S. Gurumurthy vs N. Raman

S. Rajeswaran, J.—This Revision Petition has been filed against the order dated 3.2.2005, made in RCA. No. 438/2003 on the file of the

VIII Judge, Small Causes Court, Chennai confirming the order dated 24.4.2003 made in R.C.O.P. No. 454/2001 on the file of the XVI Judge,

Small Causes Court, Chennai.

The tenant is the revision petitioner.

The respondent/landlord filed a petition u/s 10(2)(i) and 10(3)(a)(i) of the Tamil Nadu Buildings (Lease & Rent Control) Act, 1960 (hereinafter

called ''the Act'') for evicting the tenant/revision petitioner from the demised premises. It is the case of the respondent/landlord that the property

situated at Old Door No. 15A, new Door No. 32/1, 1st street, Akbarabad, Kodambakkam, Chennai. 24 belongs to him and the revision

petitioner/tenant occupied the premises on a monthly rent of Rs. 2,000/-, but he failed to remit the rent as agreed upon and consequently he fell

into arrears of Rs. 34,000/- from September 1999 to February 2001. He did not remit the rent despite the request made by the landlord.

Moreover, the landlord has retired from service on superannuation and he would like to settle down in his own house. Therefore he would like to

have the property for his own use and occupation. Therefore this RCOP was filed.

The said petition was contested by the tenant/revision petitioner stating that he has already deposited a sum of Rs. 12,000/- towards advance

and for the rental payments, the landlord never used to give receipts. It is also stated by him that he has executed a sale agreement with the

landlord on 12.12.1993 for a sum of Rs. 5.5 lakhs and also paid a sum of Rs. 60,000/- towards advance. The landlord agreed to receive the

balance sale consideration after submitting the original documents to the tenant and therefore the tenant agreed to pay the monthly rents to the

landlord until the execution of the sale deed for the purpose of avoiding increase of the sale price.

It is the case of the tenant that thereafter the landlord demanded additional sale consideration amount instead of Rs. 5.5 lakhs thereby started to

dispossess him from the petition schedule premises. Hence the tenant filed O.S. No. 7005/2000 for permanent injunction restraining the landlord

from interfering with his peaceful possession.

It is the further case of the tenant that in November 2000, the landlord requested him to have a fresh sale agreement and he also agreed not to

claim any rent thereafter and requested him to pay a sale consideration of Rs. 9 lakhs instead of Rs. 5.5 lakhs. Accordingly a fresh sale agreement

was entered into on 26.11.2000 and in that sale agreement the landlord acknowledged the receipt of a sum of Rs. 3,35,000/- and the tenant

agreed to pay balance sale consideration of Rs. 5,65,000/- on or before 10.1.2001. Even thereafter the landlord did not come forward to execute

the sale deed and started demanding additional sale price of Rs. 1 lakh and as it was not accepted by the tenant, the landlord filed the RCOP with

the ulterior motives by suppressing the real facts. The tenant has also questioned the claim of the landlord that he requires the petition schedule

property bonafidely for his own occupation.

The rent controller by her order dated 24.4.2003 held that the tenant was not able to establish his case that the landlord informed him not to pay

monthly rent after executing the 2nd sale agreement dated 26.11.2000 and therefore the revision petitioner/tenant has committed wilful default in

the payment of the monthly rent. Further, the rent controller has also referred to the claim of the tenant that he paid rent up to 2000 by depositing

the same in the name of the landlord in a bank and held that the tenant has not produced any counterfoil, receipt or bank statement to establish the

same. Insofar as the bonafide requirement of the landlord is concerned, the rent controller has rejected the claim of the landlord as the same was

not proved before her with acceptable evidence. Thus the rent controller passed an order of eviction on the ground of wilful default alone.

Aggrieved by the order of the rent controller dated 24.4.2003, the revision petitioner/tenant filed an appeal before the Rent Control Appellate

Authority in RCA No. 438/2003 and the appellate authority by order dated 3.2.2005 not only confirmed the order of the rent controller on the

ground of wilful default but also held that the bonafide requirement of the landlord was also proved and therefore the tenant is liable to be evicted

on both the grounds. Challenging the order of the appellate authority dated 3.2.2005, the tenant has filed the above revision petition u/s 25 of the

Act, 1960.

