S. Radhakrishnan, J.@mdashBoth the above Petitions have been referred to us by the Hon''ble the Chief Justice, pursuant to an order passed by the learned Single Judge in Writ Petition No. 935 of 1994 dated 26th February, 2001.
2. The short issue involved in the above is that there are two conflicting judgments of two learned Single Judges of this Court. In view thereof, the learned Single Judge had expressed the difficulty and requested the Hon''ble the Chief Justice to constitute a larger bench to resolve the conflict.
3. The basic issue raised in the above is with regard to the readiness and willingness of the tenant to pay rent and whether the rent should be paid only after the notice of termination u/s 12(3)(a) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (hereinafter referred to as the "said Act") or whether the tenant can show the readiness and willingness even prior to termination of tenancy u/s 12(3)(a) of the said Act. To appreciate the controversy, it would be relevant to quote Section 12 of the said Act;
12. No ejectment ordinarily to be made if ejectment ordinarily to be made if ejectment ordinarily to be made if tenant pays or is ready and willing to pay pays or is ready and willing to pay pays or is ready and willing to pay standard rent and permitted increases rent and permitted increases rent and permitted increases.
(1) A landlord shall not be entitled to the recovery of possession of any premises so long as the tenant pays, or is ready and willing to pay, the amount of the standard rent and permitted increases, if any, and observes and performs the other conditions of the tenancy, in so far as they are consistent with the provisions of this Act.
(2) No suit for recovery of possession shall be instituted by a landlord against a tenant on the ground of non-payment of the standard rent or permitted increases due, until the expiration of one month next after notice in writing of the demand of the standard rent or permitted increases has been served upon the tenant in the manner provided in Section 106 of the Transfer of Property Act, 1882 (VI of 1882).
(3)(a) Where the rent is payable by the month and there is no dispute regarding the amount of standard rent or permitted increases, if such rent or increases are in arrears for a period of six months or more and the tenant neglects to make payment thereof until the expiration of the period of one month after notice referred to in Sub-section (2), the Court may pass a decree for eviction in any such suit for recovery of possession. (b) In any other case, no decree for eviction shall be passed in any such suit, if, on the first day of hearing of the suit or on or before such other date as the Court may fix, the tenant pays or tenders in Court the standard rent and permitted increases then due (and thereafter, - (i) continues to pay or tender in Court such rent and permitted increases till the suit is finally decided; and (ii) also pays costs of the suit as directed by the Court.
(4) Pending the disposal of any such suit, the Court may out of any amount paid or tendered by the tenant pay to the landlord such amount towards payment of rent or permitted increases due to him as the Court thinks fit.
Explanation: In any case where there is dispute as to the amount of standard rent or permitted increases recoverable under this Act the tenant shall be deemed to be ready and willing to pay such amount if, before the expiry of the period of one month after notice referred to in Sub-section (2), he makes an application to the Court under Sub-section (3) of Section 11 and thereafter pays or tenders the amount of rent or permitted increases specified in the order made by the Court.
