AUTO TRANSPORT UNION (P) Ltd. v. CARDAMOM MARKETING CO. LTD.
1967-08-01
K.K.MATHEW, K.SADASIVAN
body1967
DigiLaw.ai
Judgment :- 1. These two appeals are directed against the decrees of the court below in O. S. Nos. 45 of 1961 and 39 of 1964 on the file of the Additional District Court, Parur. The allegations in the plaint in O. S. No. 45 of 1961 were as follows: The defendant-company had taken three buildings situate within the Municipality, Alwaye, on a monthly rent of Rs. 350 from one Neelakanta Iyer and had executed a rent deed on 30-3-1124 (M. E.). The buildings were sold to the plaintiff and the defendant-company executed, on the date of the sale deed, a rent deed in favour of the plaintiff agreeing to pay a rent of Rs. 2CO per mensem for the buildings. The defendant-company failed to pay rent due to the plaintiff. The plaintiff, therefore, filed the suit seeking to recover arrears of rent from 24-3-1959 to 24-9-1961. 2. O. S. No. 39 of 1964 is a suit filed for recovery of arrears of rent of the same buildings for the period from 24-3-1961 to 23-10-1964. 3. The court below decreed the suits. The defendant preferred two appeals before this court,. namely, A S. Nos 159 and 160 of 1966 from, the decrees. In the appeals it was contended that since the application filed by the defendant for the fixation of the fair rent of the buildings has been "finally disposed of by this Court in C. R. P. No. 38 of 1966 fixing the rate of fair rent at Rs, 116.20 per mensem, the lower court should be directed to consider the matter afresh and pass fresh decrees in the light of fair rent fixed in C. R. P. No. 38 of 1966. It was also urged that the defendant was not liable for interest on the arears of rent before the suits and for the costs of the suits. The two cases were remanded directing the court below to consider the matter afresh and pass fresh decrees. 4. The court below thereafter decreed the suits at the rate specified in CRP. No. 38 of 1966. It decreed interest on the arrears of rent at that rate before the suits at 6 per cent annum and also awarded proportionate costs to the plaintiff. These two decrees are being challenged in these appeals. 5.
4. The court below thereafter decreed the suits at the rate specified in CRP. No. 38 of 1966. It decreed interest on the arrears of rent at that rate before the suits at 6 per cent annum and also awarded proportionate costs to the plaintiff. These two decrees are being challenged in these appeals. 5. The questions that arise for consideration in these appeals are: (1) whether the court below was justified in awarding interest on the arrears of rent before the suits; and (2) whether the court below went wrong in awarding proportionate costs to the plaintiff. 6. On the first question it was argued by Mr. Mahalinga Iyer appearing for the appellant that under the Kerala Buildings (Lease and Rent Control) Act, 1965 (Act 2 of 1965), hereinafter referred to as the Act, the liability of a tenant is only to pay the fair rent and the appellant is not liable to pay any amount in excess thereof. Counsel relied on the provisions of S.5, 8 and 11(2) of the Act to substantiate his contention that a tenant is bound to pay only fair rent to the landlord and no amount by way of interest on the arrears of rent before the suits should have been decreed. Under S.5 of the Act, the Rent Control Court is bound on an application of a tenant or landlord of a building to fix the fair rent for such building. Under S 8(1) when the Rent Control Court has determined the fair rent of a building, the landlord shall not claim, receive or stipulate for payment of any premium or other like sum in addition to such fair rent, or save as provided in S.6 or S.7, anything in excess of such fair rent; and according to S.8(2) if fair rent has not been determined, then also the landlord can claim nothing more than the maximum rent that may be fixed by the Rent Control Court under S.5(2) or the agreed rent, whichever is less. In this case, we are concerned with a case where fair rent has been fixed by the Court. It is clear that the landlord is entitled only to claim the fair rent as fixed. But the question is whether the landlord is entitled to claim interest on the arrears of rent which had accrued due before the dates of the suits. 7.
