Chandrachud D.Y., J.
1. The Appellate Bench of the Court of Small Causes reversed the findings of the trial Judge and decreed the landlord's suit for eviction on the ground of a default by the tenant in the payment of rent.
2. The landlord sued for possession of two tenanted rooms situated in 'K' Block, on the Second Floor, of a building called Vanraj Bhuvan, at Bhau Daji Cross Lane, Matunga, Mumbai. The landlord issued a notice of demand claiming arrears of rent from the tenants on 27th June 1972. The arrears were calculated at the rate of Rs. 35.70 p.m. for the period from February 1970 till September 1971 and at the rate of Rs. 36.12 from the month of October 1971. According to the landlord, the notice of demand was remitted by registered post with an acknowledgment due and the postal packet was returned with the remark, 'refused'. It was averred that a notice had also been sent Under Certificate of Posting. Another notice was stated to have been pasted on the premises. In the Written Statement, the tenants denied receipt of the notice of demand and claimed that they were ready and willing to pay the rent.
3. Evidence was adduced before the trial Court by the parties. The trial Judge dismissed the suit on 30th November, 1991. The trial Court held that service of the notice of demand was not proved. The third defendant stepped into the witness box and denied that the notice had been tendered by the postman. The trial Judge held that parties reside in close proximity in the same block of tenements and upon the denial by the third defendant of the service of the notice, the landlord failed to establish service of the notice of demand. In so far as the ground for eviction was concerned, the trial Judge held, following the judgment of the Supreme Court in Raju Kakara Shetty v. Ramesh Prataprao Shirole : [1991]1SCR51 that education cess payable under the Maharashtra Education (Cess), 1962 is not payable monthly and since it forms part of the rent, the rent was not payable monthly. There was, the trial Court held, no agreement between the parties that the education cess would be paid with the rent on a monthly basis. In that view of the matter, Section 12(3)(a) of the Bombay Rents, Hotel and Lodging Rates (Control) Act, 1947 as it then stood, was held not to be attracted and the case was to be governed by Section 12(3)(b). The tenant was held to be entitled to the protection of Section 12(3)(b) since on or before the first day of the hearing of the suit, the tenant had duly deposited the arrears of rent and that thereafter, the rent had been deposited regularly as and when it fell due.
4. The Appellate Bench of the Court of Small Causes has reversed the judgment of the trial Court. In so far as the question of service is concerned, the Appellate Bench held that there is a presumption under Section 27 of the General Clauses Act that postal packet which is sent by registered post has been delivered. Thereafter, the burden was cast upon the tenant to rebut the presumption. The third defendant who was one of the heirs of the original tenant, was not present during office hours at his residence, but his mother and sister who were residing there were present at the premises.. The mother expired by the time evidence was adduced. But, though the sister was available to give evidence, she was not produced as a witness. The Appellate Bench noted that the tenant had not adduced the evidence of the Postman in support of his case that the notice had not been delivered. The Court noted that the postal packet bore the postal endorsement of the postal offices through which the notice had been transmitted and the presumption of good service which arose under the law had not been duly rebutted. In so far as the ground for eviction is concerned, the finding of the Appellate Bench in the present case is that the rent was to be paid at the interval of every six months after the payment of Municipal taxes. Upon receipt of the notice, the defendants were either required to comply with the notice or to file an application for standard rent in the event that there was any dispute in regard to the rent which had been claimed. The tenant having failed to do so, the Court was of the view that a decree for eviction has to be passed.
5. The suit for eviction was instituted prior to the amendment of Section 12. Section 12(3) of the Act, at the material time, read 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 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 shall 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 continues to pay or tender in Court regularly such rent and permitted increases till the suit is finally decided and also pays costs of the suit as directed by the Court.
6. Clause (a) of Sub-section (3) of Section 12 operates in a situation where the rent is payable by the month and there is no dispute regarding the amount of standard rent or permitted increases. In such a case, in the event that the rent is in arrears for a period of six months or more and the tenant neglects to make payment thereof after the expiration of a period of one month after the service of a notice of demand, a decree for eviction would follow. Clause (b) of Sub-section (3) of Section 12, however, operates in any other case, that is to say, a case which is not governed by Clause (a). In the category of cases governed by Clause (b), the statute provided that no decree for eviction shall be passed 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, continues to pay or tender in Court regularly such rent and permitted increases till the suit is finally decided and also pays costs of the suit as directed by the Court. Explanation (I) to Section 12 provided as follows:
Explanation I.- In any case where there is a 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.
