Tmt. Vasantha Raman v. Thiru Sri Ramamoorthy — 1995 DIGILAW 35 (MAD)

Judgment :- 1. The revision petitioner is the landlady in R.C.O. No. 2709 of 1988 in the Court of XII Judge, Court of Small Causes, Madras. The respondent is the tenant of the premises bearing door No. 16, Raja Street, Robertsonpet, Madras-28. The rent agreed was Rs. 2,800/- per month. As per the revision petitioner, the tenancy commenced on 20th February, 1988, under the original of Ex. P. 7 lease-deed dated 18.2.1988. The rent is payable by English Calendar month. The respondent has failed to pay the rent for the period from first March, 1988 to 31st August, 1988. Besides, though the premises was let out only for residential purpose as per Ex. P. 7 agreement, the respondent is running his business in the name and style of “Srikanth Construction Private Limited”, in the said premises. So she sought eviction under Section 10(2)(i) for wilful default and under Section 10(2)(ii) (b) of the Tamil Nadu Buildings (Lease and Rent Control) Act 18 of 1960 for using the building for the purposes other than that for which it w as leased. 2. The respondent-tenant pleaded that the landlady had received a sum of Rs. 20,000/- from him by way of rental advance as per Ex. R. 1 receipt dated 18.2.1988. It was mutually agreed between the parties that out of the advance of Rs. 20,000/- the landlady would retain the statutorily permissible one months advance of Rs. 2,800/- with her and adjust the balance of Rs. 17,200/- towards further rent payable by the tenant for the premises from 1.3.1988 onwards. Subsequently, the landlady has been adjusting the rent as per the agreement. There shall be no arrears in case the rent is so adjusted till August, 1988 and for the period commencing from 1.9.1988, the tenant has been making payments regularly. The tenant further claimed that he was not running any business in the name of Srikanth Construction Private Limited in the petition mentioned premises. 3. Learned Rent Controller found in favour of the landlady on both the points and ordered eviction within a period of three months. Aggrieved by the said order, the tenant took up the matter in R.C.A. No. 353 of 1990 before the Appellate Authority/VIII Judge, Court of Small Causes, Madras. 3. Learned Rent Controller found in favour of the landlady on both the points and ordered eviction within a period of three months. Aggrieved by the said order, the tenant took up the matter in R.C.A. No. 353 of 1990 before the Appellate Authority/VIII Judge, Court of Small Causes, Madras. The Appellate Authority took the view that they landlady has no right to receive any amount besides the agreed rent as advance under S. 7(2)(b) of Tamil Nadu Act 18 of 1960. There is no provision in the said Act to stipulate for receipt of any security or caution deposit which will be retained by the landlady till possession of the building is handed over to her without any damage. Any agreement to circumvent the provisions of Act 18 of 1960 is void and enforceable. He held that there was neither wilful default nor conversion of the building to a different user and accordingly, allowed the appeal and reversed the order of eviction passed by the Rent Controller and dismissed the eviction petition. He directed the parties to bear their respective costs. And this revision is directed against the said order. 4. There is no dispute that the respondent is a tenant of the petition mentioned premises under the revision petitioner landlady on a monthly rental of Rs. 2,800/- as per Ex. P. 7 agreement dated 18.2.1988. On the same day, under Ex. R. 1 receipt, the tenant had paid Rs. 20,000/- in favour of the landlady. The landlady as P.W. 1 has stated in the witness box that in case the rent due for the six months from March, 1988 to August, 1988 is adjusted towards the above said deposit of Rs. 20,000/- there will be no arrears for the said period. Thiru T. Viswanatha Rao, learned counsel for the respondent argues that as per the mandate provided in Section 7(2) of Tamil Nadu Act 18 of 1960 the landlady is not entitled to retain the sum of Rs. 20,000/- with her. She is duty bound to refund or adjust whatever amount remained with her in excess of one months rent. The terms of Ex. P. 7 lease agreement regarding the payment of Rs. 20,000/- as advance are null and void, since they are in contravention of Section 7(2) of the Act. So the nature and character of the deposit assumes importance. She is duty bound to refund or adjust whatever amount remained with her in excess of one months rent. The terms of Ex. P. 7 lease agreement regarding the payment of Rs. 20,000/- as advance are null and void, since they are in contravention of Section 7(2) of the Act. So the nature and character of the deposit assumes importance. We have also to consider whether any such deposit in excess of the month rent is violative of the provisions of Section 7(2) of the Act 18 of 1960, Whether the respondent/tenant has any right to have the rent due by him for the said six months period adjusted with the sum of Rs. 20,000/- remaining with the landlady is the controversy herein. 