Ganeshlal and Another vs Najamunnisa Begum and Others

N.D. Patnaik, J.—Respondents 1 to 6 in these two revisions have filed a petition R.C. 115/1986 in the Court of the Prl. Rent Controller, Hyderabad for eviction of the tenant on the ground that the tenant had committed willful default in payment of rent. Five respondents were impleaded in that petition. Respondents 1 and 2 are the heirs of the original tenant by name Shankar Lal. Respondents 3 to 5 are the sub- tenants. The Rent Controller allowed the petition holding that the landlords have established that the tenant committed wilful default and ordered eviction. Against that an appeal R.A.No. 508/1988 was filed by the respondents 1 and 2 in R.C. 115/86 and respondent No. 4 therein before the appellate authority under the Rent Control Act i.e., Additional Chief Judge, Small Causes Court, Hyderabad. The appellate authority has also agreed with the finding of the Rent Controller that the tenant had committed willful default and therefore dismissed the appeal. C.R.P. 1611/91 is filed by the tenants whereas C.R.P. 176/ 91 is filed by one of the sub-tenants, who was also appellant before the appellate authority.

Earlier to this revision the landlord had filed petition R.C. 59/80 in the Court of the Rent Controller for eviction of the tenant Shankarlal on the ground that he had sub-let the premises without the consent of the landlord. During the pendancy of that petition the tenant died. Therefore, since the premises in question is a non-residential premises and in view of the legal position, which was prevailing then, the Rent controller ordered eviction on the ground that the heirs of the tenant cannot continue to occupy the non-residential premises as tenant in view of the definition of ''tenant'' under the Rent Control Act. Against that the heirs of the tenant carried the matter in appeal before the appellate authority, who held following the later decisions that even the heirs of tenant come within the definition of ''tenant'' in respect of non-residential premises and so they are entitled to continue as tenants and allowed that appeal and also holding that there is no unauthorised subletting. Against that R.A. 29/85 was filed which was dismissed and against that order C.R.P. 271 /86 was filed which was also dismissed.

Then the present petition RC.115/86 was filed for eviction on the ground of wilful default. The periods of defaults are given as below:

1-12-80 to 30-4-85 29 months 1-5-83 to 31-3-84 11 " 1-4-84 to 31-1-85 10 " 1-2-85 to 31-3-85 2 " 1-4-85 to 30-6-85 1-7-85 to 31-8-85

It may be noted from the above dates that the first period covers upto 30-4-1985 and the subsequent periods of payments are only from 1-5-85 to 31-8-85. As I have stated above both the Rent Controller as well as appellate authority have found that there is willful default committed by the tenant and ordered eviction.

In these revisions Mr. Balchand, the learned Counsel for the petitioners has taken the following contentions: (i) In the earlier proceedings as the landlords were disputing the rights of the tenants to continue in occupation of the premises and did not receive the rent, the tenants could not pay the rent and therefore it could not be termed as a willful default; (2) An amount of Rs. 21,000/- and odd was in deposit with the landlords and so as the rent is payable is only Rs. 700/- p.m. they could have appropriate this amount towards the rent.

