J. M. Reddy Cars rep. by its Partner v. P. B. Mythili
2008-02-13
A.C.ARUMUGAPERUMAL ADITYAN
body2008
DigiLaw.ai
Judgment :- This revision petition has been directed against the order passed in R.C.A.No.656 of 2005 on the file of the learned Rent Control Appellate Authority/VIII Judge, Court of Small Causes, Chennai. The tenant in R.C.O.P.No.861 of 2004 on the file of XI Judge, Court of Small Causes, Chennai/Rent Controller who had lost his defence before the Courts below is the revision petitioner herein. 2. R.C.O.P.No.861 of 2004 was filed by the landlord under Sections 10(2)(i),10(2)(ii)(a), 10(2)(v) and 10(3)(a)(iii) of the Tamil Nadu Buildings(Lease and Rent Control) Act (Hereinafter referred to "the Act"). The learned Rent Controller/XI Judge, Small Causes Court, Chennai, has allowed the petition on two grounds. Aggrieved by the findings of the learned Rent Controller, the tenant has preferred an appeal in R.C.A.NO.656 of 2005 before the learned Rent Control Appellate Authority/VIII Judge, Small Causes Court, Chennai who had confirmed the findings of the learned Rent Controller in respect of an order of eviction under Section 10(2) (i) of the Act alone and allowed the appeal thereby setting aside the findings of the learned Rent Controller under Sections 10(2)(ii) (a), 10(2)(v), 10(3)(a)(iii). Aggrieved by the findings of the learned Rent Control Appellate Authority, the tenant has approached before this Court by way of this revision petition. 3. According to the landlord, the tenant has committed wilful default in payment of rent for the month of September 2003. According to the landlord, R.C.O.P.was filed on 19,.4.2004. The said petition was resisted by the tenant on the ground that as per the lease agreement, the monthly rent for the petition schedule building is Rs.5000/- and the tenant at the time of inception of tenancy had paid a sum of Rs.3,00,000/- to the landlord towards advance and that there was no wilful default in payment of rent and the tenant had paid the rent of Rs.6,000/-through a cheque bearing No.935740 dated 11. 2003 and he would further allege that apart from the advance amount of Rs.3,00,000/-, another sum of Rs.12,000/-was paid to Mr.P.B,.Raghunathan, the son of the landlord and also deliver a computer worth Rs.40,000/-and has also incurred Rs.2,10,000/- towards maintenance of the building. Both the Courts below have concurrently held that the tenant has committed wilful default in payment of rent and that the tenant cannot ask the landlord to adjust the advance amount towards the arrears of rent. 4.
Both the Courts below have concurrently held that the tenant has committed wilful default in payment of rent and that the tenant cannot ask the landlord to adjust the advance amount towards the arrears of rent. 4. It is seen from Ex R4 statement of account produced on the side of the tenant that the rent due for the month of September 2003 has been paid by way of cheque bearing No.935686 dated 110. 2003. The said cheque was drawn in the name of Raghunathan, son of the landlord. From the evidence of R.W.1/tenant, it is seen that the cheque bearing No.935740 dated 11. 2003 relating to the payment of the rent for the month of October 2003 as referred to in Ex P2 was not realised by the landlord. According to R.W.1, he came to know that the cheque dated 11. 2003 was not realised from Ex P5, notice dated 212. 2003 issued by the learned counsel appearing for the landlord. According to the tenant,as R.W.1, after coming to know through Ex R5 that the cheque dated 11. 2003 being the rent due for the month of October 2003, was not realised, he had drawn another cheque in the month of August 2004 in favour of the landlord. Under Ex P10, notice, the tenant has informed the landlord that there is no wilful default in payment of rent on his part and the rent for the month of November 2003 has been paid by cheque No.935741 dated 12. 2003 and the rent for the month of December 2003 has been paid under Cheque No.976016 dated 1. 2004 and the rent due for the month of January 2004 has been paid under Cheque No.976050 dated 2. 2004 and the rent due for the month of February has been paid through Cheque No.900553 dated 3. 2004 and the rent due for the month of March 2004 has been paid under Cheque No.900604 dated 4. 2004. It has further stated in the notice itself that those cheques , when tendered earlier by the tenant, were refused by the landlord. Ex P11 is the reply notice sent by the landlord to the tenant for the notice under Ex P10. It is seen from Ex P11 that the cheques referred to in Ex P10 notice have been received by the landlord. 5.
