D.Y. Chandrachud, J.@mdashThe present proceedings under Article 227 of the Constitution of India, are directed against a judgment and order dated 21st September 1989 of the 2nd Additional District Judge, Sangli. By the aforesaid judgment, the Learned Additional District Judge, confirmed a decree for eviction passed by the Joint Civil Judge, Junior Division, Sangli, on 16th March 1982 on the ground of default in the payment of the arrears of rent.
2. The Petitioner is a tenant in the occupation of four rooms on the north side of a property bearing City Survey No. 991 at Gaonbhag, Sangli. The petitioner is conducting and running a Printing Press therein since 1970. On 10th October 1977, a demand notice was issued by the Respondent-landlord by which a demand was made in respect of the arrears of rent in the total amount of Rs. 1125.69 as on 30th September 1977. The demand was based on arrears in respect of a period exceeding six months. There is no dispute about the fact that within a period of one month of the receipt of the notice, the Petitioner filed an application on 9th November 1977 for the fixation of standard rent. The Petitioner also filed an application at Exh. 5 for the fixation of interim standard rent. The suit came to be disposed of on 15th March 1982 and while disposing of the suit, the Learned Trial Judge fixed the standard rent of the suit premises at Rs. 150/- per month exclusive of electricity and water charges. The Learned Trial Judge decreed the suit for eviction and the judgment came to be confirmed in appeal by the Learned Additional District Judge, Sangli, on 21st September 1989. The Learned Additional District Judge while confirming the decree for eviction held, relying upon a judgment of a Learned Single Judge of this Court reported in 1986 Bombay Rent Cases 316 that the protection of Section 12(3)(b) would not be available to the tenant "merely because he has completed empty formality of moving an application for determination of the standard rent." The Appellate Court held that it was obligatory for the tenant to move the Court to specify the amount payable by the tenant and, therefore, although interim rent was not fixed, it was obligatory for the tenant to deposit the rent. The Appellate Court relied on the order passed by the Trial Court on an application at Exhibit 18 by which the tenant had been directed on the application of the landlord to deposit the arrears of rent and other charges within a period of one month from 7th November 1979. The Appellate Court noted that the tenant had made several applications for the extension of time to effect the deposit. In sum and substance, the finding of the First Appellate Court was that the tenant was irregular in making the payment of rent, Particularly during the period 1978 and 1979 when no payment was made and the applications subsequently filed by the tenant would not show that the delay had been condoned. The decree for eviction was consequently confirmed.
3. Counsel appearing on behalf of the Petitioner urged that in accordance with the provisions of Section 12(3)(a) of the Bombay Rent Act as it stood at the material time prior to its amendment in 1987, the Petitioner has within a period of one month of the receipt of the notice from the landlord, filed an application for the determination of standard rent. Thereafter, under the provisions of Section 11(3), it was necessary for the Court to make an order directing the tenant to deposit in Court forthwith and thereafter, monthly or periodically such amount of rent or permissible increases as the Court considered due to the landlord pending a final decision on the application. The submission that was urged is that there was no such determination by the Trial Court u/s 11(3) and the order that was passed by the Trial Judge on 7th November 1979 upon the application of the landlord at Exh.18 cannot be construed as an order u/s 11(3). Besides, it was submitted that even the order as it stands, did not contain any direction to the Petitioner to deposit thereafter, monthly or periodically such amount of rent as the Court would consider as reasonably due the landlord. Hence, the submission was that in the absence of an order u/s 11(3), there was no default on the part of the Petitioner to pay the amount of rent. Reliance was also placed upon the explanation to Section 12 of the Act and it was urged that as a result thereof, there is a deeming fiction that the tenant is ready and willing to pay the amount of standard rent if before the expiry of a period of one month from the receipt of the notice u/s 12(2), the tenant makes an application to the Court u/s 11(3) and thereafter pays or tenders the amount of rent or permitted increases specified in the order made by the Court. In the present case, it was urged that there was no order of the Court u/s 11(3) until the amount of standard rent came to be fixed by the Trial Court while finally disposing of the suit. The submission, therefore, was that the Learned Trial Judge ought to have given to the Petitioner an opportunity at that stage of depositing the arrears of standard rent, if any. In any event, it has been urged that during the pendency of the suit as well as the appeal, amounts were regularly deposited by the Petitioner from time to time. During the pendency of the suit, a total amount of Rs. 10,866/- came to be deposited. Reliance was also placed on chart showing the deposits made during the pendency of the appeal.
