A.K. Padmanabhan vs Sivasubramaniam

T. Mathivanan, J.—Challenging the fair and decretal Order, dated 28.8.2012 and made in R.C.A. No. 2 of 2010 on the file of the learned

Rent Control Appellate Authority (Subordinate Judge''s Court) at Tiruchengode, confirming the fair and decretal Order, dated 8.2.2010 in

R.C.O.P. No. 1 of 2009 on the file of the learned Rent Controller (District Munsif) at Tiruchengode, the Petitioner, who is the Appellant in R.C.A.

No. 2 of 2010, has approached this Court with this memorandum of this Civil Revision. The facts, which are absolutely necessary for the disposal

of this Revision are as under:

(i) The Respondent, being the Landlord, in respect of the property specified in R.C.O.P. No. 1 of 2009 seems to have filed the Petition in

R.C.O.P. No. 1 of 2009 as against the Respondent, who is the Tenant in respect of the above said premises on three grounds:

(a) u/s 10(2)(ii) of the Tamil Nadu Buildings (Lease & Rent Control) Act, 1960, for eviction of the Respondent/Tenant for willful default.

(b) u/s 10(3)(ii) of the Act, for owner''s use and occupation.

(c) u/s 14(1)(b) of the Act, for bona fide requirement of the building for demolition and erecting a new construction.

(ii) The Respondent herein is the owner of the terrace building bearing Door No. 148, Bungalow Street, Tiruchengode by virtue of the Partition

Deed, dated 7.3.2000 executed between him and his father. It is a nonresidential building.

(iii) The Respondent came to be in occupation of the said building as a Tenant for non-residential purpose for running a hardware shop from the

month of September 2003 on a monthly rent of Rs. 2,000/-. The Respondent had paid a sum of Rs. 30,000/- as an advance at the time of his

occupation and out of the said amount a sum of Rs. 10,000/- was adjusted towards the rent from September 2003 and now there is a balance of

Rs. 20,000/- at the hands of the Respondent as advance. The Respondent was not regular in payment of rent and he had committed willful default

in payment of rent from December 2008. However, the Respondent has stated in his Petition that the Petitioner had to pay one month rent in

respect of February 2009.

(iv) The building is very old and aged about 50 years and is in dilapidated condition. The Respondent required the building for his own use and

occupation and he has intended to start his own business in the said premises. Since the Respondent has committed willful default in payment of

rent, the above Petition has been filed, seeking the relief as afore stated.

On the other hand, the Respondent, against whom the above said Petition had been filed, has filed a Counter before the Rent Controller,

wherein he has stated that he had entered into tenancy only through the father of the Petitioner/Landlord and that he had paid an advance of Rs.

1,00,000/- at the time of his occupation. The Petitioner''s father did not issue any receipt for the advance amount. Since there is some

misunderstanding between the Respondent and his father in respect of the marriage of the Respondent, the Respondent/Landlord has been trying

to evict the Revision Petitioner by force without due process of law.

Since the Respondent/Landlord had been threatening the Revision Petitioner, he had lodged a Complaint against the Respondent/Landlord

before the Tiruchengode Town Police Station and only for the purpose of wreaking vengeance, the present Petition has been filed against the

Revision Petitioner.

The Respondent herein being the Petitioner in R.C.O.P. had examined himself as PW 1 and one Mr. Arumugam as PW 2. During the course of

their examination, Exs. P1 to P6 were marked. On the other hand, the Revision Petitioner being the Respondent therein has examined himself as

RW 1 and one Ramasamy as RW 2 and two documentary evidences were marked as Ex. R1 & R2 on his behalf.

On evaluating the evidences both oral and documentary, the learned Rent Controller, has allowed the Petition only in respect of the ground of

willful default in payment of rent and in respect of the remaining two grounds, i.e., for owner''s use and occupation and for demolition and

reconstruction, the Petition was dismissed.

The Petitioner/Landlord has not chosen to file any Appeal with regard to the rejected portion of the Petition, whereas the Revision Petitioner

herein, who is the Tenant, being aggrieved with the Order of Eviction has filed an Appeal in R.C.A. No. 2 of 2010.