4. Out of the two conflicting judgments, the first judgment was delivered by Bhole, J. in Suka Ishram Chaudhari v. Ranchhoddas Manakchand Shet Gujarathi 76 BLR P. 220 wherein the learned Judge while dealing with this issue, had categorically interpreted the readiness and willingness of tenant in tendering rent and if the tenants were to send rent by money order and if the money order was refused by the landlord then landlord cannot turn round and contend that the tenant was in arrears of rent for a period of six months or more. The relevant portion of the said judgment reads as under:
Section 12 of the Rent Act provides for ejectment of the tenant by the landlord. It is divided into four clauses. The first clause prohibits a landlord from recovering possession of any premises so long as the tenant pays and is ready and willing to pay the amount of the standard rent and permitted increases, if any, and observes and performs the other conditions of the tenancy in so far as they are consistent with the provisions of the Rent Act. Therefore, as long as the tenant is ready and willing to pay and as long as he observes the conditions of tenancy, the landlord cannot recover possession of the premises. The second clause directs the landlord to give a notice before a suit on the ground of non-payment of rent is filed. A landlord under this clause cannot file a suit until expiration of one month next after the notice of the demand of standard rent. The third clause deals with two kinds of arrears. Sub-clause (a) deals with a tenant who is in arrears for a period of six months or more; Sub-clause (b) deals with a tenant, who is in arrears for less than six months and Sub-clause (c) provides that if a tenant raises a dispute regarding the amount of standard rent or permitted increases, he is allowed to raise that dispute; and if the tenant makes the payment of which he is in arrears within one month of the notice, then the landlord cannot recover possession of the premises. But if he does not raise any dispute and if he neglects to pay until expiration of the period of one month after the notice then the Court has no other alternative but to pass a decree for eviction. So far as Sub-clause (b) is concerned the tenant is asked to pay the arrears on the first date of the hearing of the suit or before such other date as the court may fix and if he continues to pay rent regularly in Court, then no decree can be passed against him, but if after notice and after filing of the suit he neither pays the arrears on the first date of the hearing of the suit or before such other date as the Court may fix, then a decree for eviction shall have to be passed. We are not concerned with the fourth clause because that clause merely deals with the disbursement of the amount paid by the tenant in Court.
Now, therefore, u/s 12 of the Rent Act this Court has to see whether the tenant was ready and willing to pay rent; whether the landlord has given him necessary notice; whether in this case, which is governed by Section 12(3)(a) the tenant is in arrears of rent for a period of six months or more and whether the tenant has neglected to make payment of the same. We have seen that the respondent had been refusing to accept rent sent to him by money orders. The arrears of rent according to the notice given by the landlord is for a period from November, 1, 1964 to May 1, 1965. The question, in view of the fact that the tenant had sent rent by money orders and the landlord refused to accept the same, is whether the tenant was still in arrears of rent. If the landlord had accepted rent, the tenant would certainly not have been in arrears and there could not have been any cause of action for the notice to be served by the landlord or the tenant. Because, the landlord had been refusing to accept rent for the period for which he was said to be in arrears, the cause of action arose. In my view the landlord cannot take advantage of his conduct in not accepting rent sent by the tenant and then give a notice saying that the tenant is in arrears of rent for more than six months.
The intention of the Legislature when enacting the Rent Act could not have been to protect the landlord who refused to accept rent and after six months turn round to say that the tenant is in arrears of rent for a period of six months or more. In my view, therefore the facts and circumstances of the instant case show that the Petitioner-tenant was ready and willing to pay rent. The facts also show that the tenant was not in arrears of rent voluntarily. It is because of the conduct of the landlord that he fell in arrears for a period of six months or more. If the landlord had accepted rent, he would not have been in arrears at all. If that is so, then in my view the view of the learned Assistant Judge in inferring that the Petitioner can be evicted u/s 12(3)(a) of the Rent Act is erroneous. On the other hand the inference and the legal effect of these proved facts is that the tenant cannot be evicted because he was neither in arrears of rent nor can be said to be not ready and willing to pay rent.
5. Thereafter Jahagirdar, J. in Abdul Gani Dinalli Momin v. Mohamed Yusuf Mohamed Isak 80 BLR 646 wherein, the learned Single Judge disagreed with the view of Bhole, J. in Suka Ishram Chaudhari v. Ranchhoddas Manakchand Shet Gujarathi and took a contrary view in the light of the Hon''ble Supreme Court Judgment in Harbanslal v. Prabhudas & Fasanacht v. W.E. Works (1978) 78 Bom. L.R. 213. and also in the case of S.D. Chhaganlal v. D.V. Shroff (1958) 3 S.C.R. 346 wherein the learned Single Judge had dealt with the aforesaid issue and observed as under:
Bhole J. on a reading of Section 12 of the Rent Act was pleased to hold that on the facts and circumstances of the case before him, the Petitioner was ready and willing to pay the rent. He took particular note of the provisions contained in Section 12(1) of the Rent Act and after noting that the tenant had made efforts to tender the amount of rent to the landlord even before the landlord had asked for the rent, he thought that the tenant was ready and willing to pay the rent within the meaning of Section 12(1) of the Rent Act.