4. On the other hand, it has been urged on behalf of the Respondent that the Petitioner had not been regular in making deposits of rent during the pendency of the trial. The Petitioner had filed applications for extension of the period to effect the deposit of rent and the fact that the Petitioner had not been regular was admitted by him in the course of his evidence in the trial. These submissions can now be considered.
5. Section 12(1) of the Rent Act provides that the 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 the Act. Section 12(2) of the Act then provides thus:
"12(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)."
Section 12(3) as it stood at the material time provided as follows :
"12(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 data as the Court may fix, the tenant pays or tenders in Court the standard rent and permitted increases then due.
(c) and thereafter.-
(i) continues to pay or tender in Court such rent and permitted increases till the suit is finally decided: and
(ii) pays costs of the suit as directed by the Court."
Section 11(3) of the Act provides as follows:
"11(3) If any application for fixing the standard rent or for determining the permitted increases is made by a tenant who has received a notice from his landlord under Sub-section (2) of Section 12, the Court shall make an order directing the tenant to deposit in Court forthwith, and thereafter monthly or periodically, such amount of rent or permitted increases as the Court considers to be reasonably due to the landlord pending the final decision of the application and a copy of such order shall be served upon the landlord. Out of the amount so deposited, the Court may make order for the payment of rent or increases due to him, as it thinks fit. If the tenant fails to deposit such amount, his application shall be dismissed."
6. In the present case, the provisions of Section 12(3)(a) are not attracted. Clause (1) of Sub-section (3) applies to a case where there is no dispute regarding payment of standard rent or permitted increases. In this case, a dispute was raised by the Petitioner as stipulated within a period of one month of the receipt of the notice of the landlord by filing an application for the determination of the standard rent. Section 12(1) postulates that the landlord shall not be entitled to the recovery of possession, so long as the tenant pays or is ready and willing to pay the amount of the standard rent and permitted increases. The explanation to Section 12 provides a legal fiction and stipulates that the tenant is deemed to be ready and willing to pay the amount of the standard rent or permitted increases if (i) before the expiry of the period of one month after receipt of a notice u/s 12(2), he makes an application to the Court u/s 11(3) and (ii) he thereafter pays of tenders the amount of rent or permitted increases specified in the order made by the Court. The explanation to Section 12 and Section 11(3) of the Act, therefore, contemplate that upon the receipt of a notice u/s 12(2), the tenant is entitled to make an application u/s 11(3) for the determination of the standard rent or for determining the permitted increases. On the application, the Court has to make an order directing the tenant to deposit forthwith and thereafter monthly or periodically such amount of rent or permitted increases as the Court considers to be reasonably due to the landlord, pending final disposal of the application. If the tenant fails to deposit the amount, the application is liable to be dismissed.
7. In the present case, the application filed by the tenant for the determination of the standard rent came to be disposed of by the Learned Trial Judge while disposing of the suit. There is no dispute about the fact that the tenant had moved an application u/s 11(3) for the determination of interim standard rent, but no order was passed thereon. The First Appellate Court has relied on the order which was passed by the Trial Court on the application at Exh.18, which had been filed by the landlord on 23rd August 1979. Now, a perusal of the application would show that the landlord had in the aforesaid application sought the recovery of various amounts, including charges due on account of water and electricity and monthly compensation. The landlord had also sought a direction that the tenant be directed to deposit future payments. On the aforesaid application, the following order was passed :
"Heard, Referred application and say thereto.