In Raju Kakara Shetty v. Ramesh Prataprao Shirole : [1991]1SCR51 a Bench of three learned Judges of the Supreme Court considered the effect of the provisions of the Maharashtra Education (Cess) Act, 1962 under which the primary responsibility to pay the tax on lands and buildings was cast on the owner of the land or, as the case may be, of the building. Section 13 provided, however, that on the payment of the amount of tax, the owner shall be entitled to receive that amount from the person in actual occupation of the land and building during the period for which the tax was paid. The landlord has, therefore, a statutory right to recover the cess paid by him in respect of the premises demised to the tenant-occupant. In Shetty's case, the Supreme Court held that education cess is a part of rent and, when this was claimed in addition to the contractual or standard rent, it constituted a permitted increase within the meaning of the Act. Being payable on a year to year basis, rent ceased to be payable by month within the meaning of Section 12(3)(a):
There can be no doubt that such an increase falls within the definition of permitted increases under Section 5(7) of the Act. It, therefore, seems to be well-settled that education cess is a part of 'rent' within the meaning of the Act and when the same is claimed in addition to the contractual or standard rent in respect of the demised premises it constitutes a permitted increase within the meaning of Section 5(7) of the Act and being payable on a year to year basis, the rent ceases to be payable by the month within the meaning of Section 12(3)(a) of the Act.
However, that would not preclude the parties from quantifying by agreement, the amount liable to be paid each month at a figure not exceeding the total liability under the statute. Hence, it is open to the landlord and the tenant to quantify the amount of tax payable by the tenant on a monthly basis in which case the rent would still continue to be paid by month within the meaning of Section 12(3)(a). The Supreme Court observed thus:
We see no reason by why we should take the view that even where the parties mutually agree and quantify the tax amount payable by the tenant to the landlord on monthly basis, the rent should not be taken to be payable the month within the meaning of Section 12(3)(a) of the Act. A statutory right to recover the tax amount by way of reimbursement can be waived or limited by the holder of such right for the recovery can be regulated in the manner mutually arranged or agreed upon by the concerned parties so long as it is not in violation of statute. If for convenience and to facilitate payment, the parties by mutual consent, work out arrangement for the enforcement of the owners statutory right to recover the tax amount and for discharging the tenant-occupant's statutory obligation to reimburse the owners, we see no reason for refusing to uphold such a contract and if thereunder the parties have agreed to the tenant-occupant discharging his liability by a fixed monthly payment not exceeding his liability by a fixed tax liability, the said monthly payment would constitute 'rent payable by the month within the meaning of Section 12(3)(a) of the Act'.
The same view, it may be noted, was taken by the Supreme Court in (Chase Bright Steel Limited v. Shantaram Shankar Sawant) 1995 (1) Bom.C.R. 561 where Shetty's case was cited with approval. In two judgments of learned Single Judges of this Court, the provisions of Section 12(3) were interpreted in the context of the liability to pay cess. In (Awabai Muncharji Cama v. M.N. Kaka) : 1987(3)BomCR338 it was held thus:
Where the rent consists of a part or portion which is not payable monthly can it be said that the rent is payable by the month? If a part of the rent is not payable by the month then certainly the rent (the whole of it) is not payable by the month, and it would seem to make no difference that the part which is not payable monthly is very small or insignificant when contrasted with the other rent or the other permitted increases which may be payable monthly. If any part of the rent is not payable monthly, then it has to be held that rent which must mean the entire rent is not payable by the month. ... The education cess would form part of the rent and that the Court would be constrained to hold that the rent was therefore not payable by the month and that therefore Section 12(3)(a) would not be attracted.
In an unreported judgment, M.N. Chandurkar, J. (as he then was) held in Vaman v. Rajaram Special Civil Application 2418 of 1971, decided on 26th February 1976 that:
In a suit where the landlord wants to claim possession on the ground that the tenant is a defaulter because he has not paid the amount of education cess, which are permitted increases, it will be therefore obligatory on the plaintiff-landlord to specifically plead and prove the fact of such payment of education cess to the municipal authorities. Indeed from the provisions of Section 13(1) it is clear that there is no cause of action for claiming reimbursement from the tenant until the lessor has paid the amount of education cess in respect of which he wants to make a claim against the defendant.
The same view was taken by the Gujarat High Court in Prakash Surya v. Rasiklal 1978 (1) R.C.R. 502 and in Vanilal Vadilal Shah v. Mahendrakumar : AIR1975Guj163 .