But for the subsequent elucidation of the correct legal proposition by the Supreme Court in this regard, Mr. Nathan''s reliance on this judgment would have been justified. It has been held by the Supreme Court that Section 12(1) of the Rent Act must be read along with the other sub-sections and the Explanation to the said section. it may be noted that in the present case, the rent is payable monthly and on the date of the notice as well as on the date of the suit, the tenant was admittedly in arrears of rent for more than six months. It is true that he fell in such arrears because of the conduct of the landlord. The landlord issued a notice in accordance with Sub-section (2) of Section 12 pointing out that the tenant was in arrears of rent for more than six months. After this notice was given by the landlord on the tenant in the present case, the tenant has not admittedly tendered any amount in compliance with that notice to the landlord. This necessarily takes the present case squarely within the four corners of Section 12(3)(a) of the Rent Act, because the rent is payable by the month and there is admittedly no dispute regarding the amount of the standard rent or permitted increases. The arrears also are for a period of more than six months and admittedly again the tenant has neglected to make payment thereof until the expiration of a period of one month after the notice was given under Sub-section (2). When once these conditions are satisfied, the decree for possession must follow.
What is being contended by Mr. Nathan and what was apparently upheld by Bhole. J. on analogous facts is that if prior to the notice the tenant had remitted the amounts which were not accepted by the landlord, it could not be said that the tenant was not ready and willing to pay the rent.
In Harbanslal v. Prabhudas & Fasanacht v. W.E. Works, the Supreme Court has analysed the scheme of the Act and in particular the provisions contained in Sections 11 and 12 of the Act. In order to escape the consequences in Section 12(3)(a) of the Act, says the Supreme Court, it is incumbent upon the tenant to make an application u/s 11(3) of the Act for fixation of the standard rent, thus taking the case out of Section 12(3)(a) and carrying it to the province of Section 12(3)(b). In the present case, there is no dispute about the standard rent. But what is being contended is that an attempt had been made and that too a genuine attempt by the tenant to tender the amount to the landlord who has refused to accept the same. But it must be noted that this tender was made not after the issue of notice u/s 12(2), but before it. In Harbanslal''s case the Supreme Court pointed out its own earlier decision in S.D. Chhaganlal v. D.V. Shroff, wherein it has been laid down that Section 12(1) of the Act must be read with the Explanation and so read it means that a tenant can only be considered "to be ready and willing to pay" if before the expiry of the period of one month after notice referred to in Sub-section (2), he makes an application to the Court under Sub-section (3) of Section 11 and thereafter pays or tenders the amount of rent or permitted increases specified by the court. A tenant cannot be said to be ready and willing to pay the rent within the meaning of Section 12(1) unless he has complied with the other requirements mentioned in Section 12 and, in particular, unless he has paid or tendered the amount in arrears within one month after the expiry of the notice referred to in Sub-section (2). Sub-section (1) of Section 12 forms a part of the entire scheme relating to the payment of rent by the tenant to the landlord which is contained in Section 12 and Sub-section (1) could not be read in isolation in so far at least it relates to the payment of the standard rent. In the light of the observations of the Supreme Court in both S.D. Chhaganlal v. D.V. Shroff and in Harbanslal v. Prabhudas & Fasanacht v. W.E. Works, where S.D. Chhaganlal''s case has been referred to and reaffirmed, it cannot be said that the ratio in the judgment of Bhole J. in Suka Ishram''s case represents the correct law. Bhole J. himself has mentioned specifically as follows (p.275);
In my view, therefore, the facts and circumstances of the instant case show that the petitioner-tenant was ready and willing to pay rent.
