J. Visalakshi Ammal v. T. B. Sathyanarayana — 1996 DIGILAW 780 (MAD)

Judgment :- (Prayer: Petition under Section 25(1)(b) of the T.N.B. (Lease & Rent Control Act praying the High Court to revise the order of the Court of Small Causes (VIII Judge), Madras, dated 21-09-1994 and made in R.C.A. No.1255/93 (M.P. No.700 of 1993 in RCOP. No.1184 of 1993, IV Judge, Court of Small Causes, Madras.) K.A. Swami, C.J. On a reference made by the learned single Judge, this Civil Revision Petition is posted before this Division Bench. 2. The facts, which led to this reference are as follows: Petitioner-landlady filed RCOP.No.1184 of 1993 before the 15th Judge, Court of small Causes, Madras, for eviction of the respondent from the scheduled premises on the ground that he has committed willful default in the payment of rent. The eviction was sought for under Section 10(2) (i) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 (hereinafter referred to as “the Act”). Before RCOP.No.1184 of 1993 was filed, the landlady had filed RCOP.No.466 of 1988 for fixation of fair rent. The agreed rent was Rs.50%- per month. The Rent Controller passed an order dated 10. 1990 fixing the fair rent at Rs.1,396/- per month. The order of the Rent Controller was affirmed by the Appellate Authority by the order, dated 20.4.1993. The revision filed by the tenant was also dismissed. The landlady gave notice to the respondent – tenant on 24. 1993 demanding the difference of the amount between the fair rent fixed and the agreed rent from the date of the order passed fixing the fair rent. The respondent did not respond to the notice and did not pay the arrears. In the counter affidavit filed by him in RCOP No.1184 of 1993, the tenant took a stand that the said petition was not maintainable because he had taken up the matter relating to fixation of fair rent before the revisional authority as against the order of the Appellate Authority. Hence, the petition for eviction was premature. 2A. It is also relevant to notice that the Revision filed by the tenant against the order of the Appellate Authority relating to fixation of fair rent was also dismissed. Hence, the petition for eviction was premature. 2A. It is also relevant to notice that the Revision filed by the tenant against the order of the Appellate Authority relating to fixation of fair rent was also dismissed. When the eviction petition in RCOP.No.1184 of 1993 was pending on the file of the XV Judge, Court of Small Causes, Madras, the landlady filed M.P.No.700 of 1993 under Section 11 (4) of the Act for stopping further proceedings and directing the respondent to put the landlady in possession of the premises on the ground that he has not deposited the arrears of rent as required under Section 11 of the Act. However, the Rent Controller by the order dated 111. 1993 allowed that application. The tenant, being aggrieved by the aforesaid order went up in appeal in RCA.No.1255 of 1993 before the Appellate Authority, who allowed the appeal on the ground that RCOP.No.1184 of 1993 was premature, as it was filed within the period prescribed for filing revision. Aggrieved by the said order of the Appellate Authority, the present revision has been filed. 3. The reference to the Division Bench has been necessitated by reason of the fact that the learned single judge found it difficult to agree with the view expressed in Nelson and Another v. P. Ranganathan Mudaliar (1995 T.L.N.J.270) and C. Ranganathan v. M. Suri (100 L.W.708) 4. In this case, it is not in dispute that the tenant has not paid the arrears of rent accrued as a result of fixation of fair rent even to this day. Whether such failure on the part of the tenant to pay the arrears of rent would amount to willful default, which alone would entitle the landlady to obtain an order of eviction against the tenant is the point that has to be considered. 5. In C. Ranganathan’s case (100 L.W.708) (Supra), Chandurkar, C.J., as he then was, has held that the failure to pay the difference between the fair rent and the agreed rent will not attract the provisions of Sections 10(2) (i) of the Act and consequently, the provisions of Section 11(4) also are not attracted. The relevant portion of the order reads thus: “……Now, it is true that once fair rent if fixed under S.4 of the Rent Control Act, the liability to pay the fair rent is fixed. The relevant portion of the order reads thus: “……Now, it is true that once fair rent if fixed under S.4 of the Rent Control Act, the liability to pay the fair rent is fixed. Even though the liability to pay fair rent dates back to the date of the application, the liability itself gets determined only on the date on which the fair rent is fixed. Until the fair rent is so fixed on an application made by the landlord, during the pendency of such an application the only statutory obligation of the tenant is to pay the “agreed” rent. It is undoubtedly true that where fair rent has been fixed at a figure higher than the agreed rent, the tenant will become liable to pay a higher rent from the date of the application and when agreed rent is paid during the pendency of the application, the landlord will be entitled to claim the difference between the fair rent and the agreed rent for the period covered by the pendency of the application under S.4. However, since the fair rent itself has been fixed at a future date, there is no question of the tenant paying the fair rent either within fifteen