5. Section 7(2)(b) of the Tamil Nadu Buildings (Lease and Rent Control) Act 18 of 1960 reads as follows:— “7(2) where the fair rent of a building has not been so fixed- (a) the landlady shall not claim, receive or stipulate for the payment of, any premium or other like sum in addition to the agreed rent; Provided that the landlady may receive, or stipulate for the payment of, an amount not exceeding one months rent, by way of advance; (b) save as provided in clause (a), any sum paid in excess or the agreed rent, whether before or after the date of the commencement of this Act in consideration of the grant, continuance or renewal of the tenancy of the building after the date of such commencement, shall be refunded by the landlord to the person by whom it was paid or, at the option of such person, shall be otherwise adjusted by the landlord”. 6. Thiru. V. Narayanaswamy, learned counsel for the revision petitioner submits that the above said provision does not cover the sum of Rs. 20,000/- deposited by the tenant with the landlady, What is contemplated under Section 7(2) of the Act is payment of any premium or other like-sum in addition to the agreed rent. Premium in the context means some payment in the nature of a price and which is not refundable. The expression “or other like sum” in the clause should be understood ejusdem generis to the word “premium” and only a payment which has some resemblance to what is comprehended by the word premium will come within the scope of the words “or other like sum”. The expression “or other like sum” in the clause should be understood ejusdem generis to the word “premium” and only a payment which has some resemblance to what is comprehended by the word premium will come within the scope of the words “or other like sum”. According to him, the above said sum of Rs. 20,000/- is only a security or caution deposit for the proper maintenance of the building during the tenure of tenancy and handing over possession in the same condition in which it was taken at the time of commencement of lease. 7. In support of his contention, he placed reliance on a judgment of Veerasamy. J., (as he then was) in Abdul Rahim v. State of Madras (1962 I M.L.J. 272 = (1961)74 L.W. 355 ) There the scope of Section 6(2)(a) and 16(1) of Madras Buildings (Lease and Rent Control) Act (25 of 1949) whose language are in paramateria with the provisions of Section 7(2) of the present Act came up for consideration. The lease-deed in that case provided for payment by the tenant to the petitioner of a sum of Rs. 500/- as advance which was refundable without interest on the tenant vacating the premises in his occupation. The question was whether this provision for the payment of the amount and refund of the same on the contingency contemplated was within the mischief of Section 6(2)(a) of that Act. Learned Judge therein pointed out that the word “premium” is well understood expression used in contradistinction to the word rent, normally payable either periodically or on specific occasions. Section 105 of the Transfer of Property Act defines that the price paid or promised in consideration of a lease is called the premium and that the money, share of crops, serviced or other thing paid periodically or on specific occasions or to be rendered at such times by the tenant is called the rent. Some times a premium paid in certain circumstances may almost resemble a loan, when, of course, the amount is repayable. If the amount paid is not refundable, it will present no difficulty for that will undoubtedly be premium. But the payment being on condition that the amount is refundable on the happening of a certain event, it is necessary to determine whether the amount can be said to be “premium”. If the amount paid is not refundable, it will present no difficulty for that will undoubtedly be premium. But the payment being on condition that the amount is refundable on the happening of a certain event, it is necessary to determine whether the amount can be said to be “premium”. No direct decided case on the point was brought to the notice of learned Judge. His Lordship found that the cases cited at the Bar related to the English Rent Control Acts using different phraseology on particular contexts and none of them was of much assistance in deciding the scope of the words “any premium or other like sum” in sub-Section (2)(a) of Section 6 of the Madras Buildings (Lease and Rent Control) Act, 1949. Learned Judge took the view that an amount which is received but not as a price but as money refundable on the happening of a stipulated event cannot be held to be premium. Premium as ordinarily understood is a lump sum payment made outright as price for a lease. In the context of the words “in addition to the agreed rent” in clause (a) of sub-section (2) of Section 6 of Madras Act 25 of 1949, what is contemplated by “premium” is something other than the agreed rent. The premium in the context of the words used involves the idea that what is paid should be in the nature of money which is refundable. On the question whether such as amount was within the scope of “other like sum” occurring in Section, learned Judge held that they have to be understood in the light of the doctrine of ejusdem generis . Only a sum which has some resemblance to what is comprehended by the word “premium” that will come within the scope of the