It is clear that the landlord is entitled only to claim the fair rent as fixed. But the question is whether the landlord is entitled to claim interest on the arrears of rent which had accrued due before the dates of the suits. 7. Mr Mahalinga Iyer referred to sub-section (2) (b) of S.11 of the Act and said that it was only when a landlord wants to recover possession of building on the ground that the tenant has committed default in payment of rent and issues a notice to the tenant specifying the default that he can claim interest. S.11(2)(b) and the relevant proviso read as follows: "If the Rent Control Court, after giving the tenant a reasonable opportunity of showing cause against the application, is satisfied that the tenant 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, it shall make an order directing the tenant to put the landlord in possession of the building, and if it is not satisfied it shall make an order rejecting the application thereof by him: Provided that an application under this sub-section shall be made only if the landlord has sent a registered notice to the tenant intimating the default and the tenant has failed to pay or tender the rent together with interest at six per cent per annum and postal charges incurred in sending the notice within fifteen days of the receipt of the notice or of the refusal thereof." 8. Counsel submitted that it is not certain whether the interest mentioned in the proviso can be claimed from the date when the arrears of rent accrued due or only from the date of the notice, and that at any rate, it is only when the landlord seeks to recover possession of the building under the Act that he can recover interest on the arrears of rent and then only after issuing notice specifying the default. He referred to Ext.
He referred to Ext. P-12 notice marked in O. S. No. 45 of 1961 and submitted that the notice was issued on the basis that the landlord was entitled to recover arrears of rent at the rate of Rs. 200 per month, and that since fair rent has been fixed at Rs. 116.20, arrears of rent accruing at that rate alone could have been claimed and as the landlord sought to recover a higher amount by the notice, the notice was bad as it did not specify the default and hence no question of awarding interest at 6 per cent per annum arises. In support of this contention, he has referred to the ruling in Ram Narayan v. Benji AIR. 1959 M. P. 36. There it was held that in order that a notice might be valid under such circumstances, the notice must specify the correct amount recoverable by the landlord; and if a wrong higher amount is specified in the notice, and if the tenant fails to pay that amount, it cannot be said that there has been default in payment of the amount really due by the tenant. We do not think it necessary to go into the question whether Ext. P-12 was a valid notice. We are satisfied that the landlord was entitled to recover interest on the arrears of fair rent at the rate specified in the contract of tenancy. We do not think that all the provisions in the rent deed have been abrogated by the provisions of the Act. It is only those provisions in the contract of tenancy which are specifically abrogated by the Act or which are so inconsistent with the provisions of the Act that both cannot stand together that are abrogated by the Act. The provisions of S.8 and 11 (2) do not supersede all the terms of the contract of tenancy between the landlord and the tenant. What S.8 does is to declare that a landlord can recover from the tenant by way of rent only the fair rent calculated in accordance with the provisions of the Act. S.8 does not say anything about interest. It only says that the landlord should not receive by way of rent anything except the fair rent fixed by the Rent Control Court or the fair rent payable in accordance with the provisions of the Act, where it has not been so fixed.
S.8 does not say anything about interest. It only says that the landlord should not receive by way of rent anything except the fair rent fixed by the Rent Control Court or the fair rent payable in accordance with the provisions of the Act, where it has not been so fixed. We do not think that that would abrogate the provision in the contract of tenancy as regards payment of interest on the arrears of rent. There is no prohibition in the Act in the landlord instituting a suit for recovery of arrears of rent calculated at the fair rent rate. We do not see any provision in the Act for recovery of arrears of rent through the Rent Control Court. We think that the provision in the contract of tenancy as regards payment of interest on the arrears of rent has not been superseded by the Act and that the court below did not go wrong in awarding interest at 6 per cent per annum on the arrears of the fair rent payable. As there is no grievance for the plaintiff that interest at the rate of 12 per cent has not been awarded, we do not think it necessary to go into the question whether the court below was justified in awarding interest only at 6 per cent per annum. 9. The next question for consideration is whether the court below went wrong in awarding proportionate costs to the plaintiff. It was submitted on behalf of the appellant that there is a direction in the judgment of this court in A. S. No. 287 of 1963, an appeal filed against the decree in O. S. No. 45 of 1961, that the parties should bear the costs of the suit. The direction is as follows: "As the appellant is also responsible for not asking for relief according to the amended Act, we direct the parties to bear their costs other than the court-fees paid here which will be refunded to the appellant's advocate." It is on the strength of this direction that it was contended that both parties should have been directed to suffer their costs incurred till the order of remand passed in A. S. No. 287 of 1963. We are satisfied that the direction by the court related only to the costs in that appeal and that it has no bearing on the costs in the suits.
We are satisfied that the direction by the court related only to the costs in that appeal and that it has no bearing on the costs in the suits. We also do not think that the court below exercised its discretion improperly in awarding proportionate costs to the plaintiff. In the result, we dismiss the appeals with costs.