JAISUKHLAL MOHANLAL v. SHANTILAL UMEDRAM — 1972 DIGILAW 153 (GUJ)

A. A. DAVE, J. ( 1 ) THIS revision application is directed against the order of the learned City Magistrate 9 Court Ahmedabad convicting opponent No. 1 Shantilal Umedram Bhavsar of an offence under sec. 18 of the Bombay Rent Act and ordering him to pay Rs. 100/to the complainant as compensation and releasing him after due admonition. ( 2 ) THE facts giving rise to this revision application briefly stated are as under:-THE applicant is a tenant who had taken the suit premises on rent at the rate of Rs. 60/per month from opponent No. 1 who is the landlord of the suit premises. At the time of giving the suit premises on rent the landlord is alleged to have taken a deposit of Rs. 2100/from the applicant undertaking to return the same after the applicant vacated the suit premises. It transpired that the applicant fell into arrears of rent and opponent No. 1 filed a suit to recover possession of the suit premises. The present applicant thereupon gave a complaint under sec. 18 of the Bombay Rent Act against opponent No. 1 for contravention of the provisions thereof. Opponent No. 1 admitted that he had taken a deposit of Rs. 2100/from the applicant and had passed a receipt. According to he was not aware of the provisions contained in sec. 18 of the Act. He however was prepared to credit of the said amount towards the arrears of rent. The learned Magistrate found him guilty of the offence punishable under sec. 18 of the Act. However instead of sentencing him to pay a fine of Rs. 2100/he merely ordered him to pay Rs. 100/to the tenant as compensation. Against the said order passed by the learned Magistrate the original complainant (tenant) has preferred this revision application. ( 3 ) MR. F. A. Memon learned Advocate for the applicant urged that in view of the provisions of sec. 18 of the Act the court had no option but to sentence the landlord opponent No. 1 which may extend to imprisonment for six months and with fine which shall not be less than the amount of fine premium or sum or deposit or value of the consideration received by him. He also urged that under sec. 18 of the Act the premises were also liable to be confiscated. He also urged that under sec. 18 of the Act the premises were also liable to be confiscated. He therefore urged that the view taken by the learned City Magistrate that it would be harsh to sentence him to pay a fine of Rs. 2100/is contrary to the provisions of law and therefore this court should quash the said order and sentence the accused as provided in sec. 18 of the Act. ( 4 ) MR. G. M. Vidyarthi learned Advocate for opponent No. 1 and Mr. A. H. Thaker learned Assistant Government Pleader who appeared on behalf of the opponent No. 2 on the other hand urged that in the instant case the accused would not be liable to pay a fine which shall not be less than the amount of the deposit. They urged that the court had a discretion in awarding the sentence in view of the fact the landlord had not appropriated the amount of deposit to himself. The said amount was merely kept on credit in the name of the tenant as a security for the rent which he was liable to pay. They submitted that the deposit receipt clearly showed that the tenant was to be paid interest thereon by the landlord. They therefore urged that under the circumstances the order passed by the learned City Magistrate was just and proper. ( 5 ) IN order to appreciate the rival contentions of the parties it will be worthwhile to refer to sec. 18 of the Act. They therefore urged that under the circumstances the order passed by the learned City Magistrate was just and proper. ( 5 ) IN order to appreciate the rival contentions of the parties it will be worthwhile to refer to sec. 18 of the Act. It says:-18 If any landlord either himself or through any person acting or purporting to act on his behalf or if any person acting or purporting to act on behalf of the landlord receives any fine premium or other like sum or deposit or any consideration other than the standard rent or the permitted increases in respect of the grant renewal or continuance of a lease of any premises or for giving his consent to the transfer of a lease by sub-lease or otherwise such landlord or person shall on conviction by punishable with imprisonment for a term which may extend to six months and shall also be punished with fine which shall not be less than the amount of the fine premium or sum or deposit or the value of the consideration received by him and further where the offence is committed by a landlord in respect of premises which were of his ownership on the date of the offence such premises shall be liable to confiscation. THUS the question which would arise for consideration in the instant case is whether the landlord has received any fine premium or other like sum or deposit or any consideration other than the standard rent or permitted increases in respect of a grant or continuance of the lease of any premises. Ex. 4 is the agreement executed between the present applicant and opponent No. 1 on 17-5-1967 under which it is stated that two rooms on the second floor along with a terrace at the back of the house bearing municipal census No. 1600 situated in Bhavsar Khancha of Saraspur Ahmedabad were taken on rent by the applicant from opponent No. 1 with effect from 17-5-1967 on a monthly rent of Rs. 60. 