Judgment:
Krishna Saran Shrivastav, J.
1. This is tenant's revision from the common judgment dated 16-2-1996 in R.A. No. 357/91 and R.A. No. 358/91 by which the common order dated 24-7-1991 on the file of the III Additional Rent Controller, Hyderabad, in R.C. No. 656/86 (old R.C. No. 302/84) and R.C. No. 268/87 was reversed and the petitioner-firm and its partners have been directed to vacate the suit accommodation.
2. This judgment shall also govern the disposal of C.R.P. 910/96 for the sake of brevity and convenience.
3. It is no longer in dispute before me that the petitioner-firm was initially inducted as a tenant by the predecessor-in-title of the respondents, namely late Gopinath Bhargava on 23-8-1978 for a period of eleven months at the rate of Rs. 300-00 Ps. per month besides water charges and later the monthly rent of the building bearing No. 4-1-991 to 4-1-993/1, Abid Road, Hyderabad, popularly known as 'Bhargava Buildings' (in short 'suit accommodation') for non-residential purposes. After the expiry of the lease period, the petitioner-firm continued as monthly tenant. The 1st respondent and his deceased mother, that is respondent No. 2, filed R.C. No. 656/86 (old R.C. No.302/84) on 20-7-1984 for the ejectment of the petitioner-firm from the suit accommodation on the ground that it has failed to pay the monthly rent for June, 1979 and July, 1979 at the rate of Rs. 300/- per month and the rent for April, 1984 to July, 1984 at the rate of Rs. 400/- per month, that without the written consent of the 1st respondent and the 2nd respondent, Shanti Bhargava, since dead, had materially altered the dilapidated suit accommodation, which act has impaired its value and utility, that it has changed the initial business of manufacturing optic lenses and that they require the suit accommodation for the personal occupation of the 1st respondent who is living in a rented accommodation in Chikkadpally, Hyderabad, on a monthly rent of Rs.700/-.
4. During the pendency of the above case, the 1st respondent and the deceased 2nd respondent instituted R.C. No. 268/87 on the ground that the petitioner-firm did not pay the monthly rent for February, 1986 and from May, 1986 to February, 1987, that the petitioner-firm has materially altered the suit accommodation and that it has changed the initial business of manufacturing optic lenses.
5. In both the ejectment proceedings, the respondents alleged that the petitioner-firm has committed wilful default in payment of rents and, therefore, it is liable to be ejected from the suit accommodation on the aforementioned grounds.
6. It is a matter of record that during the pendency of the ejectment proceedings, Shanti Bhargava, the land lady, expired and the remaining respondents were brought on record as her legal representatives.
7. The petitioner-firm took similar defence in both the ejectment proceedings, that is to say, R.C. No. 656/86 (old RC 302/84) and R.C. No. 268/87. It denied that it had not paid the monthly rents regularly. It has pleaded that the monthly rents of June and July, 1979 were paid to the landlord, late Gopinath Bhargava and the rent for the other months was paid to the deceased-respondent No. 2 Shanti Bhargava who did not issue receipts. It has also pleaded that the alteration in the suit accommodation was done with the permission of the respondents. It denied that the need of the 1st respondent is genuine. It pleaded that the suit accommodation was taken for non-residential use that is for business of the petitioner-firm and it is genuinely doing business. It alleged that the respondents wanted to enhance the rent from Rs. 400/- to Rs. 600/- to which the petitioner-firm did not agree and, therefore, on false and invented grounds, the respondents have instituted both these proceedings.
8. On assessment of the evidence on record, the lower Court answered all the issues against the respondents and dismissed both the eviction petitions, that is R.C. 656/86 (old R.C. 302/84) and R.C. 268/87, by a common order.
9. Being aggrieved by the order of dismissal of both the petitions, the respondents preferred two separate appeals, that is R.A. 357/91 and R.A. 358/91 and both these appeals have been disposed of by a common judgment, whereby the common order of the III Additional Rent Controller, Hyderabad, was set aside, holding that the petitioner-firm has committed wilful default in payment of the monthly rents for April, 1984 to July, 1984, February, 1986 and from May, 1986 to January, 1987, that it has materially altered the suit accommodation without permission of the respondents and late Gopinath Bhargava and that the respondents require the suit accommodation for residential purposes, though confirming the finding of III Additional Rent Controller that the respondents have failed to establish the change of the user of the suit accommodation.