words “other like sum”. So we have to interpret the present provision of Section 7(2) of the Tamil Nadu Buildings (Lease and Rent Control) Act 18 of 1960 as per the ratio laid down in the case referred to above. So we have to interpret the present provision of Section 7(2) of the Tamil Nadu Buildings (Lease and Rent Control) Act 18 of 1960 as per the ratio laid down in the case referred to above. I am unable to accept the arguments of learned counsel for the respondent/tenant that the above said decision cannot help the case, since it was rendered in connection wit h the construction under Section 6(1) read with Section 6(2)(a) of Madras Act 25 of 1949, nor I am persuaded to subscribe to the claim of learned counsel for the respondent that Section 7(2)(b) of the Act 18 of 1960 prohibits payment of any sum in excess of the agreed rent irrespective of its context and purpose. Instead I am of the view that the proviso to Section 7(2)(a) regarding receipt of advance limited to one month cannot take in its fold all payments irrespective of their purpose and context. Whether any money paid in addition to one month rent will come within the ambit of Section 7(2)(b) will depend upon the circumstances of each case. 8. In the light of the principles enunciated in the decision referred to above let us now examine the terms of Ex. P. 7 lease deed which provides that the lessor has agreed to let out the premises on condition that the lessee should deposit a sum of Rs. 20,000/- by cash with, the lessor and the lessee shall vacate and deliver vacant possession immediately on the expiry of the period of 11 months. The deposit of Rs. 20,000/- made by the lessee should be returned without interest to the lessee on his vacating and delivering vacant possession of the house on the expiry of the said period. The lessee has undertaken to vacate and deliver vacant possession of the house in good condition immediately on the expiry of the period of 11 months. The lessee also agrees that the amount deposited as security will be refunded to him after he delivers vacant possession of the premises let out to him after deduction of the cost of repairs or other damages caused by the lessee, which amount shall be determined by the lessor at her sole discretion which shall be final and binding on the lessee. A reading of the above said terms of the lease deed clearly shows that the refund of the money is contemplated only on the happening of a contingency of the tenant handing over possession of the premises without any damage. So it is more in the nature of a caution deposit rather than the part of the rent even though it is a fact that this deposit enables the landlady to utilise the sum of Rs. 20,000/- without interest during the tenure of the tenancy. 9. Learned counsel for the revision petitioner further argues that even if the deposit is construed as an advance and not as a security or caution deposit, there cannot be any automatic adjustment of the arrears or rent with this money. Even if holding of such deposit is null and void as per the terms of Section 7(2) of the Act, the only remedy open to the tenant is to file a separate action for the recovery of the said amount. Without calling upon the landlady to adjust the said amount with the arrears of rent and thereby exercising her option, he cannot resist an action for eviction on the ground of wilful default. Ex. P. 1 is the notice dated 13.6.1988 issued by the landlady to the tenant calling upon him to deliver vacant possession on the ground that the tenant has failed to pay the rent from 1st March, 1988 onwards inspite of repeated demands. Ex. P. 2 is the reply given by the tenant on 20.6.88 pleading about the oral consensus reached between the parties entered into at the time of inception of tenancy regarding adjustment of the rent for the month of March, April, May, 1988 from the excess rental advance available with the landlady. Ex. P. 3 is the second notice passed from the landlady to the tenant on 25.6.1988 denying about the oral agreement. Instead, this notice asserts that the amount of Rs. 20,000/- retained by her is only a security deposit for the upkeeping of the building and any damage to the same. Ex. P. 4 is the reply sent by the tenant on 13.7.1988 reiterating that the sum of Rs. 20,000/- is only a rental advance. Ex. P. 5 is the lawyers notice dated 22.7.1988 stating that the landlady has no other go, but to initiate appropriate legal proceedings for eviction. Ex. P. 4 is the reply sent by the tenant on 13.7.1988 reiterating that the sum of Rs. 20,000/- is only a rental advance. Ex. P. 5 is the lawyers notice dated 22.7.1988 stating that the landlady has no other go, but to initiate appropriate legal proceedings for eviction. It is, therefore, seen that there is no communication from the tenant expressly calling upon the landlady to adjust the sum of Rs. 20,000/- retained by her to the arrears of rent for the months due to her. The only claim made in these communications by the tenant is that as per the mutual oral agreement arrived at between the parties at the time of inception of the tenancy, the landlady can retain only one months rent as advance and is to adjust the balance with the arrears of rent due to her. The stand