Williams Daniel S/o. Kannambuzha Daniel v. Jose S/o. Kuttichakku Lona
2019-10-03
A.HARIPRASAD, T.V.ANILKUMAR
body2019
DigiLaw.ai
JUDGMENT : T.V. ANILKUMAR, J. Whether the expression “arrears of rent admitted” in Section 12 of the Kerala Buildings (Lease and Rent Control) Act, 1965(for short 'the Act') could be interpreted to include the fair rent fixed in a rent control proceeding under Section 5(1) of the Act also, apart from the contractual rent agreed to between the parties, is the short question that arises for consideration in this proceeding. 2. This question was answered in the negative by the Rent Control Appellate Authority, Thrissur in R.C.A.No.59 of 2012, accepting the tenant's contention that admitted arrears of rent could only mean contractual rent agreed to between parties. Consequently, I.A.No.4801 of 2018 filed by the tenant, seeking permission to deposit arrears of contractual rent in purported compliance with an earlier order dated 14.8.2018 passed by the Rent Control Appellate Authority, Thrissur under Section 12(3) of the Act in I.A.No.761 of 2018 was allowed and the liability of the tenant was declared as discharged. On the same day, I.A. No.4637 of 2018 again filed by the landlord for initiating summary eviction under Section 12(3) for non deposit of arrears of fair rent as directed, was also dismissed. 3. Both the orders of the Rent Control Appellate Authority are under challenge in this proceedings instituted by the landlord. 4. The petitioner claimed to be the landlord of tenanted shop room and filed R.C.P. No.39 of 2008 for eviction of the respondent under Section 11(4)(iii) of the Act. The respondent denied having any landlord-tenant relationship with the petitioner and he claimed to be the tenant under the previous landlord paying monthly rent of Rs.1,400/-. According to him, during the currency of tenancy, he entered into an oral agreement for sale with the previous owner and consequently, his liability to pay rent came to an end. He instituted O.S. No.955 of 2006 before the Sub Court, Thrissur for specific performance of oral agreement for sale; but it was dismissed. The dismissal is, however, under challenge in R.F.A.No.106 of 2009 filed by him before this Court and the appeal is still pending. The petitioner secured an order of eviction under Section 11(4)(iii) of the Act in R.C.P. No.39 of 2008 and the same continues to be under challenge before the Rent Control Appellate Authority, Thrissur in R.C.A. No.59 of 2012. 5.
The petitioner secured an order of eviction under Section 11(4)(iii) of the Act in R.C.P. No.39 of 2008 and the same continues to be under challenge before the Rent Control Appellate Authority, Thrissur in R.C.A. No.59 of 2012. 5. The petitioner filed I.A. No.761 of 2018 on 14.08.2018 in R.C.A.59 of 2012 under Section 12(3) of the Act for an order directing the respondent to deposit the arrears of fair rent with effect from 01.09.2006 as fixed by the orders passed in the earlier round of litigation between parties and for consequential enforcement of the order in the event of tenant committing breach of direction. Prior to the institution of R.C.P. No.39 of 2008, the petitioner had already instituted before the same court R.C.P. 81 of 2006 for eviction of respondent under Section 11(2) (b) of the Act and also for fixation of fair rent of the shop room under Section 5(1). The respondent disputed the landlord-tenant relationship as well as the proposed fair rent as being exorbitant. Overruling the contentions raised by the respondent, the Rent Control Court, Thrissur fixed fair rent and ordered eviction of the respondent under Section 11(2) (b) of the Act. 6. Both parties took separate appeals challenging the order before the Rent Control Appellate Authority, Thrissur. R.C.A. No.72 of 2010 filed by the respondent was dismissed, confirming the finding of the court below that parties were landlord and tenant. R.C.A. 88 of 2010 filed by the petitioner was allowed, enhancing the fair rent fixed by the Rent Control Court. The orders of the Rent Control Appellate Authority were again challenged and the revisional court dismissed R.C.R. No.225 and 226 of 2018 filed by the parties confirming the common order dated 19.03.2018. The revisional order was also later confirmed on 23.07.2018 by the Hon'ble Apex Court in S.L.P. No.30773-30774/2018 dismissing the Special Leave Petition filed by the respondent. That means the finding on the landlord-tenant relationship as well as the rate of fair rent fixed by the Rent Control Appellate Authority has become final and conclusive. The respondent can no longer disown his liability to pay the fair rent adjudged under Section 5(1) of the Act. The order fixing fair rent of the shop room passed by the Appellate Authority dated 19.03.2019 which was later confirmed by the superior forums runs as follows: “In the result, R.C.A.72/2010 is dismissed with costs.