00. It is mentioned that the applicant has paid Rs. 2100/to opponent No. 1 as a deposit for taking the suit premises on rent and that the said amount was to be returned within one year after physical possession of the premises was handed over; that Rs. 20/p. m. was to be paid as interest on the said amount of Rs. It is mentioned that the applicant has paid Rs. 2100/to opponent No. 1 as a deposit for taking the suit premises on rent and that the said amount was to be returned within one year after physical possession of the premises was handed over; that Rs. 20/p. m. was to be paid as interest on the said amount of Rs. 2100and that that amount is to be given credit towards the rent of Rs. 60/p. m. and that after deducting the said amount the applicant had to pay Rs. 40/ p. m. regularly. The exact words used in Gujarati are **it will thus be clear that on the very day the present applicant took the suit premises on rent from the landlord he had paid Rs. 2100/as deposit to the landlord in consideration of the premises being leased to him The landlord had agreed to pay Rs. 20/p. m. as interest thereon and had undertaken to return the said amount within one year from the date of the physical possession of the premises was handed over by the tenant to him. In my opinion therefore the writing clearly shows that the deposit was accepted by the landlord for consideration other than the standard rent or permitted increases in respect of a grant of the lease of the premises belonging to him. Sec. 18 prohibits acceptance by the landlord of any amount either as premium fine or other like sum or deposit or any consideration other than the standard rent or permitted increases in respect of the grant of the lease. The landlord who accepts such amount in contravention of the said provisions shall on conviction be punished with imprisonment for a term which may extend to six months and shall also be punished with fine which shall not be less than the amount of fine premium or deposit or value of the consideration received by him. Apparently therefore Mr. Memon appears to be right when he stated that the court had no option but to sentence him to a term of imprisonment which may extend to six months and with fine which shall not be less than the amount of the deposit. According to Mr. Memon the court had a discretion in awarding substantive sentences of imprisonment. He submitted that the court can send him to imprisonment till rising of the court only. According to Mr. Memon the court had a discretion in awarding substantive sentences of imprisonment. He submitted that the court can send him to imprisonment till rising of the court only. But so far as fine is concerned the court had no option but to sentence him to pay the fine which shall not be less than the amount of deposit. He therefore urged that the accused should have been fined to pay Rs. 2100/atleast which is the amount of deposit. He also urged that the premises of the landlord were liable to confiscation and in view of the use of word shall in the said section the court had to confiscate the premises also. In support of his submissions Mr Memon referred to the case of Vithal Krishnaji Nivendkar v. The State 61 B L. R. 1662 wherein the accused was convicted of an offence under sec. 18 (1) of the Bombay Rent Act and was sentenced to suffer S. I. for one day and to pay as fine of Rs. 3251/in default to suffer S. I. for one month. In the appeal preferred against the said order of conviction and sentence the division bench of the Bombay High Court observed:-`the expression `consideration in sec. 18 (1) of the Bombay Rents Hotel and Lodging House Rates Control Act 1947 is used in its normal connotation and includes pecuniary as well as non-pecuniary consideration ( 6 ) THE expression `other like sum in sec. 18 (1) must be read ejusdem generis with fine or premium. In view of the facts of that case the High Court confirmed the order of conviction and sentence passed by the learned Presidency Magistrate and dismissed the appeal. In that case at the time of granting the lease the landlord demanded Rs. 4000/as pugree and ultimately as a result of some bargaining an amount of Rs. 3251/was given as donation to the Tillori Kumbi Samajonnati Sangh of which the accused was the president. Evidently the said amount was accepted as donation for the management of the building of the Sangh. In that case the accused had taken a plea that he was not the landlord but the Sangh was the landlord that there was no nexus between the donation of Rs. 3251/and the grant of tenancy of the premises. Evidently the said amount was accepted as donation for the management of the building of the Sangh. In that case the accused had taken a plea that he was not the landlord but the Sangh was the landlord that there was no nexus between the donation of Rs. 3251/and the grant of tenancy of the premises. Both these contentions were negatived by the Bombay High Court and the order of conviction and sentence was confirmed. While confirmiug the conviction and sentence the court has observed that the expression other like sum in sec. 18 (1) of the Act must be read ejusdem generis with fine or premium. Now the words fine or premium are understood as price paid or promised in consideration of the grant of a right to enjoy the property. Similarly premium also is a price paid to obtain a lease. The amount of fine or premium received by the landlord in respect of the grant of the lease naturally would be appropriated by the landlord to himself and the question of returning the said amount to the tenant would not arise. Similarly any amount of donation accepted by the landlord in consideration of letting the suit premises would also amount to fine or premium because donation is not to be returned. It is therefore necessary to consider whether the expression used in sec. 