Now, I will take up the first contention. As I have stated above the rent is Rs. 700/- p.m. and the periods mentioned above reveal that the tenants have not paid the rents for several months. Section 10 (2) of the A.P. Buildings (Lease, Rent and Eviction) Control Act provides that the tenant can be evicted if he 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. The proviso reads that in any case falling under Cl. (i), if the controller is satisfied that the tenant''s default to pay or tender rent was not wilful, he may not withstanding anything in Section 11, 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. In this case as per the agreement between the parties dated 6-12-1974 it is stipulated in cl. (3) that the tenant shall pay rent on the 4th day of every succeeding month and shall not raise any objection or plea whatsoever for the adjustment of the advance rent amounting to Rs. 1950/- from the monthly rent, every month. It is further stated that if he fails to pay the two months rent consecutively he shall be declared as a defaulter for the payment of the rent and the above said landlord shall be entitled to evict him from the demised mulgi. Therefore, according to the agreement since the stipulation to pay rent is on 4th the tenant must pay within 15 days thereafter i.e., by 19th of every succeeding month. In the decision reported in Pallapothu Narshimha Rao and Another Vs. Kidanbi Radhakrishnamacharyalu, a Full Bench of this Court has held, "On a plain reading of Section 10 (2) (i) it is clear that all that the Controller has to see is whether therent due was not paid or tendered within 15 days after the expiry of the time fixed in the agreement. If there is no such agreement the he has to see whether the rent was not paid before the last day of the month next following that for which the rent is payable. If that condition is satisfied the Controller has no option but to direct the tenant to put the landlord in possession of the building unless the matter is one which falls within the proviso" The Supreme Court in the case, reported in S. Sundaram Pillai and Others Vs. `R. Pattabiraman and Others, which arose out of an analogous provision under the Tamil Nadu Buildings (Lease, Rent and Eviction) Control Act has pointed out, "Thus a consensus of the meaning of the words''wilful default ''appears to indicate that default in order to be wilful must be intentional, deliberate, calculated and conscious, with full knowledge of legal consequences flowing therefrom. Taking for instance a case where a tenant commits default after default despite oral demands or reminders and fails to pay the rent without any just or lawful cause, it cannot be said that he is not guilty of wilful default because such a course of conduct manifestly amounts to wilful default as contemplated either by the Act or by other Acts referred to above''. Therefore, from a reading of the two decisions referred to above it is clear that if the tenant does not pay the rent by the due date he becomes a defaulter unless he shows some circumstances to show that he is not wilful defaulter and in order to come to the conclusion that there is wilful default must be intentional, deliberate and calculated and conscious with full knowledge of legal consequences flowing therefrom.

The contention of the petitioners in this case which I have already referred to above is that as the landlord is not.accepting the rent from the tenant they couid not pay rent. My attention has been drawn to a docket order dt. 17-4-82 in the earlier case R.C. 59/80 in the Court of'' the Principal Rent Controller, Hyderabad in which it is stated that the Counsel for the respondent i.e., tenant offered him Rs. 11,900/- but the learned Counsel forme petitioner refused to receive the rent as he is not his tenant and he has no legal stand to tender the rent. It is not known whether any rent was tendered subsequently and refused by the landlord. The tenant had deposited into Court the following amounts:

28-4-83 Rs, 20,300/- 29-3-84 7,700/- 19-1-85 7,000/- 26-4-85 14,000/- 21-6-85 2,100/- 7-10-85 1,400/-

These deposits would show that the tenant has been depositing the rent for several months at a time. Section 8 (2) of the Rent Control act provides that where a landlord refuses to accept, or evades the receipt of, any rent lawfully payable to him by a tenant in respect of any building, the tenant may, by notice in writing, require the landlord to specify within ten days from the date of receipt of the notice by him, a bank into which the rent may be deposited by the tenant to the credit of the landlord. Sub-section (3) provides that if the landlord specifies a bank as aforementioned, the tenant shall deposit the rent in the bank and shall continue to deposit in it any rent which may subsequently become due in respect of the building. Sub-section (5) provides that if the landlord refuses to receive the rent remitted by money order under sub-section (4), the tenant may deposit before such authority and in such manner as may be prescribed and continue to deposit any rent which may subsequently become due in respect of the building. Therefore, Section 8 prescribes a procedure whereby the tenant can pay rent in the event of the landlord refusing to receive the same. In M.V.Rao v. K. V. Subbamma 1978(1) ALT 503., it is pointed out that, "The procedure prescribed by or steps mentioned in Section 8 of the Act, are not mandatory and it cannot be stated as a rule of law that whenever the procedure or the steps mentioned therein are not followed/it must be concluded that the tenant is guilty of wilful default. Even though the procedure u/s 8 is not followed, there may be other circumstances which negative the inference of wilful default". Therefore, if the tenant is able to establish the circumstances which show that there is no wilful default on his part even if he had not followed the procedure u/s 8 it cannot be taken as wilful default. But, in this case excepting one docket entry dt 17-4-82 which shows that the Counsel for the landlord refused to receive the rent due by then, there is no material to show that for subsequent periods the tenant either offered to pay rent or that the landlord had refused to receive it. Since the deposits are made for different periods of several months it is obvious that the tenant has been in the habit of depositing rent once in several months and not regularly and therefore the two Courts below have rightly held on this ground that there is wilful default.

