K. Narasimha
Rao Vs. T.M. Nasimuddin Ahmed [1996] INSC 308 (23 February 1996)
Verma,
Jagdish Saran (J) Verma, Jagdish Saran (J) Singh N.P. (J) Venkataswami K. (J)
J.S. Verma. J.
CITATION:
1996 AIR 1214 1996 SCC (3) 45 JT 1996 (3) 181 1996 SCALE (2)570
ACT:
HEAD NOTE:
Leave
granted.
Respondent
is a tenant of the appellant in a premises at Chengalpattu in Tamilnadu. The
appellant filed a petition for eviction of the respondent-tenant on the ground
of willful default in payment of rent for the period July 1990 to November 1990
in spite of a notice dated 16.11.1990. The monthly rent is Rs.150/-. The
respondent denied that there was any willful default. He contended that certain
repairs had been made in the premises by him with the consent of the landlord
for which Rs.1000/- was spent by him; that amount had to be adjusted towards
the rent due for the said period;
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
Rent Controller rejected the respondent-the tenant's contention and held that
there was wilful default committed by the tenant in the payment of rent for
that period. An order of eviction was made against the respondent tenant. The
appellate authority rejected the tenant's appeal. The tenant then preferred a
Civil Revision Petition in the High Court which has been allowed by the impugned
order dated 9.2.1993 taking the view that on these facts there was no wilful
default in payment of the rent by the respondent.
It was
admitted that a sum of Rs.3000/- was paid by the respondent to the appellant as
advance even though according to Section 7(2) of the Tamil Nadu Buildings
(Lease and Rent Control) Act, 1960, (hereinafter referred to as "the Tamil
Nadu Act") the landlord could receive only one month's rent in advance.
Accordingly, the excess amount of Rs.2850/- paid as advance by the tenant to
the landlord was required to be refunded by the landlord. The question,
therefore, is whether the said 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.
The
High Court, on a construction of section 7(2) of the Tamil Nadu Act, held that
the tenant could not be held to have committed willful default in payment of
rent on these facts. The High Court also took the view that Section 7 of the
Tamil Nadu Buildings (Lease and Rent and Eviction) Control Act,1960. For this
reason, it held that the decision on this Court in Modern Hotel,Gudur,
Represented by 686) is applicable to hold that the tenant has not committed any
wilful default in payment of the rent. The other decisions under provisions of
the corresponding Act in Bihar were distinguished on the different
language of the provisions in the Bihar Buildings (Lease, Rent and Eviction)
Control Act (hereinafter referred to as "the Bihar Act").
Aggrieved
by the decision of the High Court allowing the tenant's Civil Revision Petition,this
appeal by special leave has been filed by the landlord.
It is
clear from the narration of facts that the ground of willful 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 nonexistent if the excess amount of Rs.2850/-
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 language of the relevant provision in the statute is of significance
for this purpose.
Section
7 of Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 reads as under :-
"7. Landlord not to claim or receive anything in excess of fair rent or
agreed rent. - (l) Where the Controller has fixed or refixed the fair rent of a
building - (a) the landlord shall not claim, receive, or stipulate for the
payment of (i) any premium or other like sum in addition to such fair rent, or
(ii) save as provided in Section 5 or Section 6, anything in excess of such
fair rent:
Provided
that the landlord may receive, or stipulate for the payment of, an amount not
exceeding one month's rent by way of advance;
(b)
Save as Provided in clause (a), any Premium or other like sum or any rent Paid
in addition to, or in excess of, such fair 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 other wise adjusted by the
landlord:
Provided
that where before the fixation or refixation of the fair rent, rent has been
paid in excess thereof, the refund or adjustment shall be limited to the amount
paid in excess for the period commencing on the date of the application by the
tenant or landlord under sub- section (1) of Section 4 of sub- section (3) of
Section 5, as the case may be, and ending with the date of such fixation or refixation.
(2)
Where the fair rent of a building has not been so fixed- (a) the landlord 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 landlord may receive, or stipulate for the payment of, an amount not
exceeding one month's rent by way of advance;
(b)
Save as Provided in clause (a), any sum Paid in excess of 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
other- wise adjusted by the landlord.