The respondent can no longer disown his liability to pay the fair rent adjudged under Section 5(1) of the Act. The order fixing fair rent of the shop room passed by the Appellate Authority dated 19.03.2019 which was later confirmed by the superior forums runs as follows: “In the result, R.C.A.72/2010 is dismissed with costs. R.C.A. 88/2010 is allowed with costs, in part, by fixing monthly rent of petition schedule building at Rs.10,000/-(Rupees ten thousand only) with effect from 01.09.2006 and Rs.11,000/-(Rupees eleven thousand only) with effect from 01.09.2006 and at the rate of Rs.12,100/-(Rupees twelve thousand and one hundred only) with effect from 01.09.2010. This rent will be enhanced every two years by 10% of the monthly rent payable during the preceding two years.” 7. In I.A. No.761 of 2018, the petitioner/landlord claimed Rs.18,35,894/- as being the arrears of fair rent due from the respondent with effect from 01.09.2006, contending that liability of respondent for contractual rent was replaced by the order of the Rent Control Appellate Authority, Thrissur, fixing the fair rent. 8. The respondent opposed I.A. No.761 of 2018 raising two-fold objections: (i) Payments deposited in courts where litigations between parties are pending were not taken into account by the petitioner while quantifying the arrears and (ii) R.F.A.No.106 of 2009 on the files of this Court in which the title of the petitioner over the tenanted premises is in serious issue is still pending and therefore, decision on I.A. requires to be deferred till the disposal of appeal. The Rent Control Appellate Authority after hearing the parties, allowed I.A.No.761 of 2018 on 14.08.2018. This order was confirmed in O.P.(RC) No.171 of 2018 by order dated 26.11.2018 passed by this Court refusing to accept the challenge raised by the respondent. The petitioner thereafter on 28.11.2018 moved the Rent Control Appellate Authority through I.A.No.4637 of 2018, seeking to issue order of eviction of respondent under Section 12(3) of the Act for non-deposit of arrears of rent in compliance with the order in I.A. No.761 of 2018. It is in answer to this I.A., the respondent filed I.A. No.4801 of 2018 seeking permission to deposit arrears of contractual rent purporting to comply with the aforesaid order and consequential discharge of his liability. 9.
It is in answer to this I.A., the respondent filed I.A. No.4801 of 2018 seeking permission to deposit arrears of contractual rent purporting to comply with the aforesaid order and consequential discharge of his liability. 9. The contention of the respondent is that, even if R.F.A. No.106 of 2009 pending before this Court is not decided in his favour, his liability cannot exceed the arrears of monthly contract rent of Rs.1,400/- agreed with the previous landlord. As per the statement of arrears filed by him before the Appellate Authority on 28.01.2019, his liability could stand limited only to a sum of Rs.3,61,564/- inclusive of interest at the rate of 12%. On the other hand, as per the statement of arrears submitted by the petitioner as on 11.02.2019, the admitted arrears of rent will amount to Rs.21,74,448/-, when quantified on the basis of fair rent fixed with effect from 01.09.2006. 10. While allowing I.A. No.761 of 2018 by Ext.P5 order on 17.10.2018, the Rent Control Appellate Authority did not, however, quantify the amount to be deposited, except giving a blanket direction to the respondent to deposit admitted arrears of rent. The order is quite silent, as to whether admitted arrears of rent included or excluded the arrears of fair rent with effect from 01.09.2006. The entire reading of Ext.P5 order in the light of the contentions raised by the parties before the Authority shows that it did not address the legal question as to whether fair rent fixed by the court in the earlier rent control proceeding could be claimed by the petitioner, as admitted arrears of rent within the meaning of Section 12(3) of the Act. But the Rent Control Appellate Authority, while dismissing I.A. Nos.4637 and 4801 of 2018 through the impugned orders took the view that admitted rent arrears do not take in fair rent determined by the court and therefore, a tenant who deposits arrears of contractual rent agreed by the parties has right to prosecute the appeal uninhibited by the bar provided by Section 12 of the Act. In my opinion, the view expressed by the court below does not appear to be legal and sound. Section 12(1), (2) and (3) reads thus; “12.