Despite these observations, if it is meant by Mr. Nathan that there is a legal proposition laid down in the judgment of Bhole, J., it is not possible for me to hold that it represents the correct legal position in view of the clear dicta given by the Supreme Court in the two judgments to which I have referred.
6. Heard the learned Counsel Mr. Dani and Mr. Joshi appearing on behalf of the Petitioners-tenants and the learned Counsel Mr. Agarwal appearing on behalf of the Respondents-landlord. Mr. Dani pointed out that the learned Judge in Abdul Gani Dinalli Momin v. Mohamed Yusuf Mohamed Isak had wrongly applied the observations in S.D. Chhaganlal v. D.V. Shroff of the Hon''ble Supreme Court, in the sense, the learned Counsel Mr. Dani pointed out that in both the cases before the Hon''ble Supreme Court, the issue was, that there was a clear dispute with regard to the standard rent and if the tenants were to raise issue with regard to the standard rent, then in that event, after the termination of tenancy, the tenants have to move an application for fixation of standard rent and then also deposit the amount as directed by the Court within a period of one month from the date of the receipt of the notice. Mr. Dani pointed out that in that context the Hon''ble Supreme Court in Harbanslal v. Prabhudas & Fasanacht v. W.E. Works had observed that "this Court held that Section 12(1) of the Act must be read with the explanation and so read it means that the tenant can only be considered "to be ready and willing to pay" if, before the expiry of the period of one month after notice referred to in Sub-section (2), he makes an application to the Court under Sub-section (3) of Section 11 and thereafter pays or tenders the amount of rent or permitted increases specified by the Court.
7. Mr. Dani further contended that these observations of the Hon''ble Supreme Court were in the context of the case wherein the tenant had categorically raised a dispute with regard to the standard rent after the notice of termination and if that be so, the tenant has to move the Court within a period of one month and also tender the amount of permitted increases as specified by the Court, within that one month. Mr. Dani, contended that the above observations should not be construed to mean that the readiness and willingness of the tenant should be decided only on the basis of the dispute raised by the tenant, in the sense if the tenant is not having any dispute with regard to the standard rent then it is the duty of the tenant to keep on tendering rent month after month and very conveniently if a landlord refuses to accept the same, the landlord cannot take advantage of this ground and turn round and contend that after the notice of termination, the tenant had not tendered the same as per Section 12(3)(a) of the Act.
8. In this context, it would be relevant to refer to paragraph Nos. 22 and 23 of the aforesaid judgment of the Hon''ble Supreme Court in the case of Harbanslal v. Prabhudas & Fasanacht v. W.E. Works Prabhudas & Fasanacht v. W.E. Works Prabhudas & Fasanacht v. W.E. Works, which read as under;
22. The Gujarat High Court in Ambalal''s case AIR 1964 Guj. 9 (supra) held that in order to attract the applicability of Section 12(3)(a) of the Act there must be non-existence of the dispute at the date of the notice and such non-existence must continue right up to the expiration of one month from the date of service of the notice so that if the dispute is raised at any time prior to the expiration of the said period of one month, the operation of Section 12(3)(a) would be excluded. The latest point of time when according to Ambalal''s case (supra) the dispute in regard to the standard rent must be raised in order to avoid the operation of Section 12(3)(a) of the Act is the expiry of one month from the date of service of the notice. Ambalal''s case (supra) did not say that the dispute concerning standard rent must be raised before service of the notice in order to repel the applicability of Section 12(3)(a) of the Act. If the dispute is in existence prior to the expiry of one month after service of the notice though subsequent to the date of the notice that would be sufficient to oust the operation of Section 12(3)(a) of the Act. The decision of this Court in
23. The question as to when a dispute is to be raised came up for consideration in
9. Harbhanslal Jagmohandas Jagmohandas Jagmohandas has followed the earlier judgment of the Hon''ble Supreme Court in