18 fine premium or other like sum would include the entire amount of the deposit or it would go with the expression any consideration used thereinas already stated earlier that cannot be the intention of the legislature. The legislature naturally intended that the landlord should not exploit the situation and should not obtain ill-gotten gains in respect of the lease of the premises given by himself. In that context the question of sentencing the accused to pay fine which shall not be less than the amount of fine or premium or like sum would be just and proper. But to sentence a person to pay a fine equivalent to the amount of the deposit which is not only to be returned within one year from the date of handing over possession by the tenant but over which a monthly interest of Rs. 20/was to be paid by the landlord to the tenant would in my opinion not be conducive to justice. 20/was to be paid by the landlord to the tenant would in my opinion not be conducive to justice. In the case referred to above the Bombay High Court has not considered the aspect regarding the minimum punishment which has got to be awarded by the court. Thus merely because the Bombay High Court had confirmed the order of conviction and sentence passed by the learned Presidency Magistrate will not be helpful in the present case. Similarly the case of Vithal Krishnaji Nivendkar v. Parduman Ram Singh 64 B. L. R. 770 could be distinguished. In that case also a sum of money paid ostensibly as donation to a person acting on behalf of charitable trust for grant of lease of premises belonging to trust was construed as coming within the expression of fine or premium or deposit by the Supreme Court. It was observed at page 772. IT is farther contended that the amount paid does not come within the expression premium or consideration in sub-sec. (1) of sec. 18 of the Act. We do not agree. Premium means any amount paid for the purpose of getting a lease. It was certainly paid as a consideration for obtaining the lease in this case. We agree with the High Court that there is no reason to restrict the expression consideration to non-pecuniary consideration alone as was held in Karsmsey Kanji v. Velji Virji. No good reason exists for restricting the meaning of this word to non-pecuniary consideration alone even though any pecuniary consideration paid in respect of the grant of the lease will usually come within the expression `premium. The fact that the sentence of fine according to the provisions of sub-sec. (1) of sec. 18 is not to be less than the value of the consideration received is not sufficient to limit the expression consideration to-non pecuniary consideration alone. It was further observed :-THE addition of the words deposit or any consideration in sub-sec. (1) of sec. 18 must have been to cover all payments besides the standard rent in consideration of getting the tenancy. In the circumstances it need not be a matter of surprise that certain extra payments may come within more than one of the expressions fine premium other like sum deposit or consideration. With these observations the Supreme Court confirmed the order of the Bombay High Court and dismissed the appeal. In the circumstances it need not be a matter of surprise that certain extra payments may come within more than one of the expressions fine premium other like sum deposit or consideration. With these observations the Supreme Court confirmed the order of the Bombay High Court and dismissed the appeal. ( 7 ) AS stated earlier this case could easily be distinguished from the facts of the instant case. In the instant case the amount of deposit was not to be appropriated by the landlord to his own use. It was merely kept as a security and was to be repaid after the tenant vacated the premises. Besides interest was to be paid to the tenant on the amount of the deposit every month. In view of this state of affairs it would be difficult to say that the amount kept as a deposit would be equivalent to the fife or premium where the whole amount usually is appropriated by the landlord. In such cases of deposit or loan which is required to be returned value of consideration would not be value of the whole amount of deposit or loan but would be loss of amount which a person depositing or giving loan may suffer by way of interest. In the instant case the tenant does not suffer any loss by way of interest because Rs. 20/p. m. were charged as interest on the amount of Rs. 2100/kept as a deposit with the landlord. Under the circumstance it would not be proper to punish the landlord by sentencing him to pay a fine equivalent to the amount of deposit. It may be noted here that the tenant fell into arrears of rent which came to Rs. 2000. 00. The landlord has shown his willingness to give credit of the deposit amount towards the arrears of rent. In fact in the suit filed by the landlord against the tenant for recovery of possession of the rented premises on the ground of arrears of rent the learned Judge of the Small Cause Court Ahmedabad had ordered that the amount of the deposit lying with the landlord may be appropriated towards the arrears of rent. It was stated at the bar by the learned Advocate for opponent =no. 1 that out of the amount of Rs. 2100/lying as deposit with him Rs. It was stated at the bar by the learned Advocate for opponent =no. 1 that out of the amount of Rs. 2100/lying as deposit with him Rs. 750/were already given credit towards the arrears of rent so far and that only an amount of Rs. 1350/had remained with him. Thus even though the act of the landlord in accepting the deposit amount is contrary to the