10. Feeling aggrieved by the common judgment, the petitioner-firm has preferred C.R.P. 910/86 and C.R.P. 911/86.
11. The petitioner-firm also filed an application C.M.P. 8890/96 in C.R.P. 911/96, under Order 41, Rule 27, read with Section 151 of the Code of Civil Procedure for receiving additional evidence on record and also filed the documents as per list.
12. I have heard Sri Venkata Raghu Ramulu, learned Counsel of the petitioner-firm and Sri Srinivasa Rao, Counsel of the respondents, on the merits of both the revision petitions as also on the application for taking additional evidence on record.
13. It has been contended on behalf of the petitioner-firm that the monthly rent was either paid or tendered regularly through money order and, therefore, it cannot be said that the petitioner-firm is a defaulter. The 1st respondent and his deceased mother, that is the 2nd respondent, used to pass receipts much after the receipt of the monthly rent and they had also accepted the rent once in two or three months on many occasions and, therefore, the petitioner-firm cannot be said to be wilful defaulter. It has paid the entire rents prior to the institution of the R.C. No. 268/87 on 12-2-1987 and, therefore, cause of action for ejectment of the petitioner-firm on the ground of non-payment of arrears of rent had been vitiated. It has also been urged on behalf of the petitioner-firm that the need of the 1st respondent for residence is not. genuine because on many occasions, the adjoining portion of the suit accommodation has fallen vacant, but it was let-out to others. The lower Court has erred in not considering that the respondents are not entitled to eject the petitioner-firm from the suit accommodation on the ground of bona fide need because the suit accommodation has been let out for non-residential use while the alleged need of the 1st respondent is for residential purpose, particularly when a portion of the same building in which the suit accommodation is located has been in occupation of the respondents. It has further been urged on behalf of the petitioner-firm that the alleged alteration in the suit accommodation has not been proved to be detrimental to the interest of the respondents. Because the lower appellate Court has drawn adverse inference against the petitioner-firm for not producing its account books to establish the regular payment of monthly rents, the petitioner-firm should be permitted to adduce additional evidence by way of account books in an attempt to establish that the monthly rent was paid regularly to the respondents and the deceased Gopinath Bhargava. This document, though material, could not be filed earlier because its Counsel did not advise it to do so.
14. On the other hand, it has been argued by the learned Counsel of the respondents that the petitioner-firm had paid the monthly rents for April to June, 1984 vide Receipt dated 5-8-84 which is at Ex.R-31 which clearly establishes that the rent was paid after the institution of the proceedings in R.C. 302/84 (old number) and the rent for the months of July 1984 to October 1984 was paid vide receipt dated 12-10-1984 which is at Ex.R-32 and thus it is crystal clear that the petitioner-firm has committed default in making the payment of the monthly rents of April 1984 to June 1984 as also the monthly rents of July 1984 and August 1984 during the pendency of the suit. The delayed payment of the rent during the pendency of the suit is indicative of the fact that the petitioner-firm is a wilful defaulter. Similarly the petitioner-firm has failed to pay the monthly rent for February, 1986 within time as also the monthly rent of June 1986 to August 1986 vide Ex.R-38 dated 8-9-1996 along with the rent for the months of September, 1986 to October, 1986. No acceptable explanation has been given by the petitioner-firm for delayed payment of monthly rents. The lower appellate Court has rightly concluded that the petitioner-firm has committed wilful default by not paying the monthly rents in time, that the need of the 1st respondent in the suit accommodation is genuine and that the petitioner-firm has materially altered the suit accommodation without the written consent of the respondents and late Shanti Bhargava, the 2nd respondent, and her husband late Gopinath Bhargava and, therefore, the revision petitions are liable to be dismissed. The application for adducing additional evidence deserves to be dismissed because no valid ground has been given for permitting the petitioner-firm to adduce additional evidence.
15. In the case of K.K. Venkataramiah, : [1964]2SCR35 , it has been held by the Apex Court that:
'Under Rule 27(1), the appellate Court has the power to allow additional evidence not only if it requires such evidence 'to enable it to pronounce judgment', but also for 'any other substantial cause'. There may well be cases where even though the Court finds that it is able to pronounce judgment on the state of record as it is, and so it cannot strictly say that it requires additional evidence to enable it to pronounce judgment, it still considers that in the interest of justice something which remains obscure should be filled up so that it can pronounce its judgment in a more satisfactory manner. Such a case will be one for allowing additional evidence for any other substantial cause under Rule 27(1) (b) of the Code.
