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1962 DIGILAW 207 (ALL)

Khushro S. Gandhi v. Ferjunji J. Gandhi

1962-07-31

MITHAN LAL

body1962
JUDGMENT Mithan Lal, J. - This second appeal filed by the plaintiff arises out of the dismissal of his suit for eviction of the defendant. 2. The plaintiff-appellant is the landlord of the disputed accommodation, 8 Hastings Road, Allahabad, while the defendant is a tenant on a rent of Rs. 15 per mensem."The defendant's tenancy commences from the first of every month. The plaintiff alleged that the defendant had not paid the rent in spite of service of a notice of demand and as three months' rent had fallen in arrears the defendant was liable to ejectment. In the suit the plaintiff claimed Rs. 285 as arrears of rent from 1st February 1953 to 31st August 1954. A prayer for damages for use and occupation was also made. 3. The suit was contested on the grounds that the defendant had not made any default in the payment of rent and that he had been paying rent month from month through cheques as agreed upon between the parties. It was stated that the cheques were never dishonoured and the defendant learnt about the non-cashing of the cheques only after the receipt of the notice of demand given by the plaintiff. Thereafter, he made an application under Sec. 7-C of the U.P. (Temp.) Control of Rent and Eviction Act on 19th August 1954 and deposited a sum of Rs. 285 being the rent from 1st February 1953 to 31st August 1954. It was alleged that the defendant never made any default in the payment of rent and in spite of the refusal of the monthly cheques issued by the defendant he took care to deposit the entire rent in the court of the Munsif having jurisdiction and so this deposit, though contested by the plaintiff, had the effect of payment of arrears and the defendant could not be called a tenant in default. 4. The plaintiff's suit was decreed by the trial court but on appeal the learned Civil Judge came to the conclusion that the defendant had been paying rent through cheques as agreed upon between the parties. This constituted a lawful payment of the rent and wrongful refusal of the rent on the part of the plaintiff. For this purpose he relied upon the provisions of Section 50 of the Indian Contract Act. This constituted a lawful payment of the rent and wrongful refusal of the rent on the part of the plaintiff. For this purpose he relied upon the provisions of Section 50 of the Indian Contract Act. The learned Civil Judge further held that the mode of payment could not be changed by the plaintiff landlord. He also came to the conclusion that the payment of rent by cheques was a lawful payment as the cheques were legal tender. He also accepted the defendant's case that deposit of rent under Sec. 7-C of the Act amounted to payment of the arrears under sub-sec. (6) of Sec. 7-C. The plaintiff's suit for eviction was thus dismissed and so this appeal. 5. It has been contended by Sri G. N. Kunzru, learned advocate for the appellant, that the letter of the plaintiff dated 15th September 1952 and the reply of the defendant dated 29th September 1952 did not constitute any agreement nor did the letter of the plaintiff prescribe any mode of payment within the meaning of Section 50 of the Indian Contract Act. According to him it was a mere concession which could be withdrawn at any time by the plaintiff. The case of Section 50 of the Indian Contract Act is said to have been set up by the lower appellate court without any defence on that ground. The learned counsel's argument is that the plaintiff had the discretion to accept or not to accept the cheques issued by the defendant and if he refused to cash the cheques and returned them to the defendant such cheques could not be taken to be payment of the rent nor could they save the defendant from being in arrears of rent. The cheques were further said to be defective as they had not been issued with a special crossing which the letter of the plaintiff dated 15th September 1952 required. The cheques were further said to be defective as they had not been issued with a special crossing which the letter of the plaintiff dated 15th September 1952 required. It is also his submission that after a notice of demand had been given to the defend-ant it was his duty to make payment to the landlord within the meaning of Section 3 of the U.P. (Temporary) Control of Rent and Eviction Act and it having been found that the defendant made no payment of the rent nor offered to pay any rent after the service of the notice mere deposit of money under Sec. 7-C of the Act could not be treated to be valid nor could it be treated to be a payment of rent within the meaning of sub-sec. (6) of that section. 