J. Visalakshi Ammal vs T.B. Sathyanarayana

K.A. Swami, C.J.—On a reference made by the learned single Judge, this Civil Revision Petition is posted before this Division Bench. The

facts, which led to this reference are as follows: Petitioner-landlady filed RCOP. No. 1184 of 1993 before the 15th Judge. Court of Small Causes,

Madras, for eviction of the respondent from the scheduled premises on the ground that he has committed wilful default in the payment of rent. The,

eviction was sought for u/s 10(2) (i) of the Tamil Nadu Buildings (Lease and Rent Control) Act. 1960 (hereinafter referred to as ""the Act""). Before

RCOP. No. 1184 of 1993 was filed, the landlady had filed RCOP. No. 466 of 1988 for fixation of fair rent. The agreed rent was Rs. 50/- per

month The Rent Controller passed an order dated 5.10.1990 fixing the fair rent at Rs. 1,396/- per month. The order of the Rent Controller was

affirmed by the Appellate Authority by the order, dated 20.4.1993. The revision filed by the tenant was also dismissed. The landlady gave notice

to the respondent- tenant on 25.4.1993 demanding the difference of the amount between the fair rent fixed and the agreed rent from the date of the

order passed fixing the fair rent. The respondent did not respond to the notice and did not pay the arrears. In the counter affidavit filed by him in

RCOP No. 1184 of 1993, the tenant took a stand that the said petition was not maintainable because he had taken up the matter relating to

fixation of fair rent before the revisional authority as against the order of the Appellate Authority. Hence, the petition for eviction was premature.

1A. It is also relevant to notice that the Revision filed by the tenant against the order of the Appellate Authority relating to fixation of fair rent was

also dismissed. When the eviction petition in RCOP. No. 1184 of 1993 was pending on the file of the XV Judge, Court of Small Causes, Madras,

the landlady filed M.P. No. 700 of 1993 u/s 11(4) of the Act for stopping further proceedings and directing the respondent to put the landlady in

possession of the premises on the ground that he has not deposited the arrears of rent as required u/s 11 of the Act. However, the Rent Controller

by the order dated 12.11.1993 allowed that application. The tenant, being aggrieved by the aforesaid order went up in appeal in RCA. No. 1255

of 1993 before the Appellate Authority, who allowed the appeal on the ground that RCOP. No. 1184 of 1993 was premature, as it was filed

within the period prescribed for filing revision. Aggrieved by the said order of the Appellate Authority, the present revision has been filed.

The reference to the Division Bench has been necessitated by reason of the fact that the learned single judge found it difficult to agree with the

view expressed in Nelson and another v. P. Ranganathan Mudaliar (1995 T.L.N.J. 270) and C. Ranganathan v. M. Suri (100 L.W.708).

In this case, it is not in dispute that the tenant has not paid the arrears of rent accrued as a result of fixation of fair rent even to this day. Whether

such failure on the part of the tenant to pay the arrears of rent would amount to wilful default, which alone would entitle the landlady to obtain an

order of eviction against the tenant is the point that has to be considered.

In C. Ranganathan''s case (100 L.W.708) (Supra), Chandurkar, C.J., as he then was, has held that the failure to pay the difference between the

fair rent and the agreed rent will not attract the provisions of Sections 10(2) (i) of the Act and consequently, the provisions of Section 11(4) also

are not attracted. The relevant portion of the order reads thus:

...Now, it is true that once fair rent if fixed under S. 4 of the Rent Control Act, the liability to pay the fair rent is fixed. Even though the liability to

pay fair rent dates back to the date of the application, the liability itself gets determined only on the date on which the fair rent is fixed. Until the fair

rent is so fixed on an application made by the landlord, during the pendency of such an application the only statutory obligation of the tenant is to

pay the ""agreed"" rent. It is undoubtedly true that where fair rent has been fixed at a figure higher than the agreed rent, the tenant will become liable

to pay a higher rent from the date of the application and when agreed rent is paid during the pendency of the application, the landlord will be

entitled to claim the difference between the fair rent and the agreed rent for the period covered by the pendency of the application under S. 4.