But the contention of the learned Counsel for the tenant is that a sum of Rs. 21,000/- and odd is lying in deposit with the land-lord and so they could have adjusted it towards the rent. According to the agreement between the parties which 1 have referred to above under C1.9, until and unless all mulgies and the pan dabba are vacated by the tenant till such time he shall be responsible for the payment of the complete and full rent and after the complete eviction from the demised premises he shall be entitled to claim for the refund of the deposit amount paid by him. The learned Counsel for the petitioner referred to Section 7 (2) of the Rent Control Act which reads -

7 (2) Where the fair rent of a building has not been so fixed -

(a) the landlord shall not, after the commencement of this act claim, receive or stipulate for the payment of any premium or other like sum in addition to the agreed rent;

Provided that the landlord may receive, or stipulate for the payment of an amount not exceeding one month''s rent by way of advance;

(b) save as provided in cl. (a), any sum paid in excess of the agreed rent whether before or after the commencement of this Act, in consideration of the grant, continuance of renewal of the tenancy of the building after such commencement, shall be refunded by the landlord to the person by whom it was paid or, at the option of such person, shall be otherwise adjusted by the landlord.

In the decision reported in Modern Hotel, Gudur, Represented by M.N. Narayanan Vs. K. Radhakrishnaiah and Others, . it is pointed out, "Mr.. Rao building upon the ratio of these two decisions rightly contended before us that when the landlord had Rs. 5,000/- on tenant''s account with him which he was holding for years without paying interest and against the clear statutory bar, there could be no justification for granting a decree of eviction on the plea of arrears of rent. In view of the fact that the stipulation that the amount would be refundable at the end of the tenancy is null and void u/s 7 (3) of the Act, the amount became payable to the tenant immediately and the landlord with Rs. 5,000/- of the tenant with him could not contend that the tenant was in default for a smaller amount by not paying the rent for some months."

The learned Counsel for the respondents has referred to the second agreement, between the parties dt. 6-12-74 in which it is stated in para (1) that if Sri Shankerlal Bhangadia i.e., tenant vacates the demised mulgies within the period of two years he shall be liable for the payment of the full rent of the period of two years and it will be binding on him. Clause (2) provides that at the time of vacating the demised mulgies all the arrears payable by the tenant shall be adjusted from the deposit amount and the tenant shall be entitled to receive the balance amount after the adjustments. On the same day a receipt was also passed on by the landlady for receiving a sum of Rs. 20,000/-. It is therefore contended by the learneu Counsel for the respondents that this amount is deposited as a security towards the rent for two years and the tenant would be entitled for refund of this amount if he continues to be in occupation of the premises for a period of two years and after adjusting arrears of rent if any. In the decision of the Supreme Court referred to above the lease was for 30 years and it was stipulated that out of the advance of Rs. 6,500/- the second party i.e., the tenant shall deduct every month Rs. 75/- from the tenant upto Rs. 1,500/- and the balance of Rs. 5,000/- shall be paid back to the second party by the first party under valid receipt after the expiry of the lease period. The Supreme Court held that the stipulation of holding excess amount of Rs. 5,000/- free of interest to be refunded under a valid receipt after expiry of the lease period is null and void stipulation and the amount of Rs. 5,000/- in the hands of the landlord was on the account of the tenant on the date of filing of the petition for eviction. In view of the decision of the Supreme Court since the landlord is holding about Rs. 21,000/- and odd as advance, I agree with the contention of the learned Counsel for the petitioner that he cannot be held to be a defaulter and on this ground the petitioner is entitled to succeed.

Mr. Ramachandra Reddy, the learned Counsel for the respondents no doubt contended that since there is concurrent finding of fact by both the Courts below, the High Court should not interfere. But in view of the decision of the Supreme Court referred to above that if the landlord receives any amount in excess of one month rent as deposit u/s 7 (2) of the Act he cannot seek for eviction of the tenant, I agree with the contention of the learned Counsel for petitioner that this Court can interfere in exercise of the revisional jurisdiction of this Court u/s 22 of the Rent Control Act because it affects the legality of the orders passed by the two Courts below.

The revisions are therefore allowed. The orders of Rent Controller and the appellate authority are set aside. No costs.