In my opinion, the view expressed by the court below does not appear to be legal and sound. Section 12(1), (2) and (3) reads thus; “12. Payment of deposit of rent during the pendency of proceeding for eviction.-(1) No tenant against whom an application for eviction has been made by a landlord under Section 11, shall be entitled to contest the application before the Rent Control Court under that section, or to prefer an appeal under Section 18 against any order made by the Rent Control Court on the application unless he has paid or pays to the landlord, or deposits with the Rent Control Court or the appellate authority, as the case may be, all arrears of rent admitted by the tenant to be due in respect of the building up to the date of payment or deposit, and continues to pay or to deposit any rent which may subsequently become due in respect of the building, until the termination of the proceedings before the Rent Control Court or the appellate authority, as the case may be. (2) The deposit under sub-section (1) shall be made within such time as the Court may fix and in such manner as may be prescribed and shall be accompanied by the fee prescribed for the service of notice referred to in sub-section (4): (3) If any tenant fails to pay or to deposit the rent as aforesaid, the Rent Control Court or the appellate authority, as the case may be, shall, unless the tenant shows sufficient cause to the contrary, stop all further proceedings and tenant shows sufficient cause to the contract, stop all proceedings and make an order directing the tenant to put landlord in possession of the building.” 11. Section 12 of the Act enjoins a tenant to pay or deposit arrears of rent admitted by him in the proceeding, in order to entitle him to contest a petition for eviction or prosecute an appeal, whether the ground of eviction be under Section 11(2)(b) of the Act or any other grounds statutorily recognised under Section 11. Section 12 makes it very clear that liability of a tenant to pay or deposit rent is only to the extent he admits the rate of rent or period of default.
Section 12 makes it very clear that liability of a tenant to pay or deposit rent is only to the extent he admits the rate of rent or period of default. The object of the Section appears to deny the defaulting tenant's right to resist eviction proceeding without his making payment or deposit of arrears of rent to the extent he has acknowledged his liability. When the tenant denies the rate of rent or else disowns liability to pay or deposit arrears, the court has no power under Section 12 of the Act to conduct an enquiry and decide whether the denial is true or not. An adjudication to find out whether denial is true or not may be essentially required, when the court is to pass a final order under Section 11(2)(b) of the Act. Arrears of rent admitted under Section 12 do not postulate adjudicated rent, when there is denial of liability and the only enquiry which could be taken as granted by law in this respect is to find out whether the tenant has made any admission of liability and, if so the extent thereof, so that the arrears of admitted rent could well be ascertained by the court. Decisions in Mrs. Celine Sourunny v. Mary Paul Abrao [ 1979 KLT 533 ], Rajendran Nair v. Sadasivan Nair [ 2016 (1) KLT 199 ], Sadique v. Mohammed Umair [ 2017 (3) KLT 759 ], Pathumma Beevi v. Lonappan [ 1985 KLT 705 ] and Jose P.O. v. Xavier and Another [ 2017 (3) KLT 222 ] cited at the Bar are relevant in this respect. But none of these decisions had occasion to deal with the precise legal question that has arisen in this case, as to whether liability of a tenant for payment of arrears of admitted rent could be determined on the basis of fair rent fixed by the court in an earlier rent control proceeding. 12. Once fair rent is fixed by the court, the rent agreed or stipulated by the parties to lease transaction comes to a total cessation and becomes unenforcible under law. The contractual rent is fully replaced by fair rent adjudged by the court in exercise of power vested in it under Section 5(1) of the Act.