My learned predecessor has directed the applicant to deposit electric, water etc. charges regularly, below Exh. 13. The rent stated is seen to be agreed rent.
Hence, the applicant to deposit said amount in the Court within one month from today.
8. The record and proceedings has been perused by me with the assistance of Counsel. The record contains several applications which were moved by the tenant after the order dated 7th November 1979 for an extension of time to effect deposit. In the first of those applications dated 5th December 1979, the petitioner stated that though the time which had been granted by the Trial Court to effect deposit was due to expire, there had been no determination of the interim rent. Consequently, since there was no determination of the interim standard rent, the Petitioner sought an extension of time. The Learned Trial Judge passed an order thereon on 5th December 1979 granting two weeks time in view of the contents. From the record it appears that there were further applications by the tenant on 21st December 1979, 2nd January, 1980, 19th January, 21st January 1980, 25th January 1980, 15th March 1980 and 28th March 1980. The application dated 2nd January 1980 was granted by the Learned Trial Judge. In the application dated 19th January 1980, the Petitioner stated that he was depositing an amount of Rs. 1500/- on that date and prayed that a further extension of time may be granted to deposit the balance. On the aforesaid application, the Trial Judge passed an order that the amount may be accepted. In the application dated 22nd January 1980, the petitioner recorded that the payment which had been made until then, amounted to Rs. 3268.45 and applied for a further extension of one month. On the aforesaid, the Learned Trial Judge passed an order permitting the Nazir to accept the payment and order that a short time was granted for making further payment. Similarly on the applications dated 25th January 1980 and 15th March 1980, the Learned Trial Judge granted time to the tenant to effect deposit. Thus, it would appear that while there was a delay on the part of the tenant in effecting deposit as originally directed by the Learned Trial Judge, applications were made from time to time for an extension of time to effect deposit and orders were passed thereon by the Learned Trial Judge extending time. Both the Learned Counsel have fairly drawn the attention of the Court to a chart in the record and proceedings which would demonstrate that even during the course of the appeal, a deposit was made of the arrears of rent from month to month. Thus in the present case, the Petitioner had filed an application for the determination of the standard rent before the Trial Court within a period of one month of the receipt of a notice from the landlord u/s 12(2). An application for the determination of the interim standard rent also came to be filed. On the application filed by the tenant u/s 11(3) upon the receipt of the notice, there was, in any event, no order passed by the Trial Court, determining such amount of rent which the Court considered to be reasonably due to the landlord and which would have to be deposited by the tenant monthly or at periodical intervals. The order passed by the Trial Court on 7th November 1979 on the application at Exh.18 moved by the landlord did not contain any specific direction to the tenant to deposit the future dues accruing on account of rent either monthly or at periodical intervals in such amount as the Court considered reasonably due to the landlord. Even the Appellate Court, while construing the order passed on Exh. 18 has proceeded on the basis that the order gives an indication that the tenant was to deposit the rent as per the agreed rate. Reading the order of the Trial Judge dated 7th November 1979, it would not follow therefrom that there was any direction in regard to the deposit of future rent, if any. In fact, from the photocopy of the aforesaid order which is placed on the record and proceedings, it appeared that a direction in regard to the deposit of future rentals was specifically scored out in the order of the Learned Trial Judge. Be that as it may, it is evident from the record that deposits were made by the tenant both during the pendency of the suit and in appeal. Applications were made when there was a delay, for the condonation thereof before the Trial Court. Section 11(3) postulates that if the tenant fails to deposit the amount which he is directed to deposit, the application is liable to be dismissed. In the present case, the Learned Trial Judge while disposing of the application for the fixation of the standard rent, did not perceive that there was any default on the part of the tenant because, if there was any default the application for fixation of the standard rent would have been liable to be dismissed. On the contrary, the Learned Trial Judge proceeded to fix the standard rent in an amount of Rs. 150/- per month in his judgment and order dated 15th March 1982 disposing of the suit.