10. It appears to us that there is no substance in the contention put forward on behalf of the appellant. Section 12(1) must be read with the Explanation and so read it means that a tenant can only be considered to be ready and willing to pay" if, before the expiry of the period of one month after notice referred to in Sub-section (2), he makes an application to the Court under Sub-section(3) of Section 11 and thereafter pays or tenders the amount of rent or permitted increases specified by the Court. We have already noted that the tenant made no payment within the period of one month of the notice of ejectment and although in his written statement he raised a dispute about the standard rent he made no application in terms of Section 11(3) of the Act. The readiness and willingness to, pay has therefore to be judged in the light of the facts of the case. Where as here a suit is filed on the ground that the tenant was in arrears for a period of more than 6 months and although raising a dispute as to the standard rent or permitted increases recoverable under the Act, the tenant makes no application in terms of Section 11(3) he cannot claim the protection of Section 12(1) by merely offering to pay or even paying all arrears due from him when the Court is about to pass a decree against him. In
10. Mr. Dani again reiterated that while dealing with a case to find out whether the tenant is ready and willing to tender rent, a landlord cannot take advantage by refusing to accept the rent if tendered and thereafter a landlord cannot contend that there has been arrears of more than six months rent. This issue has been specifically considered by the Hon''ble Supreme Court in the case of
It is not difficult to conceive of several situations which may arise and necessitate the remittance of the rent by money order. We have referred to one and the High Court had referred to another. But there could be many more such situations and it must be realised that the law intended to ensure on the one hand regular payment to the landlord and on the other protection to the tenant from a not-too-cooperative landlord. If the tenant is sure on account of a consistent course of conduct of the landlord that the latter will not accept the rent if paid hand to hand, it would be futile for him to make the trip every time; in such a situation he would be justified in remitting the rent by money order. What is it that the landlord requires? He must be assured of his rent. If the tenant pays the rent, whether by hand to hand or by money order at his cost, that should not make any difference to the landlord. Why should a tenant who resorts to the latter mode of payment be evicted even though he has shown readiness and willingness to pay the rent due and payable by him to the landlord? The law has to be broadly construed because it is not intended to trap the tenant into a situation so that the landlord can evict him. We are afraid that the High Court construed the relevant provisions of the law in a rather hyper technical manner without keeping in mind the fact that Rent Restriction legislations were enacted to protect the tenants from eviction by not-too-cooperative landlords.
11. Mr. Dani also pointed out that the same view has been followed by the Hon''ble Supreme Court in the case of
22. Mr. Sanyal has placed reliance on a judgment of this Court in
Why should a tenant who resorts to the latter mode of payment be evicted even though he has shown readiness and willingness to pay the rent due and payable by him to the landlord? The law has to be broadly construed because it is not intended to trap the tenant into a situation so that the landlord can evict him.
The Burmans tendered the rents to Anar Devi one of the co-owners and one of the plaintiffs who refused to receive the same which should not result in a trap to sue them for eviction on the ground of non-payment of rent.
12. In the light of the above, Mr. Dani contended that the view taken by Bhole, J. in Suka Ishram Chaudhari v. Ranchhoddas Manakchand Shet Gujarathi was the correct view and Jahagirdar, J. had committed an error in misconstruing the aforesaid observations of the Hon''ble Supreme Court, which was in the context where there was a dispute with regard to the standard rent and as such those observations were made in that context. Mr. Dani thereafter pointed out that the learned Single Judge of this Court had also followed the judgment of Bhole, J. and had held in the same manner in the case of
It has come on record that the tenant offered the rent for the months of October and November, 1975 by money orders, which was refused by the respondent-landlord. In the circumstances, having regard to the totality of the evidence on record, I am inclined to affirm the conclusion reached by the Trial Court that the tenant was not a wilful defaulter or had neglected in paying the rent as alleged. In the circumstances, no decree could be made u/s 12(3)(a) of the Bombay Rent Act.
