bankruptcy, voluntary assignment, either inter vivos or by
will, a total or partial subletting; but from time to time
put into one of the series of Acts a provision as to one of
the incidents without considering how it fitted in with the
general nature of the tenancy which those incidents might
affect". On the provisions which gave no clear and
comprehensive idea of the nature of a statutory tenancy, the
courts in England had been slowly "trying to frame a
consistent theory", "making bricks with very insufficient
statutory straw". Evershed M. R. in Boyer v. Warbey said:
"The character of the statutory tenancy, I
653
have already said, is a very special one. It has earned many
epithets, including "monstrum horrendum", and perhaps it has
never been fully thought out by Parliament". Courts in
England have held that a statutory tenant has no estate or
property in the premises he occupies because he retains
possession by virtue of the Rent Acts and not as being
entitled to a tenancy; it has been said that he has only a
personal right to remain in occupation, the statutory right
of "irremovability", and nothing more.
We find it difficult to appreciate how in this country
we can proceed on the basis that a tenant whose contractual
tenancy has determined but who is protected against eviction
by the statute, has no right of property but only a personal
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right to remain in occupation, without ascertaining what his
rights are under the statute. The concept of a statutory
tenant having no estate or property in the premises which he
occupies is derived from the provisions of the English Rent
Acts. But it is not clear how it can be assumed that the
position is the same in this country without any reference
to the provisions of the relevant statute. Tenancy has its
origin in contract. There is no dispute that a contractual
tenant has an estate or properly in the subject matter of
the tenancy, and heritability is an incident of the tenancy.
It cannot be assumed, however, that with the determination
of the tenancy the estate must necessarily disappear and the
statute can only preserve his status of irremovability and
not the estate he had in the premises in his occupation. It
is not possible to claim that the "sanctity" of contract
cannot be touched by legislation. It is therefore necessary
to examine the provisions of the Madhya Pradesh
Accommodation Control Act, 1961 to find out whether the
respondents’ predecessors-in-interest retained a heritable
interest in the disputed premises even after the termination
of their tenancy.
Section 2(i) of the Madhya Pradesh Accommodation
Control Act, 1961 defines ’tenant’ to mean, unless the
context otherwise requires:
"a person by whom or on whose account or behalf
the rent of any accommodation is, or, but for a
contract express or implied, would be payable for any
accommodation and includes any person occupying the
accommodation as a sub-tenant and also any person
continuing in possession after the termination of his
tenancy whether before or after the commencement of
this Act; but shall not include any person against whom
any order or decree for eviction has been made".
The definition makes a person continuing in possession after
the determination of his tenancy a tenant unless a decree or
order for eviction has been made against him, thus putting
him on par with a person whose contractual tenancy still
subsists. The incidents of such tenancy and a contractual
tenancy must therefore be the same unless any provision of
the Act conveyed a contrary intention. That under this Act
such a tenant retains an interest in the premises, and not
merely a personal right of occupation, will also appear from
section 14 which contains provisions restricting the
tenant’s power of subletting. Section 14 is in these terms:
654
"Sec. 14 Restrictions on sub-letting.-(1) No
tenant shall, without the previous consent in writing
of the landlord-
(a) sublet the whole or any part of the
accommodation held by him as a tenant; or
(b) transfer or assign his rights in the tenancy
or in any part thereof.
(2) No landlord shall claim or receive the payment
of any sum as premium or pugree or claim or receive any
consideration whatsoever in cash or in kind for giving
his consent to the sub-letting of the whole or any part
of the accommodation held by the tenant."
There is nothing to suggest that this section does not apply
to all tenants as defined in section 2(i). A contractual
tenant has an estate or interest in premises from which he
carves out what he gives to the sub-tenant. Section 14 read
with section 2(i) makes it clear that the so-called
statutory tenant has the right to sub-let in common with a
contractual tenant and this is because he also has an
interest in the premises occupied by him. Considering the
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position of the sub-tenant of a statutory tenant in England,
Lord Denning said in Solomon v. Orwell. "When a statutory
tenant sub-lets a part of the premises he does not thereby
confer any estate or interest in the sub-tenant. A statutory
tenant has no estate or interest in himself and he cannot
carve something out of nothing. The sub-tenant, like the
statutory tenant, has only a personal right or privilege."