provisions of sec. 18 (1) of the Bombay Rent Act this is not a case where the court should sentence him to pay a fine equivalent to the amount of the deposit. It is the tenant who has come in revision against the order passed by the learned City Magistrate. The tenant has not come with clean hands in court. After getting the premises on rent he did not care to pay any rent to the landlord. Thus in a way the landlord was right in taking the amount of deposit from him as a security towards payment of rent though his act no doubt is contrary to the provisions of sec. 18 (1) of the Rent Act. But taking into consideration the conduct of the tenant in not paying any rent to the landlord and the conduct of the landlord not only acknowledging the amount of the deposit but giving interest thereon it cannot be said that the order passed by the learned City Magistrate merely admonishing the accused-opponent No. 1 for the offence committed under sec. 18 (1) of the Act and directing him to pay Rs. 100/as compensation to the tenant is not just and proper under circumstances. ( 8 ) MR. Vidyarthi learned Advocate appearing for the landlord invited my attention to the two unreported judgments of the Bombay High Court wherein it was observed by the division bench of the Bombay High Court consisting of Chainani and Shah JJ. in criminal appeal No 1058 of 1956 decided on 11-9-1956 thatit has been held by this court that where the consideration for a lease is a loan free of interest the value of the consideration is the amount of interest on the amount of the loan advanced to the landlord. The learned trial Magistrates view that the minimum amount of fine in this case had to be Rs. 3000/was therefore not correct. We reduce the fine imposed upon the appellant to Rs. 1000. 00. The learned trial Magistrates view that the minimum amount of fine in this case had to be Rs. 3000/was therefore not correct. We reduce the fine imposed upon the appellant to Rs. 1000. 00. Apart from this modification in the sentence passed upon the appellant the appeal will be dismissed. The excess amount of fine if paid be refunded. SIMILARLY in appeal No. 37 of 1956 with appeal No. 38 of 1956 decided on 10-4-1956 the Division Bench consisting of Dixit and Chainani JJ. took the same view and while considering the sentence under sec. 18 (1) of the Act which provided that fine shall not be less than the value of consideration received observed thatin these cases we find it difficult to determine the value of the consideration. There is no evidence to show at what rate of interest it was possible for accused No. 2 to obtain loans at the time when he entered into the agreements with Parchure and Kanitkar. There is also no evidence to show that it was not possible for him to borrow loans from other persons at 3%. As therefore it is not possible to determine the value of the consideration the fine in each case Will be of such an amount as must be regarded as reasonable under the circumstances of the case. Thereafter considering the relevant conduct of the tenant and landlord respectively they further observedthe object of filing the complaints 3 years later does not appear to have been to vindicate justice but in order to apply pressure on accused No. 2 after he had been adjudged as an insolvent so that he might pay back the loans advanced to him. In these circumstances we think that the fines of Rs. 600/and Rs. 450/imposed on accused No. 2 are rather heavy. We reduce the amount of fine imposed upon him in each case to Rs. 100/in the instant case also it can be stated with equal force that the tenant after having fallen into arrears of rent to the tune of more than Rs. 2000/thought it fit to file a complaint against the landlord which cannot be said by any reasoning to vindicate justice. In my opinion therefore the order passed by the learned City Magistrate cannot be said to be unreasonable under the circumstances. In any case I see no reason to interfere with the same. 2000/thought it fit to file a complaint against the landlord which cannot be said by any reasoning to vindicate justice. In my opinion therefore the order passed by the learned City Magistrate cannot be said to be unreasonable under the circumstances. In any case I see no reason to interfere with the same. ( 9 ) MR. Memon learned Advocate for the applicant however urged that said Bombay decisions were contrary to the decision of the Supreme Court referred to above and therefore they cannot be said to be laying down correct proposition of law. He urged that in view of the decision of the Supreme Court stated above the court had no option but to sentence the accused to pay a fine which shall not be less than the amount of the deposit. I do not agree. As already explained earlier the decision of the Supreme Court was in respect of the amount of donation which the landlord had accepted in respect of the grant of the lease. Naturally the tenant who paid the donation amount lost the whole amount. Under the circumstances the court was right in insisting on sentencing the accused to a fine which shall not be less than the amount of the consideration. In the instant case not only the whole deposit amount was to be returned to the tenant but it carried interest every month. The decisions of the Bombay High Court are with regard to the amount of loan accepted by the landlord which was to be repaid. Therefore the ratio of the Bombay cases would be applicable to the facts of the instant case and with respect I am in entire agreement with the view taken by the Bombay High Court. 10 In the result the revision application fails and is rejected. .