(3)
Any stipulation in contravention of sub-section (1) or sub-section (2) shall be
null and void." (emphasis supplied) The provisions in sub-sections (1) and
(2) are similar and provide for cases where fair rent has been fixed or not
fixed, as the case may be. Sub-section (3) declares any stipulation in
contravention of sub-section (1) or sub- section (2) to be null and void. In
this case, it is admitted that fair rent of the building had not been fixed
and, therefore, sub-section (2) applies. Clause (a) of sub- section (2) enacts
that a landlord is entitled to claim and receive only the agreed rent, which
was Rs.150/- per month in this case. The proviso to clause (a) permits the
landlord to receive by way of advance an amount not exceeding one month's rent
only i.e. Rs.150/- in the present case. Clause (b) provides for the situation
where any sum is paid by the tenant to the landlord in excess of the agreed
rent save as provided in clause (a), i.e., any sum paid in excess of the agreed
rent and an amount net exceeding one month's rent by way of advance. Clause (b)
enacts that the amount in excess of the Sum which the landlord is permitted to
take under clause (a) shall be refunded by the landlord to the person by whom
it was paid, i.e., the tenant, or at the option of the tenant, shall be
otherwise adjusted by the landlord. In other words, clause (b) requires that
the excess amount paid to the landlord has to be refunded by the landlord to
the tenant unless the tenant exercises the option of requiring the landlord tc
otherwise adjust the excess amount. It is clear that this excess amount
available with the landlord is only for the benefit of the tenant, the
liability to refund the amount to the tenant being immediate unless the tenant
exercises the option to get it adjusted otherwise. The character or the excess
amount undoubtedly is that it is the tenant's money in the hands of the
landlord for return to the tenant or for adjustment towards the dues of the
tenant's at the tenant's 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 of 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 exercises 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 visualizes 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. The corresponding provisions in the Bihar Act are
different which import the pari delicto principle. This difference in the
language of the provisions of the two enactments distinguishes the cases under
the Bihar Act.
K. Radhakrishnaiah
and Others (1989 [2] SCC 686), was a case under Section 7(2) of the Andhra
Pradesh Buildings (Lease, Rent and Eviction) Control Act which is in pari materia
with the corresponding provision in the Tamil Nadu Act. In that case the amount
of arrears of rent was smaller than the amount of advance held by the landlord
on account of the tenant and it was held that there was no default of rent to
permit a decree for eviction on the ground of arrears of rent. While dealing
with the effect of sub-sections (2) and (3) of Section 7,it was held as under :
"Mr.
Rao building upon the ratio of these two decisions rightly contended before us
that when the landlord had Rs.5000/- on tenant's account with him which he was
holding for years without paying interest and against the clear statutory bar,
there could be no justification for granting a decree of eviction on 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 Section 7(3) of
the Act, the amount became payable to the tenant immediately and the landlord
with Rs.5000/- 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." With
respect we are of the opinion that this decision squarely applies in the
present case under the Tamil Nadu Act and was rightly relied on by the High
Court.
The
cases relating to the provisions in the Bihar Act from which some support was
sought by learned counsel for the appellant to overcome the effect of the
decision in Modern Hotel. Gudur (supra) are Budhwanti and Anr. vs. Gulab Chand
Prasad [1987 (2) SCC 153], M/s.Sarwan Kumar Onkar Nath vs. Subhas Kumar Agarwalla
[1987 (4) SCC 546], Nand Lal Agarwal vs. Ganesh Prasad Sah and Others [1988 (4)
SCC 215], and Bhoia alias Bhoja Ram Gupta vs.Rameshwar Agarwala and Others
[1993(2)SCC 443].
For
the purpose of this case, it is sufficient for us to say that there are
provisions in the Bihar Act, which clearly make it illegal to claim or receive
any payment in excess of the amount in addition to the rent or any sum
exceeding one month's rent in advance and there is a clear declaration that any
excess amount received would not be lawful. There is no provision in the Bihar
Act corresponding to that in sub-section (1) and (2) of Section 7 in the Tamil Nadu
and Andhra Pradesh Acts, which creates a legal obligation in the landlord to
refund the excess amount to the tenant creating a corresponding right in the
tenant to recover that amount from the landlord. The absence of such a
provision in the Bihar Act making the excess amount refundable and imposing an
obligation on the landlord to make that refund immediately or to adjust it, is
the distinguishing feature in the Bihar Act. However, on the clear provision of
the Tamil Nadu Act which applies in the present case, there is no ambiguity. Further
reference to the decisions under the Bihar Act is. therefore, not necessary.
In the
present case, excluding from consideration the tenant's claim for adjustment of
the amount of Rs.1000/- spent on repairs and the amount of Rs.750/- sent by
demand draft on receipt of the notice, the amount of Rs.2850/- with the
landlord as the excess amount of advance paid by the tenant to the landlord,
was alone sufficient to negative the landlord's claim of ejectment. The arrears
of rent from July to November 1990 was only Rs.750/- , while the excess amount
of advance was Rs.2850/-, far in excess of the arrears. The landlord was bound
to immediately refund that excess amount even before the arrears accrued, and
he not having made the refund was bound to adjust it towards the rent due from
the tenant. On these facts, the tenant could certainly not be held to be a
willful defaulter in the payment of rent. The High Court is, therefore, right
in deciding against the landlord.
Consequently,
the appeal is dismissed with costs.
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