K.N. Trading Co. vs Masonic Fraternity of Simla

V.D. Misra, C.J.—This revision is directed against the order of Rent Controller, Simla, dismissing the objections filed by the Petitioner and ordering his eviction.

The Petitioner (referred to as the tenant) had taken oh rent a property known as Masonic Guest House near Rite Cinema, Simla. The monthly rent was Rs. 1,250/-. The property belongs to the Masonic Fraternity of Simla (referred to as the landlord). The landlord filed an application for eviction of the tenant on the ground that the tenant was in arrears of rent for the period from 1-12-1974 to 31-12-1975, amounting to Rs. 16,250/-. The application was resisted and various objections were raised. By an order dated 7-1-1978, the Rent Controller allowed the application for eviction. The tenant was granted five weeks for vacating the premises.

The second proviso to Clause (i) of Sub-section (2) of Section 14 of the Himachal Pradesh Urban Rent Control Act, 1971 (referred to as the Act), gives a tenant 30 days from the date of order of eviction to deposit the amount due to save himself from eviction. The tenant deposited the amount due on 10-2-1978 i.e., beyond the prescribed period of 30 days.

Now some more facts may also be noticed. The tenant filed an appeal before the Appellate Authority, Simla, against the order of Rent Controller. However, in the appeal no challenge was laid against the findings of the Rent Controller that the tenant was in arrears of rent. This appeal was filed on 15-2-1978. A stay order was granted by the Additional District Judge, Simla, on the same day. But the Additional District Judge, Simla, was not the Appellate Authority. The appeal was finally dismissed by the Appellate Authority on 2-9-1979.

The tenant filed a revision before the High Court against the order of the Appellate Authority. When it came up for final hearing on 17-5-1980, it was dismissed as withdrawn. It was specifically recorded that the matter regarding the validity to deposit of rent within the prescribed period is left open and can be agitated by the parties by appropriate proceedings.

The landlord filed an application for eviction of the tenant. Objections were filed by the tenant. It was averred that the arrears of rent had been deposited by the tenant and the amount has been withdrawn by the decree-holder. It was also alleged that Shri G. K. Gautam, Advocate, a relation of the tenant, had informed the tenant that 35 days for deposit of the arrears of rent had been granted by the Rent Controller. The Rent Controller dismissed the objections and ordered the eviction.

Mr. O.P. Sharma, learned Counsel for the tenant, has raised three contentions. The first contention is that the tenant had been misled by the advice given by Shri Gautam that the arrears of rent could be deposited within 35 days. The second contention is that by withdrawing the amount deposited by the tenant the landlord has waived his right and is estopped from executing the order of eviction. The last contention is that the order of the Rent Controller stands merged into the Appellate Authority''s order and for this reason the deposit cannot be said to be beyond 30 days.

Now the relevant provisions of the Act may be noticed. Section 14(2)(i) reads:

(2) A landlord who seeks to evict his tenant shall apply to the Controller for a direction in that behalf. If the Controller, after giving the tenant a reasonable opportunity of showing cause against the applicant is satisfied-

(i) that the tenant has not paid or tendered the rent due by him in respect of the building on rented land 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:

Provided that if the tenant on the first hearing of the application for ejectment after due service pays or tenders the arrears of rent and interest at 6 per cent per annum on such arrears together with the cost of application assessed by the Controller, the tenant shall be deemed to have duly paid or tendered the rent within the time aforesaid:

Provided further that the tenant against whom the Controller has made an order for eviction on the ground of non-payment of rent due from him, shall not be evicted as a result of his order, if tenant pays the amount due within a period of 30 days from the date of order.

This Section gives various opportunities to a tenant to pay the arrears of rent. The second proviso gives a last chance to the tenant to pay up the amount due from him. This he can avail even after the order of eviction has been passed. The period during which he can deposit the dues is fixed. It is 30 days from the date of the order. He can save the eviction only if the pays the amount due within the prescribed period in terms of the aforementioned proviso. This period can neither be enlarged nor abridged by the Court. There is no provision for condonation of the delay in depositing the rent. Since the time is fixed by law there is no question of anyone misleading the tenant about the same.

This Court in Krishan Kumar v. Gurbux Singh 1977 (2) R.C.R. 62, held:

It is apparent that the statute itself provides a period of 30 days from the date of the order for payment of rental arrears by the tenant. On such payment, the statute declares, effect will not be given to the order of eviction. The statute does not leave the determination of the period to the Rent Controller. It is not open to the Rent Controller, when disposing of the petition for eviction, to make an order either abridging or enlarging the period of 30 days. Indeed, the period having been determined by the statute itself, no order was necessary by the Rent Controller.

