JAGMOHAN RATILAL SHETH v. JAYANTILAL LAXMISHANKER — 1972 DIGILAW 114 (GUJ)

D. P. DESAI, J. ( 1 ) ONE of the questions raised in this revisional application is quite interesting and it relates to the effect of tendering a few months rent to the landlord by a tenant who is admittedly on the date of the tender in arrears for a period greater than the period covered by the amount tendered when this tender is made before issuance of a notice under sec. 12 (2) of the Bombay Rents Hotel and Lodging House Rates Control Act 1947 (hereafter referred to as the Act ). ( 2 ) ADMITTEDLY the petitioner was the tenant of the rented premises at a monthly rent of Rs. 50/and the premises were let out possibly according to the Indian calendar month. The rent note in this case came to be executed on June 1 1964 It was made for a period of two months only. However there was holding over by the tenant under the rent note. It cannot be challenged now that this tenant was in arrears from September 1 1967 It appears that the parties regulated the month of rent with reference to Gregorian calendar. The amount of rent in arrears came to Rs. 350/on April 26 1968 Thus it was rent in arrears for seven months. On that day the tenant sent a money order for Rs. 200/which would be sufficient to cover four months rent only. He mentioned in the money order that the rent sent was to cover four months from November 1 1967 This money order was refused by the landlord; and it is this act of the tenant in sending the money order of rent for a lesser period than seven months and the refusal of the landlord to accept the same which has given rise to the question referred to in the beginning of this judgment. After this refusal of the money order the rent for the month of April would also accrue due. The landlord gave a notice on May 13 1968 to the tenant terminating the tenancy with effect from June 30 1968 coupled with a demand for payment of rent in arrears upto that date. This notice was received by the tenant on May 14 1968 Thereafter on May 20 1968 the tenant sent Rs. 300/only which would not ex facie be sufficient compliance with the provisions of sec. This notice was received by the tenant on May 14 1968 Thereafter on May 20 1968 the tenant sent Rs. 300/only which would not ex facie be sufficient compliance with the provisions of sec. 12 (3) (a) of the Act if we ignore the previous money order of April 26 1968 as of no effect. However on June 18 1968 the tenant sent by money order an amount of Rs. 450/which would cover full amount of rent due as on June 1 1968 i. e. the amount of seven months rent from September 1 1967 to May 31 1968 But this was admittedly done after the expiry of one month after receipt of the notice. Therefore the tenant can save himself only if the tender of amount of four months rent on April 26 1968 is effective in the eyes of law to reduce the arrears from seven months to three months. If it is effective it is obvious that on the date of the notice i. e. on May 13 1968 the tenant was not in arrears for six months and therefore sec. 12 (3) (b) of the Act would apply. And admittedly before filing of the suit full amount in arrears was sent on June 18 1968 as stated earlier and therefore there would be no cause of action for the landlord to file a suit for eviction. This would be so if sec. 12 (3) (b) is applied. The suit for eviction was filed on December 9 1968 Possession was claimed inter alia on the ground of non payment of rent; and the learned trial Judge came to the conclusion that the tender of rent of Rs. 450/one month after the service of the notice would not be helpful to the tenant. Subsequent to that tender of Rs. 450/it appears that two other tenders of Rs. 150/and Rs. 100/were also made. These tenders were accepted by the landlord in the months of September November 1968 respectively. But according to the learned trial Judge the acceptance of these later tenders also will have no effect on the landlords right to recovery of possession. In this view of the matter the learned trial Judge gave a decree for eviction in favour of the landlord. But according to the learned trial Judge the acceptance of these later tenders also will have no effect on the landlords right to recovery of possession. In this view of the matter the learned trial Judge gave a decree for eviction in favour of the landlord. The tenant went in appeal to the District Court at Rajkot; and the learned Assistant Judge Rajkot at Gondal dismissed the appeal with costs observing that the case in question is covered by sec. 12 (3) (a) of the Act. Hence the tenant has come in revision to this court. ( 3 ) FOUR contentions were advanced by Mr. Shah appearing for the petitioner-tenant in this case; and they are :- ( 4 ) (1) On the date of the notice Exh. 16 which was given on May 13 1968 the tenant was not a person in arrears of rent for a period of six months or more because of the tender of four months rent by money order before the date of that notice on April 26 1968 Therefore the tenant was not bound to send the amount due within a period of one month of the service of the notice as the case did not fall