Ex P11 is the reply notice sent by the landlord to the tenant for the notice under Ex P10. It is seen from Ex P11 that the cheques referred to in Ex P10 notice have been received by the landlord. 5. The learned counsel appearing for the revision petitioner relying on a decision reported in Rajappa-v- Johny D.Couto(2006-2.L.W.916) and also R.Murugan-v-M.O.M.Abubucker (2005(5)CTC 473) and contended that the tenant cannot ask the landlord to adjust the arrears of rent towards the advance amount. The facts in Rajappa-v- Johny D.Couto(2006-2.L.W.916)are that the tenant if committing wilful default in payment of rent claimed that he had paid Rs.5000/-to the landlord towards advance and hence the arrears of rent to be adjusted towards the advance amount of Rs.5000/- in the hands of the landlord. But there is absolutely no evidence in that case to show that the tenant had paid Rs5000/-towards advance with the landlord. Only under such circumstances, this Court has held that even if there is any advance in the hands of the landlord, the rental arrears due from the tenant cannot be adjusted with the advance amount. The observation relevant for the purpose of this case in the said ratio runs as follows: "Relying on the decided cases cited by the learned counsel for the respondent/ landlord and based on the facts of the case, it is clearly found that the petitioner/tenant has committed "wilful default" as alleged in the eviction petition filed by the respondent/landlord, especially, in view of the fact that the petitioner/tenant could not prove the existence and the validity of the alleged lease agreement to the satisfaction of the Rent Control Authorities. Therefore, in such circumstances, the claim of the petitioner/tenant with regard to the advance amount of Rs.5000/- being with the respondent/landlord could not be established. Even if that be true, the necessity of the respondent/landlord adjusting the same towards the rental arrears due from the petitioner/tenant did not arise as there is nothing shown to prove that the respondent/landlord was required to do so either in accordance with the prescribed provisions of law or on the request of the petitioner/tenant. Moreover, taking into account the subsequent conduct of the petitioner/tenant, it is seen that he has continued to commit default in payment of rents even after the initiation of the rent control proceedings".
Moreover, taking into account the subsequent conduct of the petitioner/tenant, it is seen that he has continued to commit default in payment of rents even after the initiation of the rent control proceedings". The facts in R. Murugan-v- M.O.M.Abubucker(2005(5)CTC 473) are that there was an obligation in the lease agreement entered into between the landlord and the tenant, providing three months rent in the event of the tenant committing default in payment of rent for a continuous period of three months, could be adjusted towards the advance amount of Rs.5,000/- and then to surrender the vacant possession to the landlord. Under such circumstances, it has been held by this Court that it is not open to the tenant to resist the claim of the landlord on the ground of wilful default by saying that the arrears of rent is to be adjusted towards the advance amount of Rs.5000/-without handing over the vacant possession of the property. In the said ratio, also the Judgment of the Honourable Apex Court in K.Narasimharao-vs-T.M.Nasimuddin Ahmed(1996(II) CTC 78) was referred to. The said Judgment was relied on by the respondent herein as to the effect that if the landlord is in possession of advance amount which is in excess to that of the arrears of rent then the landlord has no cause of action to file a petition for eviction. The facts of the said dictum are that the appellant/landlord has filed a petition for eviction of the respondent/tenant on the ground of wilful default in payment of rent for the period July 1990 to November 1990 in spite of a notice dated 111. 1990. The monthly rent is Rs.150/-. The respondent denied that there was any wilful default. The respondent would contend that certain repairs had been made in the premises by him with the consent of the landlord for which Rs.1,000/-was spent by him and that amount has to be adjusted towards the rent due for the said period and on receipt of the notice from the landlord, he sent a demand draft for Rs.750/-as the rent for five months, which was received by the landlord, and the amount of Rs.2,850/-paid as excess advance was also available with the landlord for adjustment towards the rent due. The learned Rent Controller rejected the respondent/tenants contention and held that there was wilful default committed by the tenant in the payment of rent for that period.