However, since the fair rent itself has been fixed at a future date, there is no question of the tenant paying the fair rent either within fifteen days after

the expiry of the time fixed in the agreement of tenancy or by the last day of the month next following the month for which rent is payable during the

period of the pendency of the application for fixation of fair rent. In such a case, the tenant cannot be said to incur the liability of being adjudged a

''defaulter'' if he has not paid the difference between the fair rent and the agreed rent. Though it is true that any default in the payment of fair rent

after the date on which the fair rent has been fixed would attract the provision of S. 10(2)(i) of the Rent Control Act, that provisions cannot be

availed of by the landlord for the period prior to the date on which the fair rent is fixed. S. 10(2)(i) and the Explanation have to be read together.

The ''default'' to pay referred to in the Explanation is the default contemplated by S. 10(2)(i). Therefore, unless the landlord is entitled to avail of

the provision is S. 10(2)(i). There is no occasion for the Rent Controller to apply his mind to the question whether the default is wilful and

consequently the artificial rule of evidence contemplated in the Explanation will also not be attracted to a case to which the substantive provision is

S. 10(2)(i) will not be attracted. Therefore, in a case where a certain amount becomes due from the tenant as a result of the fair rent being fixed at

a higher figure than the agreed rent, the failure to pay the difference between the fair rent and the agreed rent will not attract the provisions of S.

10(2)(i) at all Consequently, the landlord in the instant case, was not entitled to invoke the provisions of S. 10(2)(i) of the Rent Control Act, and

the petition filed by him was therefore clearly not maintainable. Consequently, further the provision in S. 11(4) cannot be attracted in the instant

case. The Appellate Authority was, therefore, right in allowing the appeals filed by the tenant and dismissing the petition for eviction. The revision

petitions are therefore dismissed. No costs....

Thus, the view taken in the aforesaid decision is that the failure to pay the fair rent from the date it is fixed would result in default in payment of

rent. However, the failure to pay the arrears accruing as a result of difference between the fair rent and the agreed rent will not amount to default.

One of the reasons given is that when Section 10(2)(i) refers to ''rent'' which is not paid or tendered by the tenant that rent is the ''agreed rent'',

whereas the fair rent fixed is not the agreed rent. It is also further observed that as the fair rent itself would be fixed at a future date, there is no

question of the tenant paying the fair rent either within fifteen days after the expiry of the time fixed in the agreement of tenancy of by the last day of

the month next following the month for which the rent is payable during the period of the pendency of the application for fixation of fair rent. It is

also further noticed in the said decision that the proviso to Section 10(2) embodies the power of Controller to give relief to the tenant in a case

where the default in payment of rent or in tendering the rent is not wilful. If the Rent Controller is satisfied that the tenant''s default to pay or tender

the rent was not wilful, there is power given to the Rent Controller to give the tenant a reasonable notes not exceeding 15 days to pay the entire

amount due by him upto the date of such payment of tender, if the tenant accordingly pays the entire rent, the application is to be rejected.

The aforesaid decision, has been followed by Subramani, J. in Nelson''s case (1995 TLNJ 270) (supra). We may also notice another decision,

which has not been referred to in the Order of Reference of the learned single judge in P.S. Hussain Vs. C.A. Kabeer, . In that decision, Abdul

Hadi, J. has taken a view that the fair rent due after the date on which the fair rent is fixed and the failure to pay the difference between the fair rent

and the agreed rent would attract the provisions of Section 10(2)(i) of the Act and consequently. Section 11(4) of the Act would be attracted. It

has also been further held that "" when an order is parted u/s 11(4) of the Act, it cannot be said that the order is wrong. Even assumes the quantum

of rent which the appellant authority directed the tenant to pay is not correct, it is clear that at least the different between"" the fair rent and the

agreed rent bought to have been paid by the tenant, if he wanted to contest the R.C.O.P. In this decision, the decision in Ranganatthan v. M. Suri

(100 L. W. 708) (supra), also has been noticed and it has been followed to the extent the said decision has laid down that failure to pay the fair

rent due after the date on which the fair rent is fixed, the said failure would attract Section 10(2)(i) of the Act, and consequently Section 11(4) of

the Act.