Of course, it may be noted here that while delivering the said judgment by the learned Single Judge, the judgment of Jahagirdar, J. was not brought to his notice.
13. Mr. Agarwal, the learned Counsel appearing on behalf of the Respondents sought to contend that the judgment of Jahagirdar, J. was correct in the light of two judgments of the Hon''ble Supreme Court. However, Mr. Agarwal could not dispute that in the present case, there was no dispute at all with regard to the standard rent.
14. After having heard the learned Counsel for both sides in the above and after perusal of all the aforesaid judgments, it is very clear that Section 12 makes it abundantly clear that if tenant pays or ready or willing to pay standard rent or permitted increases, then no ejectment will be made. To put it in other words, the landlord will be entitled to recover possession of the premises only if the tenant fails to pay the standard rent and permitted increases. In fact the said Section 12 clearly contemplates in a negative manner that no suit for recovery of possession shall be instituted by the landlord unless the landlord satisfies that the tenant was not ready and willing to tender and had not paid the standard rent and permitted increases for over a period of six months and in the event, the tenant was not ready and willing to tender standard rent and permitted increases, and that he has been in arrears of over a period of six months, then the landlord has to issue notice terminating the tenancy and demand the standard rent and permitted increases within a month after service of the notice. Even Section 12(3)(a) makes it clear that where the rent is payable by the month and there is no dispute regarding the amount of standard rent or permitted increases, if such rent or increases are in arrears for a period of six months or more and the tenant neglects to make payment thereof until the expiration of period of one month after the notice as referred in Sub-section (2), the Court may pass a decree for eviction in any such suit for recovery of possession. By way of explanation, in the said section, it is provided that in any case where there is dispute as to the amount of standard rent or permitted increases recoverable under this Act the tenant shall be deemed to be ready and willing to pay such amount if, before the expiry of the period of one month after notice referred to in Sub-section (2), he makes an application to the Court under Sub-section (3) of Section 11 and thereafter pays or tenders the amount of rent or permitted increases specified in the order made by the Court. To put it in other words, the explanation is with regard to the procedure, when there is a dispute with regard to the standard rent. Where there is no dispute with regard to the standard rent, the tenant has to show that he was always ready and willing to tender rent and he must not be in arrears for more than six months and in the event, the tenant was in arrears for more than six months, the landlord has the right to serve notice of termination and demand rent and permitted increases, and if the tenant does not pay the same within one month, in such a case, the landlord will be entitled for a decree of eviction.
15. In view of the clear explanation of Section 12, if the tenant raises a dispute with regard to the standard rent and permitted increases, he has to approach the Court within a period of one month from the notice of termination and make deposit within a period of one month in the Court. On the contrary, if there is no dispute, the tenant must show his readiness and willingness to pay rent and permitted increases and must keep regularly tendering the same, even by money order and no landlord can take advantage, neither by refusing to accept the same nor say that the tenant had not paid the rent or tendered the rent. This fact has been rightly pointed out by the Hon''ble Supreme Court in the case of Priya Ghosh and Ors. v. Bajranglal Singhania and Anr. and it is held that the landlord will be easily able to trap the tenant by refusing to accept and turn round and to file a suit against the tenant. That is why, the Hon''ble Supreme Court has clearly observed that the law has to be construed in a fair manner and it is not intended to trap the tenant into a situation so that the landlord can evict the tenant.
16. Under the aforesaid facts and circumstances of the case, we are clearly of the view that the view taken by Bhole, J. is correct and the view taken by Jahagirdar, J. is over-ruled and the same does not lay down the correct law.
17. In the light of the above, both the above Petitions may be placed before the appropriate bench for being heard on merits, since we have only answered the question of law which was referred to us.
18. Registry is directed to place both the above matters before the appropriate bench taking Rent Act matters.
