Full Judgment Text
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CASE NO.:
Appeal (civil) 5658-5659 of 1998
PETITIONER:
Ramji Purshottam (D) by Lrs. & Ors.
RESPONDENT:
Laxmanbhai D, Kurlawala (D) by Lrs. & Anr.
DATE OF JUDGMENT: 23/04/2004
BENCH:
R.C. LAHOTI & ASHOK BHAN.
JUDGMENT:
J U D G M E N T
R.C. Lahoti, J.
The suit premises are part of the property known as Eaglewadi,
situated at New Mill Road, Kurla, Mumbai. It is a Chawl consisting of
several rooms which are single-storeyed and numbered. Ramji
Purshottam and Jagjivan Ram Purshottam, the two appellants before
us, both of whom have expired during the pendency of the
proceedings and are represented by their heirs, are brothers and in
occupation of two rooms ___ Room No. 12 and Room No.13
respectively ___ in the Chawl. For the sake of convenience, we refer
the two tenants before us as ’tenants’ and the respondents as
’landlords’ who are undisputedly the owner-landlords of the Chawl.
The facts are common and lie in a narrow compass to the extent they
are relevant for the purpose of highlighting the issues surviving for
decision in these appeals.
The monthly rent of the tenants-appellants is Rs.6.37 paise
each. They were in arrears of rent in respect of their respective
premises for the period 1.6.1969 to 31.1.1970. They were served with
demand-cum-quit notices dated 20th February, 1970. The mode of
service was personal on the tenants as also by sending copies thereof
under certificate of posting. In spite of the service of notice they did
not pay or tender the rent in arrears. The service of notices in person
had taken place on 20.2.1970 itself. Notices under certificate of
posting were sent on 6.3.1970 and were delivered. As the two tenants
failed to respond to the notices, proceedings for eviction were initiated
against the appellants under Section 12 of the Bombay Rents Hotel
and Lodging House Control Act, 1947, hereinafter the Act, for short.
The tenants did not also pay or tender the rent in the court on the first
day of hearing of the suit as required by Section 12(3)(b) of the Act.
In the written statement filed by the tenants they disputed the receipt
of any notice and also raised a dispute about water charges payable in
respect of the premises.
On trial, the learned Judge of the Court of Small Causes vide the
judgment dated 31.8.1983 directed the tenants to deliver vacant
possession of the suit premises to the landlord-respondents after two
months from the date of the decree. The material findings of fact
arrived at by the Trial Court are : (i) that the tenants were duly served
with the demand-cum-quit notice; (ii) that the tenants were in arrears
of the rent for more than six months and they neither paid the rent
nor raised a dispute as to the standard rent within the statutory period
of one month from the receipt of the notice by them; and (iii) that
they were liable to be evicted from the suit premises under Section
12(3)(a) of the Act. These findings have been upheld in appeal and
also by the High Court where the judgments of the courts below were
sought to be impugned in exercise of writ jurisdiction of the High
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Court. The first two findings are pure of facts and they have achieved
a finality. It may be stated that before this Court also in these appeals
the learned counsel for the appellants has in all fairness not laid
challenge to the said findings of fact. The only issue arising for
decision is as to the liability of the appellants to be evicted from the
suit premises, in the light of the law as amended during the pendency
of the proceedings as will be noticed shortly hereinafter.
The two appellants were also alleged to have committed acts of
waste and carried out permanent additions and alterations in the suit
premises and, their eviction was claimed on those grounds also. The
Trial Court has rendered a finding of ’not proved’ on this issue and the
landlord-respondents have not pursued that plea further.
Now, the facts relevant to the controversy which has emerged
for decision before this Court.
Section 12 of the Act under which the proceedings for eviction
were initiated in the year 1970 and as it stood at that time reads as
under___
"12. (1) A landlord shall not be entitled to
the recovery of possession of any premises so long
as the tenant pays, or is ready and willing to pay,
the amount of the standard rent and permitted
increases, if any, and observes and perform the
other conditions of the tenancy, in so far as they
are consistent with the provisions of this Act.
(2) No suit for recovery of possession shall
be instituted by a landlord against tenant on the
ground of non-payment of the standard rent or
permitted increases, due, until the expiration of
one month next after notice in writing of the
demand of the standard rent or permitted
increases has been served upon the tenant in the
manner provided in section 106 of the Transfer of
Property Act, 1882.