The fair rent is also the rent of the building and the words used in Section 10(2)(i) of the Act are that ""the tenant has not paid of tendered the

rent due by him in respect of the building"". It is not possible to agree with the decision in Ranganathan''s case (100 L.W. 708) (supra), that the

arrears accruing as a result of difference between the fair rent and the agreed rent and the non-payment of the same will not qualify for seeking

eviction u/s 10(2)(i) of the Act. If such a view is approved, the very object of fixation of fair rent will be defeated. The fair rent is fixed because the

agreed rent is too low. The Act prescribes the procedure and the norms for fixation of fair rent. If that be so, once the fair rent is fixed and the

order fixing the fair rent becomes final, the difference of the amount between the fair rent and the agreed rent becomes due at least from the date

the order fixing the fair rent becomes final. Merely because certain time has lapsed from the date of filing of the application for fixation of fair rent

and the determination of the fair rent, it does not enable the tenant to escape from the clutches of Section 10(2)(i) of the Act, when as per the law,

the fair rent fixed becomes effective from the date of application and it becomes payable on the date the order fixing the fair rent is passed by the

Rent Controller, unless the said order is challenged in appeal and thereafter in revision; and in such event when the order becomes final. The

difference of the amount between the fair rent fixed and the agreed rent will have to be paid within fifteen days counted from the last day of the

tenancy month, as in the case of such arrears of rent arising out of the difference in the fair rent and agreed rent, time fixed in the agreement will not

apply. Therefore, it would be a case of no agreement as to the date of payment of rent and as such it would fall in the category of absence of any

agreement as provided in Section 10(2)(i). The words ""or in the absence of any such agreement by the last day of month next following that for

which the rent is payable"" contained in the very Section 10(2)(i) of the Act are not taken into consideration in Ranganathan''s case and so also in

Nelson''s case.

The interpretation placed on Section 10(2)(i) of the Act in the aforesaid cases does not take into consideration the objects of the Act. The Act

while imposing certain restrictions on the right of a landlord to seek eviction of a tenant also ensures that the rent is paid by the tenant regularly by

providing a ground for eviction in the event the tenant commits wilful default in payment of the rent. The Act also further ensures that such tenant

should pay the arrears upto date before he contests the proceedings for eviction, (see Section 11 of the Act). If as held in the aforesaid cases that

non payment of difference between the fair rent fixed and the agreed rent does not amount to default much less wilful default and as such does not

furnish a ground for eviction under S. 10(2)(i) is accepted as correct, it will result in defeating one of the important objects of the Act and it will

only encourage contumacious conduct on the part of the tenant who with impunity will not pay such arrears. Consequently, it will result in placing

unreasonable restriction on the right of the landlord. It is not possible to appreciate when the fair rent fixed shall be the rent of the building, why the

difference of the amount between the fair rent fixed and the agreed rent should not be considered as rental arrears, if it is not paid within 15 days

from the last day of the tenancy month as provided in Section 10(2) (i) of the Act to which we have already adverted to.

In the instant case, the order fixing the fair rent became final when the Revision was dismissed. Thereafter, for several years, the R.C.O.P. 1184

of 1993 has been pending. The tenant has not cared to pay the rental arrears. The R.C.O.P. 1184 of 1993 was instituted after issuing notice to the

tenant calling upon him to pay the arrears of rent. Even to this day, he had not paid the rent. Explanation to sub-section (2) of Section 10 of the

Act added by Act No. 23 of 1973 specifically provides that for the purpose of sub-section (2)(i) of Section 10, default to pay or tender rent shall

be construed as wilful if the default by the tenant in the payment or tender of rent continues after the issue of two months'' notice by the landlord

claiming the rent. In the instant case, more than two months had elapsed when the application u/s 11(4) of the Act was filed. Two months need not

elapse ever prior to the filing of the petition for eviction. It would be sufficient if on the date the petition comes up for trial, the tenant in spite of the

notice issued calling upon him to pay the arrears or rent, fails to pay or tender the arrears, such a tenant as per the Explanation referred to above

can undoubtedly be held to have committed wilful default in payment or tendering of the rent. Any interpretation placed on a statute must advance

the object of the Act.