taken by the respondent/tenant in his counter also is that even at the inception of the tenancy, it was mutually agreed between the parties that out of the rental advance of Rs. 20,000/-paid by him to the landlady, she will retain the statutory permissible one months advance of Rs. 2,800/- and the balance amount of Rs. 17,200/- to be adjusted towards further rent payable by him for the premises from 1.3.1988 onwards, and as per the terms of the oral arrangement, the landlady has been adjusting the rent for the months from March, 1988. So the tenant never exercised his option either for refund of the advance or otherwise adjust the same as contemplated under S. 7(2) (b) of the Act. Having failed to indicate his preference or exercise his option he cannot now plead that the rent due by him if adjusted with the amount remaining in the hands of the landlady, there will be no arrears. And the mutual oral agreement pleaded contrary to the terms of Ex. P. 7 lease deed is not valid in law. 10. Whereas Thiru. T. Viswanatha Rao, learned counsel for the respondent placed reliance on the expression “advance deposit” used in Ex. P. 1 receipt to substantiate his plea that it represents only part of the rent agreed. But as pointed out by the Apex Court in Commissioner of Income Tax. v. Panbart Tea Co. , (A.I.R. 1965 S.C. 1871), it is the substance of the transaction and not the form that matters. P. 1 receipt to substantiate his plea that it represents only part of the rent agreed. But as pointed out by the Apex Court in Commissioner of Income Tax. v. Panbart Tea Co. , (A.I.R. 1965 S.C. 1871), it is the substance of the transaction and not the form that matters. The nomenclature may not be decisive or conclusive but it helps the Court, having regard to the other circumstances, to ascertain the real intention of the parties. 11. Learned counsel for respondent further submitted that the parties to the contract were unequal. The tenant was acting under compulsion of circumstances and was obliged to succumb to the will of the landlady, who was in a dominating position. If the tenant had not agreed to advance the loan, he would not have been able to secure the tenancy. So the sum of Rs. 20,000/- paid by the tenant would come well within the meaning of the expression “premium” or “other like sum” in addition to the agreed rent in S ection 7(2)(a) of the Act. However, in the context and purpose of the deposit as stipulated in Ex. P. 7 lease-deed, this contention is untenable. 12. The main argument of learned counsel for the respondent is that so long as the advance remains with the landlady in contravention of the provisions of Section 7(2) of the Act, no question of wilful default can arise. He sought to substantiate his contention by placing reliance on modern Hotel, Gudur v. K. Radha krishiah (A.I.R. 1989) S.C. 1510 = 1990-1 L.W. 560) and Kranti Swarup Machine Tools (P) Ltd. v. Kantabai Asawa (A.I.R. 1994 S.C. 1216=1994-2-L.W. 18) In the first citation the landlord had Rs. 5,000/- on tenants amount with him as advance amount which he was holding for years without paying interest. Held that such conduct was against the clear provisions of Section 7 of Andhra Pradesh Building (Lease, Rent and Eviction) Control Act (1960). As holding of this money was against the clear statutory bar, there could be no justification for granting a decree of eviction of the plea of arrears of rent. In view of the fact that the stipulation that the amount would be refundable at the end of the tenancy is null and void under S. 7(3) of the Act, the amount became payable to the tenant immediately and the landlord with Rs. In view of the fact that the stipulation that the amount would be refundable at the end of the tenancy is null and void under S. 7(3) of the Act, the amount became payable to the tenant immediately and the landlord with Rs. 5,000/- of the tenant with him could not contend that the tenant was in default for a smaller amount by not paying the rent for some months. In Kranti Swarup Machine Tools (P) Ltd. v. Kantabai Asawa the tenant had deposited with the landlady a sum of Rs. 10,000/- under clause 3 of the Tenancy agreement. That deposit was not to carry any interest. It would be adjusted at the termination of the tenancy towards the rent, light bills and damages, which may be found due. This deposit was to be returned to the tenants only at the time of the tenant vacating the premises. As regards municipal taxes, the obligation to pay the same should arise within one month from the date of intimation by the landlady. Admittedly, the tenant had not been intimated about the payment in relation to the municipal taxes and rent included municipal taxes as agreed to between the parties. Alleging that the tenant has committed wilful default in payment of rent as well as the taxes due to the Municipal Corporation in respect of the demised premises, the landlady filed eviction petition. The Rent Controller came to the conclusion that the tenant had committed wilful default in payment of rent as well as municipal taxes. Accordingly, the eviction-petition was allowed. The Appellate Authority took a contrary view and reversed the findings of the Rent Controller. The High Court was of the view that concerning