days after the expiry of the time fixed in the agreement of tenancy or by the last day of the month next following the month for which rent is payable during the period of the pendency of the application for fixation of fair rent. In such a case, the tenant cannot be said to incur the liability of being adjudged a ‘defaulter’ if he has not paid the difference between the fair rent and the agreed rent. Though it is true that any default in the payment of fair rent after the date on which the fair rent has been fixed would attract the provision of S.10(2)(i) of the Rent Control Act, that provisions cannot be availed of by the landlord for the period prior to the date on which the fair rent is fixed. S.10(2)(i) and the Explanation have to be read together. The ‘default’ to pay referred to in the Explanation is the default contemplated by 8.10(2)(i). Therefore, unless the landlord is entitled to avail of the provision is S.10(2) (i). S.10(2)(i) and the Explanation have to be read together. The ‘default’ to pay referred to in the Explanation is the default contemplated by 8.10(2)(i). Therefore, unless the landlord is entitled to avail of the provision is S.10(2) (i). there is no occasion for the Rent Controller to apply his mind to the question whether the default is willful and consequently the artificial rule of evidence contemplated in the Explanation will also not be attracted to a case to which the substantive provision is S.10(2)(i) will not be attracted. Therefore, in a case where a certain amount becomes due from the tenant as a result of the fair rent, being fixed at a higher figure than the agreed rent, the failure to pay the difference between the fair rent and the agreed rent will not attract the provisions of S.10(2)(i) at all, Consequently, the landlord in the instant case, was not entitled to invoke the provisions of S.10(2)(i) of the Rent Control Act, and the petition filed by him was therefore clearly not maintainable. Consequently, further the provision in S.11(4) cannot be attracted in the instant case. The Appellate Authority was, therefore, right in allowing the appeals filed by the tenant and dismissing the petition for eviction. The revision petitions are therefore dismissed. No costs…” 6. Thus, the view taken in the aforesaid decision is that the failure to pay the fair rent from the date it is fixed would result in default in payment of rent. However, the failure to pay the arrears accruing as a result of difference between the fair rent and the agreed rent will not amount to default. One of the reasons given is that when Section 10(2)(i) refers to ‘rent’ which is not paid or tendered by the tenant that rent is the ‘agreed’ rent’, whereas the fair rent fixed is not the agreed rent. It is also further observed that as the fair rent itself would be fixed at a future date, there is no question of the tenant paying the fair rent either within fifteen days after the expiry of the time fixed in the agreement of tenancy of by the last day of the month next following the month for which the rent is payable during the period of the pendency of the application for fixation of fair rent. It is also further noticed in the said decision that the proviso to Section 10(2) embodies the power of Controller to give relief to the tenant in a case where the default in payment of rent or in tending the rent is not willful. If the Rent Controller is satisfied that the tenant’s default to pay or tender the rent was not willful, there is power given to the Rent Controller to give the tenant a reasonable notice not exceeding 15 days to pay the entire amount due by him upto the date of such payment or tender, if the tenant accordingly pays the entire rent, the application is to be rejected. 7. The aforesaid decision, has been followed by Subramani, J. in Nelson’s case (1995 TLNJ 270) (supra). We may also notice another decision, which has not been referred to in the Order of Reference of the learned single judge, in Hussain v. Kabeer (1990-I-M.L.J.85). In that decision, Abdul Hadi, J. has taken a view that the fair rent due after the date on which the fair rent is fixed and the failure to pay the difference between the fair rent and the agreed rent would attract the provisions of Section 10(2) (i) of the Act and consequently, Section 11(4) of the Act would be attracted. It has also been further held that “when an order is passed under Section 11(4) of the Act, it cannot be said that the order is wrong. Even assuming the quantum of rent which the appellate authority directed the tenant to pay is not correct, it is clear that at least the difference between “the fair rent and the agreed rent ought to have been paid by the tenant, if he wanted to contest the R.C.O.P. In this decision, the decision in Ranganatthan v. M. Suri (100 L.W. 708) (supra), also has been noticed and it has been followed to the extent the said decision has laid down that failure to pay the fair rent due after the date on which the fair rent is fixed, the said failure would attract Section 10(2)(i) of the Act, and consequently Section 11(4) of the Act. 8. The fair rent is also the rent of the building and the words used in Section 10(2)(i) of the Act are that “the tenant has not paid or tendered the rent due by him in respect of the building”. 