Coming to the second contention, in my opinion, the landlord never waived his right nor he is estopped from executing the order of eviction. The application for withdrawal is Ex. P-3. It is dated 15-3-1978. It is specifically stated that the landlord was withdrawing the amount without prejudice to his rights. The relevant part of the application reads:

As the amount has not been either paid or deposited within 30 days of the order of eviction, the Respondent is liable to be evicted from the premises for which separate execution is pending, but without prejudice to the rights of the Petitioner, the amount may kindly be ordered to be paid to the Petitioner.

Not only the landlord had asked for the refund of the amount without prejudice to his rights but he had specifically mentioned the default of the tenant in paying the arrears for which he had already filed an application for eviction. The lendlord had never abandoned his right. On the other hand, he has expressly reserved his right. Mr. Sharma relies upon a Full Bench decision of the Patna High Court in Bibi Amna Khatun and Ors. v. zahir Husain and Anr. 1981 (1) R.C.J. 426, in support of his contention. In that case the Court was considering Section 11A of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947. This Section enables a landlord "to make an application at any stage of the suit for order on the tenant to deposit month by month rent at a rate at which it was last paid and also the arrears of rent, if any, and the Court, after giving an opportunity to the parties to be heard, may make an order for deposit of rent at such rates as may be determined month by month and the arrears of rent, if any, and on failure of the tenant to deposit the rent within fifteen days of the date of the order the rent at any such rate for any month by the fifteenth day of the next following month the Court shall order the defence against ejectment to be struck out and the tenant to be placed in the same position as if he had not defended the claim to ejectment." The tenant hid been ordered in terms of the above Secrion to deposit the rent.

However, the landlord died soon thereafter and his legal representatives were brought on record. After the expiry of stipulated period, the arrears were deposited with the permission of the Court. These were withdrawn by the landlord. It was held that since the landlord had withdrawn the arrears of rent which were deposited late by the tenant, the landlord had derived an advantage which was not due to him since he could only ask for striking out the defence of the tenant. Harilal Agrawal, J., observed that the striking out of the defence was purely intended for the benefit of the landlord and, therefore, it could be waived. A later Full Bench of Patna High Court in Rai Kumar Prasad v. Uchit Narain Singh 1981 (2) R.C.J. 172, specifically ruled that there cannot be any question of waiver nor there can be any question of abandonment of a right by the landlord by mere acceptance of rent. It was observed:

It is well settled that waiver is an intentional relinquishment of a known right or such conduct as warrants such an inference. In cases of the instant nature under the Rent Acts what is the known right which the landlord, by acceptance of rent, can be said to have intentionally relinquished? The answer is evidently that the landlord knows that he has a right to get the tenant evicted in execution of a decree passed by a Court of competent jurisdiction and until such a decree is legally executed, he continues to be a statutory landlord and is entitled or, rather impelled by the law, to receive rent from the defaulting tenant. There is thus no known right which can be said to have been abandoned by the landlord merely by acceptance of rent even while the suit for eviction is pending. No question of waiver can, therefore, in my view, arises in such cases.

I am inclined to agree with the latter Full Bench decision of the Patna High Court. In the case in hand I have already reproduced the relevant part of the landlord''s application for permission to withdraw the deposited amount. By no stretch of imagination it can be held that the landlord had waived his right of having the tenant evicted. On the other hand, the landlord had clearly stated that he had already filed an application for eviction which was pending at that time. Similarly, there cannot be any question of the landlord being estopped from challenging the validity of the deposit since he had expressly stated that the deposit had not been made within the prescribed period of limitation on the basis of which he had filed an application for eviction.

Mr. Sharma''s last contention is that the original order of eviction has merged into the order passed by the appellate Court. In this connection he cites a judgment of the Kerala High Court in K. Kanakamma v. Govinda Pitted Sivasankharan Nair 1977 (1) R.C.J. 700. In that case the Court was considering the provisions of Section 11(2)(c) of the Kerala Buildings (Lease and Rent Control) Act, 1965, which reads:

The order of the Rent Control Court directing the tenant to put the landlord in possession of the building shall not be executed before the expiry of one month from the date of such order or such further period as the Rent Control Court may in its discretion allow; and if the tenant deposits the arrears of rent with interest and cost of proceedings within the said period of one month or such further period, as the case may be, it shall vacate that order.

It was held that the expression ''Rent Control Court'' will include both the appellate and revisional authorities, and, therefore, the period of one month referred to in the Section would be available for deposit of arrears when the final order passed is that of High Court. It will be noticed that unlike the provisions of Section 14(2)(i) of the Act, already reproduced, a specific provision has been made enabling the Rent Control Court to extend the period of one month. This decision therefore is of no help to the tenant.