(3)(a) Where the rent is payable by the
month and there is no dispute regarding the
amount of standard rent or permitted increases, if
such rent or increases are in arrears for a period of
six months or more and the tenant neglects to
make payment thereof until the expiration of the
period of one month after notice referred to in sub-
section (2), the Court shall pass a decree for
eviction in any such suit for recovery of possession.
(b) In any other case, no decree for eviction
shall be passed in any such suit if, on the first day
of hearing of the suit or on or before such other
date as the Court may fix, the tenant pays or
tenders in Court the standard rent and permitted
increases then due and thereafter continues to pay
or tender in Court regularly such rent and
permitted increases till the suit is finally decided
and also pays costs of the suit as directed by the
Court.
(4) Pending the disposal of any such suit,
the Court may out of any amount paid or tendered
by the tenant pay to the landlord such amount
towards payment of rent or permitted increases
due to him as the Court thinks fit.
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Explanation I. ___ In any case where there is
a dispute as to the amount of standard rent or
permitted increases recoverable under this Act the
tenant shall be deemed to be ready and willing to
pay such amount if, before the expiry of the period
of one month after notice referred to in sub-section
(2), he makes an application to the Court under
sub-section (3) of section 11 and thereafter pays or
tenders the amount of rent or permitted increases
specified in the order made by the Court.
Explanation II. ___ For the purposes of sub-
section (2), reference to ’standard rent’ and to
’permitted increase’ shall include reference to
’interim standard rent’ and ’interim permitted
increase’ specified under sub-section (3) or (4) of
section 11."
The Bombay Municipal Corporation and Bombay Rent Hotel and
Lodging House Rates Control (Amendment) Act, 1975 (Maharashtra
Act LI of 1975) was assented to by the President of India on the 17th
October, 1975. The assent was published in Maharashtra Government
Gazette dated October 30, 1975. Vide Notification No. BMC
1074/65962-MC-1 published in Maharashtra Government Gazette
dated November 13, 1975, the Amendment Act came into force on
first day of November, 1975. Sections 10 and 21 which are relevant
for our purpose are extracted and reproduced hereunder :
"10. After section 173BB of the principal
Act*, the following section shall be
inserted, namely:-
"173C. If, under the terms of
the tenancy, the rent for any
premises is inclusive of water taxes
or water charges for supply of water
by measurement and the person in
actual occupation of the premises
has, on behalf of the owner thereof,
paid to the Commissioner any water
taxes or water charges in respect of
the premises, such person shall be
entitled to recover from the owner
the amount so paid and may deduct
the amount from the rent which
from time to time becomes due to
the owner."
[*Principal Act means the Bombay Municipal Corporation Act]
21. In section 12 of the Bombay Rents,
Hotel and Lodging House Rates Control Act,
1947 (hereinafter referred to as "the
Bombay Rent Control Act"), at the end,
after Explanation II, the following
Explanation shall be added, namely:-
"Explanation III. \026 For the
purposes of this section, where a
tenant has deducted any amount
from the rent due to the landlord
under section 173C of the Bombay
Municipal Corporation Act for
recovery of any water tax or charges
paid by him to the Commissioner,
the tenant shall be deemed to have
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paid the rent to the extent of
deductions so made by him".
It is not disputed that the Chawl has a water tap installed within
its precincts through which the water supply by the Bombay Municipal
Corporation is made available to the tenants. The tenants do not pay
any water charges other than the rent to the landlords. In other
words, the facility for use of water is available to the tenants by virtue
of tenancy and the charges for supply of water are included in the
rent. The water taxes or water charges for supply of water by the
Municipal Corporation are payable by the landlords to the Municipal
Corporation. With effect from coming into force of the Amendment Act
a statutory right was conferred on the tenants whereunder the tenants
could pay water taxes or water charges to the Municipal Corporation
and the tenants became entitled to recover the amount of charges so
paid from the owner or to deduct from the rent or, in the alternative,
to the extent of the amount so paid by the tenant to the landlord the
same was deemed to be the payment of rent by the tenant to the
landlord.