8. The fair rent is also the rent of the building and the words used in Section 10(2)(i) of the Act are that “the tenant has not paid or tendered the rent due by him in respect of the building”. It is not possible to agree with the decision in Ranganathan’s case (100 L.W. 708) (supra), that the arrears accruing as a result of difference between the fair rent and the agreed rent and the non-payment of the same will not qualify for seeking eviction under Section 10(2)(i) of the Act. If such a view is approved, the very object of fixation of fair rent will be defeated. The fair rent is fixed because the agreed rent is too low. The Act prescribes the procedure and the norms for fixation of fair rent. If that be so, once the fair rent is fixed and the order fixing the fair rent becomes final, the difference of the amount between the fair rent and the agreed rent becomes due at least from the date the order fixing the fair rent becomes final. Merely because certain time has lapsed from the date of filing of the application for fixation of fair rent and the determination of the fair rent, it does not enable the tenant to escape from the clutches of Section 10(2)(i) of the Act, when as per the law, the fair rent fixed becomes effective from the date of application and it becomes payable on the date the order fixing the fair rent is passed by the Rent Controller, unless the said order is challenged in appeal and thereafter in revision; and in such event when the order becomes final. The difference of the amount between the fair rent fixed and the agreed rent will have to be paid within fifteen days counted from the last day of the tenancy month, as in the case of such arrears of rent arising out of the difference in the fair rent and agreed rent, time fixed in the agreement will not apply. Therefore, it would be a case of no agreement as to the date of payment of rent and as such it would fall in the category of absence of any agreement as provided in Section 10(2)(i). Therefore, it would be a case of no agreement as to the date of payment of rent and as such it would fall in the category of absence of any agreement as provided in Section 10(2)(i). The words “or in the absence of any such agreement by the last day of month next following that for which the rent is payable” contained in the very Section 10(2)(i) of the Act are not taken into consideration in Ranganathan’s case and so also in Nelson’s case. 9. The interpretation placed on Section 10(2)(i) of the Act in the aforesaid cases does not take into consideration the objects of the Act. The Act while imposing certain restrictions on the right of a landlord to seek eviction of a tenant also ensures that the rent is paid by the tenant regularly by providing a ground for eviction in the event the tenant commits willful default in payment of the rent. The Act also further ensures that such tenant should pay the arrears upto date before he contests the proceedings for eviction. (see Section 11 of the Act). If as held in the aforesaid cases that non payment of difference between the fair rent fixed and the agreed rent does not amount to default much less willful default and as such does not furnish a ground for eviction under S.10 (2)(i) is accept as correct, it will result in defeating one of the important, objects of the Act and it will only encourage contumacious conduct on the part of the tenant who with impunity will not pay such arrears. Consequently, it will result in placing unreasonable restriction on the right of the landlord. It is not possible to appreciate when the fair rent fixed shall be the rent of the building, why the difference of the amount between the fair rent fixed and the agreed rent should not be considered as rental arrears, if it is not paid within 15 days from the last day of the tenancy months as provided in Section 10(2) (i) of the Act to which we have already adverted to. .10. In the instant case, the order fixing the fair rent became final when the Revision was dismissed. Thereafter, for several years, the R.C.O.P. 1184 of 1993 had been pending. The tenant has not cared to pay the rental arrears. .10. In the instant case, the order fixing the fair rent became final when the Revision was dismissed. Thereafter, for several years, the R.C.O.P. 1184 of 1993 had been pending. The tenant has not cared to pay the rental arrears. The R.C.O.P. 1184 of 1993 was instituted after issuing notice to the tenant calling upon him to pay the arrears of rent. Even to this day, he had not paid the rent. Explanation to sub-section (2) of Section 10 of the Act added by Act No.23 of 1973 specifically provides that for the purpose of subsection (2)(i) of Section 10, default to pay or tender rent shall be construed as willful if the default by the tenant in the payment or tender of rent continues after the issue of two months’ notice by the landlord claiming the rent. In the instant case, more than two months has elapsed when the application under Section 11(4) of the Act was filed. Two months need not elapse ever prior to the filing of the petition for eviction. It would be sufficient if on the date the petition comes up for trial, the tenant inspite of the notice issued calling upon him to pay the arrears or rent, fails to pay or tender the arrears, such a tenant as per the Explanation referred to above can undoubtedly beheld to have committed willful default in payment or tendering of the rent. Any interpretation placed on a statute must advance the object of the Act. .11. It is to save the tenant from the order of eviction on the ground of willful default in payment