It is true that an appeal is a continuance of the proceedings and the judgment and decree of the trial Court merge into the judgment and decree of the appellate Court. However, this doctrine is not of general application. There are exceptions to it. The Supreme Court in State of Madras Vs. Madurai Mills Co., Ltd., had an occasion to consider the doctrine of merger. It was held:

The doctrine of merger is not a doctrine of rigid and universal application and it cannot be said that whereever there are two orders, one by the inferior authority and the other by a superior authority, passed in an appeal or revision, there is a fusion or merger of two orders irrespective of the subject-matter of the appellate or revisional order and the scope of the appeal or revision contemplated by the particular statute. The application of the doctrine depends on the nature of the appellate or revisional order in each case and the scope of the statutory provisions conferring the appellate or revisional jurisdiction.

The Supreme Court approved its earlier decision in Commissioner of Income Tax, Bombay Vs. Amritlal Bhogilal and Co., In that case a composite order had been passed by the Income Tax Officer granting registration of the firm and making an assessment on the basis of the registration, and it was held that the order granting registration cannot be deemed to have merged into the order of the appellate commissioner in an appeal against composite order of assessment.

It may be repeated that the tenant had not challenged the findings of the Rent Controller that he was in arrears of rent. This had thus become final. The tenant had only challenged the findings on the other related issues. There could thus be no merger of this part of the order in the order passed by the appellate tribunal. Therefore, deposit was required to be made within 30 days of this order of Rent Controller in terms of the provisions of law.

My conclusion that it is the duty of the tenant to make a deposit within 30 days allowed by the law and this period cannot be extended for any reasons whatsoever, is supported by two judgments of the Supreme Court. Of course these judgments relate to the provisions of order 20, Rule 14 CPC regarding the decrees passed in pre-emption cases. But that does net make any difference. Under order 20, Rule 14 while decreeing a claim of pre-emption in respect of a particular sale of a property it has been enjoined upon the Court to direct payment of the purchase money together with the costs on or before the day to be specified by the Court and in default of payment of that amount, the suit shall be deemed to be dismissed with costs. The Supreme Court in Sulleh Singh and Others Vs. Sohan Lal and Another, ruled that mere filing of an appeal does not suspend the decree of the trial Court and unless that decree is altered in any manner by the Court of appeal, the pre-emptor is bound to comply with that direction given by the trial Court in terms of order 20, Rule 14 Code of Civil Procedure. The direction given by the trial Court for deposit was held as mandatory. It was explained that the trial Court could not extend the time for payment in case the deposit is not made in accordance with the direction of the trial Court. It was also observed that only if the decretal amount is paid within the time granted by the trial Court or if the Plaintiff obtains an order of stay in appeal, he can save himself from depositing the amount as directed by the trial Court. In other words, if the Plaintiff has already committed a breach of the directions of the trial Court without any stay having been granted by the appellate Court, the trial Court is bound to dismiss the suit of the Plaintiff and mere filing of the appeal will neither amount to automatic stay nor the appellate Court will be entitled to extend the time of deposit. In State of U.P. v. Mohammad Nooh AIR 1958 S.C. 86, the Supreme Court observed:

While it is true that a decree of a Court of first instance may be said to merge in the decree passed on appeal therefrom or even in the order passed in revision, it does so only for certain purposes, namely, for the purposes of computing the period of limitation for execution of the decree as in Batuk Nath v. Munni Dei 41 Ind. App. 104 : AIR 1914 P.C. 65, or for computing the period of limitation for an application for final decree in a mortgage suit as in Jowad Hussain v. Gendan Singh 53 Ind. App. 197 : AIR 1926 P.C. 93. But as pointed out by Sir Lawrence Jenkins in delivering the judgment of the Privy Council in Juscurn Boid v. Pirthichand Lal 46 Ind. App. 52 : ILR 46 Cal. 670 at pp. 678 and 679 : AIR 1918 P.C. 151 at pp. 152-153, whatever be the theory under other systems of law, under the Indian law and procedure an original decree is not suspended by the presentation of an appeal nor is its operation interrupted where the decree on appeal is merely one of dismissal. There is nothing in the Indian law to warrant the suggestion that the decree or order of the Court or tribunal of the first instance becomes final only on the termination of all proceedings by way of appeal or revision. The filing of the appeal or revision may put the decree or order in jeopardy but until it is reversed or modified it remains effective.

This contention of Mr. Sharma has also to be rejected.

The result is that the revision fails and is dismissed with costs.