7. In the present case, the trial Judge in the Court of Small Causes held, following the judgment of the Supreme Court in Shetty's case that from the facts of the present case, it was clear that the permitted increases claimed in the notice of demand included education cess. The trial Judge held that no evidence was adduced by the plaintiff and there was not even a suggestion that there was an agreement to pay the permitted increases together with the rent on a monthly basis. The trial Court consequently concluded as follows:
However, in view of the legal position, the education cess is included in the rent. The education cess is not payable monthly. There is no agreement between the plaintiff and defendant to pay education cess by month. As the education cess is included in the rent which is not payable by month, it is held by our High Court that the entire rent cannot be said to be payable monthly. It is not necessary to specifically plead in the Written Statement that... education cess rent is not payable by month. By virtue of law, the education cess becomes part of the rent. In absence of agreement between the plaintiff an landlord, education cess is payable six monthly. In the present case before me there is no agreement between the plaintiff and defendant to pay Education cess along with the monthly rent. Therefore, I hold that as the education cess is included in the rent claimed by the plaintiff, the rent is not payable by month and therefore the plaintiff is not entitled for decree under Section 12(3)(a) of the Bombay Rent Act and the case of the plaintiff will fall under Section 12(3)(b) of the Bombay Rent Act.
8. When the matter was carried in appeal to the Appellate Bench of the Small Causes Court that Court also found that as a matter of fact, rent was to be paid at an interval of every six months after the payment of Municipal taxes. The finding which the Appellate Bench recorded in para 35 of its judgment is to the following effect:
On the basis of the case laws if we consider the facts in the present case it is admitted by the defendant No. 3, who is the only witness of defendants that there was an agreement as to when rent was to be paid. Rent was to be paid at interval of every six months after payment of Municipal Taxes. Till 1965 the defendant No. 3 and his brother used to pay rent of the suit premises and after that defendant No. 3 is paying rent of the suit premises. So above discussed evidence establishes that this defendant was paying rent of the suit premises after every six months.
Therefore, it is necessary to emphasise that the Appellate Court did not disturb the finding of the trial Judge that (i) The permitted increases which were claimed by the landlord included the education cess; (ii) The education cess was a part of the rent; (iii) The education cess was not payable monthly and that as a result neither was the rent payable on a monthly basis; and (iv) There was no agreement between the parties to the effect that the liability of the tenant towards the landlord would be quantified on a monthly basis. The Appellate Bench held that when the conduct of the defendant has been established that he was paying the rent every six months, there was no necessity to have a separate agreement. The Appellate Bench, however, held that upon receipt of the notice of demand, the only option available to the tenant was either to comply with the notice or to file an application for the fixation of standard rent. That not having been done, it was held that a decree for eviction would have to follow.
9. On behalf of the petitioners, it has been submitted that the entire approach of the Appellate Bench is flawed inasmuch as the Appellate Bench proceeded on the basis that it was Section 12(3)(a) of the Act that would be the governing provision. There is merit in the submission that the judgment of the Appellate Bench of the Court of Small Causes is unsustainable on the issue of default. The Appellate Bench of the Court of Small Causes, it is to be noted, does not disturb the finding of the trial Judge that the permitted increases in the present case included the education cess and that since the cess was not payable monthly, it could not be said that the rent was payable by the month. This finding of the trial Court was borne out by the evidence on the record and is consistent with the law enunciated by the Supreme Court in Shetty's case. The judgment of the Supreme Court in Shetty's case recognises that it would be open to the landlord and the tenant by an agreement between them to quantify the liability of the tenant towards the education cess on a monthly basis in which case, the education cess together with the rent would continue to be payable monthly. In the event that there is such an agreement it has to be pleaded and proved. In the present case, the Appellate Bench does not find the existence of any such agreement in the evidence. On the contrary, the Appellate Court proceeds on the assumption that no such separate agreement was necessary, once it was established that the rent was to be paid on a six monthly basis by the third defendant. The entire approach of the Appellate Bench is to my mind completely flawed because in the absence of an agreement of the nature referred to in Shetty's case, the inevitable conclusion is that the rent is not payable monthly since the education cess which is a part of the rent was not payable by the month. In the present case, it is of course to be noted that the suit has been instituted by the tenant against his sub-tenant, but that would not make any difference because even in such a case, it is necessary for the plaintiff to plead and prove the existence of an agreement by which the education cess was liable to be paid together with the rent on a monthly basis. That admittedly is not the case here. The landlord's evidence does not show any reference to an agreement by which the liability towards education cess was quantified on a monthly basis, to be payable with the rent. The distinction made by Counsel between what is payable and what is paid does not carry the case any further, the ingenuity of the submission notwithstanding. It was for the landlord to establish the existence of an agreement as held by the Supreme Court. That was not done.