Such requirement of the Court is not likely to arise ordinarily unless some inherent lacuna or defect becomes apparent on an examination of the evidence. It may well be that the defect may be pointed out by a party, or that a party may move the Court to supply the defect, but the requirement must be the requirement of the Court upon its appreciation of the evidence as it stands.'
16. The powers of the appellate Court to take additional evidence are regulated by Order 41, Rule 27 of the Code of Civil Procedure. The appellate Court can direct the evidence to be taken on record when: (1) the trial Court has improperly rejected to record the evidence which the party was prepared to adduce; (2) the party seeking to adduce additional evidence establishes that notwithstanding the exercise of due diligence, such evidence was not within his knowledge or could not, after the exercise of due diligence, be produced by him at the time when the decree appealed against was passed and (3) the appellate Court requires any document to be produced or any witness to be examined to enable it to pronounce judgment, or for any other substantial cause. The appellate Court has to act in conformity with the provisions of Order 41, Rule 27 of the Code of Civil Procedure in admitting additional evidence.
17. In the case on hand, it is to be remarked that it is not specifically pleaded by the petitioner-firm that on 12-10-1984, an amount of Rs. 1600/- was paid without obtaining receipt by it to the deceased-respondent No. 2, Shanti Bhargava, at the time of her alleged pilgrimage with a promise to adjust the said amount towards future rent. It has not stated on oath during cross-examination that it paid Rs. 1,600/- to the deceased-respondent No. 2 on 12-10-1984 against the rent for the months of July 1984 to October, 1984. Adverse inference in not filing the account books maintained by the petitioner-firm has been drawn by the lower appellate Court.
18. From the evidence of R.W.1, it is gathered that the account books were available with the petitioner-firm and the cause for not filing the same before the trial Court or before the lower appellate Court is that the Advocate had not so advised. There appears to be no force in the argument of the learned Counsel of the petitioner-firm that the account books should be taken on record as additional evidence merely because the lower appellate Court has drawn adverse inference against it. No case has been made out for taking the additional evidence on record for the simple reason that the petitioner-firm has failed to establish any of the three grounds as mentioned in the case of K.K. Venkataramiah (1 supra), particularly because no inherent lacunae is apparent on the examination of evidence on record which requires to be supplied for better appreciation of the evidence.
19. For the foregoing reasons, the application CMP 8890/96 is liable to be dismissed and accordingly it is dismissed.
20. Clause (iii) of Sub-section 2 of Section 10 of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960 (in short 'Rent Control Act) provides that where the tenant has committed such acts of waste as are likely to impair materially the value or utility of the building, it can be a ground for eviction.
21. A Division Bench of the Madras High Court, in the case of R. Govindaswami Naidu v. G. Pushpalammal and Anr., : AIR1952Mad181 , has held that every act of waste will not entitle the landlord to obtain an order of eviction under the provisions of Madras Buildings (Lease and Rent Control) Act, 1946. It is equally clear that it cannot be laid down as a rule of law that a demolition of any wall in a building must necessarily be deemed to be an act of waste which is likely to impair materially the value or utility of the building. A finding on this point is a finding which must be based upon the particular facts as emerge from the evidence that is adduced in the case.
22. In order to constitute voluntary waste by destruction of the premises or additional construction, the destruction or the construction must be wilful or negligent. A substantial alteration in the character of the demised premises may be treated as a waste provided it has impaired its value or utility. The mere change or addition in the demised premises is not waste unless it is in fact injurious to the interest of the landlord either by diminishing the value of the estate or by increasing the burden on it.
23. Bearing these principles in mind, if the facts of this case are examined, it will be found that the respondents have neither alleged nor proved that the alteration done in the suit accommodation has either impaired its value or utility. The lower appellate Court merely on the ground that the petitioner-firm has failed to establish that it had obtained the consent of the respondents and their predecessor-in-title for the alterations in question coupled with Clause B of Section 108 of the Transfer of Property Act has held that the petitioner-firm is liable to be ejected on the ground that it has made alterations in the suit accommodation. Similarly there is no evidence on record that the alleged repairs in the suit accommodation cannot be carried on unless it is vacated by the petitioner-firm.
24. In view of the specific provisions made in Clause (iii) of Sub-section 2 of Section 10 of the Rent Control Act, the provisions of Clause B of Section 108 of the Transfer of Property Act cannot be pressed into service because only on establishing the grounds mentioned in Clause (iii) of Sub-section 2 of Section10 of the Rent Control Act, a tenant can be ejected.