Heard the learned Counsel for the revision petitioner and the learned Counsel for the respondent. I have also gone through the documents filed

and also the judgments referred to in support of their submissions.

The learned Counsel for the revision petitioner/tenant strenuously contended that both the authorities have failed to appreciate the fact that the

tenant stopped paying the rent only after executing the 2nd sale agreement dated 26.11.2000 as he had paid an advance of a sum of Rs. 3.35

lakhs towards the entire agreed sale consideration of Rs. 9 lakhs and in such circumstances, there is no landlord-tenant relationship and therefore

the tenant need not pay the rent after executing the 2nd sale agreement. He further submitted that even assuming that the rent should have been

paid even after the 2nd sale agreement dated 26.11.2000, the failure to pay cannot be termed as wilful default as the tenant bonafidely believed

that he need not pay any rent after executing the sale agreement dated 26.11.2000. The learned Counsel for the revision petitioner/tenant has

placed strong reliance on the decisions of the Hon''ble Supreme Court reported in (1) 2001 AIR SCW 2369 (R. Kanthimathi v. Beatrice Xavier)

and (2) Rakapalli Raja Rama Gopala Rao Vs. Naragani Govinda Sehararao and Another, to contend that the tenant need not pay rent after the

sale agreement and therefore no wilful default was committed by him. He further submitted that in any case, the tenant''s money amounting to a sum

of Rs. 12,000/- paid as rental advance and a sum of Rs. 3,35,000/- paid as advance sale consideration is lying in the hands of the landlord and in

such a situation it cannot be termed as the tenant has committed wilful default. The learned Counsel for the revision petitioner vehemently

contended that when the landlord himself did not contest the dismissal of the RCOP on the ground of bonafide requirement for his own occupation,

the appellate authority ought not to have gone into the matter and reversed the findings of the rent controller in this regard.

Per contra, the learned Counsel for the respondent/landlord submitted that even after executing the 1st sale agreement dated 12.12.1993, the

tenant had been paying the rent and that would establish that not- withstanding the execution of the sale agreement dated 12.12.93, the liability to

pay the rent is always there. The learned Counsel for the respondent/landlord submitted that the 2nd agreement dated 26.11.2000 was obtained

by coercion and despite that, even in the 2nd agreement there is no separate clause excluding the liability of the tenant to pay the monthly rent and

therefore it is a clear case of the tenant committing wilful default. The learned Counsel for the respondent/landlord specifically pointed out that the

RCOP was filed claiming that the tenant has committed wilful default from September 1999 to February 2001 and even according to the revision

petitioner/tenant, he paid rent up to 26.11.2000 and only thereafter he refrained from paying the rent on the basis of the sale agreement dated

26.11.2000. But the tenant has miserably failed to produce any receipts or bank statements evidencing payment of rent up to 26.11.2000 even

though he claimed that he deposited the same in the name of the landlord in a bank. Therefore he prayed for dismissal of the C.R.P. on the basis of

the concurrent findings of the authorities below that the tenant has committed wilful default. He relied on the decision of this Court reported in B.

Kuppulal Vs. D. Sagunthala and Another, to contend that the tenant will have to continue to pay the rent, unless there are specific recitals to the

contrary in the agreement of sale. I have given my careful consideration to the rival submissions made by both the learned Counsel.

Both the learned Counsel for the landlord and the tenant agreed that they both entered into a rental agreement dated 10.10.1992 and

according to which the tenant should continue to pay the monthly rent until the sale deed is executed. It is also not in dispute that the tenant

continued to pay rent even thereafter. It is the specific case of the tenant that after the 2nd sale agreement dated 26.11.2000, he need not pay any

rent as the specific clause in the 1st sale agreement dated 12.12.1993 that the tenant should continue to pay the rent is not there in the 2nd

agreement. The tenant has also specifically stated that the landlord himself informed him not to pay the rent after executing the 2nd sale agreement.

Both the authorities below have found that the tenant has not proved his case that as the landlord himself informed him not to pay the rent after

executing the 2nd sale agreement he did not come forward to pay the rent on 26.11.2000 onwards. This finding of the authorities below is based

on evidence and this Court sitting in revision cannot interfere with the same. The question to be decided is whether after executing the sale

agreement the liability of the revision petitioner/tenant to pay the rent is ceased or not.