6. Learned counsel for the respondent, Sri R.C. Ghatak, has supported the judgment of the lower appellate court. His contention is that the U.P. (Temp.) Control of Rent and Eviction Act has been enacted with the primary object of preventing the eviction of tenants from accommodations at the sweet will of the landlords. No landlord should be permitted to create grounds of alleged default of arrears of rent by his own action. In this case the landlord having agreed to accept the rent by cheques and the tenant having issued cheques month by month the landlord should have cashed them and if he failed to cash those cheques and returned them to the defendant-tenant the latter could not be said to be in arrears of rent. It is also his argument that once the landlord having agreed to accept payment of rent through cheques he could not treat it to be a concession liable to be changed at the sweet will of the landlord. It is also his contention that even before the expiry of the period of notice the tenant made an application under Sec. 7-C of the Act to the Munsif having jurisdiction and also made a deposit of all the rent due till then. The Munsif having accepted the application and having passed an order after the contest of the landlord the deposit would amount to payment of rent as laid down in sub-sec. (6) and there was no ground for the plaintiff to file a suit for eviction of the tenant. 7. The Munsif having accepted the application and having passed an order after the contest of the landlord the deposit would amount to payment of rent as laid down in sub-sec. (6) and there was no ground for the plaintiff to file a suit for eviction of the tenant. 7. I have heard learned counsel for the parties at great length. There are only two points which require decision in the case. The first is as to what is the effect of the letters (Exs. 6 and 7) dated 15th and 29th September 1952 sent by the plaintiff and the defendant respectively and whether the issue of cheques in furtherance of the aforesaid letters amounted to tender or payment of rent in law and the defendant tenant was not in arrears of rent. The second question is whether the deposit of the rent in proceedings under Sec. 7-C of the U.P. (Temp.) Control of Rent and Eviction Act amounted to payment of rent within the meaning of sub-sec. (6) of that section. 8. In this case the following facts have either been admitted or proved: (1) The defendant is a tenant of the plaintiff in this accommodation for quite a long time. Formerly he was in possession of larger accommodation, but by an agreement a major portion of the accommodation was given to another tenant and the present accommodation is in possession of the defendant as a tenant since 1943 or so. (2) The relations between the parties, who belong to the Parsi community, are very much strained and as stated by the parties' learned counsel during the course of the arguments a number of cases of various kinds are going on between them. (3) By means of a letter (Ex. 5) dated 7th September 1952 the defendant complained to the plaintiff about his behaviour in accepting the rent and suggested that the plaintiff should either himself receive the rent personally or through an authorised agent under proper receipt. (4) The plaintiff gave a reply vide his letter (Ex. 6) dated 15th September 1952 suggesting the payment of rent through cheques. He offered to accept cheques "crossed Allahabad Bank, Allahabad." (5) The defendant sent a reply on 29th September 1952 vide his letter (Ex. 7) accepting the offer and also sending two cheques for the past three months' rent due from him and his wife. 6) dated 15th September 1952 suggesting the payment of rent through cheques. He offered to accept cheques "crossed Allahabad Bank, Allahabad." (5) The defendant sent a reply on 29th September 1952 vide his letter (Ex. 7) accepting the offer and also sending two cheques for the past three months' rent due from him and his wife. (6) The offer made by the plaintiff in his letter (Ex. 6) was retracted through letter (Ex. 40) dated 7th Oct. 1952. The plaintiff wrote to the defendant that "the cheques being not legal tender I shall not accept the same in payment of your rent." (7) In spite of this letter, cheques for rent for subsequent period upto January 1953 were accepted and cashed by the plaintiff. (8) For the rent from February 1953 upto the month of June 1954 the defendant had been sending cheques for rent for the previous month almost every month near about the 10th of the subsequent month. (9) The plaintiff did not present any of the cheques for encashment to the Bank. He also did not return these uncashed cheques every month or soon after a cheque was received from the defendant. (10) A composite notice of demand of arrears of rent under Section 3 of the U.P. (Temp.) Control of Rent and Eviction Act and of eviction as required by Section 106 of the Transfer of Property Act was sent by the plaintiff to the defendant near about the 20th of July 1954. (11) The defendant did not tender or offer to pay the arrears of rent to the plaintiff. (12) The defendant presented an application under Sec. 7-C of the U.P. (Temp.) Control of Rent and Eviction Act in the court of the Munsif having jurisdiction and made a deposit of Rs. 285 i.e. all rent from February 1953 to 31st August 1954 on 19th August 1954. Another application for deposit of the future rent was also made on 29th October 1954. The applications were contested. The Munsif ordered the deposit of the past rent but the application for deposit of the future rent was disallowed. 9. The above facts will show that the defendant did not retain the rent of any month and made payments through cheques in the same manner as prescribed by the plaintiff-landlord in his letter dated 15th September 1952 (Ex. 6). The Munsif ordered the deposit of the past rent but the application for deposit of the future rent was disallowed. 