The tenants residing in the Chawl had formed a Tenants’
Association led by Raghubir Singh Thakur, one of the tenants who was
also sought to be evicted by filing a suit against him and who
contested the landlords’ case upto the stage of appeal. Thereafter, he
has given up the contest and vacated the room in his occupation. It
seems that the Tenants’ Association had paid the amount of water
charges. The exact details of payment are not clearly available from
the records. However, during the course of hearing before this Court
an affidavit sworn in by Vilas Prajapati S/o Late Ramji Puroshttam
Dass has been filed containing the details of payments made by the
Tenants’ Association, consisting of 26 tenants as members, to the
Bombay Municipal Corporation which are set out as under :
In September 1969 Rs. 608.00
On 15.11.71 Rs.1,060.00
On 30.6.75 Rs.4,297.77
On 30.6.75 Rs. 304.41
On 30.6.75 Rs.2,542.40
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Rs.8,813.16
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When the litigation was initiated in the Trial Court in the year
1970 the plea of adjustment was not available to the tenants which
became available to be raised for the first time under Amendment Act
No. LI of 1975 on its coming into force on 1.11.1975. Accordingly, the
plea was not raised in the written-statement. However, the Tenants’
Association had filed suits for recovery of the water charges paid by
them to the Municipal Corporation and the suits were decreed against
the landlords. The landlords did not dispute the right of the Tenants’
Association to have the water charges paid by them to the Municipal
Corporation being adjusted against the rent due and payable to them
and they have willingly allowed such adjustment. The plea of
adjustment in the light of the provisions introduced by Act No. LI of
1975 was pressed before the Appellate Court by bringing to its notice
the decrees passed in the summary suits filed by the Tenants’
Association against the landlords and the same was dealt with and
disposed of by the Appellate Court in the following manner :
"They (tenants) filed summary suit against
the respondents to recover the water
charges which were paid by them for and on
behalf of the landlords. That suit was
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compromised and water charges were
adjusted in the rental amount that was due
and payable by the appellants to the
respondents for the year 1969. It will thus
be seen that the payment of water charges
and the recovery thereof would be a matter
which would have no bearing on the demand
of arrears of rent by the respondents on the
appellants. In any case the appellants have
been recovering these water charges by
instituting appropriate proceedings against
the respondents. Besides the respondents
have been making suitable adjustments
towards water charges from time to time in
consultation with the tenants’ association in
this property. That being the position there
was absolutely no justification for the
appellants’ for withholding the payment of
arrears of rent which were justly due to the
respondents. If there was any dispute about
the water charges the appellants ought to
have paid those charges and thereafter
deducted that amount from the arrears
demanded vide the impugned notice. No
steps in that regard were taken by the
appellants but instead payment of arrears of
rent was un-necessarily withheld."
The learned counsel for the tenant-appellants submitted that the
benefit of the amended provisions of law which were brought in force
and became available for the benefit of the tenants during the
pendency of the cases before the Trial Court should not have been
denied to the tenants. And, if only the payments made by the
Tenants’ Association to the Municipal Corporation and available in
remission of rent (by way of adjustment) would have been taken into
account by the Trial Court, then the appellants would not have been
held defaulters and there would have been no occasion to pass the
decree of eviction. On the other hand, the learned counsel for the
landlord-respondents submitted that the substantive rights of the
parties would stand crystallized on the date of institution of the suits
and once the tenants were proved to be defaulters on the date of the
suit, they had incurred liability for eviction and that right having
accrued to the landlord-respondents could not have been taken away
by Amending Act No. LI of 1975; more so when the amendment has
not been given a retrospective operation. From the submissions so
made, two questions arise for consideration: firstly, whether the
amendments introduced by Act No. LI of 1975 are applicable to the
pending eviction proceedings; and if yes, then secondly, whether the
appellants can be held to be defaulters in the light of the payment of
water charges made by them on behalf of landlords to Municipal
Corporation.
Whether Act No. LI of 1975 insofar as it amends Section 12 of
Act No.57 of 1947 can be said to be retrospective in operation is the
first question. A perusal of Section 12 shows that sub-Section (1)
speaks of the landlord’s entitlement to the recovery of possession of
premises from the tenant. Sub-Section (2) speaks of the institution of
suit. The fulfillment of conditions prescribed by sub-Section (2) is a
condition precedent to enable a landlord to institute a suit for recovery
of possession. On the date of passing of the decree for recovery of
possession the Court shall have to record findings by reference to
Section 3(a) of the Act that the tenant has been in arrears for a
period of six months prior to the institution of the suit, that a period of
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one month has expired from the date of the service of notice in writing
demanding the rent in arrears from the tenant and that the tenant
neglected to make payment of such arrears for the abovesaid period of
one month. It has always open for the tenant to show that though he
was alleged to be in arrears but that was not so. On the date of the
institution of the suit the tenant did not have a right to claim
adjustment of the amount of water charges paid by him against the
amount of rent in arrears. However, he could have paid such water
charges to protect himself against discontinuance of water supply, an
essential service. Section 21 of Act No.LI of 1975 introduced
Explanation III in Section 12 of Act No.57 of 1957 which is declaratory
in nature and creates a fiction for holding the tenant deemed to have
paid the rent to the extent of payment of water charges and creating a
statutory right in the tenant to make adjustment of the amount of
water charges paid to the Municipal Corporation from out of the
amount of rent due by him to the landlord. So long as the amount of
water charges paid by the tenant has not been actually returned or
reimbursed by the landlord to the tenant, the tenant would be justified
in treating the amount of water charges paid by him to the Municipal
Corporation as the amount of rent paid by him to the landlord. In
other words, to the extent of water charges paid by tenant he cannot
be deemed to be in arrears outstanding against him.