This Court in B. Kuppulal Vs. D. Sagunthala and Another, held that despite the alleged oral agreement of sale with one of the co-owners, even

if it is found to be true, the tenant will still be under an obligation to pay the rent to the landlord. This Court reiterated that mere agreement of sale

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

continue to pay the rent unless there are specific recitals to the contrary in the agreement of sale.

In the case in hand, in the 1st sale agreement dated 12.12.1993, there is a specific clause that the tenant should continue to pay the rent till the

execution of the sale deed. In the 2nd sale agreement dated 26.11.2000, there is no such specific plea insisting the tenant to continue to pay the

rent. At the same time, there is no specific clause in the 2nd sale agreement dated 26.11.2000 excluding the liability of the tenant to continue to pay

the rent. In such circumstances, if the law laid down by the court in Kuppulal''s case (cited supra), is applied to the facts of the case, I will have to

necessarily hold that the revision petitioner/tenant''s liability to continue to pay the rent on and from 26.11.2000 is not put to an end or terminated

by the sale agreement dated 26.11.2000.

But the learned Counsel for the revision petitioner placed strong reliance on the judgment of the Hon''ble Supreme Court reported in R.

Kanthimathi''s case (cited supra) to contend that once there is an agreement of sale between a landlord and a tenant, the old relationship as such

comes to an end.

In the above decision, the Supreme Court considered the question whether on the execution of the agreement of sale by the landlord with the

tenant and the landlord having received substantial portion of the sale consideration, the relationship of landlord and tenant inter se between them

ceases and fresh rights and obligations flows from the agreement.

In the above case before the Hon''ble Supreme Court, the landlady agreed to sell the disputed premises and consequently an agreement of sale

was executed according to which the landlady agreed for a sale consideration of Rs. 25,000/- and she had also acknowledged and accepted the

payment of Rs. 20,000/- paid by the tenant. She further stated in the agreement that she would complete the transaction of sale and conveyance as

the property demised has already been surrendered to tenant''s possession. Taking note of the relevant facts, namely, a substantial portion of the

sale consideration was already paid by the tenant and the demised property was also surrendered to the tenant, the Supreme court held that the

landlady has repudiated her old relationship of landlord-tenant. The facts in the present case are different and easily distinguishable.

In the other decision relied on by the learned Counsel for the revision petitioner, namely, Rakapalli Raja Rama Gopala Rao Vs. Naragani

Govinda Sehararao and Another, , the Hon''ble Supreme Court on facts held that there was a case of tenant, who failed to pay the rent without

any rhyme or reason and the tenant was not averse to paying the rent but he genuinely believed that he was under no obligation to do so as he had

a prior right to purchase the property. Therefore the Supreme Court felt that the rent controller should have called upon the tenant to pay the

arrears within certain time and the rent controller''s failure to do so has resulted in miscarriage of justice.

This decision is also not applicable to the present case for the simple reason that both the authorities below found that the revision

petitioner/tenant did not prove the payment of rent up to November 2000 even though he claimed that he deposited the money in the name of the

landlord in a bank.

The learned Counsel for the revision petitioner argued that as the rental advance and the sale price advance are lying in the hands of the

landlord, the same could be treated as payment of advance rent and therefore there was no wilful default on the part of the tenant. He relied on the

decision of the Hon''ble Supreme Court reported in 1996 2 L.W. 159 (Narasimha Rao, K. v. Nasimuddin Ahmed, T.M.).

In the above decision, the Hon''ble Supreme Court held that Section 7 of the Act, 1960 permits the landlord to receive by way of advance an

amount not exceeding one month rent only and where any sum is paid by the tenant, in excess of one month rent as advance, the landlord is liable

to refund the amount to the tenant or for adjustment towards the dues of the tenant at the tenant''s option.

I am unable to accept the arguments of the learned Counsel for the revision petitioner.

