M/S Chordia
Automobiles Vs. S. Moosa & Ors [2000] INSC 94 (29 February 2000)
A.P.Misra,
N.S.Hegde
MISRA,
J.
This
appeal is directed against the eviction of the appellant on account of default
of payment of rent under Section 10(2)(i) of the Tamil Nadu Buildings (Lease
and Rent Control) Act, 1960.
The
appellant took the disputed shop situated at 71, Usman Road, T. Nagar, Madras on rent
in the year 1972 from the erstwhile owner who sold this property to the present
respondents in the year 1977. The rent then paid by the appellant was at the
rate of Rs.275/- p.m. Thereafter, it was raised to Rs. 343.75 p.m. from
1.4.1979. Next enhanced to Rs.500/- p.m. w.e.f. 1.9.1985. In the year 1988 the
appellant desired to change his business from spare parts of two-wheelers to
sale of tyres, then the rent was again increased to Rs.750/- p.m. The appellant
desired that for selling of tyres he needs to install air-conditioner and
compressor with water connection for checking of tubes and fitment of tyres.
This also requires additional electricity load, a water tap and a separate
lavatory. For doing these, the appellant offered and respondent agreed on
condition that the rent be further enhanced from Rs.750/- to Rs.1,000/- p.m. On
this oral agreement the appellant spent about Rs.1,00,000/- on renovation.
However, the respondent failed to discharge their obligations for providing the
aforesaid additional facilities despite repeated requests.
On
respondents failure to do so, the appellant filed a suit against him that the
landlord was not entitled to claim this enhanced rent of Rs.1,000/- p.m. In
support he stated that on the ground floor there are nine shops including the
one with the appellant, similarly situated, but none of these shops have any
rental of Rs.1,000/- p.m.
Instead
of complying with the said conditions, the appellant received respondents
notice dated 9.8.1989 through his advocate that the agreed rent of Rs.1,000/-
p.m.
from
1.4.1989 has not been paid in spite of demands. Before any reply could be sent
the appellant was served with a copy of the eviction proceedings dated
27.9.1989 under Section 10(2)(i) of the aforesaid Act. The appellant contested
this claim that enhancement agreed to pay Rs. 1,000/- was on a clear
understanding that the respondent would provide separate toilet, water
connection, additional electricity load etc. In fact, during the pendency of
the said petition the counsel for the appellant wrote a letter dated 17.1.1990
to the counsel of the respondent for getting the three- phase electric connection
for the shop in question.
Since
there was a dispute in respect of rate of rent the Rent Controller passed an
order under Section 11 on 30.7.1990 directing the appellant to deposit Rs.17,250/-
towards the rent for the period 1.1.1989 to 31.7.1990. The aforesaid amount was
directed to be paid by 16.8.1990. The appellant deposited the said amount in
the treasury of the court on 13.8.1990 and thereafter continued to pay/deposit
the rent at the rate of Rs.750/- p.m. initially in the court and then directly
to the respondents who thereafter accepted the same. Thus, there has been no
conceivable default. However, the Rent Controller decreed the petition of the
respondent. The Rent Controller held that the respondent did not pay the
arrears of rent even till filing of the counter in the said petition and it was
paid only when Order under Section 11 was passed which constitutes to be wilful
default. On appeal, the Appellate Authority confirmed the said order. The
Appellate Authority records, in spite of receiving the aforesaid notice, Ex.
P-2, the appellant did not sent any reply to contradict the contents of the
said notice. Finally the revision was also dismissed by the High Court against
which the present appeal has been preferred.
Learned
counsel for the appellant submits that the Rent Controller without application
of mind held, appellant to be wilful defaulter. The Appellate Authority also
fell into the same error, while confirming the order. It records not sending
any reply to the said notice dated 9.8.1989 amounts to non-controverting the
facts and not depositing the rent within the time stated therein constitute a
case of wilful default. Submission is, the authorities did not properly
construe Explanation I to Section 10 (2)(i) of the Act. The said notice is
dated 9.8.1989, thus wilful default under the aforesaid provisions could only
mature after expiry of 60 days from the date of the notice and since before the
expiry of that period, the landlord filed eviction petition on 20.9.1989, hence
on that date the appellant could not be said to be a wilful defaulter nor it
was possible for the appellant to send any reply, as the eviction suit itself
was filed before the expiry of the said 60 days. For ready reference Section
10(2)(i) is quoted hereunder:-
10.