The learned Rent Controller rejected the respondent/tenants contention and held that there was wilful default committed by the tenant in the payment of rent for that period. The learned Rent Control Appellate Authority rejected the tenants appeal. The High Court has allowed the revision petition by its impugned order dated 2. 1993 taking the view that on the facts of the case, there was no wilful default in payment of rent by the respondent. It was admitted in that case that a sum of Rs.3,000/- was paid by the respondent as advance even though according to Section 7(2) of the Tamil Nadu Buildings(Lease and Rent Control) Act 1960, the landlord can receive only one months rent in advance. Accordingly, excess amount of Rs.2,850/-paid as advance by the tenant to the landlord was required to be refunded by the landlord. So the question that arose for consideration was whether the excess amount paid by the tenant to the landlord being available with the landlord, the tenant can be held to have committed wilful default in payment of rent even though he had not expressly asked the landlord to adjust that amount towards the arrears of rent. While deciding the civil appeal in favour of the tenant, the Honourable Apex Court has held as follows: " It is clear from the narration of facts that the ground of wilful default in payment of rent by the tenant for the period July 1990 to November 1990 @ Rs.150/- per month amounting to Rs.750/- was non-existent if the excess amount of Rs.2,850/- available with the landlord in the form of excess advance required adjustment towards the arrears of rent. The nature of this excess amount of advance and its availability for adjustment towards the arrears of rent without an express request by the tenant to this effect would determine the decision on this point. . . . . . . . . . . . . . .The character of the excess amount undoubtedly is that it is the tenants money in the hands of the landlord for return to the tenant or for adjustment towards the dues of the tenant, at the tenants option. Any other stipulation in contravention to it has no legal effect being null and void.
. . . . . . . .The character of the excess amount undoubtedly is that it is the tenants money in the hands of the landlord for return to the tenant or for adjustment towards the dues of the tenant, at the tenants option. Any other stipulation in contravention to it has no legal effect being null and void. The provision clearly enacts the course to be adopted in the case of any excess amount being paid by the tenant to the landlord, taking into account the factor that the tenant in certain circumstances may be compelled to make payment as advance or an amount in excess of that required to be paid to the landlord according to law. For that situation the provision imposes the legal obligation on the landlord to immediately refund the excess amount to the tenant unless the tenant exercise the option of requiring the landlord to adjust that amount towards any dues of the tenant or in any other manner indicated by the tenant. This provision has the effect of creating a corresponding enforceable right in the tenant to recover the excess amount from the landlord or to have it adjusted for his benefit in case the landlord fails to discharge his obligation of refunding that amount. The provision of adjustment of the excess amount at the option of the tenant clearly visualises its adjustment towards the rent due from the tenant since the jural relationship envisages payment only of rent by the tenant to the landlord towards which it can be adjusted. There is no illegality attaching to the payment of the excess amount by the tenant to the landlord and a legally enforceable right clearly flows from the provision to the tenant. The pari delicto principle is, therefore, clearly excluded for the purpose of envisaging the consequences of an excess amount being taken by the landlord from the tenant because the provision requires the landlord to refund that excess amount." Under such circumstances, the revision petitioner cannot take shelter under the dictum in Rajappa-v- Johny D.Couto(2006-2.L.W.916) and also under the ratio R.Murugan-v-M.O.M.Abubucker (2005(5)CTC 473) . 6. It is seen from Ex P15, the deed of lease between the revision petitioner and the respondent that the monthly rent was fixed as Rs.5,000/- and a sum of Rs.3,00,000/-was paid towards advance by the tenant to the landlord.