Insofar as the case in hand is concerned, it is not in dispute that the revision petitioner/tenant paid a sum of Rs. 12,000/- towards rental

advance, but the rental arrears from September 1999 to December 2004, that is, when the case was being heard before the appellate authority,

amounts to Rs. 1,28,000/-. The monthly rent is Rs. 2,000/- and even if the excess amount of Rs. 10,000/- out of the advance of Rs. 12,000/- is

adjusted towards rental arrears, it would cover a period of only 5 months, whereas at that time the arrears was for a total period of 64 months.

This fact was specifically adverted to by the appellate authority in para 14 of the order. Further, Section 7 of the Act, 1960 deals with only the

advance amount paid by the tenant towards the rental advance and Section 7 will have no application for the advance amount paid by the tenant

towards the sale consideration on the basis of the sale agreement.

A final attempt was made by the learned Counsel for the revision petitioner to contend that the RCOP filed by the respondent/landlord itself is

not maintainable in view of the fact that having issued a notice claiming arrears of rent, without waiting for the two months period, the landlord

initiated the rent control proceedings within the two months period. He placed reliance on the decision of the Hon''ble Supreme Court reported in

2003 1 L.W.134 (Raja Muthukone (D) by L Rs. v. T. Gopalasami and Anr. (S.C.)

I am unable to accept the above submission of the learned Counsel for the revision petitioner/tenant. First of all, this point was not at all raised

before the Rent Controller nor before the Appellate Authority. This ground was also not taken in the Memorandum of Grounds of revision filed

before this Court. It is made for the first time before this Court, that too, at the time of arguing the revision petition. Even otherwise, the legal notice

was issued on behalf of the landlord on 10.2.2001 calling upon the revision petitioner/tenant to vacate the premises and also to pay a sum of Rs.

32,000/- towards rental arrears. Thus the notice is not for just claiming rental arrears and in fact it is also for vacating the tenant from the petition

premises.

In 2003 1 L.W.134 (cited supra), the Hon''ble Supreme Court considered the facts that the notice was given claiming rental arrears, the

eviction petition was filed within a period of two months, money was not deposited by the tenant within the period of two months and the same

was also withdrawn by the landlord within the two months period. Only in such circumstances, the Supreme Court held that the tenant is not a

wilful defaulter. But in the case on hand, the respondent/landlord issued notice on 10.2.2001 calling upon the tenant to vacate the premises and

also to pay the rental arrears and to file RCOP on 19.3.2001, i.e., within the period of two months. But the RCOP was not only filed on the

ground of wilful default but also filed on the ground of requirement of the building bonafidely by the landlord. It is also not the case of the revision

petitioner/tenant that he deposited the rental arrears of Rs. 34,000/- as claimed in the notice dated 10.2.2001, within the period of two months. In

such circumstances, I am not inclined to accept the contentions of the learned Counsel for the revision petitioner in this regard.

Insofar as the eviction confirmed on the ground of requirement of the building for the landlord''s own occupation by the appellate authority is

concerned, I find force in the submission of the learned Counsel for the revision petitioner. The rent controller in her order dated 24.4.2003

specifically held that the landlord has failed to prove his case u/s 10(3)(a)(i) of the Act, 1960, i.e., requirement of the building for the landlord''s

own occupation and rejected the RCOP in this regard, while ordering eviction on the ground of wilful default alone. No appeal was filed by the

respondent/landlord against the disallowed portion of the order of the rent controller and it is only the revision petitioner/tenant who filed the appeal

in RCA No. 438/2003 challenging the order of the rent controller. The very fact that the landlord has not chosen to file any appeal against the

disallowed portion of the order of the rent controller would clearly prove that there is no bonafide in his requirement of the building for his own use

and occupation. Therefore, the appellate authority has clearly erred in law and on facts in re-considering the issue and ordering eviction on this

ground also. Therefore, I am inclined to set aside that portion of the order of the appellate authority by which the eviction has been ordered u/s

10(3)(a)(i) also.

Hence the Civil Revision Petition is partly allowed by restoring the order of the rent controller dated 24.4.2003 and setting aside the order of

the appellate authority dated 3.2.2005 insofar as ordering eviction u/s 10(3)(a)(i) of the Act, 1960 also.

In the result, the eviction order passed by the authorities below on the ground of wilful default is upheld. No costs. C.M.P. No. 4271/2006 is

closed.