the municipal taxes, it would not be said that the tenants had not committed any wilful default in payment of those taxes. It was found that the default had been committed by the tenant in respect of taxes and the same amounted to wilful default in payment of rent which would entitle the landlady to evict the tenants. So the revision petition was allowed. The tenant took up the matter before the Supreme Court. The Apex Court held that the High Court ought to have examined the object of tenant depositing a huge sum of Rs. 10,000/- with the landlady. The deposit was to be adjusted towards rent also in addition to the electricity charges or damages. So the revision petition was allowed. The tenant took up the matter before the Supreme Court. The Apex Court held that the High Court ought to have examined the object of tenant depositing a huge sum of Rs. 10,000/- with the landlady. The deposit was to be adjusted towards rent also in addition to the electricity charges or damages. Under Section 7(2)(a) of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960, the landlady is forbidden to receive any premium or other like sums in excess of the agreed rent. Even if the tenant fails to ask the landlady to make adjustment of the advance amount, eviction on the ground of wilful default cannot be ordered. Merely because a small sum by way of municipal taxes has not been paid, it does not mean that tenant is liable to be evicted. 13. On the strength of these two decisions learned counsel for respondent submitted that since the language used in Section 7 of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act 1960) is the same as that in Section 7 of the Tamil Nadu Act 18 of 1960, the ratio laid down by the Supreme Court in the cases referred to above squarely applies to the facts of the present case and the stipulation in Ex. P. 7 lease agreement for holding the sum of Rs. 20,000/- till the expiry of the lease period is null and void. Since the landlord is having a huge sum on tenants account with him which amount he is holding for arrears without paying interest against the statutory bar, there could be no justification for grant of decree of eviction on the plea of arrears of rent. 14. Learned counsel for the respondent also placed strong reliance of the judgment of Bellie, J., in Nazimudhin Ahmed v. Narasimha Rao (1993 2 M.L.J. 39) There, learned Judge has held as follows:— “Thus, there is mandate of law to the landlord to refund that amount even though the tenant has not asked for that. But an option is given to the tenant to tell the landlord to adjust that amount towards rent and that the landlord shall do. But an option is given to the tenant to tell the landlord to adjust that amount towards rent and that the landlord shall do. The question is when the landlord has not refunded the said excess amount as enjoined on him by law even though the tenant has not asked him to adjust that amount towards the arrears of rent, can it be said that the tenant has committed wilful default in payment of rent. Obviously not, when the tenants amount is with the landlord which the landlord ought to have refunded and he failed to do so and the amount is more than the al leged arrears of rent it does not lie in the mouth of the landlord to say that the tenant committed default much less wilful default in payment of rent because rent amount payable by the tenant and even more is already with the landlord.” 15. In Bhoja v. Rameshwar Agarwala (A.I.R. 1993 Supreme Court 1499), cited by revision petitioner the scope of Sections 4 and 11 of Bihar Buildings (Lease, Rent and Eviction) Control Act (3 of 1947) came up for consideration before the Supreme Court. Section 4 states that it shall not be lawful for any landlord to increase or claim any increase in the rent except in accordance with the provisions of that Act. There the Supreme Court has held is follows:— “The Act does not contain any provision for automatic adjustment of excess rent. A tenant cannot save himself from the consequence of eviction under the Act on the ground of default in the payment of rent by claiming automatic adjustment of any excess rent paid consequent upon mutual enhancement of rent, even if illegal unless there is an agreement between the parties for such an adjustment. The tenant may also in a given case seek adjustment of the excess rent in the hands of the landlord against the arrears by specifically asking the landlord for such an adjustment before filing of the suit or in response to the notice to quit and even in the written statement by way of set off within the period of limitation and by following the procedure for claiming such a set off, while resisting the claim for eviction on the ground of default in payment of arrears of rent but he cannot claim ‘automatic adjustment’. The Apex Court in the course of their judgment has referred to the judgment of this Court in Nune Panduranga Rao v. Divvala Gopala Rao (A.I.R. 1952 Madras 827=65 L.W. 159) and expressed that they are in broad agreement with the view of this Court therein. There, while construing Section 7(2) of the Madras Buildings (Lease and Rent) Control Act, this Court has held: “Under the express provisions of this Section if the tenant has not