9. The above facts will show that the defendant did not retain the rent of any month and made payments through cheques in the same manner as prescribed by the plaintiff-landlord in his letter dated 15th September 1952 (Ex. 6). Thee plaintiff also accepted the cheques and encashed them for the months of September, October, November and December 1952 and January 1953 in spite of his letter (Ex. 40) resiling from his former offer. Learned counsel for the appellant made out that the cheques issued by the defendant were not specially crossed as directed and so such cheques could not be treated to be a tender or payment of rent lawfully made. This argument appears to have been raised in this Court for the first time. It seems that the question that the cheques had not been specially crossed as directed was either not specifically raised in the courts below or not pressed and that is why there is no finding on this point. However, there appears to be no material difference between the manner of payment desired by the plaintiff through a special crossing of the cheques as issued by the defendant in payment of rent as crossed cheques were issued on Allahabad Bank. This point has further lost all importance because even after the plaintiff retracted the offer made through his letter Ex. 6 he cashed crossed cheques issued by the defendant and encashed them without any objection or protest. It cannot, therefore, be fruitfully argued that the cheques not having been issued in the manner prescribed by the plaintiff they did not constitute payment or tender of rent. It is not necessary for the purpose of this case to go into the proposition of law whether payment of a debt or payment of rent by a cheque without any offer on the part of the creditor of the landlord, as the case may be, or without any agreement between the parties, amounts or does not amount to payment or discharge of the debt or the rent. The point involved in the instant case does not relate to the general question of payment of debt or rent through cheques without any direction of the promisee. The point involved in the instant case does not relate to the general question of payment of debt or rent through cheques without any direction of the promisee. It relates to the proposition whether in view of the directions given by the landlord for payment of rent through cheques, its acceptance by the tenant and in view of the subsequent conduct of the landlord in encashing five of such cheques the payment of rent through cheques does or does not amount to rent lawfully paid. 10. Ch. IV of the Indian Contract Act beginning from Section 37 and ending with Section 50 relates to the performance of contracts while Secs. 51 to 58 relates to the performance of reciprocal promises. It is only Section 50 which is material for our purposes. That section lays down: - "The performance of any promise may be made in any manner, or at any time which the promisee prescribes or sanctions." Illustrations (a) and (d) to this section are important. Illustration (d) lays down the principle that a contractual obligation is discharged by the performance of the promise in the manner prescribed or sanctioned by the promisee. In the instant case the appellant directed the respondent to make payments of rents through specially crossed cheques. The defendant respondent issued crossed cheques from month to month and the appellant also presented the cheques for the rents for September 1952 to January 1953 to the Bank for encashment and the cheques were cashed. Even though the landlord had sent a letter in October 1952 resiling from the earlier letter of September 1952 yet he did realise the cheques. The appellant did not present other cheques to the Bank for encashment nor were they dishonoured. Under such circumstances the issue of the cheques by the defendant respondent in the manner prescribed by the appellant must be treated to be a lawful payment of rent and the landlord could not at his option treat the respondent a defaulter in payment of the rents. In the case of Commissioner of Income Tax v. Ogale Glass Works, A.I.R. 1954 SC 429 their Lordships of the Supreme Court reiterated the already accepted principle of law that payment by cheques unless dishonoured is a payment in law. In the case of Commissioner of Income Tax v. Ogale Glass Works, A.I.R. 1954 SC 429 their Lordships of the Supreme Court reiterated the already accepted principle of law that payment by cheques unless dishonoured is a payment in law. In the present case, too, when the defendant respondent issued cheques upto June 1954 in the manner prescribed by the appellant landlord it must be deemed that he lawfully paid the rents upto that month and if the landlord did not cash the cheques issued by the respondent he himself was at fault. The notice of demand, which was issued by the landlord in July 1954 was, therefore, uncalled for. The defendant was not in arrears of three months' rent nor could he be called to be a wilful defaulter. It may be noted that at the time the notice under Section 3 of the U.P. (Temp.) Control of Rent and Eviction Act was given Cl. (a) of Section 3 was:- "That the tenant has wilfully