12. Once fair rent is fixed by the court, the rent agreed or stipulated by the parties to lease transaction comes to a total cessation and becomes unenforcible under law. The contractual rent is fully replaced by fair rent adjudged by the court in exercise of power vested in it under Section 5(1) of the Act. When the court adjudicates and quantifies the fair rent, the contract between the parties agreeing to any rate of rent or terms of payment vanishes for ever. The right or liability of parties to receive or pay the rent is thereafter governed by the terms of the order of court adjudicating the fair rent. Parties can no longer fall back upon the contractual rent and build his or her claim thereon, since the contract rent is non-existent under law. 13. In order that a tenant is qualified to contest an eviction petition or prosecute an appeal, I am of the opinion that he is bound to pay or deposit the arrears of fair rent already fixed by the court, as if the fair rent also means rent admitted by the tenant and payable by him under Section 12 of the Act. The expression 'arrears of rent admitted' in Section 12 of the Act, when read in the light of the scheme of the Act and provisions for fixing fair rent, could only be construed as rent incapable of being disputed or denied by the tenant. When a party is legally dis-entitled or disabled under law from denying or disputing a fact which was decided by the court after adjudicatory process, it is as good as a fact admitted by him, since under no circumstance he can wriggle out of the binding decision, unless it could be shown to be inconclusive. A tenant bound by an order fixing fair rent under Section 5(1) of the Act, cannot contend that he is not liable under Section 12 to deposit fair rent greater than contract rent agreed to between parties, adjudged by the court nor can a landlord similarly contend that he is entitled to contract rent larger than the fair rent adjudged by the court.
The fair rent adjudged by the court is at par with the expression 'admitted rent' used in Section 12 inasmuch as parties are estopped or precluded from disowning or renouncing their liability to pay or receive fair rent as long as it has attained finality under law. 14. In view of the forgoing discussion, I hold that the respondent's liability to deposit the arrears of admitted rent under Section 12, must be identified with the arrears of fair rent payable by him and computed in accordance with the rates specified in the common order of the Rent Control Appellate Authority, Thrissur dated 19.03.2018. The order of the Rent Control Appellate Authority accepting the arrear statement filed by the tenant based on the monthly contract rent of Rs.1,400/- and consequential discharge of him from liability appears, therefore, to be illegal and unsustainable. The respondent is liable to deposit arrears of fair rent calculated with effect from 01.09.2006 till the date of payment. Since the statement of arrears filed by the tenant is not in terms of his liability to pay fair rent as aforesaid, it has only to be rejected and his liability requires to be quantified on the basis of a fresh statement to be prepared based on calculation of fair rent with effect from 01.09.2006. In this view of the matter, I consider it to be appropriate to remit the matter back to the Rent Control Appellate Authority to decide the matter afresh after giving parties opportunity to submit fresh statements of arrears in terms of what has been stated by me above. I hold that the impugned orders passed by the Rent Control Appellate Authority on 28.05.2019 in I.A. Nos.4801 and 4637 of 2018 are liable to be set aside. A. Hariprasad, J. 15. I availed the opportunity of carefully perusing the erudite judgment by my learned brother. I am in perfect agreement with the conclusions arrived at by him that a tenant's liability under Section 12(1) of the Act to deposit all arrears of rent admitted by him could only be construed as the arrears of fair rent determined by a Rent Control Court in a properly instituted previous proceedings between the parties.