9. Section 12(3)(b) provides that no decree of eviction shall be passed, if on the first day of the hearing of the suit or on or before such other date as the Court may fix, the tenant pays or tenders before the Court the standard rent and permitted increases. u/s 12(3(c) the tenant has to thereafter, continue to pay or tender in Court such rent meaning thereby, the standard rent and permitted increases. In Mohanlal Gokulchandji v. Khimraji Bhagaji, 1978 Mh.L.J. 611, Justice R.A. Jahagirdar speaking for this Court, construed the provisions of Section 12(3)(b) and held that it cannot be suggested that once dates are fixed by the Trial Court, those dates cannot be altered to me the requirement of justice or the exigencies of a situation that may later on arise in the suit. The Learned Judge also held that the provision dies not presuppose the fixation of an inflexible schedule of payment which cannot be altered by the Court. This Court held that if payments are made even after the date fixed for the payment and the Court accepts the same without treating them as defaults, it cannot be held that there was no compliance with the provisions of Section 12(3(b) because ultimately all the payments are made into the Court and are accepted by the orders of the Court.
10. The provisions of Section 12(3)(b) came up for interpretation before the Gujarat High Court in Somabhai Kahjibhai Kharva v. Ramanlal Chhitabhai, 1980 Bom. R.C. 56. That was also a case were interim standard rent was not fixed during the trial. There was a dispute regarding the standard rent which was settled for the first time in the judgment of the Trial Court. Mr. Justice A.M. Ahmadi (As the Learned Chief Justice then was) held that since the standard rent came to be settled for the first time by the Trial Court in its final judgment and order, the Court ought to have given time to the tenant to deposit the arrears of rent. Similarly, in Rupaben v. Babubhai Deojibhai, 1983 Bom. R.C. 377, a Learned Single Judge of the Gujarat High Court held that in order to avail himself of the benefit of Section 12(3)(b), the tenant must know at what rate he has to go on paying the rent and if before the Trial Court and the Appellate Court, the question of deciding what the standard rent is remained to be revolved, the tenant can be said to be technically not able to deposit the rent fully, even though he was willing to do so.
11. The first Appellate Court has placed reliance on the judgment of a Learned Single Judge of this Court in Dhanilal Ganpat Kank v. Lalji Mohanlal Thakkar, 1986 Bom.R.C. 316, wherein S.M. Daud, J. held that the ''empty formality'' of moving an application for determination of standard rent within a month of the receipt of a demand notice u/s 12(2) is not enough. The Learned Single Judge held that though the Court was under an obligation to forthwith specify the amount payable by the tenant, it could do so only if it was moved by the tenant. In that case, it appears that the tenant had not done anything at all after the filing of the application for the determination of standard rent. The facts of the present case, on the other hand, will show that apart from moving the application for determination of the standard rent, the tenant had moved an application at Exh. 5 for fixation of interim standard rent. Even after the Trial Court passed an order on 7th November 1979 on the application of the landlord on Exh.18. the tenant continued by his applications dated 5th December 1979, 21st December 1979, 2nd January 1980 and 2nd January 1980 to draw the attention of the Court to the fact that there had been no determination of the interim standard rent. In the meantime, deposits were made and on applications for the extension of time, the Trial Court had extended time.