It is to save the tenant from the order of eviction on the ground of wilful default in payment or tendering of the rent that sub-section(1) of

section 11 of the Act enables him to pay all the arrears due in respect of the building upto the date of payment or deposit and continue to pay or to

deposit any rent which may subsequently became due in respect of the building until the termination of the proceedings before the Controller or the

Appellate Authority as the case may be. sub-section (2) of Section 11 also states that the deposit of the rent shall be made within the time and in

the manner prescribed. It is only in the event of failure on the part of the tenant to pay or deposit the rent as prescribed in sub-sections(1) and (2)

of Section 11 of the Act, the Controller or the Appellate Authority, as the case may be, shall, unless the tenant shows sufficient cause to the

contrary, stop all further proceedings and make an order directing the tenant to put the landlord in possession of the building. It is also relevant to

notice that the Proviso to sub-section (2) of Section 10 of the Act relates to a case falling u/s 10(2)(i) of the Act. As per the proviso, in such a

case, even if the tenant''s default to pay or lender rent was not wilful, the Court has to direct the tenant to pay or tender the arrears of rent within a

reasonable time not exceeding 15 days, upto the date of such payment and in the event the tenant pays or tenders the rent, then only the

application for eviction shall have to be rejected. That being the position, the reasoning of the Appellate Authority that the application for eviction

falling u/s 10(2)(i) of the Act was not maintainable, cannot at all be accepted as correct. Similarly, the interpretation placed in Ranganathan''s case

and Nelson''s case cannot be accepted as correct. Consequently, It follow: that the application filed u/s 11 of the Act was maintainable.

Maintainability of the application filed for eviction on the ground falling u/s 10(2)(i) of the Act, does not arise, as long as, on the date the application

was filed, the tenant was not in arrears of rent of course, if the landlord fails to prove that the tenant had committed wilful default in payment or

tendering of the rent, the order has to be passed as per the proviso to sub-section (2) of Section 10 of the Act, pertaining to the grounds falling u/s

10(2)(i) of the Act. Even in such a case also, as already pointed out, the Rent Controller has to fix a reasonable lime not exceeding 15 days for

payment of arrears of rent. The application for eviction can be rejected only in the event the tenant pays or tenders the rent due. Looked from any

angles it is not possible to hold that the petition for eviction filed on the ground falling u/s 10(2)(i) of the Act, in the facts and circumstances of the

case, was not maintainable In the instant case, the Rent Controller was justified in passing an order sub-section (4) of Section 11 of the Act. No

doubt, the learned Appellate Judge has followed the decision in Ranganathan''s case. As we have held that the said decision and also the decision

in Nelson''s case do not lay down the law correctly and as such the decisions are liable to be overruled the order of the learned Appellate Judge

has also to be set aside. We are firmly of the view that the difference of the amount between the fair rent fixed and the agreed rent is the arrears of

rent for the building, and it becomes payable when the order fixing the fair rent become final, and the same shall have to be paid within 15 days

from the last day of the tenancy month failing which, it would be open to the landlord to issue notice calling upon the tenant to pay the arrears of

rent, and in the event of the tenant failing to pay the arrears of rent pursuant to the notice, it would be open to the landlord to institute a proceeding

for eviction on the ground falling u/s 10(2)(i) of the Act. It is not necessary for the landlord to go to a civil court to recover such arrears of rent. In

the view we take, we find it difficult to agree with the case Ranganathan''s case (100 L.W. 708) (supra) and Nelson''s case (1995 TLNJ 270)

(supra). Accordingly, the said two decisions are overruled. The decision in Hussain''s case (1990 1 MLI 85) (supra) docs not deal with the arrears

of rent accruing due to the difference between the fair rent and the agreed rent. For the reasons stated above, this Revision Petition is allowed. The

order dated 21.9.1994, passed in R.C.A. No. 1255 of 1993 on the file of the Appellate Authority is set aside. Consequently, the order dated

12.11.1993 passed by the Rent Controller, u/s 11(4) of the Act is restored and the same shall be implemented in accordance with law. However,

there will be no order as to costs.