I am in perfect agreement with the conclusions arrived at by him that a tenant's liability under Section 12(1) of the Act to deposit all arrears of rent admitted by him could only be construed as the arrears of fair rent determined by a Rent Control Court in a properly instituted previous proceedings between the parties. In other words, after adjudication of fair rent in a proceedings between the parties, the tenant's liberty to take a stance that he is only liable to deposit arrears of rent admitted by him at a rate different from the fair rent cannot be countenanced. 16. I fully agree with the factual issues dealt with in the main judgment. I may add a couple of reasons to fortify the above legal view. Section 5(1) of the Act, which was reintroduced into the Statute by the pronouncement in Edger Ferus v. Abraham Ittycheria [ 2004 (1) KLT 767 ], speaks about the Rent Control Court's authority to determine fair rent in respect of a building on an application, either of the tenant or the landlord. Section 11(2) of the Act specifies a ground for eviction when the tenant keeps rent in arrears. Clause (b) in the above provision speaks about the obligation of a tenant to pay or tender the rent in respect of a building under his occupation within 15 days after the expiry of time fixed in the agreement of tenancy or, in the absence of such agreement, by the last day of the month next following that for which the rent is payable. Landlord would be entitled to seek eviction of the tenant, if the tenant fails in his statutory obligation to pay rent, only after sending a registered notice to the tenant intimating the default. Other aspects of procedure required to be taken before seeking an eviction under this head are also mentioned therein. Going by Clause (c) of Section 11(2) of the Act, it can be seen that even after passing an order of eviction, a right is conferred upon the tenant to deposit the rent in arrears adjudicated by the court within a stipulated time so as to avert the order of eviction. 17. But, the situation envisaged under Section 12 of the Act is entirely different. It speaks about the tenant's liability to pay or deposit rent during the pendency of the proceedings for eviction.
17. But, the situation envisaged under Section 12 of the Act is entirely different. It speaks about the tenant's liability to pay or deposit rent during the pendency of the proceedings for eviction. Section 12 quoted above in the main judgment would clearly show that a tenant cannot contest an eviction proceeding unless he deposits or pays all arrears of rent admitted to be paid upto the date of payment and continues to pay or deposit, as the case may be, until termination of the proceedings in the Rent Control Court. The provision is applicable to appeals preferred before the Rent Control Appellate Authorities as well. It is pertinent to note that the interdiction under Section 12 of the Act preventing the tenant from proceeding with the case without deposit of admitted arrears is not applicable to a proceeding in revision. 18. Tenant's liability, as per Section 12 of the Act, is limited to depositing all arrears of rent admitted by him to be due in respect of the building upto the date of payment or deposit and continues to pay or deposit any rent which may subsequently become due. Importantly, in a proceeding under Section 12 of the Act, there is no need for determining the rate of monthly rent in case of any dispute or quantification of the arrears of rent in case of any dispute regarding the period of keeping the rent in arrears. The basis for determining what is the admitted rent can be the written objection of the tenant or other reliable evidence brought before the Court at that time. Tenant has been given a freedom by the Statute to deposit arrears of rent admitted by him to escape from stopping the proceedings and directing him to put the landlord in possession summarily. Most important aspect discernible from Section 12 of the Act is that a tenant's liberty to deposit arrears of rent admitted by him will arise only once in a proceeding under Section 11 of the Act. Of course, he can avail of that benefit in an appeal as well, which can be treated as a continuation of the eviction proceedings. Normally, disputes between a landlord and tenant arise only when there is difference of opinion regarding the rate of rent or the period of keeping the rent in arrears.
