Bombay High Court

Indian Oil Bhawan vs Vijay on 29 November, 2011

Bench: Ravi K. Deshpande

                                        1

               IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
                          NAGPUR BENCH, NAGPUR




                                                                               
                        Writ Petition No.571 of 2011




                                                       
    Indian Oil Corporation Limited,
    A Govt. Company within the meaning
    of Section 617 of the Indian Companies
    Act, 1956, having its Regd. Office at




                                                      
    Indian Oil Bhawan, G-9, Aliyavar Jung
    Marg, Bandra (East), Mumbai-440 051
    and Divisional Office at 'Akarshan',
    Busyples, 26, Central Bazar Road,
    Ramdaspeth, Nagpur-440 010,




                                            
    through Dy. Manager Mr. Kamal Kishor
    Radhavallabh Kalantri.                        ... Petitioner


    Versus
                            
                           
    1. Vijay s/o Shridhar Alsi,
       Aged about 70 years,
       Occupation - Business,
       R/o Alsi Plots,
       Gawati Bungalow,
      

       Akola.

    2. The Additional Collector,
   



       an Appellate Authority under
       C.P. & Berar Letting of Houses
       and Rent Control Order, 1949,
       Akola.





    3. The Resident Deputy Collector &
       House Rent Controller,
       Akola.                                     ... Respondents





    Shri Rohit Joshi, Advocate for Petitioner.
    Shri A.S. Chandurkar, Advocate for Respondent No.1.



                CORAM : R.K. Deshpande, J.

Date of Reserving the Judgment : 23-11-2011.

Date of Pronouncing the Judgment : 29-11-2011

Judgment :

1. The Resident Deputy Collector & House Rent Controller,

Akola, granted permission to the respondent No.1-landlord to terminate

the tenancy of the petitioner-tenant under clauses 13(1) and 13(3)(ii) and

(vi) of the C.P. & Berar Letting of Premises and Rent Control Order, 1949

(for short, "the Rent Control Order") in R.C. Case No.BRA

13(3)/AKL/1/2008-89. This was the subject-matter of challenge in Appeal

No.BRA-13(3)/Akola/1/2009-10 filed under Section 21 of the Rent Control

Order before the Additional Collector, Akola, as an Appellate Authority,

and the same was partly allowed by an order dated 30-9-2010,

maintaining the permission granted under clause 13(3)(ii) of the said

Order. Hence, both these orders are subject-matter of challenge in this

petition at the instance of the tenant. The subject-matter of dispute is

the portion of 10,710 sq.ft. of Plot No.2, Nazul Sheet No.55, situated at

National Highway No.6 at Akola, and another portion of the said plot

admeasuring 3,410 sq.ft. leased out under the lease-deed

dated 16-12-1969 registered on 12-3-1970.

2. The facts in detail are as under :

The annual lease in respect of the suit property expired on

15-4-1985. The respondent No.1-landlord issued a notice

dated 10-4-1985 calling upon the petitioner-tenant to deliver the vacant

possession of the suit premises on the ground of expiry of lease period.

Regular Civil Suit No.298 of 1985 was filed for eviction and possession on

14-4-1985. During the pendency of the suit, the petitioner-tenant

forwarded demand draft No.203963 dated 20-7-1985 for the payment of

rent for the period from 16-4-1985 to 15-4-1986. The rent was at the rate

of Rs.7,620/- payable per annum and it was forwarded under the covering

letter dated 7-8-1985. The respondent No.1-landlord, in his reply dated

22-8-1985, informed the petitioner-tenant that he cannot accept the

demand draft towards rent and he was willing to accept the said amount

towards damages to be recovered from the petitioner-tenant, and the

response to this, a proposal was called for from the petitioner-tenant.

The petitioner-tenant did not respond to this proposal.

3. On 28-4-1989, the suit was decreed for eviction and

possession. Regular Civil Appeal No.199 of 1989 was preferred by the

petitioner-tenant, which was dismissed on 16-2-1995. Thereupon,

Second Appeal No.237 of 1995 was filed before this Court, and during the

pendency of the said second appeal, an application was moved, being

Civil Application No.2173 of 2006, by the respondent-landlord for

direction to the petitioner-tenant to deposit the occupation charges at the

rate of Rs.7,500/- along with interest at the rate of 10% per annum with

effect from 15-4-1985. The said application was decided on 6-9-2006 by

this Court, directing the petitioner-tenant to pay to the

respondent-landlord directly the arrears of rent from 15-4-1985 at the

rate of Rs.7,620/- per year, without prejudice to the rights and liabilities

and subject to the proceedings pending before the Court. Subsequently,

the said second appeal was disposed of by an order dated 10-4-2008, and

taking into consideration the change in the position of law requiring

compliance of the provisions of the Rent Control Order, occurring during

the pendency of the litigation. The decree passed by the Trial Court was

made subject to the grant of permission by the Rent Controller under the

provisions of the Rent Control Order.