After hearing both sides, the learned Rent Control Appellate Authority has confirmed the fair and decretal Order of the learned Rent Controller,

dated 8.2.1010 and made in R.C.O.P. No. 1 of 2009 and subsequently the Appeal preferred by the Revision Petitioner was dismissed.

Challenging the correctness of the Order of dismissal in R.C.A. No. 2 of 2010, the Revision Petitioner being the Appellant in the Rent Control

Appeal and the Respondent in R.C.O.P. No. 1 of 2009 has come forward with this Revision Petition before this Court.

When the Revision Petition is taken up for hearing, Mr. P. Valliappan, learned Counsel appearing for the Revision Petitioner has adverted to

that according to the Revision Petitioner, he had paid a sum of Rs. 1,00,000/- at the hands of the Respondent''s father towards advance for the

occupation of the Petition mentioned property for non-residential purpose. But in fact, no receipt was issued by the Respondent''s father for having

received the advance of Rs. 1,00,000/-. However, as per the admission made by the Respondent in his Petition a sum of Rs. 30,000/- was paid as

advance and subsequently, according to the Petitioner, a sum of Rs. 10,000/- was adjusted towards the payment of rent and the remaining balance

of Rs. 20,000/- was available at the hands of the Respondent. The monthly rent was determined at Rs. 2,000/- p.m. and the same had been paid

by the Revision Petitioner to the Respondent.

He would further submit that as per the admission of the Respondent a sum of Rs. 2,000/- for the month of February 2009 alone is due and

therefore, this could not be construed as willful default on the part of the Revision Petitioner. However, since sufficient amount is available, i.e., a

sum of Rs. 20,000/- at the hands of the Respondent, he could have very well adjusted the said amount towards the balance of rent i.e. Rs. 2,000/-

for the month of February 2009 as contemplated u/s 7(2)(b) of the Act.

From the submission made by Mr. P. Valliappan, on behalf of the Revision Petitioner, a crucial point is arisen for the consideration of this

Court as to whether the amount much less Rs. 20,000/-, according to the Respondent, which is available at his hands could be adjusted towards

the rent for the month of February 2009.

In this connection, it is imperative on the part of this Court to take the existence of Section 7(2)(a) & (b) and also sub-section (3) of the Act.

Subsection (2) to Section 7 reads:

(2) Where the fair rent of a building has not been so fixed--

Sub-clause (a) reads:

(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.

Sub-clause (b) envisages:

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 otherwise adjusted by the Landlord.

(3) Any stipulation in contravention of sub-section (2) shall be null and void.

(emphasis supplied)

On coming to the instant case on hand, no fair rent is fixed in respect of the demised building. As admitted by both the parties the agreed rent is

Rs. 2,000/-. But according to the Respondent/Landlord a sum of Rs. 30,000 was given as advance at the time of occupation of the premises by

the Revision Petitioner. The Respondent has fairly admitted that a sum of Rs. 10,000/- was adjusted towards rent and at present a sum of Rs.

20,000/- is available at his hands. The Proviso to sub-clause (a) contemplates that the Landlord may receive or stipulate for the payment of

amount not exceeding one month''s rent by way of advance. In this case, instead of receiving one month''s rent as advance, the Respondent being

the Landlord had received a sum of Rs. 30,000/-. The Respondent/Landlord himself has admitted in his Petition that he had adjusted a sum of Rs.

10,000/- towards the payment of rent.

Sub-clause (b) to Section 2 contemplates that any sum paid in excess of the rent, shall be refunded by the Landlord to the person by whom it

was paid or at the option of such person shall be otherwise adjusted by the Landlord.

A rider clause is given in sub-clause (b), saying that at the option of such person, any amount paid in excess of the agreed amount shall be

otherwise adjusted by the Landlord.

It has to be remembered that a sum of Rs. 10,000/- was adjusted by the Respondent being the Landlord from the advance of Rs. 30,000/-

towards the payment of rent. The averments of the Petition do not have any reference to show as to whether any option was given by the Revision

Petitioner to the Respondent/Landlord to adjust a sum of Rs. 10,000/- towards the payment of rent. But without any option or requisition on the

part of the Revision Petitioner, the amount of Rs. 10,000/- was adjusted. Admittedly, a sum of Rs. 20,000/- is at present available at the hands of

the Respondent/Landlord.