Eviction of tenants.(1) A tenant shall not be evicted whether in execution of a
decree or otherwise except in accordance with the provisions of this section or
sections 14 to 16:
(2) A
landlord who seeks to evict his tenant shall apply to the Controller for a direction
in that behalf. If the Controller, after giving the tenant a reasonable
opportunity of showing cause against the application, is satisfied (i) that the
tenant has not paid or tendered the rent due by him in respect of the building,
within fifteen days after the expiry of the time fixed in the agreement of
tenancy with his landlord or in the absence of any such agreement, by the last
day of the month next following that for which the rent is payable, or ..
Provided that in any case falling under clause (i) if the Controller is
satisfied that the tenants default to pay or tender rent was not wilful, he
may, notwithstanding anything contained in section 11, give the tenant a
reasonable time, not exceeding fifteen days, to pay or tender the rent due by him
to the landlord up to the date of such payment or tender and on such payment or
tender, the application shall be rejected.
Explanation
I: For the purpose of this sub- section, default to pay or tender rent shall be
construed as wilful, 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.
{Emphasis
supplied} In support that there was no default, it is submitted that always in
the past, the rent was regularly collected by the agent of the landlord as for
some reasons he did not come to collect the amount fell in arrears. Further, as
dispute arose of the hike of the rent with effect from 1.4.1989, the arrears
fell due, thus on these facts, it would not constitute to be a case of wilful
default.
Further,
Explanation to Proviso of Section 10(2) makes it clear that the wilful default
could only be if the tenant defaults after the expiry of two months from the
date of the notice, and as this period did not expire when the suit was filed,
the finding of wilful default is liable to be set aside. However, when an order
was passed under Section 11(4) fixing tentative rent the amount so determined
was paid within the period granted. For all these reasons, even if it could be
said that there was default, it would not a wilful default. This aspect had not
been considered by any of the authorities including High Court, which summarily
dismissed the revision. He has also taken us to the chart filed by the
appellant, to show that he never defaulted in the past except the disputed one
since the year 1972. The default referred to in the notice is for the period
1.1.1989 to 31.3.1989 at the rate of Rs.750/- p.m. and from 1.4.1989 to
31.7.1989 at the rate of Rs.1,000/- p.m. So far arrears for the second period
1.4.1989 to 31.7.1989, admittedly there was a dispute of rate of rent. For the
first period, i.e., from 1.1.1989 to 31.3.1989, for a period of three months,
the case is that as rent was being collected regularly earlier by the agent of
the landlord and as he did not come to collect the same, the arrears fell due.
It is further submitted, the chart shows for the subsequent period also that
appellant has been paying rent regularly without any default.
On the
other hand, learned counsel for the respondent submits that fixation of rent
under Section 11 and payment thereafter is no defence for the default. This
adjudication is interim in nature and is subject to the final decision by the
court. Further, in spite of notice, neither any reply was sent by the appellant
nor the amount was tendered. Even thereafter he took number of adjournments
before the Rent Controller, hence all this constitute to be a case of a wilful
default.
We
have heard learned counsel for the parties and examined their submissions and
made overall assessment to judge, whether any wilful default was committed or
not by the tenant. It is not disputed by the landlord that the appellant is a
tenant of this accommodation since 1972 and was regularly paying the rent in
the past. The only default is, as aforesaid, for the disputed period from
1.1.1989 to 31.3.1989 at the rate of Rs.750/- p.m. and from 1.4.1989 to
31.7.1989 at the rate of Rs. 1000/- p.m. These facts reveal that there is a
default towards payment of rent by the tenant for the aforesaid period. The
only question is, whether this default on these facts would constitute to be or
could be construed to be a wilful default? We proceed to examine the law on
these facts. The statute has given a benefit to a tenant viz., if there is
default in payment of rent and a notice is sent by the landlord of such
default, then the default would mature into a wilful default only if the
default continues in other words the defaulted amount is not paid within a
period of two months from the date of notice. In the present case, notice was
sent on 9.8.1989, thus the said two months would have expired only on the
9.10.1989. In other words, in case the tenant could have paid the said amount
within this period, it would not be a case of wilful default. We find in the
present case after sending the said notice, the landlord did not wait for the
expiry of the said period and before that filed the eviction petition R.C.O.P.
No. 2963 of 1989 on 20.9.1989 alleging the wilful default and further if the
suit itself was filed before the said period there could be no question of
sending any reply to the said notice. Next, we find notice contained amount
which fell into arrears is of two periods.