4. The respondent No.1-landlord accordingly filed an application

for permission to determine the tenancy of the petitioner-tenant on the

grounds mentioned in Clauses 13(1) and 13(3)(ii) and (vi) of the Rent

Control Order. This application was opposed by the petitioner-tenant by

filing written statement on 15-12-2008. The respondent No.1-landlord

filed an affidavit in lieu of evidence and he was cross-examined by the

petitioner-tenant. One Shri Kamalkishore Kalantri, the Deputy Manager of

the petitioner, also filed an affidavit in lieu of evidence and he was

cross-examined by the respondent No.1-landlord.

5. On 17-11-2009, the Rent Controller passed an order granting

permission to determine the tenancy under clause 13(1) read with

Clauses 13(3)(ii) and (vi) of the Rent Control Order. It was held that the

petitioner-tenant did not exercise its option under clause 13(1) of the

Rent Control Order and had developed the habit of remaining in arrears

of rent continuously for a long period. It was further held that the

respondent-landlord was entitled to an order of eviction also on the

ground of bona fide requirement. The appeal filed by the

petitioner-tenant was thereafter partly allowed by an order

dated 30-9-2010, holding that no case for bona fide requirement was

made out. It was held that the petitioner-tenant had failed to pay the

rent for a period of 22 years and hence was a habitual defaulter. It was

also observed that the period of tenancy had expired, but the permission

granted only on the ground under clause 13(3)(ii) was maintained by

partly allowing the appeal. Hence both these orders are subject-matter

of challenge in this petition.

6. The basic question, which arises for determination, is whether

the test, as laid down under clause 13(3)(ii) of the Rent Control Order to

grant permission to issue notice determining the lease in respect of the

suit premises, is satisfied or not. Clause 13(3)(ii) of the Rent Control

Order being relevant, is reproduced below :

"13(3) If after hearing the parties the Controller is satisfied -

... ... ...

(ii) that the tenant is habitually in arrears with the rent.

... ... ...

he shall grant the landlord permission to give notice

to determine the lease as required by

sub-clause (1)."

The Apex Court in its decision in Sunderam Pillai and others v. V.R.

Pattabiraman and others, reported in 1985(1) SCC 591, dealing with the

requirement of wilful default under the Tamilnadu Rent Control Act, has

held as under :

"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 by other Acts referred to

above."

Applying the aforesaid principles in the matter of habitual default under

clause 13(3)(ii) of the Rent Control Order, this Court has held in para 13

of its decision in Surendrakumar Ambalal Khatri v. Subhash Sitaram

Zanwar, reported in 1996(2) Mh.L.J. 1035, as under :

"13.

Applying the aforesaid principles it would be clear

that non-payment of rent month after month for a period of

11 months despite notice given by the landlord and

undertaking given by the tent that he would make the

payment of rent regularly every month, the conduct of the

tent, obviously would be that the tenant did not make the

payment intentionally and his conduct was wilful and

deliberate in not making the payment regularly with full

knowledge of legal consequences and, therefore, he was

habitually in arrears with rent."

The requirement of the said clause was considered by the Apex Court in

its decision in Rashik Lal v. Shah Gokuldas, reported in (1989) 1 SCC 542,

wherein it has been held that the crucial test appears to be the conduct

of the landlord in receiving the rent.

7. In view of the aforesaid principles laid down, what is required

to be seen is whether there was any default and it was intentional, wilful,

deliberate, calculated and conscious with full knowledge of legal

consequences. To gather this, the conduct of the parties becomes

relevant. The pleadings, evidence and other circumstances also need to

be seen. The relevant pleading in respect of habitual default is

contained only in para 10 of the application, which is reproduced below :

"10. It is further submitted that, the non-applicant is

habitual defaulter and had developed habit of remaining into

the arrears of the rent and this aspect has been duly proved

before the Civil Court and on this Court, the applicant is

entitled for the recovery of the possession from the

non-applicant."