within sec. 12 (3) (a) of the Act. If that is the position Mr. Shahs submission that the tender of the full amount of arrears of nine months rent by money order on June 18 1965 which money order was refused by the landlord on June 24 1968 would disentitle the landlord from obtaining a decree for possession because prior to the institution of the suit the demand in the notice given under sec. 12 (2) of the Act was complied with. It is obvious that if this contention of Mr. Shah is accepted and if it is held that the tender of Rs. 200/sent by money on April 26 1968 before the notice was effective to reduce the arrears from 7 months to 3 months the revisional application must succeed and the decree for eviction must be set aside. If on the contrary this submission of Mr. Shah cannot be accepted in the sense that the sending of the aforesaid money order of April 26 1968 has no effect because it was as contended by Mr. If on the contrary this submission of Mr. Shah cannot be accepted in the sense that the sending of the aforesaid money order of April 26 1968 has no effect because it was as contended by Mr. Parekh for the other side not a full tender of the rent in arrears the decree for eviction must stand subject of course to the three other contentions of Mr. Shah which are set out hereunder. ( 5 ) HAVING discussed all the other three contentions of Mr. Shah we may now come to the first contention. For this purpose sec. 12 of the Act requires to be reproduced :- ( 6 ) A landlord shall not be entitled to the recovery of possession of any premises so long as the tenant pays or is ready and willing to pay the amount of the standard rent and permitted increases if any and observes and performs the other conditions of the tenancy in so far as they are consistent with the provisions of this Act. (2) No suit for recovery of possession shall be instituted by a landlord against a tenant on the ground of non-payment of the standard rent or permitted increases due until the expiration of one month next after notice in writing of the demand of the standard rent or permitted increases has been served upon the tenant in the manner provided in sec. 106 of the Transfer of Property Act 1882 (3) (A) Where the rent is payable by the month and there is no dispute regarding the amount of standard rent or permitted increases if such rent or increases are in arrears for a period of six months or more and the tenant neglects to make payment thereof until the expiration of the period of one month after notice referred to in sub-section (2) the court may pass a decree for eviction in any such suit for recovery of possession. (B) In any other case no decree for eviction shall be passed in any such suit if on the first day of hearing of the suit or on or before such other date as the court may fix the tenant pays or tenders in court the standard rent and permitted increases then due and thereafter continues to pay or tenders in court regularly such rent and permitted increases till the suit is finally decided and also pays costs of the suit as directed by the court. (4) Pending the disposal of any such suit the court may out of any amount paid or tendered by the tenant pay to the landlord such amount towards payment of rent or permitted increases due to him as the court thinks fit. EXPLANATION :-In any case where there is a dispute as to the amount of standard rent or permitted increases recoverable under this Act the tenant shall be deemed to be ready and willing to pay such amount if before the expiry of the period of one month after notice referred to in sub-section (2) he makes an application to the court under sub-section (3) of sec. 11 and thereafter pays or tenders the amount of rent or permitted increases specified in the order made by the court. The question is whether present case would fall under sec. 12 (3) (a) or under sec. 12 (3) (b) of the Act. If the tender of four months rent by money order of April 26 1968 is effective to reduce the amount of arrears of seven months to three months the case would not fall under sec. 12 (3) (a) because on the date of the notice of May 13 1968 the rent would be in arrears for four months only. This will be on the basis that the rent was due from September 1 1967 and upto April 30 1968 and the rent which would fall into arrears would be for eight months; and if tender of Rs. 200/made in April 1968 is effective the arrears on the date of the notice would be for four months only. Therefore one of the conditions of sec. 12 (3) (a) that the rent must be in arrears for a period of six months or more would not be satisfied and the case would fall under sec. 12 (3) (b) of the Act. Therefore one of the conditions of sec. 12 (3) (a) that the rent must be in arrears for a period of six months or more would not be satisfied and the case would fall under sec. 12 (3) (b) of the Act. ( 7 ) IN a different context I had an occassion to examine the scheme of sec. 12 of the Act in Thakkar Maganlal Papatlal v. Thakkar Bhikhubhai Devji Civil Revision Application No. 551 of 1969 decided on April 27 1971 There I observed as under :-SUB-SEC. (3) (a) of Sec. 12 of the Act may be