Strictly speaking, in the present case, the application of the
amendment brought in by the statute to the pending proceedings does
not have the effect of retrospectivity. The rent is alleged to have
fallen in arrears for the period 1.6.1969 to 31.1.1970. Some payment
of water charges is said to have been made referrable to the same
period. Thus, both the events are referrable to a period anterior to the
coming into force of Act No. LI of 1975. The law coming into force
during the pendency of the proceedings is being applied on the date
of judgment to the pre-existing facts for the purpose of giving benefit
to the tenant in the pending proceedings. This is not retro-activity.
Justice G.P. Singh states in Principles of Statutory Interpretation
(Ninth Edition, 2004, at page 462) ___ "the fact that a prospective
benefit under a statutory provision is in certain cases to be measured
by or depends on antecedent facts does not necessarily make the
provision retrospective. The rule against retrospective construction is
not always applicable to a statute merely because a part of the
requisites for its action is drawn from time antecedent to its passing."
In Shah Bhojraj Kuverji Oil Mills and Ginning Factory Vs.
Subhash Chandra Yograj Sinha \026 AIR 1961 SC 1596 the
Constitution Bench held that the Bombay Act No.57 of 1947 is a piece
of legislation passed to protect the tenants against the evil of eviction.
And the benefit of the provisions of the Act ought to be extended to
the tenants against whom the proceedings are pending on the date of
coming into force of the legislation.
In the present appeal, once the provisions of Act No. LI of 1975
became applicable the tenants became entitled to take benefit of the
amended provisions. However, it shall have to be borne in mind that
the cause of action on which the landlord’s action was founded was
referable to the period from 1.7.1969 to 31.1.1970 for which the
tenants were alleged to be in arrears. The tenants could have shown,
and the Court could have entered into the question, if the tenants had
made any such payment on account of water charges as would have
exonerated them of their liability to make the payment of the rent
claimed in the plaint as arrears by claiming adjustment so as to hold
that on the date of the institution of the suit they were not in arrears
for a period of six months or more and that such arrears did not
continue to remain so for the period of one month after the date of
service of the notice.
The position of law stands clarified as above. However, still the
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question remains how the law has to be applied to the facts and that
cannot be done without ascertaining the precise facts. It appears that
the tenant-appellants before us have not themselves paid any water
charges due and payable by those two alone to the Municipal
Corporation. It also appears that all the tenants contributed towards
the payment of water charges which were collected by the Tenants’
Association and then paid. Of course they would be entitled to
adjustment proportionate with their share in the contribution. Answers
to a few questions are not clear: (i) what was the exact amount of
water charges paid, (ii) when, (iii) to which period they are relatable,
and (iv) what was the exact or deemed share of the tenant-appellants
before us in the contribution. These are the questions purely of fact
for the determination whereof the cases shall have to be remanded to
the Court of facts.
The appeals are allowed. The judgments and decrees of the
Appellate Court as upheld by the High Court are set aside. The cases
of the two tenants, i.e. Ramji Purshottam and Jagjivan Ram
Purshottam (both now represented by their legal representatives) shall
stand restored on the file of the Appellate Court. The Appellate Court
shall, on the basis of the material available on record and by eliciting
such further relevant facts as it may deem necessary, proceed to hear
and decide the cases afresh consistently with the law as explained
hereinabove. The Appellate Court would examine, after ascertaining
the relevant facts with particulars as to payment of water charges and
giving effect to the provisions as amended by Act No. LI of 1975
whether a ground for eviction under Section 12(2) was available to
landlords on the date of the suits. If so, decree for eviction shall
follow. If not, the suits shall stand dismissed. So also, if the tenants
had collected the amount of water charges paid by them in cash from
the landlord, the question of adjustment would not arise.
The costs shall abide the result.
The parties through their respective counsel are directed to
appear before the Trial Court on 21st June, 2004. The records received
here shall be returned forthwith.