The petitioner-tenant has denied the contents of the said para and has

alleged that he has always been prompt and particular in making the

payment. The petitioner-tenant has further taken the stand in response

to para 10 above, in para 6 of its written statement, as under :

"6) As to Para-10 : ... It would be pertinent to mention here

that on 07/08/1985 the non-applicant had issued a letter to

the applicant tendering rent for the suit properties for the

period from 01/05/1985 to 31/03/1986 and 16/04/1985 to

15/04/1986. The said letter alongwith the Demand Draft was

received by the applicant. However, vide reply dated

22/08/1985 the applicant refused to accept the rent. The

applicant had stated in the letter dated 22/08/1985 that he

was depositing the Demand Draft towards the damages and

not towards rent. It was also stated in the said reply suit for

eviction was already filed. In view of the aforesaid, it is

absolutely clear that the applicant himself had refused to

accept the rent, for which the non-applicant cannot be held

responsible. It would be pertinent to mention here that the

applicant had filed Civil Application No.2173/2006 in Second

Appeal No.237/1995 inter alia praying that the non-applicant

be directed to pay occupation charges @ Rs.7,500/- per

month with 10% interest w.e.f. 15/04/1985.

ig The said

application was disposed of vide order dated 06/09/2006.

The Hon'ble High Court was pleased to direct the non-

applicant to pay to the applicant arrears of rent w.e.f.

15/04/1985 @ Rs.7,620/- per year. The non-applicant has

accordingly deposited the rent with the applicant in

compliance of the said order by Demand Draft dated

05/10/2006, which has been received by the applicant. It

would be pertinent to mention here that the rent was payable

from year to year. The non-applicant was paying the rent

regularly as per the agreed terms. The applicant had himself

refused to accept the rent as stated above and, therefore, no

fault can be found with the non-applicant. The applicant has

failed to make out any case of habitual default or arrears of

rent. The application is liable to be dismissed."

8. The entire pleadings in respect of habitual default under

clause 13(3)(ii) of the Rent Control Order are contained in para 10 of the

application, which is reproduced in its entirety. There is no pleading to

show the number of defaults and the period of each default. Though the

requirement of annexing the schedule of defaults may not be mandatory,

in the absence of pleadings, such schedule could have been prepared

and annexed. This has also not been done. There are no details of

alleged arrears given in the application. In the absence of pleadings of

material facts and particulars constituting habitual default, no amount of

evidence could have been permitted to be led. Both the authorities

below have ignored this vital aspect of the matter. Hence, on this count

alone, the findings cannot be sustained.

9. The pleading is that the petitioner-tenant is a habitual

defaulter and had developed a habit of remaining into the arrears of rent,

is duly proved before the Civil Court. There is nothing pointed out to

substantiate this contention. Even the copy of the judgment or decree

passed by the Civil Court is not produced before this Court. Assuming

that such a finding is recorded, the same was without jurisdiction, as on

the applicability of the Rent Control Order, the competent authority to

record the findings on arrears of rent under clause 13(3)(i) and on

habitual default under clause 13(3)(ii) of the Rent Control Order is the

Rent Controller. Hence, a specific pleading ought to have been made

and the evidence to substantiate it, ought to have been led before the

Rent Controller, whose jurisdiction was invoked.

10. The Appellate Authority has held that the requirement of

clause 13(3)(ii) of the Rent Control Order was satisfied, as the

petitioner-tenant has failed to make the payment for the period from

1-5-1985 to 6-9-2006, that is the date on which this Court had passed an

order in Second Appeal No.237 of 1995, directing the petitioner-tenant to

clear the arrears of rent from 15-4-1985. The Appellate Court has

recorded the finding that the petitioner-tenant has committed 22 defaults

in payment of rent from 16-4-1985 to 6-9-2006, and, therefore, the

respondent-landlord was held entitled to

permission under

clause 13(3)(ii) of the Rent Control Order.

