B. Kuppulal vs D. Sagunthala and Another

Padmini Jesudurai, J.—The two civil revision petitions are filed by the tenant and the landlords respectively, each challenging the findings

adverse to him in R.C.A. 8/1985 rendered by the learned Rent Control Appellate Authority, (Subordinate Judge, Coimbatore).

The facts giving rise to the present revision briefly are as follows : The proceedings relate to non-residential premises in Door No 20/803 and

804 in Big Bazaar Street, Coimbatore. The petitioners in C.A.P. No. 18 97 of 1985 (hereinafter referred to as the petitioners) are the owner of

the premises. The petitioner in C.A.P. No. 1344 of 1985 (hereinafter referred to as the respondent) is a tenant under the petitioners. The

petitioners filed R.C.O.P. No. 361 of 1981 before the Rent Controller (District Munsif), Coimbatore seeking eviction of the respondent both on

the ground of wilful default in the payment of rent (under Section 10(2)(i) of the Tamil Nadu Buildings (Lease and Rent Control) Act (hereinafter

referred to as the Act) and also claiming the premises for their own business u/s 10(3)(a)(iii) of the Act. The petitioners had purchased the

premises on 30-9-1980 for the purpose of shifting there the business they were carrying on in rented premises in the same street. The respondent

had been a tenant even under the previous owner and was carrying on business in the premises on a monthly rent of Rs. 550/- Despite repeated

demands for the payment of rent, the respondent had not paid the rent from September, 1980 upto the date of the filing of the petition for eviction,

viz., 21-9-1981. The default was wilful. The premises were required by the petitioners for carrying on their business, since the building which they

were occupying and in which they were carrying on business was not owned by them and had been rented out to them by their landlord, who

required the premises. Eviction therefore was sought for on both the grounds stated above.

The respondent resisted the move contending that there was no default in the payment of rent since the premises had been mortgaged by one

Ramesh Babu on 9-6-1978 for Rs. 25,000/-, that the respondent got assignment of the above mortgage on 9-5-1980 and the interest on the

mortgage amount at the rate of 24% P.a. coming to Rs. 500/- P.M. had to be adjusted towards the rent and that, therefore, there was no default in

the payment of rent, much less was there any wilful default. The respondent further contended that the petitioners were not doing any business, but

that the first petitioner''s -husband, was doing business in premises owned by him and that, therefore, the petition deserves to be dismissed on both

the grounds.

Before the Rent Controller, the husband of the first petitioner and father of the second petitioner was examined as P.W. 1 and Exs. A.1 to A.20

were marked on the side of the petitioners. R.W. 1 was examined on the side of the respondent and Exs. B.1 to B.3 have been marked on his

side.

Learned Rent Controller, on a consideration of the materials, found that there was default in the payment of rent from September, 1980 to

September, 1981 and that the default was wilful. He also found that the petitioners were doing business in the name and style of ""Ponmani Steel

House"" and the premises occupied by them for the above business was not their own and that the claim of the petitioners was BONA FIDE

entitling them to have eviction of the respondent from the premises. Eviction, therefore, was ordered on both the grounds. On appeal, learned

Appellate Authority, concurred with the finding of the learned Rent Controller that there was default in the payment of rent and that the default was

wilful. However, on the question as to whether the petitioners would be entitled to have the premises u/s 10(3)(a)(iii) of the Act for the purpose of

carrying on their business there, the learned Appellate Authority, on the basis of Exs. B.1 to B.3, which were portions of the evidence given by

P.W. 1 in a prior suit, held that Exs. B.1 to B.3 indicated that Ponmani Steel House really belonged to P.W. 1 and not to petitioners, that they also

indicated that the second petitioner owned a shop in Raja Street in Coimbatore and that, therefore, the petitioners were not entitled to seek

eviction u/s 10(3)(a)(iii) of the Act. The appeal however, was dismissed with the above finding.

The petitioners have preferred C.R.P. No. 1897 of 1985 against the finding of the learned Appellate Authority that the petitioners are not

entitled to seek eviction u/s 10(3)(a)(iii) of the Act. The respondent has filed C.R.P. No. 1344/1985 against the finding of the learned Appellate

Authority that the default in the payment of rent was wilful, entitling the petitioners to get eviction u/s 10(2)(i) of the Act.