considered now. It contemplates inter alia that the rent is in arrears for a period of six months or more. Whartons Law Lexicon 14 edition defines arrear meaning money unpaid at the due time; as rent behind. In Strouds Judicial Dictionary third edition we find the following :- arrears-presupposes a time fixed for payment of a sum of money and the lapse of time thereafter without payment. The thread running through the various provisions of Sec. 12 of the Act indicates that the person contemplated to be evicted from possession as a tenant is a person who not only has committed default in payment of rent prior to the notice under sec. 12 (2) but who does not remedy that default and persists in his conduct of default even after that notice. If such a tenant has allowed the rent to accumulate for a period of six months or more it could reasonably be said that the tenant is in arrears for a period of six months or more. A tenant who does not make payment pursuant to the notice given under sub-sec. (2) of sec. 12 but who is not covered by clause (a) of sub-sec. (3) is given a further opportunity to make good his default notwithstanding the filing of the suit by the landlord. This is shown by clause (b) of sub-sec. (3 ). It is clear therefore that in the scheme of sec. 12 both the words non-payment occurring in sub-sec. (2) and arrears occuring in sub sec. (3) (a) indicate a duty or obligation to make payment of rent on the part of a tenant and the breach thereof by him. This is shown by clause (b) of sub-sec. (3 ). It is clear therefore that in the scheme of sec. 12 both the words non-payment occurring in sub-sec. (2) and arrears occuring in sub sec. (3) (a) indicate a duty or obligation to make payment of rent on the part of a tenant and the breach thereof by him. The more accumulation of rent without any breach of duty or obligation to pay on the part of the tenant cannot for the purpose of sec. 12 be equated with non-payment or arrears of rent. The phrase neglects to make payment thereof occuring in sub-sec. (3) (a) also emphasises the the aforesaid character of arrears resulting from breach of duty or obligation to pay on the part of the tenant. This meaning of the word arrear is consistent with the meaning expressed by Wharton and Stroud as mentioned earlier. ( 8 ) NOW what is the duty and obligation of a tenant whether he is a contractual tenant or one commonly known as statutory tenant after termination of the contract of tenancy ? So far as the contract goes there can be no dispute about the proposition that the rent being recurring payment in the present case the obligation or the duty of the tenant is to make payment of the amount of rent every month as per the contract as and when it accrues due. This aspect of regular payment of rent as and when it accrues due which could be explicit in the contract would also form part of the obligation of a tenant who is a statutory tenant and not a contractual tenant. It is clear from sec. 12 (1) that the law protects a tenant who pays or is ready and willing to pay the amount of rent. The emphasis appears to be on payment of rent or readiness and willingness to pay the same as and when it accrues due. It is the nonpayment of rent or absence of readiness and willingness to pay rent which would take the case of a tenant out of the provisions of sec. 12 (1) of the Act. The emphasis appears to be on payment of rent or readiness and willingness to pay the same as and when it accrues due. It is the nonpayment of rent or absence of readiness and willingness to pay rent which would take the case of a tenant out of the provisions of sec. 12 (1) of the Act. Looking to the fact that the rent is a periodical payment to be made by the tenant to the landlord in order to enjoy protection either under the contract or under the Statute it is clear that when the rent had fallen into arrears in the present case for seven months upto April 26 1968 it was a lump sum amount of arrears of rent for seven months. In such a case by tendering rent of a smaller amount the tenant cannot show that he has paid the rent or he is ready and willing to pay rent within the meaning of sec. 12 (1) of the Act. This is so for the simple reason that the default contemplated by sec. 12 (1) which would for the time being enable the landlord to proceed further in accordance with the scheme of that section has continued inasmuch as the full amount of rent in arrears has not been paid or tendered by the tenant. Such a default would therefore entitle the landlord to take recourse to sec. 12 (2) of the Act and give a notice of demand. Now it is true that tender of full amount of rent would be equivalent to payment. But to say by analogy that tender of part of the amount of rent would be equivalent to part payment is neither logical nor rational. If once we proceed on the basis that the whole of the amount of rent which had fallen into arrears becomes payable in a lump sum to the landlord by the tenant by virtue of a single contract that the tenant has entered into with the landlord or by virtue of a similar obligation arising under the statute it is clear that sending of