6. It is seen from Ex P15, the deed of lease between the revision petitioner and the respondent that the monthly rent was fixed as Rs.5,000/- and a sum of Rs.3,00,000/-was paid towards advance by the tenant to the landlord. As per Section 7(1) of the Act, the landlord is competent to receive only a months rent by way of advance. Now in this case , as per Ex P15, the landlord has received about 60 months rent towards advance. It is seen from Ex P10 that subsequent arrears of rent have been paid by way of cheque and the same has been received by the landlord as seen from Ex P11. Under such circumstances, the findings of the Courts below that the tenant has committed wilful default warrants interference from this Court since the finding is perverse in nature and against the available evidence. 7. The learned counsel appearing for the revision petitioner would rely on a decision reported in Modern Hotel,Gudur represented by M.N.Narayanan-v- K.Radhakrishnan (AIR 1989 Supreme Court 1510) and Mahalingam-v-Pichaiammal(2000(II) M.L.J.202)for the same proposition of law that if excess amount is found in the hands of the landlord,towards advance , the same can be adjusted towards the arrears of rent. Even in Ex P5 notice, the landlord has stated that the tenant has committed wilful default in payment of rent for the month of September 2003, October 2003 and December 2003. Ex P5 was issued on 212. 2003. But it is seen from Ex R4 that the rent for September 2003 has been paid by the tenant under Cheque No.935686 dated 110. 2003 itself. Under such circumstances, it cannot be said that a valid notice as contemplated under Explanation to Section 10(2)(1) of the Act was issued by the landlord. If there is no valid notice demanding the arrears of rent, as held in P.M.Punnoose-v- K.M.Munneruddin (2003(4)L.W.671), the default in payment of rent cannot be construed as wilful. The relevant observation in the Judgment of the Honourable Apex Court runs as follows: "The provisions of Section 10(2) of the Act came up for consideration before a three Judge Bench of this Court in S.Sundaram Pillai and others .v. V.R.Pattabiraman & others, 1985 (1) SCC 591 =(1985) 98 L.W.49. On a review of decisions, this Court held that wilful default would mean a deliberate and intentional default knowing fully well the legal consequences thereof.
On a review of decisions, this Court held that wilful default would mean a deliberate and intentional default knowing fully well the legal consequences thereof. The use of the words"wilful default" in the provision is suggestive of the legislative intent that default, in order to be wilful, must be intentional, deliberate, calculated and conscious with full knowledge of legal consequence flowing therefrom. So is the view taken by this Court in Chorobia Automobiles .v.S.Moosa and others,2000 (1) CTC 742: 2000(3)SCC 282= 2001 (1)L.W.737. Sundaram Pillais case (supra) came up for consideration of this Court in Raja Muthukone(dead) by Lrs.v.T.Gopalasami and another, 2002(4) SCC 204 = 2003(1) L.W.134). This Court held that on a cumulative reading of the provisions of Section 10(2)(1) , the proviso and the Explanation appended to Sub Section (2), the following consequences follows: " Where no notice is given by the landlord in terms of the Explanation, the Controller, having regard to the four conditions spelt out by us has the undoubted discretion to examine the question as to whether or not the default committed by the tenant is wilful. If he feels that any of the conditions mentioned by us is lacking or that the default was due to some unforeseen circumstances, he may give the tenant a chance of locus poenitentiae by giving a reasonable time, which the statute puts at 15 days, and if within that time the tenant pays the rent, the application for ejectment would have to be rejected." 8. Subsequent to the payment of the arrears of rent for the month of September 2003, by way of cheque No.935686 dated 110. 2003 as seen from Ex R4, there was no demand by way of notice as contemplated under Explanation to Section 10(2) of the Act was given by the landlord to the tenant giving 15 days time to the tenant to pay the arrears of rent. Under such circumstances, I am of the view that default, if any in payment of rent cannot be construed as a wilful default. 9. In fine, this civil revision petition is allowed and the Judgment in RCA.No.656 of 2005 on the file of Court of VIII Judge, Small Causes Court, Chennai is set aside. Consequently, R.C.O.P.No.861 of 2004 is dismissed. No costs.