or tendering of the rent that sub-section (1) of Section 11 of the Act enables him to pay all the arrears due in respect of the building upto the date of payment or deposit and continue to pay or to deposit any rent which may subsequently became due in respect of the building until the termination of the proceedings before the Controller or the Appellate Authority as the case may be. Sub-section (2) of Section 11 also states that the deposit of the rent shall be made within the time and in the manner prescribed. Sub-section (2) of Section 11 also states that the deposit of the rent shall be made within the time and in the manner prescribed. It is only in the event of failure on the part of the tenant to pay or deposit the rent as prescribed in sub-sections (1) and (2) of Section 11 of the Act, the Controller or the Appellate Authority, as the case may be, shall, unless the tenant shows sufficient cause to the contrary, stop all further proceedings and make an order directing the tenant to put the landlord in possession of the building. It is also relevant to notice that the Proviso to sub-section (2) of Section 10 of the Act relates to a case falling under Section 10(2)(i) of the Act. As per the proviso, in such a case, even if the tenant’s default to pay or tender rent was not willful, the Court has to direct the tenant to pay or tender the arrears of rent within a reasonable time not exceeding 15 days, upto the date of such payment and in the event the tenant pays or tenders the rent, then only the application for eviction shall have to be rejected. That being the position, the reasoning of the Appellate Authority that the application for eviction falling under Section 10(2)(i) of the Act was not maintainable, cannot at all be accepted as correct. Similarly, the interpretation placed in Ranganathan’s case and Nelson’s case cannot be accepted as correct. Consequently, it follows that the application filed under Section 11 of the Act was maintainable. Maintainability of the application filed for eviction on the ground falling under Section 10(2)(i) of the Act, does not arise, as long as, on the date the application was filed, the tenant was not in arrears of rent. Of-course, if the landlord fails to prove that the tenant had committed willful default in payment or tendering of the rent, the order has to be passed as per the proviso to sub-section (2) of Section 10 of the Act, pertaining to the grounds falling under Section 10(2)(i) of the Act. Even in such a case also, as already pointed out, the Rent Controller has to fix a reasonable time not exceeding 15 days for payment of arrears of rent. The application for eviction can be rejected only in the event the tenant pays or tenders the rent due. Even in such a case also, as already pointed out, the Rent Controller has to fix a reasonable time not exceeding 15 days for payment of arrears of rent. The application for eviction can be rejected only in the event the tenant pays or tenders the rent due. Looked from any angle, it is not possible to hold that the petition for eviction filed on the ground falling under Section 10(2)(i) of the Act, in the facts and circumstances of the case, was not maintainable. In the instant case, the Rent Controller was justified in passing an order sub-section (4) of Section 11 of the Act. No doubt, the learned Appellate Judge has followed the decision in Ranganathan’s case. As we have held that the said decision and also the decision in nelson’s case do not lay down the law correctly and as such the decisions are liable to be overruled, the order of the learned Appellate Judge has also to be set aside. We are firmly of the view that the difference of the amount between the fair rent fixed and the agreed rent is the arrears of rent for the building, and it becomes payable when the order fixing the fair rent becomes final, and the same shall have to be paid within 15 days from the last day of the tenancy month, failing which, it would be open to the landlord to issue notice calling upon the tenant to pay the arrears of rent, and in the event of the tenant failing to pay the arrear of rent pursuant to the notice, it would be open to the landlord to institute a proceeding for eviction on the ground falling under Section 10(2)(i) of the Act. It is not necessary for the landlord to go to a civil court to recover such arrears of rent. In the view we take, we find it difficult to agree with the case Ranganathan’s case (100 L.W. 708) (supra) and Nelson’s case (1995 TLNJ 270) (supra). Accordingly, the said two decisions are overruled. The decision in Hussain’s case (1990-I-MLJ 85) (supra) does not deal with the arrears of rent accruing due to the difference between the fair rent and the agreed rent. 12. For the reasons stated above, this Revision Petition is allowed. The order dated 29. Accordingly, the said two decisions are overruled. The decision in Hussain’s case (1990-I-MLJ 85) (supra) does not deal with the arrears of rent accruing due to the difference between the fair rent and the agreed rent. 12. For the reasons stated above, this Revision Petition is allowed. The order dated 29. 1994, passed in R.C.A.No.1255 of 1993 on the file of the Appellate Authority is set aside. Consequently, the order dated 111. 1993 passed by the Rent Controller, under Section 11(4) of the Act is restored and the same shall be implemented in accordance with law. However, there will be no order as to costs.