Mr. R. Krishnamoorthy, learned Advocate General, appearing for the respondent, submitted that there had been an oral agreement of sale by

one of the prior owners of the premises in favour of the respondent, that after the above agreement the respondent was not bound to pay rent to

the prior owner or his successors - in - interest, the petitioners herein, and that in view of the fact that the respondent had. taken assignment of the

mortgage executed by one of the owners viz., Thiru K.V. Srinivasan, subsequent to the date of assignment, viz., 9-5-1980, the respondent was not

bound to pay rent to the landlord and the rent payable had to be adjusted towards the interest that was payable by the landlord to him and that,

therefore, on these two grounds it could not be taken that there was any default in the payment of rent. Learned Advocate General further

submitted, that, in the light of the above two facts, even if the respondent was held to be liable to pay rent and a default was found against him, the

default could never be construed as a wilful default making him liable to be evicted on that ground. Reliance was placed upon a decision of this

court, rendered by Ramaprasada Rao, J., (as he then was) in T.S. Rajagopal v. M.N. Saraswathi Ammal and Anr. (1977) 90 L.W. 26, wherein

this Court has held that the tenant must be recalcitrant in payment of rent and his conduct should amount to supine indifference and the default

should be telling and conspicuous before it could be characterised as a wilful default. Reliance was also placed on the decision of the Supreme

Court in S. Sundaram Pillai and Others Vs. `R. Pattabiraman and Others, . On the question of the claim of the petitioners for the premises u/s

10(3)(a)(iii) of the Act, learned Advocate General submitted that the learned Appellate Authority had given due significance to Exs. B.1 to B.3 and

though a discussion of the oral as well as the documentary evidence on that issue was lacking in the judgment of the learned Appellate Authority,

still in the light of Exs. B.1 to B.3. the finding of the learned Appellate Authority on that aspect should be sustained.

Per contra, Thiru V. Sridevan, Learned Counsel for the petitioners, submitted that an oral agreement of sale would not terminate the land-lord

tenant relationship and, even if there was an agreement of sale it had to be in writing and the agreement itself should, in clear terms, specify that the

landlord - tenant relationship was being terminated and that there was no future liability on the part of the tenant to pay rent to the landlord and, in

the absence of such specific recitals in a written agreement, the mere oral agreement of sale would not exonerate the tenant from continuing to pay

rent to the landlord. Learned Counsel also submitted that the mortgage had been executed by only one of the two owners of the property whereas

the rent was due to be paid not only to the mortgagor but also to the other co-owner who was not a, party to the mortgage and as such the interest

that was due to one of the co-owners under the mortgage could not be set off against a rent that was due to both the co-owner as landlords and

also that the mortgagor had not been examined to show that there was any such adjustment of rent towards the interest agreed upon between them

and that even if such an adjustment was proper, the rent payable was Rs. 550/- and the interest even according to the respondent came only to Rs.

500/- and there was a balance of Rs. 50/- of rent, regarding which there was wilful default and for which no explanation had been offered by the

respondent either in his counter or in any of the earlier notices. There was, therefore, default in the payment of rent; the default was wilful and both

the courts had given a finding to the above effect, which this court, sitting in revision, could not lightly interfere with. Learned Counsel, on the

question of requirement u/s 10(3)(a)(iii) of the Act submitted that the order of the learned Appellate Authority was perverse in having not

considered the oral and documentary evidence, which clearly indicated that Ponmani Steel House really belonged to the petitioners, who were

carrying on the business in a premises not belonging to them and Exs. B.1 to B.3 being portions of the evidence of P.W. 1 in a prior suit, should be

read in the context of those proceedings and should not be isolated and extracted and put against the several clinching documents exhibited on the

side of the petitioners and that, therefore, the finding of the learned Appellate Authority, having ignored the entire evidence on the side of the

petitioners, exhibited perversity, which required to be set aside by this Court under its revisional jurisdiction. Learned Counsel placed reliance upon

certain decisions, which I shall refer to later.

The question that arises for consideration is whether the order of the learned Appellate Authority, concurring with the finding of the learned Rent

Controller on the question of wilful default in the payment of rent or reversing the finding of the learned Rent Controller u/s 10(3)(a)(iii) of the Act

suffers from any illegality, impropriety or perversity calling for interference by this Court under its revisional jurisdiction?