paid of tendered the rent due by him within the time prescribed therein he is liable to be evicted. The Section does not compel a landlord to adjust the excess amounts in his hands towards any arrears of rent if the said amounts were not paid by the tenant towards the rent of any particular month. It is true that on the date when a tenant authorises the landlord to adjust the amounts with him towards the rent of any particular month or months the amounts will be deemed to have been paid on that date towards rent. But till that adjustment is made and the amount if so appropriated, any amounts in excess of the rent due with the landlord will only be payments made in suspense. The fact that such excess came into the hands of the landlord by reason of the Rent Controllers order fixing the fair rent does not really affect the question. The amount not paid towards rent of any particular month and the amount not agreed to be adjusted toward s any rent of a particular month is not payment of rent within the meaning of Section 7(2) of the Act.” 16. In Nand Lal v. Ganesh Prasad (A.I.R. 1988 S.C. 1821) the Supreme Court has said that without the tenant calling upon the landlord to adjust the excess payment towards arrears of rent, he cannot seek such a right in the suit filed by the landlord by was of defence in the suit for eviction. There Section 8(2) of Bihar Buildings (Lease, Rent and Eviction) Control Act of 1977 stated that any payment made in excess of given rent fixed for a building has to be refunded to the person by whom it was paid or at the option of such person it has to be adjusted towards the arrears of rent. There Section 8(2) of Bihar Buildings (Lease, Rent and Eviction) Control Act of 1977 stated that any payment made in excess of given rent fixed for a building has to be refunded to the person by whom it was paid or at the option of such person it has to be adjusted towards the arrears of rent. Be it noted that the very same question in this case has been considered by the Apex Court in this decision. 17. In P.S. Venkatarajan v. T.A. Govindarajan (1990-1-L.W. 563) “in the tenancy agreement there was no provision whatever for an adjustment of the advance amount towards the rents payable by the petitioner, the tenant did not ask for the refund of the advance paid nor for adjustment by exercise of an option as contemplated under Section 7(2)(b) of the Act.” Ratnam, J., (as he then was) has suecinctly stated the law as under: “It is clear from Section 10(2)(1) of the Act as well as the Explanation that irrespective of the amount that may be held by the landlord in his hands by way of advance, the tenant is under an obligation to pay the rent as provided under Section 10(2)(1) of the Act, or even within a period of two months as contemplated in the Explanation, as otherwise he may be visited with, the consequence of committing wilful default entailing non-availability of Protection against the removability. It is in the backg round of Section 10(2)(1) of the Act and the Explanation, that Section 7(2) of the Act has to be considered. Section 7(2)(b) of the Act provides for certain remedies to the tenant in a case where any sum in excess of the agreed rent except as provided under Section 7(2)(a) of the Act is paid in consideration of the grant, continuance or renewal of the tenancy of the building. In such a case, two mutually exclusive rights are conferred on the tenant. One such right is to seek a refund of the amount from the landlord and the other is to ask for an adjustment by the landlord. In such a case, two mutually exclusive rights are conferred on the tenant. One such right is to seek a refund of the amount from the landlord and the other is to ask for an adjustment by the landlord. In other words, refundability of the amount paid in excess of the permissible limit under Section 7(2)(a) read with the proviso would be lost by asking for an adjustment of the amount by the person who paid it and an adjustment of the amount paid in contravention of Section 7(2)(a) of the Act, would not be available, if a refund is asked for by the person by whom it was paid Section 7(2)(b) of the Act statutorily makes available to the tenant one of two rights, viz. , a refund of the amount paid in excess of the permissible limit or the exercise of an option for an adjustment of the amount so paid in excess by the landlord. When statutorily the right to seek a refund or an adjustment on the tenant is conferred under Section 7(2)(b) of the Act, in a case where the amount in excess of the permissible limit is paid, it would appear that the declaration of the void nature of the stipulation contemplated under Section 7(3) of the Act as being in contravention of Sub Sec tion (1) or Sub Section (2) would be preferable to the right to refund or seek an adjustment conferred under Section 7(2)(b) of the Act.” In this case learned Judge has referred to the Judgment of the Supreme Court in Modern Hotel, Gudur v. Radhakrishnaiah as well as Nandlal v. Ganesh Prasad and also the other Judgments of this Court. Learned Judge has distinguished Modern Hotel, Gudur v. K. Radhakrishnaiah in this manner: “The question whether the availability in the hands of the landlord of a sum of Rs. 5000/- would by itself tantamount to an automatic adjustment of either the whole or part of it towards arrears of rent due by the tenant, does not appear to have been specifically adverted to and considered. On the contrary the decision of the Supreme Court in Nandlal Agarwal v. Ganesh Prasad is in accordance with Section 7(2) of the Act and also earlier decisions of this Courts.” 