10. The Appellate Bench was clearly, therefore, in error in proceeding on the basis that it was Section 12(3)(a) that applies. The trial Court was correct in coming to the conclusion that the case was governed by Section 12(3)(b). The trial Court held that the tenant was entitled to the benefit of Section 12(3)(b). The finding of fact that was arrived at by the trial Court was that the tenant had on or before the first date of hearing deposited the entire arrears of rent and that he had thereafter been regularly depositing the rent as and when it fell due. There is no finding in that regard in the impugned judgment of the Appellate Bench. This position was not disputed by Counsel. That is essentially a matter which must be considered by the Appellate Bench of the Court of Small Causes. The question of compliance with Section 12(3)(b) involves several factual determinations. The Appellate Bench of the Small Causes Court exercises an appellate jurisdiction on the judgments of trial Judges in that Court. Since the issue relating to Section 12(3)(b) has not been considered by the Appellate Bench, it would be necessary to remand the case for a determination thereon. I am, therefore, of the considered view that it would be necessary to remit the matter back to the Appellate Bench for determining the question as to whether there was compliance of Section 12(3)(b).
11. In so far as the service of the notice is concerned, the finding of the Appellate Bench does not warrant interference. The notice of demand was remitted by registered post to the tenant. The 'presumption of due or proper service if the document sought to be served is sent by properly addressing, pre paying and posting by registered post to the addressee ... irrespective of whether any acknowledgment due is received from the addressee or not' finds recognition in the judgment of the Supreme Court in Har Charan Singh v. Shiv Rani A.I.R. 1981 S.C. 1284. The presumption of service of a letter sent by registered post can be rebutted by the addressee. In Anil Kumar v. Nanak Chandra : AIR1990SC1215 the Supreme Court held that there is no hard and fast rule on the question as to whether the bare testimony of the tenant is sufficient to rebut service. In certain cases, the unchallenged testimony of a tenant may be sufficient to rebut the presumption but where it is inherently unreliable, the position would be different. The same view emerges from the judgment of the Supreme Court in Green View Radio Service v. Laxmibai Ramji 1991 (1) Bom.C.R. 505.
The presumption of service of a letter sent by registered post can be rebutted by the addressee by appearing as witness and stating that he never received such letter, if the acknowledgement due receipt contains the signatures of the addressee himself and the addressee as a witness states that he never received such letter and the acknowledgment due does not bear his signature and such statement of the addressee is believed then it would be a sufficient rebuttal of the presumption drawn against him. The burden would then shift on the plaintiff who wants to rely on such presumption to satisfy the Court by leading oral or documentary evidence to prove the service of such letter on the addressee. This rebuttal by the defendant of the presumption drawn against him would of course depend on the veracity of his statement. The Court in the facts and circumstances of a case may not consider such denial by the defendant as trustful and in that case such denial alone would not be sufficient. But if there is nothing to disbelieve the statement of the defendant then it would be sufficient rebuttal of the presumption of service of such letter or notice sent to him by registered post.
In Basant Singh v. Roman Catholic Mission : [2002]SUPP3SCR70 the Supreme Court held that the conduct of the defendant acquires importance, once it is proved that summons has been sent by registered post to a correct and given address. In Basant Singh's case, the premises were occupied by two defendants jointly of whom one appeared and examined himself and stated that he did not receive the registered letter. The other defendant did not appear and no evidence on his behalf was led to rebut the presumption regarding summons sent to him by registered post with acknowledgment due. The Supreme Court held that save and except for a bald statement that the registered letter was not tendered, no evidence whatsoever was led to rebut the presumption. The postman who would have been a material witness and whose evidence would have a bearing on the proper adjudication of the issue was not examined. In these circumstances, the Supreme Court held that the onus which had been cast by the statute had not been duly discharged.
12. The principle which has been laid down by the Supreme Court in Basant Singh will apply to the facts of the present case. As the Appellate Bench noted, the third defendant who stepped into the witness box, deposed that the notice has not been delivered to him. The mother and sister of the third defendant who were also heirs of the deceased tenant, were admittedly present at the residence when the third defendant was away at work between 10 a.m. and 5 p.m. The Appellate Bench noted that though the mother had expired, the sister was still available to give evidence. However, the evidence of the sister was not adduced. A material witness who was available for rebutting the presumption was not produced in evidence. The finding of fact which has been arrived at is consistent with the law laid down by the Supreme Court. A bald statement by the addressee that he had not received a summons is in the facts of this case, clearly not sufficient to rebut the presumption of due service. The Appellate Bench has considered the evidence in considerable detail has referred to the postal endorsements of the concerned Post Offices in regard to the transmission of the postal packets. That part of the finding does not warrant interference in the exercise of the supervisory jurisdiction under Article 227 of the Constitution.
13. In these circumstances and for the reasons already indicated, the impugned Judgment and Order of the Court of Small Causes is quashed and set aside. The matter shall stand remitted back to the Appellate Bench for determining whether the tenant would be entitled to the benefit of the provisions of Section 12(3)(b) of the Act. Before concluding, it would be necessary to record that the findings of the Appellate Bench in regard to the issue of bona fide requirement have not been questioned in these proceedings. No arguments were addressed before the Court on that issue.
14. The petition is accordingly disposed of in these terms. There shall be no order as to costs.