Taking C.R.P. No. 1344 of 1985 first, it is seen that the finding here that the respondent has committed wilful default in the payment of rent

from September, 1980 to September, 1981 is concurrent. The respondent had instituted the suit, O.S. No. 768 of 1980, before the District

Munsif, Coimbatore, for specific performance of an alleged oral agreement of sale between him and one of the co-owners of the property viz.,

Thiru K.V. Srinivasan. The suit had been dismissed. As rightly contended by the Learned Counsel for the petitioners, mere agreement of sale will

not terminate the landlord - tenant relationship and the liability of the tenant to continue to pay the rent, the tenant will have to continue to pay the

rent, unless there are specific recitals to the contrary in the agreement of sale. The judgment of Ramanujam, J. in Section Doraisami Nadar v.

Nagammal (1980) 93 L.W. 858 (1971) 1 M.L.J. 35 : (1981) 1 R.C.J. 349 : to the above effect relied on by the Learned Counsel for the

petitioners, would apply to the facts of this case. It, therefore, follows that the respondent, despite the alleged oral agreement of sale with one of

the co-owners, even if it is found to be true, will still be under an obligation to pay the rent to the petitioners. Further, it is settled law that u/s 53A

of the Transfer of Property Act the agreement has to be in writing and, even if there was one, oral agreement of sale does not transfer title. In the

instant case, even according to the respondent, there was only an oral agreement between him and one of the co-owners. The co-owner, Thiru

K.V. Srinivasan, had not been examined to substantiate the averment of the respondent that he was entitled to have an adjustment of the rent

towards the interest due under the mortgage of which he had got an assignment. It is clear that the respondent is not entitled to have an adjustment

of the rent. That apart, 3ven according to the respondent, the interest due on the mortgage was only Rs. 500/- p.m. whereas the rent was Rs.

550/-.

No explanation has been offered, worthy of acceptance, as to how the remaining Rs. 50/- was not paid by the respondent to the petitioners. It is

seen from Ex. A-10 that the petitioners had filed O.P. No. 335 of 1980 before the District Munsif''s Court, Coimbatore, depositing Rs. 25,000/-

being the mortgage amount for redeeming the mortgage. The said petition had been dismissed on the ground that the correct amount had not been

deposited. The respondent, at least after the disposal of the above O.P., ought to have known about the purchase and ought to have tendered or

paid the rent to the petitioners. He had failed to do so. One could understand the bona fides of the above claim for adjustment, if the respondent

had paid the balance of Rs. 50/- every month to the petitioners so as to indicate that, even if the courts ultimately found that the respondent was

not entitled to any adjustment, the default, if any, was at least not wilful. The fact that the respondent had not cared to pay the balance of Rs. 50/-

to the petitioners clearly shows that, if the default when found to be true, has also to be taken as wilful. Though a clumsy explanation has been put

forward by the respondent in his evidence, the same has been rightly rejected by both the courts below. I am unable to see any perversity or

illegality in the finding of both the courts below that there has been a default in the payment of rent from September, 1980 to September, 1981,

and that the default has also been wilful. C.R.P. No. 1344 of 1985 therefore has to be dismissed.

Regarding C.R.P. No. 1897 of 1985, the learned Rent Controller had found that the petitioners were doing business in the name and style

Ponmani Steel House"" in a rented building in the same street, that the place where they were doing business did not belong to them and that,

therefore, their claim u/s 10(3)(iii) of the Act was true and bona fide entitling them to get eviction of the respondent. This finding has been arrived at

by him on the bais of the evidence of P.W. 1 and on the basis of Exs. A-3 to A-7 and A.11 to A.19. Learned Appellate Authority has chosen to

reverse the above finding, acting solely on Exs. B.1 to B.3. Exs. B.1 to B.3 have been extracted in the order of the learned Appellate Authority.

Exs. B.1 to B.3 are certain portions of the evidence of P.W. 1 given in O.S. No. 768 of 1980 filed by the respondent herein against K.V.