failed to make payment to the landlord of any arrears of rent within one month of the service upon him of a notice of demand from the landlord." This clause was substituted by the Amendment Act of 1954 which came into force prior to the institution of the suit but subsequent to the notice. This clause reads:- "That the tenant is in arrears of rent for more than three months and has failed to pay the same to the landlord within one month of the service upon him of a notice of demand." It is not necessary for the purpose of the suit to go into the question as to whether the case is governed by the old Cl. (a) or by the new Cl. (a) because the fact remains that the defend-ant was not in arrears on the date the notice of demand was given. The plaintiff, therefore, had no grounds to institute the suit. 11. One other fact which needs mention is that the intention of the plaintiff in resiling from his offer of 15th September 1952 within six weeks of the letter Ex. 6 appears to have been to accumulate the rent and then charge the defendant for being in arrears by creating an artificial ground. 11. One other fact which needs mention is that the intention of the plaintiff in resiling from his offer of 15th September 1952 within six weeks of the letter Ex. 6 appears to have been to accumulate the rent and then charge the defendant for being in arrears by creating an artificial ground. This is why the plaintiff stated in his letter of 7th October 1952 that cheques were not legal tender and that is also why an argument was raised that the letter (Ex. 6) was a mere concession on the part of the plaintiff which could be withdrawn at any time. This is not permitted by law. Whatever may have been the rights of the landlord for eviction of the tenant from the accommodation under the Transfer of Property Act those rights now stand curtailed by the provisions of the U.P. (Temp.) Control of Rent and Eviction Act. A landlord in order to be successful in a suit for eviction must come within the four corners of the provisions of the said Act. The courts have to carry out the purpose of the law. One of the purposes of the Act was to prevent undue eviction of tenants from accommodations and if it is found by the courts that grounds for eviction have been artificially created by a landlord by his own action the courts have to relieve the tenant against the oppression of a landlord in order to carry out the purpose of law. The landlord, who is the appellant in this case, cannot he permitted to seek the assistance of the court by unlawfully refusing to accept the rent lawfully paid when he himself is a wrong doer and not the person wronged. A restriction on eviction has been placed by the U, P. (Temp.) Control of Rent and Eviction Act under Section 3 of that Act. No suit for eviction of a tenant can be filed against a tenant of any accommodation in any court without the permission of the District Magistrate except on one or more of the grounds given in Cls. (a) to (g) of sub-sec. (1). The landlord in this case filed the suit on the basis of Cl. (a) which has already been quoted earlier. In order that a suit under Cl. (a) to (g) of sub-sec. (1). The landlord in this case filed the suit on the basis of Cl. (a) which has already been quoted earlier. In order that a suit under Cl. (a) be maintained it is necessary for the landlord to show (1) that the tenant wilfully failed to make payment to the landlord of the amount of rent within one month of the service of notice of demand or as the law stands now that the tenant is in arrears of rent for more than three months and has failed to pay the same to the landlord within one month of the service upon him of a notice of demand; (2) that a notice of demand as required by law was given; and (3) that the tenant did not make the payment of the rent to the landlord within one month of the notice of demand in spite of service of the notice. Such a suit by the landlord even if instituted would fail if the tenant shows that he was not in arrears, that he lawfully paid or tendered the rent to the landlord; and that the landlord either accepted the rent or wrongly refused to accept the rent. 12. It has already been shown above that in this case the defendant-respondent was not in arrears of rent, that he lawfully tendered and paid the rent due from him month by month upto June 1954, that it was the landlord himself who after agreeing to a particular mode of payment unlawfully refused to accept the rent and that the defendant respondent was not in arrears at all much less of more than three months of rent on the date of notice nor had he wilfully failed to make payment of rent to the landlord. The lower appellate court, therefore, rightly held that the issue of cheques by the defendant respondent amounted to tender or payment of rent in law and the defendant was not in arrears of rent. This question is by itself sufficient to dispose of the appeal but since lot of arguments have been addressed on the validity of the deposit of rent made under Sec. 7-C(1) of Rent Control and Eviction Act and such a deposit being treated as due payment of rent to the landlord by the tenant under sub-sec. (6) it seems necessary to dispose of this point as well. 13. (6) it seems necessary to dispose of this point