In this connection, Mr. P. Valliappan would submit that instead of filing this Petition on the ground of willful default, the Respondent who is the

Landlord could have adjusted the balance amount towards the arrears of rent, i.e., a sum of Rs. 2,000/-.

In support of his contention, he has placed reliance upon the following decisions:

a. K. Narasimha Rao Vs. T.M. Nasimuddin Ahmed, ;

b. Raja Muthukone (D) by Lrs. Vs. T. Gopalasami and Another, ;

c. Muthuramalingam Vs. Raju and others, ;

d. M/S Chordia Automobiles Vs. S. Moosa and Others, ;

e. Modern Hotel, Gudur, Represented by M.N. Narayanan Vs. K. Radhakrishnaiah and Others, .

On the other hand, Mr. Dhanya Kumar, the learned Counsel appearing for the Respondent/Landlord has submitted that unless there is a

requisition on the part of the Tenant calling upon the Landlord to make adjustment of the advance amount as against rent, the Tenant cannot

escape the consequences of willful default in payment of rent.

In support of his contention, he has placed reliance on the following two decisions:

a. S. Sahabudeen represented by his power of attorney S. Mohammed Mansoor Vs. Muniammal, ;

b. M.K. Swaminathan Vs. V. Thangam, .

In K. Narasimha Rao Vs. T.M. Nasimuddin Ahmed, , while speaking on behalf of Three-Judges Bench of the Hon''ble Supreme Court of

India, the Hon''ble Mr. Justice J.S. Verma has observed that 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 & Rent Control) Act is in pari materia with Section 7 of the Andhra Pradesh Building (Lease Rent and Eviction

Control) Act, 1960. For this reason it held that the decision on this point of this Court in Modern Hotel, Gudur, Represented by M.N. Narayanan

Vs. K. Radhakrishnaiah and Others, is applicable to hold that the Tenant has not committed any willful 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"").

The Appellant-K. Narasimha Rao in the above cited decision has preferred the above Appeal before the Hon''ble Supreme Court of India

having been aggrieved by the decision of the High Court allowing the Tenant''s Revision Petition.

His Lordship has further observed that--

The provisions in sub-sections (1) & (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 to otherwise adjust the 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.

His Lordship has also quoted the decision reported in Modern Hotel, Gudur, Represented by M.N. Narayanan Vs. K. Radhakrishnaiah and

Others, . In Paragraph 10 of the decision reported K. Narasimha Rao Vs. T.M. Nasimuddin Ahmed, , His Lordship has observed that Modern

Hotel, Gudur, Represented by M.N. Narayanan Vs. K. Radhakrishnaiah and Others, , was a case u/s 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 in

payment of rent to permit a decree for eviction on the ground of arrears of rent. While dealing with the effect of sub-sections (2) & (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. 5,000/- 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.

In Raja Muthukone (D) by Lrs. Vs. T. Gopalasami and Another, , a Petition was filed for eviction of the Tenant on the ground of willful

default. The Tenant was served with Notice u/s 10(2) to pay arrears of rent. In this connection, the Apex Court has held that he cannot then be

adjudged as defaulter on the basis of post conduct by recourse to Section 10(2) of the Act. It is only on Tenant''s failure to pay arrears within two

months notice period that he can be considered defaulter. The Landlord filed an Eviction Petition before the expiry of two months'' Notice period.

The Landlord having initiated the proceedings for eviction withdraw the amount of rent and on the date when he sought for withdrawal, a period of

two months'' Notice from the date of Notice had not expired. In these circumstances, the Tenant cannot be said to be a willful defaulter and

therefore, the Eviction Petition is liable to be dismissed.

In Muthuramalingam Vs. Raju and others, , the learned Single Judge of this Court has held that the Landlord retained substantial amount of

more than one month''s rent as advance and filed an Application for eviction on the ground of willful default. The Landlord cannot retain more than

one month''s rent as advance and therefore, he ought to have adjusted the advance amount towards the arrears of rent. It is not necessary that the

Tenant should approach the Landlord with a request to adjust the amount towards the arrears of rent.