25. In the case of P.B. Gopal Rao v. S.K. Murthy, 1984 (1) APLJ 57, the tenant has constructed a room in the common verandah which has caused inconvenience and obstruction to the other tenants of the premises and, therefore, it was held in this case that the tenant has committed acts of waste impairing the utility of the building. Such is not the case here because, as noted above, there is no evidence of any inconvenience or obstruction that has caused to either the respondents or the other occupiers of the adjoining building as also there is no evidence regarding diminishing of the value or the utility of the suit accommodation.
26. Thus, in my view, the learned appellate Court was in error in holding that the petitioner-firm is liable to be ejected on the ground of making alterations in the suit accommodation.
27. Section 10(3) (a) (i) (a) of the Rent Control Act says that in case of a residential building, the landlord can seek ejectment of the tenant if he is (not) occupying a residential building of his own in the city, town or village concerned and he requires it for his own occupation, while Section 10(3) (b) (sic). (a)) (iii) provides that in case of a non-residential building, the landlord can seek ejectment of his tenant if he is not occupying a non-residential building in the city, town or village concerned which is his own or to the possession of which he is entitled whether under this Act or otherwise either for the purpose of business which he is carrying on or the business which he bona fide proposes to commence. Clause (c) of Sub-section (3) of Section 10 of the Rent Control Act provides that a landlord can invoke this provision to seek the eviction of a tenant who is occupying a portion of the building occupied by the landlord himself. In other orders, a landlord can seek the eviction of a tenant occupying another portion or the remaining portion of the building in which the landlord is also residing or carrying on his business in one portion. Thus, it is seen that a landlord is entitled Under Section 10(3) (c) of the Rent Control Act by way of additional accommodation, to eject the tenant, if the portion of the building occupied by him is not sufficient for the purpose of either residential or non-residential use.
28. In the case of Gangaram v. N. Shankar Reddy, : AIR1989SC302 , it is held that a practical test which can be applied to find out if two adjoining portions form part of the same building or two different buildings would be to see whether one of the two buildings can be sold by the landlord and the purchaser inducted into possession of the premises sold without the landlord's possession and enjoyment of the premises in his occupation being affected. It is further held in this case that as per the Rent Control Act, the relief of eviction of a tenant can be given to a landlord only under two situations, viz. (1) where the landlord is not in occupation of a building of his own or to the possession of which he is entitled to by an order of eviction Under Section 10(3) (a) (iii) (i) of the Rent Control Act and (2) where the landlord is in occupation of only a portion of his building and is bona fide in need of additional accommodation and another or the remaining portion of the building is in occupation of a tenant or tenants by ordering his or their eviction Under Section 10(3) (c) of the Rent Control Act.
29. In the case of P. Kesavan (Dead) v. Ammukutty Amma and Ors., : [1988]2SCR81 , the landlord had established his bona fide need of the premises in question for his own use and occupation.; The Apex Court held that Under Section 17(1) of the Kerala Buildings (Lease and Rent Control) Act, 1965, conversion of building as contemplated in this Section for which permission was required is conversion by the tenant and cannot be a conversion by the landlord because putting to a different purpose, the user of the building is not a conversion of the building as such. When it is found that the building as it is without any structural change can be put to residential purpose, it is no conversion of the building, but only a change of user of the building. The tenant is required to obtain the permission or the consent of the landlord for converting the building.
30. Sub-section 3 of Section 11 of the Kerala Buildings (Lease and Rent Control) Act, 1965 provides as under:
'A landlord may apply to the Rent Control Court for an order directing the tenant to put in possession of the building if he bona fide needs the building for his own occupation or for the occupation by any member of his family dependent on him.'
While Sub-section 17 provides as follows:
'Conversion of buildings and failure by landlord to make necessary repairs: (1) No residential building shall be converted into a non-residential building or vice versa and no such building shall be divided into separate portions for letting on rent or for other purposes except with the permission in writing of the Accommodation Controller.'
31. From a reading of Section 10(3) of the Rent Control Act and Sees. 11(3) and 17 of the Kerala Buildings (Lease and Rent Control) Act, 1965, it is crystal clear that possession of the non-residential building from the tenant cannot be obtained by the landlord for his residential purposes unless the case is covered by Section 10(3) (c) of the Rent Control Act.