The
amount for the period 1.4.1989 to 31.7.1989 was admittedly in dispute. In fact
for this reason during pendency, a proceeding to fix interim rent under section
11 was initiated. The tenant reasonably thought to pay the same after its
adjudication and in fact deposited the same the moment it was adjudicated. So far
the earlier period, i.e. 1.1.1989 to 31.3.1989 for three months, the case of
the appellant is that tenants long dependency in the past, on the agent of the
landlord to collect the rent and as he did not come, thus rent could not be
tendered, thus this could not be a case of wilfully not paying the rent. It may
be, as enhancement of rent came in dispute, the agent did not come to collect
the rent. We have given our full consideration, and find submission for the
appellant has force, which has not been adverted to by any of the three courts
below. This coupled with Explanation to the proviso of Section 10 (2)(I) as two
months did not expire from the date of notice when suit was filed it could not
to be a case of wilful default.
Wilful
default means an act consciously or deliberately done with open defiance and
intent not to pay the rent. In the present case the amount of rent defaulted
firstly is on account of fact that the agent of the landlord did not come to
collect the rent for some reason. Further, notice of default contained disputed
rent. This fact coupled with the fact that eviction suit was filed before
maturing a case of wilful default in terms of the Explanation to the proviso of
Section 10(2). The dispute of rent admittedly was genuine. Further, we find
conduct of the appellant throughout in the past being not of a defaulter or
irregular payer of rent. Thus, all these circumstances cumulatively come to
only one conclusion that the appellant cannot be held to be a wilful defaulter.
Pattabiraman
and Ors. (1985 [1] SCC 591) this Court had occasion to consider the word Wilful
default under Section 10(2) of the aforesaid of the Tamil Nadu Buildings (Lease
and Rent Control) Act, 1960 which is reproduced below:- Before, however, going
into this question further, let us find out the real meaning and content of the
word wilful or the words wilful default. In the book A Dictionary of Law by L.b.
Curzon, at page 361 the words wilful and wilful default have been defined thus:
Wilful-
deliberate conduct of a person who is a free agent, knows that he is doing and
intends to do what he is doing.
Wilful
default Either a consciousness of negligence or breach of duty, or a
recklessness in the performance of a duty.
In
other words, wilful default would mean a deliberate and intentional default
knowing full well the legal consequences thereof. In Words and Phrases, Volume
11-A (Permanent Edition) at page 268 the word default has been defined as the
non-performance of a duty, a failure to perform a legal duty or an omission to
do something required. In volume 45 of Words and Phrases, the word wilful has
been very clearly defined thus:
Wilful
intentional; not incidental or involuntary;
- done
intentionally, knowingly, and purposely, without justifiable excuse as
distinguished from an act done carelessly; thoughtlessly, heedlessly or
inadvertently;
- in
common parlance word wilful is used in sense of intentional, as distinguished
from accidental or involuntary.
P. 296
Wilful refers to act consciously and deliberately done and signifies course of
conduct marked by exercise of volition rather than which is accidental,
negligent or involuntary.
In
Volume III of Websters Third New International Dictionary at page 2617, the
word wilful has been defined thus :
governed
by will without yielding to reason or without regard to reason; obstinately or
perversely self-willed.
The
word default has been defined inVol. I of Websters Third New International
Dictionary at page 590 thus :
to
fail to fulfil a contract or agreement, to accept a responsibility; to fail to
meet a financial obligation.
In
Blacks Law Dictionary (Fourth Edn.), at page 1773 the word wilful has been
defined thus:
Wilfulness
implies an act done intentionally and designedly; a conscious failure to
observe care;
conscious;
knowing; done with stubborn purpose, but not with malice.
The
word reckless as applied to negligence, is the legal equivalent of wilful or
wanton.
Thus,
a consensus of the meaning of the words wilful default appears to indicate that
default in order to be wilful must be intentional, deliberate, calculated and
conscious, with full knowledge of legal consequences flowing therefrom. Taking
for instance a case where a tenant commits default after default despite oral
demands or reminders and fails to pay the rent without any just or lawful
cause, it cannot be said that he is not guilty of wilful default because such a
course of conduct manifestly amounts to wilful default as contemplated either
by the Act or other Acts referred to above.
For
the foregoing reasons and as per our findings we come to the irresistible
conclusion that all the three courts below committed error in law in holding
tenant to be a wilful defaulter. So, we hold even if he was in default it is
not a case of wilful default. We hold that the appellant committed no wilful
default. Accordingly, the impugned orders and judgments of all the three courts
are hereby set aside. The appeal is allowed. However, on the facts and
circumstances of the case, the costs on the parties.
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