In M/S Chordia Automobiles Vs. S. Moosa and Others, , a Division Bench of the Hon''ble Supreme Court of India has observed in Paragraph

8 of his Judgment saying that willful 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 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 willful default

in terms of the Explanation to 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 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 willful defaulter.

In S. Sahabudeen represented by his power of attorney S. Mohammed Mansoor Vs. Muniammal, , which is relied upon by Mr. Dhanya

Kumar, learned Counsel appearing for the Respondent, it is held that in so far as this Court is concerned, it has been consistently held that unless

the Tenant has called upon the Landlord to make an adjustment of the advance amount as against the rent, he cannot escape the consequences of

willful default in payment of rent.

In another decision M.K. Swaminathan Vs. V. Thangam, , the learned Single Judge of this Court has observed that the High Court has

consistently held that in the absence of any request by the Tenant to adjust the rent from advance, it is not open to the Tenant to contend that he

has not committed willful default and the Landlord ought to have adjusted the rent from the advance amount. Unless the Tenant called upon the

Landlord to adjust the advance against the arrears of rent, he cannot escape the consequence of the willful default. The learned Single Judge of this

Court has followed the earlier decision referred to above, viz., S. Sahabudeen represented by his power of attorney S. Mohammed Mansoor Vs.

Muniammal, .

On coming to the instant case on hand, the past conduct of the Respondent, who is the Landlord, would go to establish the fact that without

any requisition or option on the part the Revision Petitioner, being the Tenant, he himself had voluntarily adjusted a sum of Rs. 10,000/- towards of

rent out of Rs. 30,000/-, which was paid as advance.

Now admittedly, a sum of Rs. 20,000/- is available at the hands of the Respondent. As contemplated under the Proviso to sub-clause (a) to

Section 7(2), the Landlord can only receive the amount not exceeding one month rent by way of advance from the Tenant. As envisaged under

Clause (b) to Section 7(2) of the Act, any amount paid in excess of the agreed rent, it shall be refunded by the Landlord to the Tenant or at the

option of such person shall be otherwise adjusted by the Landlord.

As observed by the Three-Judges Bench of the Hon''ble Supreme Court of India in K. Narasimha Rao Vs. T.M. Nasimuddin Ahmed, , the

character of 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, at the Tenant''s option. Any other stipulation in contravention to it has no legal effect being null and void.

It has also been observed that the excess amount available at the hands of the Landlord had to be adjusted towards the rent due for the said

period.

This Court on a meticulous analysis of the materials available on record, has found that the past conduct of the Respondent/Landlord itself

would demonstrate and display that he had previously adjusted a sum of Rs. 10,000/- without the option or request on the part of the Revision

Petitioner and since sufficient amount much less Rs. 20,000/- is available at the hands of the Respondent/Landlord, he can very well adjust the

advance amount towards the arrears of rent as the law enjoins on him being the Landlord.

Even according to the Respondent/Landlord, the Revision Petitioner is in arrears of rent for the month of February 2009 alone and since

sufficient amount is available in his hands, the Revision Petitioner cannot be called as a willful defaulter.

As observed in Modern Hotel, Gudur, Represented by M.N. Narayanan Vs. K. Radhakrishnaiah and Others, , the Respondent/Landlord

herein holding a big amount in his hands for years together without paying any interest which amounts to clear statutory violation as contemplated

u/s 7(2)(a) of the Act and therefore, on perusal of both the fair and decretal order pronounced by the learned Rent Controller as well as the

learned Rent Control Appellate Authority, this Court finds that there could be no justification for granting a decree for eviction on the plea of

arrears of rent as the Respondent could not contend that the Revision Petitioner was in default in payment of rent as the amount of Rs. 20,000/- is

available at the hands of the Respondent/Landlord. Keeping in view of the above fact, the Revision Petition is allowed and the fair and decretal

Order, dated 28.8.2012 and made in R.C.A. No. 2 of 2010 on the file of the learned Rent Control Appellate Authority and the fair and decretal

Order, dated 8.2.2010 and made in R.C.O.P. No. 1 of 2009 on the file of the Rent Controller are set aside and the Petition in R.C.O.P. No. 1 of

2009 is dismissed. Connected M.P. is closed. However, there will be no order as to costs.