18. In Sahabudeen v. Muniammal (1994) 2 M.L.J. 254 = 1995-2-L.W. 732) the very same question arose for consideration. On the contrary the decision of the Supreme Court in Nandlal Agarwal v. Ganesh Prasad is in accordance with Section 7(2) of the Act and also earlier decisions of this Courts.” 18. In Sahabudeen v. Muniammal (1994) 2 M.L.J. 254 = 1995-2-L.W. 732) the very same question arose for consideration. It was not in dispute therein the landlady had received a sum of Rs. 3000/-by way of advance to be returned at the time of vacating the premises after the expiration of the tenancy. The tenant contended that he was paying the rent of Rs. 140/- per month regularly from the inception of the tenancy. When admittedly the landlady was having the balance amount of Rs. 3300/-out of the loan amount given to her by the tenant, she cannot claim that the tenant has committed wilful default in payment of rent. Srinivasan, J., had elaborately considered all the decisions referred to above and held that in so far as this Court is concerned, it has consistently taken the view that unless the tenant has called upon the landlord to make an adjustment of the advance amount as against the rent he cannot escape the consequences of wilful default in payment of rent. Reliance was placed before him upon the judgment of the Supreme Court in Modern Hotel, Gudur v. Radhakrishnaiah and that of Bellie, J., in Nazimudhin Ahmed v. Narasimha Rao . After adverting to the ration laid down by the Apex Court, leaned Judge has felt that it was not applicable to the facts of the case before him. He found that the Supreme Court had another weighty reason for coming to that conclusion. That was on the footing that the lease was for the period of 30 years which was to expire only by the end of the century and therefore the contractual tenancy was subsisting under the provision of the Transfer of Property Act and there could not be any eviction from such tenancy. Apart from that, the Supreme Court has not considered any of the Judgment of this Court which had taken the view that the tenant cannot escape the consequence of wilful default unless he has made a request for adjustment of the advance amount as against the rent. Apart from that, the Supreme Court has not considered any of the Judgment of this Court which had taken the view that the tenant cannot escape the consequence of wilful default unless he has made a request for adjustment of the advance amount as against the rent. Further, the decisions of this Court have not been overruled by the Supreme Court in that case, His Lordship chose to follow Nand Lal Agarwal v. Ganesh Prasad (A.I.R. 1988 S.C. 1821) where in the very question has been considered and the contrary view has been expressed by Supreme Court. He pointed out that this earlier Judgment of the Supreme Court in Nand Lal Agarwals case has not at all been referred in the latter case decided by the Supreme Court in Modern Hotel, Gudur v. Radhakrishnaniah . Srinivasan, J, did not choose to follow the Judgment of the Supreme Court in Krent Swarup Machine Tools Limited v. Smt. Kanta Bai (1994) 1 S.C. 211 =1994-2-L.W. 18) for the reason that the Bench only followed the decision in Modern Hotel, Gudur case for coming to the conclusion. And in that case also, there was no reference whatever to the judgments of this Court taking a different view. In that situation it cannot be considered that the view taken by this Court all along has been reversed by the Supreme Court. Learned Judge then referred to Navaneethammal. In re. , (1950) 2 M.L.J. 579 ) wherein a Division Bench of this Court has held that the tenant who committed wilful default in payment of rent, in order to invoke the provisions of Sub Section (c) of Section 6 of the Act., as it stood then, should have exercised the option and called upon the landlord to make the adjustment and the mere fact that the landlord had with him an advance rent does not mean that the tenant had not committed default within the meaning of Section 7(2) of the present Act. After stating that a similar view has been taken by Ratnam, J, in P.S. Venkatarajan v. T.A. Govindarajan (1990-1 L.W. 563) learned single Judge felt that in view of the above said Judgment and particularly the Judgment of the Division Bench in Navaneethammal. In re. After stating that a similar view has been taken by Ratnam, J, in P.S. Venkatarajan v. T.A. Govindarajan (1990-1 L.W. 563) learned single Judge felt that in view of the above said Judgment and particularly the Judgment of the Division Bench in Navaneethammal. In re. , (1950) 2 M.L.J. 579 =63 L.W. 1176) which is binding on him, the view taken by Bellie, J., in Nazimudhin Ahmed v. Narasimha Rao (1993) 2 M.L.J. 39 ) was not binding on him. I am in respectful agreement with the reasoning of learned Judge and particularly in view of the ruling to Nand Lal v. Ganesh Prasad (A.I.R. 1988 S.C. 1821), I hold that the respondent herein is guilty of wilful default and the verdict given by the Appellate Authority is unsustainable. 