Of course, he can avail of that benefit in an appeal as well, which can be treated as a continuation of the eviction proceedings. Normally, disputes between a landlord and tenant arise only when there is difference of opinion regarding the rate of rent or the period of keeping the rent in arrears. Rules of interpretation of Statutes unquestionably have laid down a principle that all the provisions in a Statute will have to be construed harmoniously so as to give full effect to the statutory provisions embodied in the entire Statute. Viewing from that angle, one has to remember the existence of Section 5 in the Act while interpreting Section 12 of the Act. Section 5 of the Act gives a statutory right to a Rent Control Court to determine fair rent in respect of a building to which the Act applies and it can be at the instance either of the landlord or tenant. Once an adjudication is made in respect of the rate of rent payable by the tenant, his liberty to deposit arrears of rent only to the extent admitted by him ceases and he has to deposit arrears of rent calculated on the basis of adjudication. Concept embodied in Section 12 of the Act as “arrears of rent admitted by the tenant” pales into insignificance as Section 12 of the Act can operate only so long as the tenant enjoys the liberty to dispute the rate of rent or quantum of arrears of rent. He loses the said right when fair rent has been determined by a competent authority in a properly instituted proceedings between the parties. If this interpretation is not adopted, it will unjustly give the tenant a long rope for enabling him to contend that he is only liable to deposit a lesser rate of rent and it may defeat the object of determining fair rent under Section 5 of the Act. 19. In many rent control legislations, a provision similar to Section 12 of the Act can be seen. Predecessor of the present Act was the Kerala Buildings (Lease and Rent Control) Act, 1959 (Act 16 of 1959). In fact, many of the provisions therein are copied from the Madras Buildings (Lease and Rent Control) Act, 1949 (Act 25 of 1949).
19. In many rent control legislations, a provision similar to Section 12 of the Act can be seen. Predecessor of the present Act was the Kerala Buildings (Lease and Rent Control) Act, 1959 (Act 16 of 1959). In fact, many of the provisions therein are copied from the Madras Buildings (Lease and Rent Control) Act, 1949 (Act 25 of 1949). Section 7A(1) of Act 25 of 1949 may be extracted hereunder for clarity: “Payment or deposit of rent during the pendency of proceedings for eviction.-(1) No tenant against whom an application for eviction has been made by a landlord under section 7, shall be entitled to contest the application before the Controller under that section, or to prefer any appeal under section 12 against any order made by the Controller on the application, unless he has paid or pays to the landlord, or deposits with the controller or the appellate authority, as the case may be, all arrears of rent due in respect of the building up to the date of payment or deposit, and continues to pay or to deposit any rent which may subsequently become due in respect of the building, until the termination of the proceedings before the Controller or the appellate authority as the case may be.” It shows that in order to contest an eviction petition or to prefer and prosecute an appeal, the tenant will be bound to pay all arrears of rent in respect of the building. In Act 16 of 1959, referred to above, I find Section 12, which is pari materia to the present Section 12 in the Act. Sub-section (1) of Section 12 in both the Acts are ipsissima verba. Noticeable difference lies in the addition of a proviso to Sub-section (2) to Section 12 in the present Act which was not there in Act 16 of 1959. Rest of the provisions in both Acts are identical. Purpose of the proviso added to Subsection (2) is only to give four weeks time to the tenant to deposit arrears of rent admitted by him. 20. It is apparent from the scheme of the Act that tenants occupying buildings covered by the Act, for which fair rent was not fixed, enjoy the liberty of depositing arrears of rent and continue to deposit monthly rent at the rate admitted by him.
20. It is apparent from the scheme of the Act that tenants occupying buildings covered by the Act, for which fair rent was not fixed, enjoy the liberty of depositing arrears of rent and continue to deposit monthly rent at the rate admitted by him. But, once adjudication as to the rate of fair rent in respect of a building has been done by a competent Rent Control Court in a properly instituted proceedings between the landlord and tenant, the tenant's liberty to cling on to the admitted arrears comes to an end. 21. Even though Section 15 of the Act does not apply while dealing with a dispute under Section 12 of the Act, the principles of estoppel embodied in Section 115 of the Evidence Act, 1872 will get attracted and stand in the way of the tenant disputing his liability to deposit fair rent already determined. Common law principles and doctrine of fair play too prevent the tenant from raising such a contention. Aforementioned reasons prompt me to agree with the conclusions arrived at by my learned brother. Order of the Court: In the result, original petition is allowed. We set aside the impugned orders. The Rent Control Appellate Authority, Thrissur is directed to decide upon the amount of arrears of fair rent payable by the respondent based on the respective statements filed by the parties and dispose of I.A.Nos.4801 and 4637 of 2018 in the light of the law declared by us as above.