In England the statutory tenant’s right to sub-let is
derived from specific provisions of the Acts conceding this
right to him; in the Act we are concerned with in this
appeal, the right flows from his status as a tenant. This is
the basic difference between the English Rent Restrictions
Acts and the Act under consideration and similar other
Indian statutes. In a Special Bench decision of the Calcutta
High Court, Krishna Prosad Bose v. Sm. Sarajubala Dasi,
Bachawat J. considering the question whether a statutory
tenant continuing in occupation by virtue of the West Bengal
Premises Rent Control (Temporary Provisions) Act, 1950 could
sub-let the premises let to him, said:
"The Rent Control and Tenancy Acts create a
special world of their own. They speak of life after
death. The statutory tenancy arises phoenix-like out of
the ashes of the contractual tenancy. The contractual
tenant may die but the statutory tenant may live long
thereafter. The statutory tenant is an ex-tenant and
yet he is a tenant."
The concept of statutory tenancy under the English Rent Acts
and under the Indian statutes like the one we are concerned
with in this appeal rests on different foundations. It must
therefore be held that
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the predecessors-in-interest of the present respondents had
a heritable interest in the premises and consequently the
respondents had the right to prosecute the appeal in the
High Court. Mr. Gupte’s first submission thus fails
On the ground of default, it is not disputed that the
defendants tendered the amount in arrears by cheque within
the prescribed time. The question is whether this was a
lawful tender. It is well established that a cheque sent in
payment of a debt on the request of the creditor, unless
dishonoured, operates as valid discharge of the debt and, if
the cheque was sent by post and was met on presentation, the
date or payment is the date when the cheque was posted. The
question however still remains whether in the absence of an
agreement between the parties, the tender of rent by cheque
amounts to a valid discharge of the obligation. Earlier, we
have extracted a passage from the High Court’s Judgment on
this aspect of the case. We agree with the view taken by the
High Court on the point. Rent is payable in the same manner
as any other debt and the debtor has to pay his creditor in
cash or other legal tender, but there can be no dispute that
the mode of payment can be altered by agreement. In the
contemporary society it is reasonable to suppose such
agreement as implied unless the circumstances of a case
indicate otherwise. In the circumstance of this case, the
High Court, in our opinion, rightly held that the cheque
sent to the plaintiffs amounted to valid tender of rent. The
second contention urged on behalf of the appellants must
also be rejected.
Mr. Gupte’s last contention relates to the plaintiffs’
bona requirement of the premises. The trial court found on
the evidence that the plaintiffs’ claim was unjustified. The
first court of appeal reversed that finding and held that
the plaintiffs’ requirement was bona fide. The High Court in
second appeal agreed with. the trial court in holding that
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the landlord had no bona fide requirement. Mr. Gupte
contended that the High Court had no jurisdiction in second
appeal to upset the finding of the lower appellate court on
this issue which, according to him, was a finding of fact.
Mr. Nariman for the respondent relied on the decision of
this Court in Madan Lal Puri v. Sain Das Berry to argue
that the question was a mixed question of law and fact and
that it was within the jurisdiction of the Court in second
appeal to examine the correctness of the finding. In answer
Mr. Gupte referred to another decision of this Court
Mattulal v. Radhey Lal which, relying on an earlier decision
of this Court in Sarvate T. B. v. Nemi Chand, held that such
a finding was one of fact and not a finding on a mixed
question of law and fact. We do not think that for the
purpose of this case we need express any opinion on the
apparent conflict between these two decisions. Plaintiffs’
case was that they had cloth and grocery business at village
Nadan and that they desired to start a wholesale cloth and
grocery business at Satna. The trial court’s finding was
based inter alia on the evidence
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that the plaintiffs had not adequate funds to start a new
wholesale business. The lower appellate court reversed the
finding of the trial court on the ground that there was no
evidence that the plaintiff had no money to start a new
business; the lower appellate court’s finding rests mainly
on this consideration. The High Court pointed out that
plaintff Damadidas alias Damadi Lal (P. W. 2) stated in his
evidence that their income from the business at Nadan was
sufficient " only for meeting the expenses of livelihood";
plaintif Tirath Prasad (P.W. 6) also admitted that "our
present income is not sufficient even for our maintenance
because there are many members in the family" It thus
appears that the lower appellate court overlooked a very
mate rial part of the evidence bearing on the question. It
is well establish ed that if a finding of fact is arrived at
ignoring important and relevant evidence, the finding is bad
in law. (see Radha Nath Seal v. Haripada Jana & Ors. We
therefore think that the High Court was within its
jurisdiction in setting aside the finding of the lower
appellate court and restoring that of the trial court on
this point.
In the result the appeal fails and is dismissed but in
the circumstances of the case we make no order as to costs.
P.B.R. Appeal dismissed.
657