19. The respondent/tenant as R.W. 1 admits in his evidence that he is a Civil Engineer and a building contractor. He is doing business under the name and style of “Srikanth Construction Private Limited” which is a Private Limited Company. The registered office of the company is located at door No. 25 Dr. Rangachari Road, Alwarpet, Madras. However, we find from Ex. P. 9 that the tenant had stated in Form No. 18 furnishing to the Registrar of Companies under the Indian Companies Act that the registered offic e of the Company was changed from the above said premises to the petition mentioned building with effect from 14th April, 1988. Ex. P. 10, discloses that the registered office was located there till 16.3.1989. This would indicate that on 15.9.88 the date of eviction petition the company had its registered office in the demised premises. On the strength of this factor, learned Rent Controller took the view that the building is used for non-residential purpose. Whereas the Appellate Authority held that merely from the fact that the registered office is located in the disputed building and that the name board of the company is hanging on the front will of the premises, it cannot be said that the building is used for business purpose which is other than that for which the property was leased out. 20. Learned counsel for the present respondent submitted that the location of the registered office cannot mean that the business of the company is being carried on there even if the tenant is the proprietor of the business concerned. 20. Learned counsel for the present respondent submitted that the location of the registered office cannot mean that the business of the company is being carried on there even if the tenant is the proprietor of the business concerned. The construction activity is not done in the premises. For the purpose of correspondence the company has to have an office address. And this will not make the property leased out as one used for non residential purpose. To substantiate his contention, he relied on S.U.S. Davey and Sons v. Liberty Dry Cleaners (1980 T.L.N.J. 15). There if has been held that merely because the servants of the tenant are allowed to sleep in the premises which has been let out for the purpose of the laundry, it could never mean that the building has been put for a different user. The next decision cited by learned counsel for the respondent is L.D. Meha v. J. Subramaniam (1979 T.L.N.J. 168). There, admittedly the tenancy was for a residential purpose. The tenant was running a factory at Ambattur and he was keeping scrap iron in one room of the house. Ramaprasada Rao, J. (as he then was) held that if a landlord files an application on the ground of conversion or complaints about the user of the demised premises as other than that for which it was let out, then it is incumbent upon him to establish not withstanding the nature of the defence in any particular case by the tenant, that such unauthorised user is substantial and the area in which such prohibited occupation is being carried on bears a substantial proportion to the totality of the area demised by the landlord to the tenant. In Conjal Electronic Industries by its Partners v. A. Rajendran (1970 II M.L.J. Notes of Recent Cases) Ramaprasada Rao, J., (as he then was) has reiterated the same view. It is the contention of the present respondent that there is no such substantial user in this case. 21. Whereas the revision petitioner cited Commissioner of Income-Tax v. B.M. Kharwar (A.I.R. 1969) I S.C.R. 651) in which the Supreme Court has held that the company was a legal entity distinct from the partnership under the general law. It is the contention of the present respondent that there is no such substantial user in this case. 21. Whereas the revision petitioner cited Commissioner of Income-Tax v. B.M. Kharwar (A.I.R. 1969) I S.C.R. 651) in which the Supreme Court has held that the company was a legal entity distinct from the partnership under the general law. So, the revision petitioner claims that the user of the building by the company for its registered office would mean that the building has been put to a different user than that for which it was leased out. However, I am unable to accept his contention that having the registered office of a private limited construction company for the purpose of receiving correspondence would come within the mischief of Section 10(2)ii)(b) of the Tamil Nadu Act 18 of 1960. Be it noted that the activities of the construction company are concerned on elsewhere. Similarly, because the Private Limited Company has a distinct legal entity, that will not make that the premises has been put to a different user. And so there is no infirmity in the view of the Appellate Authority on this aspect. 22. In the result, the Civil Revision Petition is allowed and the order of the Appellate Authority in R.C.A. No. 353 of 1990 is set aside and that of the Rent Controller in R.C.O.P. No. 2709 of 1988 is restored. Time for eviction two months from this date. Parties are to bear their respective costs throughout.