32. The respondents have pleaded in Para 7 of the petition that the suit accommodation was obtained by the petitioner-firm for the business of Sona Opticals. P.W.1 has admitted in cross-examination that the petitioner-firm had obtained the suit accommodation for its business, though originally it is for residential purpose, for manufacturing of optic lenses etc., and any other business. He has also admitted in cross-examination that the portion in which his deceased mother was residing and his brothers and sisters were residing is bearing No. 4-1-990 and the number of the suit accommodation is 4-1-991 and 993. He has further admitted that the demised premises and the suit accommodation are separate and distinct. It is pertinent to note that he has also admitted that if the respondents desired to sell the demised premises to the tenants, they can sell it conveniently as it is separate.
33. From what is stated above, it is established that the suit accommodation was let out to the petitioner-firm for non-residential purposes, that is to say for business purposes and it is separate and distinct from the other portion of the building which is in occupation of the respondents and that it can be sold without any inconvenience to them.
34. Applying the test lad down in Gangaram's case (4 supra), the suit accommodation being separate and distinct and can be independently sold and the purchaser can be put in possession of the same without respondents possession of door No. 4-1-990 and/or other portion of the said building being affected in any manner, it is clear that the provisions of Section 10(3) (c) of the Rent Control Act are not at all attracted, but the case is covered by Section 10(3) (a) (iii) of the Rent Control Act and the respondents are not entitled to obtain the possession of the suit accommodation for residential purposes because it was let out for non-residential purposes.
35. The principle laid down in the case of P. Kesavan (5 supra) is of no help to the respondents for the simple reason that the provisions of Sub-section(3) of Section 11 of the Kerala Buildings (Lease and Rent Control) Act, 1965 are quite different from the afore-mentioned provisions of the Rent Control Act.
36. The oversight of the aforementioned provision of law led the appellate Court to conclude that the suit accommodation, though a non-residential building, can be obtained by the respondents if they establish that their requirement for residential purpose is bonafide. Therefore, the finding of the lower appellate Court that the respondents are entitled for ejecting the petitioner-firm from the suit accommodation because it is required bonafide by the 1st respondent for residential purpose deserves to be reversed and I accordingly hold that the respondents are not entitled to eject the petitioner-firm from the suit accommodation on the ground that it is required bonafide by the 1st respondent for his residence.
37. Section 10(2) (i) of the Rent Control Act says that, if the rent controller is satisfied on the application of the landlord that the tenant has not paid or tendered the rent due by him in respect of the building within 15 days after the expiry of time fixed in the agreement of tenancy with the landlord or in the absence of any such agreement, by the last day of the month next following that for which the rent is payable, it shall make an order directing the tenant to put the landlord in possession of the building and if he is not so satisfied, he shall make an order rejecting the application, and the proviso to this sub-clause provides that if the rent controller is satisfied -that the tenant's default to pay or tender rent was not wilful, he may notwithstanding anything in Section 11 give the tenant a reasonable time not exceeding 15 days to pay or tender the rent due by him to the landlord upto the date of such payment or tender and on such payment or tender, the application shall be rejected.
38. The question that falls for determination is : what is 'wilful default' within the meaning of Section 12(2) (i) (sic. 10(2)(i)) read with its proviso of the Rent Control Act?
39. In the case of K. Lakshminarasaiah v. R. Krishna, 1972 APLJ 122, it is held that the, meaning of the word 'default' is a failure to perform an obligation imposed on a person. When a person knows that he has committed a default and even after knowing that, he does not choose within a reasonable time, to pay the amount for which he has defaulted, he should be considered to be a wilful dafaulter. In this case, the tenant knew that he was under an obligation to pay the rent after the expiry of the month of tenancy, but even after knowing that, month after month he failed to pay the rent for six months. He was, therefore, found to be a wilful defaulter.
40. In the case of G. Murali Krishna and Anr. v. P. Mahalakshmi and Ors., : 1992(3)ALT316 , the tenants committed default in payment of rent for a period of 13 months when the eviction petition was pending before the Rent Controller and for a further period of 14 months when the matter was pending before the Appellate authority. Taking the subsequent events into consideration as also the fact that the case was pending for nearly 10 years and a subsequent application for ejectment may last for another decade, the learned single Judge found that the tenants had committed wilful default, particularly when they had no possible defence to make.
41. Relying on the case of G. Murali Krishna (7 supra), in the case of D.L. Satyanarayana v. Kalasantha Radha Krishanaiah, : 1994(1)ALT526 , it is held that the tenant had committed wilful default and there was supine indifference in payment of rents because in this case also, the tenant had failed to pay the rents for a long period of nearly two years, that is from the month of July, 1986 to June, 1988.