the amount of four months rent by money order on April 26 1968 was nothing but part payment towards this lump sum. Such part payment is not effective for the purpose of sec. 12 (3) (a) of the Act. Such part payment is not effective for the purpose of sec. 12 (3) (a) of the Act. It is obvious that the law of procedure treats periodical rent which has fallen into arrears for a number of years or months as a single debt arising upon one cause of action viz. the contract to make payment periodically contained in the contract of tenancy. This is illustrated by the Illustration to Order II Rule 2 of the Civil Procedure Code which reads as under :-A lets a house to B at a yearly rent of Rs. 1 200 The rent for the whole of the years 1905 1906 and 1907 is due and unpaid. A sues B in 1908 only for the rent due for 1906. A shall not afterwards sue B for the rent due for 1905 or 1907. So far as payment of rent by a statutory tenant is concerned the obligation to pay rent under the contract continues even after the termination of the tenancy if the protection under the Act is to be availed of. This is of course subject to the contractual rent being the standard rent of the rented premises. If the contractual rent is in excess of the standard rent this contractual obligation is replaced by a statutory obligation. But in that case also the obligation is to pay the amount of standard rent as and when it accrues due. The concept of arrears of rent would also suggest the accumulation of rent on account of default of the tenant in paying the same. In the instant case admittedly seven months rent was in arrears on the date of the first money order of April 26 1968 It was a lump sum rent of seven months which could be said to be rent in arrears. The contention of Mr. Shah for the petitioner was that the words when the rent is payable by the month and reference to these words in sub-sec. (3) (a) of sec. 12 by the words such rent would suggest that each months rent is taken by the Legislature as a separate debt. He also submitted that the legislative intent was to prevent piling up of arrears of rent for six months. (3) (a) of sec. 12 by the words such rent would suggest that each months rent is taken by the Legislature as a separate debt. He also submitted that the legislative intent was to prevent piling up of arrears of rent for six months. He of course qualified this statement by saying that the arrears of rent have the characteristics of rent till the amount in arrears is transferred by the landlord to somebody because in that case only it would become debt. There is nothing in the whole scheme of sec. 12 to suggest that the Legislature for the purpose of the protection conferred by that section treated rent payable by the month as a separate debt after it has fallen into arrears. If that was what the Legislature wanted to provide for it would not have failed to provide for adjustment of tender of part of arrears made in the past prior to the notice of demand under sec. 12 (2) of the Act. It would also have made some provision casting an obligation on the landlord to accept these part payments. These two features are absent in the scheme of sec. 12 of the Act. Therefore the contention of Mr. Shah based on the notion of the arrears of rent being a separate debt cannot be accepted. If this notion is imported in the provisions of sec. 12 (3) (a) it may well be argued on behalf of some of the tenants that at the end of seventh month only the first months rent would be in arrears for six months because the rent of second month and subsequent months would be in arrears for five months and less; and therefore the obligation of the tenant to make payment within one month of the receipt of the notice contemplated by sec. 12 (3) (a) would be limited to first months rent only. Mr. Shah also conceded that that would not be the meaning of sub-sec. (3) (a ). However he contended that by treating rent of each month as a separate debt what he meant was that there would be arrears of rent for first six months of which some rent for each month would be a separate debt. It is not possible to accept this contention. In fact that would lead to placing an artificial constriction on the plain language of sec. It is not possible to accept this contention. In fact that would lead to placing an artificial constriction on the plain language of sec. 12 (3) (a) with regard to the tenant being in arrears of rent for six months and more. Therefore looking to the aforesaid clause used in sub-sec. (3) (a) of sec. 12 also it appears that the accumulation of rent for six months was treated by the Legislature as a single amount payable by the tenant to the landlord at the end of six months and in such a case the tenant could not prevent a decree for eviction by saying that prior to the date of the notice he had tendered a part of these arrears. Mr. Shah however sought to derive some support for his contention from a recent decision of the Bombay High Court reported as Isabel M. Rebello and others v. Kasarchand Anandram Banthia and others 1972 All India Rent Control Journal 479 Therein the facts were as under :- ( 9 ) ON