11. Regular Civil Suit No.298 of 1985 was filed on 14-4-1985.

There is not even a whisper about any default in payment of rent alleged

to have been committed by the petitioner-tenant prior to 14-4-1985. The

tenancy was annual, the rent was payable in advance, and the

petitioner-tenant had offered to make the payment of rent on 7-8-1985 in

writing, for the period from 16-4-1985 to 15-4-1986, which has been

refused by the respondent-landlord in writing on 22-8-1985. Since the

respondent-landlord refused to accept the rent, the petitioner-tenant

thereafter did not forward the amount of rent. Thereafter till 26-3-2006,

the respondent-landlord did not demand the rent or called upon the

petitioner-tenant to pay the rent. It is urged that it was the obligation of

the petitioner-tenant to pay the rent and it should have on its own

deposited the same in the Court regularly by obtaining such order. The

question is not of the deposit by the petitioner-tenant of the rent amount

by obtaining the order of the Court, but the question is of the

petitioner-tenant developing a mental attitude of non-payment of rent. It

is the conscious act of non-payment of rent, knowing full the

consequences flowing therefrom and the conduct of the parties. The

petitioner-tenant immediately upon passing of the order dated 26-3-2006

on Civil Application No.2173 of 2006 filed in Second Appeal by the

respondent-landlord, deposited the entire amount, as directed by this

Court. In fact, this Court recorded in the order the willingness of the

petitioner-tenant to pay the entire amount and such anxiety to pay the

rent is reflected in the order itself. Accordingly, the amount of arrears

from 16-4-1985 to 26-3-2006 was paid, as per the order without prejudice

to its rights and contention that there was no default, muchless wilful, in

paying the rent. It is the conduct of the respondent-landlord, which has

deprived him of the rent for the period from 16-4-1985 to 26-3-2006. The

petitioner-tenant cannot be blamed for it and the respondent-landlord

cannot be permitted to artificially prepare such ground to seek eviction

and possession. The insistence of the respondent-landlord, as reflected in

reply dated 22-8-1985 was that the petitioner-tenant should pay the

amount as damages to which the petitioner-tenant was not agreeable.

Failure to pay damages is not the ground for eviction under the Rent

Control Order. The Authorities below have, therefore, committed a

serious error of law in failing to apply the relevant tests and to record the

findings, which are not based upon any pleading and the relevant

material on record.

12. From the aforesaid position, it is apparent that there was no

default in payment of rent prior to 16-4-1985. The respondent-landlord

refused to accept the payment of rent offered by the petitioner-tenant on

7-8-1985 for payment of rent for the period from 16-4-1985 to

15-4-1986. Thereafter there was no demand by the respondent-landlord,

calling upon the petitioner-tenant to make the payment of rent till it filed

Civil Application No.2173 of 2006 in Second Appeal No.237 of 1995

before this Court. The petitioner-tenant shown its willingness to pay the

amount of rent on its own and it had actually paid the same after the

order was passed. The order passed on the said Civil Application clearly

records that this was all without prejudice to the contentions of the

parties. The Appellate Authority has held that there was no default,

muchless habitual default, committed by the petitioner-tenant after

5-10-2006. Hence, the Authorities below have committed an error in

holding that the requirement of clause 13(3)(ii) was satisfied. The orders

passed by the Authorities below granting permission under clause 13(3)

(ii) cannot, therefore, be sustained.

13. The Appellate Authority has though observed that

clause 13(1)(b) of the said Order was also attracted, there is no

permission granted on the said ground. The contention of the learned

counsel for the respondent-landlord is that since the finding is recorded

in favour of the respondent-landlord on this ground, the permission is

deemed to have been granted to determine the tenancy. The contention

cannot be accepted, for the reason that there is no order of granting

permission under clause 13(1)(b) of the Rent Control Order. Apart from

this, clause 13(1)(b) of the said Order, which is relevant, is reproduced

below :

"13(1) No landlord shall, except with the written permission

of the Controller -

(b) where the lease is determinable by efflux of the time

limited thereby, require the tenant to vacate the

premises by process of law or otherwise if the tenant

is willing to continue the lease on the same terms

Bare reading of the aforesaid provision makes it clear that the lease can

be continued if the tenant is willing to continue it on the same terms and

conditions. In the present case, the lease expired on 15-4-1985, and

even prior to that on 10-4-1985, the respondent-landlord called upon the

petitioner-tenant to deliver the vacant possession of the suit premises.

There is nothing on record to show that the respondent-landlord had

made an offer to the petitioner-tenant to continue the lease on the same

terms and conditions. There was no occasion for the petitioner-tenant to

express its willingness to continue the lease on the same terms and

conditions, as the respondent-landlord did not want the petitioner-tenant

to be continued in the premises in question. Both the Authorities below

have ignored these relevant aspects of the matter and hence even if it is

assumed that such permission was granted by the Appellate Authority,

the same cannot be maintained. Thus, the respondent-landlord has

failed to satisfy the test laid down under clauses 13(1)(b) and 13(3)(ii) of

the Rent Control Order, and the Authorities below have committed an

error in holding that the respondent-landlord has satisfied the test

prescribed therein. The impugned orders passed by the Authorities

below are required to be quashed and set aside.