as well. 13. After the landlord sent a notice of demand of arrears of rent from 1st January 1953 to 31st July 1954 on or about 20th July 1954 the defendant-respondent took the precaution of availing himself of the provisions of sub-sec. (1) of Sec. 7-C. He made an application and also made the deposit of all the past rent of Rs. 285 claimed by the landlord on 19th August 1954. The application was given in proper form and notice was also issued as required by law. The landlord filed an objection, but his objection was overruled and the court passed an order on 23rd October 1954 as follows:- "Without prejudice to rights of parties in other respects, it is hereby ordered that the O.P. may withdraw amount in deposit in full satisfaction of claim to rent or damages upto 30-9-54. As to the rent the application is rejected." The last sentence in this order is irrelevant because it relates to the deposit of future rent with which this Court is not concerned. Several questions in this behalf were raised in the court below and again before me, such as whether after a notice of demand under Section 3 of the U.P. (Temp.) Control of Rent and Eviction Act an application under Sec. 7-C could be filed, whether it was at all a case in which the landlord refused to accept the rent lawfully paid, whether the learned Munsif entertaining such an application could at all pass an order on the contest between the parties or could pass an order of deposit in the manner it has been done, whether the effect of the order passed by a Munsif on an application under Sec. 7-C is to debar the plaintiff from instituting a suit for eviction treating the tenant to be in default and whether the deposit of the amount under sub-sec. (1) of Sec. 7-C by itself amounts to payment of rent to the landlord as given in sub-sec. (6) of that section. (1) of Sec. 7-C by itself amounts to payment of rent to the landlord as given in sub-sec. (6) of that section. It does not seem necessary for the purpose of this case to decide all the questions raised in this appeal with respect to the proceedings under Sec. 7-C. Only one question on which this appeal can be disposed of is whether the deposit of arrears of rent made by the tenant should be deemed to be the rent duly paid by the tenant to the landlord. 14. Sub-Sec. (1) of Sec. 7-C lays down only three requirements; (a) the landlord refuses to accept the rent; (b) the rent should have been lawfully paid to him by a tenant; and (c) the rent intended to be deposited relates to an accommodation within the meaning of the Act. There is no dispute with regard to (c). The only question is whether the issue of cheques by the defendant respondent in the manner prescribed by the landlord amounted to a lawful payment of rent and whether the non-presentation of those cheques to the Bank by the landlord amounted to refusal. Both these questions have already been discussed while disposing of the first point. I do not agree with the learned counsel far the appellant that sub-sec. (1) requires that the refusal of the landlord to accept the rent must be after the service of the notice. Such a restricted interpretation cannot be placed upon the language of that section. The refusal of the landlord may be prior or may be subsequent to the notice and a mere refusal by the landlord would make the tenant entitled to deposit the rent. If the argument of the learned counsel for the appellant were to be accepted it would amount to giving a handle to an unscrupulous landlord to create artificial grounds of arrears as in the present case and then claim ejectment of the tenant because after the notice of demand in respect of arrears, which never existed, there was no tender or payment of rent and so there was no refusal after the service of notice of demand. The intention of the Legislature in enacting sub-sec. (1) was to relieve a tenant against the hardship of eviction by the conduct of a landlord who unlawfully refused to accept the rent lawfully paid. The intention of the Legislature in enacting sub-sec. (1) was to relieve a tenant against the hardship of eviction by the conduct of a landlord who unlawfully refused to accept the rent lawfully paid. It is also for this reason that the Legislature enacted sub-sec. (6) in which it has been laid down:- "In any case where a deposit has been made, as aforesaid, it shall be deemed that the rent has been duly paid by the tenant to the landlord." In this case the respondent is fully entitled to the protection of sub-Section (6). He issued cheques for payment of rents according to the directions of the appellant month by month, but the appellant did not present those cheques to the Bank for encashment. The respondent took the further precaution of making a deposit under Section 7-C (1) of the Act and after such a deposit was made and the court accepted it in spite of the contest by the landlord (though the acceptance of the deposit by the court is quite besides the point) such a deposit had the effect of the past rent having been duly paid by the tenant to the landlord. In this view of the matter also the suit was not maintainable and the lower appellate court was right in dismissing the suit. 15. The appeal has no force and it is accordingly dismissed with costs. Leave is refused.