September 3 1964 the landlord served a notice to the tenant terminating his tenancy on the ground that the tenant had failed and neglected to pay arrears of rent from November 1 1963 Before the expiry of one month after the notice the tenant paid Rs. 100/to the landlord on September 29 1964 and the landlord accepted the same towards arrears. On October 17 1964 a suit was filed by the landlord praying for a decree for eviction on the ground of non-payment or rent. The learned Judge in paragraph 9 of the judgment examined the scheme of sec. 12 as a whole and observed as under :-IN my judgment where the tenant does make payment within one month as aforesaid so as to reduce the arrears of rent to less than six months sec. 12 (3) (a) cannot be applied. To such a case being any other case within the meaning of sub-sec. (3) (b) the Court must apply the provisions of sec. 12 (3) (b ). It appears that the observations reproduced above were based on the peculiar facts of that case viz. that the landlord by a subsequent act of acceptance of part payment towards arrears reduced the arrears from six months or more to less than six months. I am not called upon to decide whether sec. 12 (3) (b ). It appears that the observations reproduced above were based on the peculiar facts of that case viz. that the landlord by a subsequent act of acceptance of part payment towards arrears reduced the arrears from six months or more to less than six months. I am not called upon to decide whether sec. 12 (3) (a) would yet be applicable in such a case in the circumstances of the present case. But from these observations it cannot be argued that the tender of part of the arrears of rent even if refused by the landlord can operate to reduce the arrears to less than six months. In fact that argument does not follow from these observations at all. This argument is an argument based on an analogy and as observed by me earlier the proposition that tender of part of the rent is equivalent to part payment is neither logical nor rational. ( 10 ) FROM the scheme of sec. 12 of the Act it is fairly clear that in a case where rent was payable by the month and there was no dispute about standard rent the Legislature contemplated eviction of a tenant who allowed rent to fall into arrears for six months or more subject of course to the opportunity given to him to make payment of all the arrears of rent within one month of the receipt of the notice issued under sec. 12 (2) of the Act. If there was neglect in making payment within this period the liability to be evicted becomes absolute. This seems to have been done with a view to see that the landlords also are secured payment of rent which is not otherwise disputed regularly as and when it accrues due. In the present case admittedly the tenant allowed rent to fall into arrears for more than six months before the first tender by money order. The only remedy of such a tenant was either to send the whole amount of rent in arrears before issue of a notice under sec. 12 (2) or to send it within one month of the receipt of the notice if already issued. The event contemplated by the Legislature viz. The only remedy of such a tenant was either to send the whole amount of rent in arrears before issue of a notice under sec. 12 (2) or to send it within one month of the receipt of the notice if already issued. The event contemplated by the Legislature viz. accumulation of rent for six months or more having already taken place before the first tender by money order the complexion of that event could not have been changed by sending money order for a part of the arrears of rent and not the whole. If this is permitted the tenants would make payment of rent at their leisure taking care to see that as soon as arrears accumulate to arrears of six months or more part of the amount is sent so as to reduce the arrears to less than six months. This in effect would defeat the very object of security of regular payment of rent to the landlords intended to be achieved by the provisions contained in sec. 12 (2) and 12 (3) (a) of the Act. Once therefore the tenant is in arrears of rent for six months or more and rent is payable by the month and there is no dispute about the standard rent it can be said that a tenant has made himself subject to the risk of being evicted under sec. 12 (3) (a ). Such a tenant cannot obliterate that risk by sending a part of the arrears so as to reduce the balance to less than six months prior to issue of the notice under sec. 12 (2) of the Act. If part of arrears is sent in such circumstances the landlord would be justified in refusing to accept them and the tender of part of arrears would not be treated by the court as equivalent to payment of part of the arrears so as to reduce the default to a period of less than six months. Such a refusal does not come in the way of the landlord in enforcing his right under sec. 12 (3) (a) of the Act if other conditions of that provision are satisfied. In my opinion therefore the decree passed by the lower courts for eviction on the ground of non-payment of rent under sec. 12 (3) (a) of the Act is quite correct and proper. .