12. The provisions of Section 12(3)(b) have been construed in a judgment of a Learned Single Judge in Rehanabai Shaikh Farid v. Laxman Piraji Kumbhar. (Writ Petition No. 3846 of 1994, decided by D.K. Deshmukh, J. on 19th February 1997). The Learned Single Judge has held thus:
"The tenant, who is in arrears for the period of more than 6 months, after receiving notice of demand from the landlord, can make an application under Sub-section 3 of Section 11 of the Act for fixation of the standard rent. The moment, such an application is made, in view of the provisions contained in the explanation No. (I), appearing below Section 12 of the Act, it is to be deemed that the tenant is ready and willing to pay the rent. Perusal of the provisions of Sub-section 1 of the Section 12 of the Act shows that a landlord becomes entitled to recover possession of the demise premises, only in one contingency, namely, if the tenant is not ready and willing to pay the rent. Perusal of the provisions of explanation (I), appearing below Section 12, shows that the moment the tenant makes an application for fixation of the standard rent within one month from the receipt of the notice, a statutory presumption is raised that he is ready and willing to pay the rent. In the fact of this statutory presumption in terms of the provisions of Sub-section 1 of Section 12 of the Act, the landlord would not be entitled to recover possession from the said tenant. Perusal of Sub-section 3 of Section 11 of the Act shows that after a tenant makes an application for fixation of the standard rent, the duty is cast on the Court to fix the amount of rent and it is only after such an order is made then the duty cast on the tenant to deposit the rent. If there is no order made by the Court, then the tenant is not obliged to deposit any amount of rent. In any case the moment an application for fixation of the standard rent is made a statutory presumption arises that the tenant is ready and willing to pay rent and, therefore, the landlord loses his cause of action in terms of provisions of Sub-section 1 of Section 12 of the Act to recover the possession of the premises on the ground that the tenant is defaulter."
The Appellate Court has, in the present case placed significant reliance on the circumstance that on the application moved by the landlord on 23rd August, 1979, the Trial Court had directed that the arrears of rent and other charges be deposited within one month from 7th November 1979. The Appellate Court has noted that the Petitioner had made several application for the extension of time to effect the deposit and had made no grievance about the fixation of the interim rent. The Appellate Court while arriving at the conclusion that the Petitioner had not deposited the rent regularly in Court relied on the circumstances that no payment was made for the period of two years 1978 and 1979. The approach of the Appellate Court suffers from a clear fallacy of reasoning. The order of the Learned Trial Judge dated 7th November 1979 cannot be construed to be a direction u/s 11(3) on the application filed by the tenant for the fixation of the standard rent. Even otherwise, on its plain terms the direction of the Trial Court contained no provision for the payment of future rent. The conclusion of the Appellate Court and the reasoning, thus suffer from a clear error apparent on the face of the record and calls for the interference of this Court under Article 227. The Appellate Court has clearly lost sight of the circumstance that the Petitioner had duly move an application for the determination of the standard rent within a period of one month of the receipt of the notice u/s 12(2). No order was passed by the Trial Court u/s 11(3). Counsel for the Respondent fairly stated that on perusing the record and proceedings it does emerge that there was no order u/s 11(3). The tenant, therefore, continued to have the benefit of the legal fiction in the explanation to Section 12 under which he would be deemed to be ready and willing to pay the amount of the standard rent once he had filed an application u/s 11(3) within a period of one month of the receipt of the notice u/s 12(2) and thereafter, paid or tendered the amount specified in the order made by the Court. Even on the assumption that there may have been some delay on the part of the tenant in depositing the rental payment, this delay would not disentitle the tenant to the benefit of the statutory provision for two reasons. The first is that the deposit by the tenant was not with reference to any order passed by the Court u/s 11(3). Second, the conduct of the tenant would show that he had from time to time, made applications before the Trial Court for extending the time to effect deposit and several orders were in fact passed by the Trial Court granting time. Payments also were made regularly before the Appellate Court during the pendency of the appeal.
13. In the circumstances, the interference of the Court under Article 227 of the Constitution is clearly warranted in the interests of justice to correct an error apparent in the judgments below. A manifest failure of justice will result if the decree for eviction is allowed to stand. The impugned order of the Learned 2nd Additional District Judge, Sangli, dated 21st September 1989 shall stand quashed and set aside. Regular Civil Suit No. 608 of 1977 instituted by the Respondent for the recovery of possession on the ground of default in the payment of rent shall accordingly stand dismissed. There shall be no order as to costs.