Srinivasan as the first defendant, petitioners 1 and 2 as defendants 2 and 3 respectively and P.W. 1 as the fourth defendant. The, suit was instituted

for specific performance on the allegation that there had been an oral agreement between him and Thiru K.V. Srinivasan and part of the

consideration had been paid by him to the above Srinivasan. On behalf of himself and on behalf of his wife and minor son, the petitioners herein,

P.W. 1 has given evidence as D.W. 2. The main issue in that suit was with reference to the alleged oral agreement of sale. When P.W. 1 was

giving evidence for himself and on behalf of the petitioners herein, what P.W. 1 stated there in respect of the ownership of Ponmani Steel House or

the ownership of the other properties belonging to him could not be taken literally as establishing the ownership of the business or other property as

belonging to him and excluding the ownership of the petitioners herein. In those proceedings there was no necessity to be specific as to who were

the owners of the business or who were the owners of the other properties owned by the different members of the family. Exs. B.1 to B.3,

therefore, cannot be taken out of their context dissociated from the nature of the proceedings in which P.W. 1 was giving evidence fixs. B.1 to B.3

cannot be accepted literally, more so, when on the side of the petitioners unimpeachable documents in the form of Exs. A.1 to A.7 and A.11 to

A.19 have been produced. Ex. A.3 is a notice of demand for property tax issued by the Coimbatore Municipal Corporation for the premises

wherein Ponmani Steel House Business was being conducted. The names of both the petitioners are shown as the assessees, together with the

address of the premises where in Ponmani Steel House business was being carried on. P.W. 1 is also shown as the guardian of the minor, the

second petitioner herein. Exs. A-4, A-5, A-13, and A-14 are similar documents wherein all the above recitals are also found. Ex. A-6 and Ex.

A.7 are receipts issued by the Coimbatore Municipal Corporation to the petitioners for payment of property tax. Ex. A.11 is an Income Tax

assessment order wherein Ponmani Steel House business has been assessed to income tax and the name of the first petitioner is shown as the name

of the proprietor. Ex. A.12 is a demand notice for profession tax for Ponmani Steel House, Exs. A.15 and A.16 are Certificates of Registration

issued under the Sales Tax Act. Similarly Exs. A.17 to A.19 are also documents connected with Ponmani Steel House, which clearly indicate that

the petitioners are carrying on the above business. P.W. 1 has also given oral evidence that the business is that of the petitioners. Learned

Appellate Authority has neither discussed the oral evidence of P.W. 1 nor the documents, referred to above. Exs. B.1 to B.3 cannot be put against

Exs. A-3 to A-7 and A-11 to A-19 and the oral evidence of P.W. 1. Learned Appellate Authority has given no reasons as to why he was

rejecting all these documents and acting upon Exs. B.1 to B.3 The -only inference that could be drawn from Exts. A-3 to A-7 and A-11 to A-19

is that Ponmani Steel House belongs to the petitioners. It is not the case of the respondent that the premises wherein Ponmani Steel House is

located belongs to the petitioners. The order of the learned Appellate Authority, without adverting to Exs. A.3 to A-7 and A.11 to A.19 and giving

a finding merely on the basis of Exts. B.1 to B.3, suffers from illegality and perversity.

Learned Counsel for the petitioners relied upon certain decisions of this Court reported in Abdul Rahman v. Sadasivam (1984) M.L.J. 410 :

97 L.W. 516, Palaniapra Chettiar P.S. v. A. Simen George (1983) 96 L.W. 394, Indian Plywood Manufacturing Company Vs. Balaramiah

Chetty, . The principles laid down in the above decisions would apply to the facts of this case also. As held by me above, the order of the learned

Appellate Authority, reversing the finding of the learned Rent Controller, without considering Exs. A.3 to A-7, and A.11 to A.19, has to be set

aside. The petitioners have proved that they are carrying on business under the name and style ""Ponmani Steel House"" and that the premises

wherein they are carrying on business does not belong to them and the claim of the petitioners requiring the petition scheduled premises for shifting

their above business is also bonafide. C.R.P. No. 1857 of 1985 has therefore to be allowed.

In the result, C.R.P. No. 1344 of 1985 is dismissed. C.R.P. No. 1897 of 1985 is allowed, the order of the learned Appellate Authority is set

aside and the order of the learned Rent Controller is restored. There will be no order as to costs in both the revisions.

Learned Counsel for the respondent requests three months'' time to vacate the petition premises Thiru V. Sridevan, Learned Counsel for the

landlords has no objection. Time for eviction three months from this date on condition that the tenant files an affidavit of undertaking before this

Court within two weeks from to-day and also pays the entire arrears of rent within four weeks from today.

This petition having been set down this day for being mentioned in the presence of the said Advocates the court made the following Order:

The matter is listed to-day for being mentioned. Affidavit of undertaking to vacate the premises without recourse to a court of law has been filed. It

is also made clear that as on date there are no arrears of rent. Three months'' time from 0-12-1986 is granted to the tenant to vacate the premises,

and hand over possession to the landlords.