42. Discussing the case of D.L. Satyanarayana, : 1994(1)ALT526 , it is observed by a learned single Judge of this Court in the case of P. Rajanna v. K. Lalitha Reddy @ Chinnamma Devi andAnr., : AIR1996AP113 . that, the observation made by the learned single Judge in the case of D.L Satyanarayana, : 1994(1)ALT526 , cannot be taken as any law declared in that regard to make it binding or supporting precedent because it is not stated therein as could be made out that such future defaults could be made a basis for eviction, but what is stated therein is that the Courts were justified in taking into consideration of the subsequent defaults to hold that the tenant had committed wilful default.
43. In the case of Adapa Santharam v. Sait Nathmal Manik Chand, : AIR1996AP149 , both the Courts rejected the contention of the tenant regarding his case that he had sent money orders under Exs.B-2 and B-3 to the landlord because the relevant money-order coupons Exs.B-4 and B-5 showing refusal did not contain the correct name of the landlord and also his address and no postal stamp was found on the same. Inspite of exchange of notices, the tenant did not send the rent due either by demand draft or by cheque or through the Counsel of the landlord. Under these circumstances, it was found that the tenant was a wilful defaulter in payment of rent.
44. The Apex Court in the case of S. Sundaram Pillai v. V.R. Pattabiraman, : [1985]2SCR643 , after considering the meaning, definition and content of the word 'wilful default', as given in the Dictionary of Law by L.B. Curzon, 'Words and Phrases', Volume 11A (Permanent Edition) and in Volume No. 45, in Volume III of Webster's Third New International Dictionary and in Black's Law Dictionary (4th Edition), has observed that:'
'......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.'
It is further held in this case that the word 'wilful' contemplated in the Rent Control Act is wilful, yet it has been put in the negative form which undoubtedly gives sufficient leeway to get the tenant out of the rigoros of the statutory provisions.
The following view expressed in the case of Khivaraj Chordia v. G. Maniklal Bhattad, : AIR1966Mad67 has been quoted with approval by the Apex Court vide Para 65 of the judgment:
'Keeping in mind the main object of the enactment, namely, prevention of unreasonable eviction of tenants, the principle that emerges from the several decisions is that for default to be regarded as wilful default, the conduct of the tenant should be such as to lead to the inference that his omission was a conscious violation of his obligation to pay the rent or reckless indifference. If the default was due to accident or inadvertence or erroneous or false sense of security based upon the conduct of the landlord himself, the default cannot be said to be wilful default.'
45. The principle laid down in the case of S. Sundaram Pillai (11 supra), has been quoted with approval in the case of Rakapalli Raja Rama Gopala Rao v. Naragani Govinda Sehararao and Anr., : AIR1989SC2185 .
46. I feel myself in complete agreement with the view taken by my learned Brother, B.K. Somasekhara J, in the case of P. Rajanna (9 supra), wherein he has laid down the following tests to be applied for the facts and circumstances of each case in order to determine whether the tenant has committed willful default in the payment of rent or not.
'(1) The social and economic status of the tenant and the landlord.
(2) The capacity of the tenant to pay the rent at a given time.
(3) The bona fide conduct of the tenant in making attempts to pay or tender the rent to the landlord.
(4) The conditions of the tenant at a particular situation like family obligations, social obligations, illness, festivals etc.
(5) The conduct of the landlord in relation to the tenant regarding payment of rent.
(6) The totality of the circumstances in a particular case to satisfy the conscience of the Court that the tenant was guilty or otherwise in regard to payment or tender of rent.
(7) Any other useful circumstances in a given case in support of the above tests. These are only illustrative and not exhaustive.'
47. Relying on the case of S.P. Deshmukh v. Shah Nihar Chand Waghajibai Gujarati, : AIR1977SC1985 , it has been held in the case of Rashik Lal and Ors. v. Shah Gokkuldas : [1989]1SCR439 that:
'The crucial test appears to be the conduct of the landlord in receiving the rent offered belatedly. If he receives the same under a protest and warns the tenant to be regular in payment in the future, he cannot be assumed to have agreed to a modified agreement in this regard. But if he, without any objection and without letting the tenant know his thought process, continues to receive rent at intervals of several months, he cannot be allowed to spring a surprise on the tenant by suddenly starting a proceeding for eviction. Having lulled the tenant in the belief that things were alright, the landlord was under a duty to serve him with a notice demanding regular payment, if he wished to insist upon it. In the case before us there was no objection whatsoever, raised on behalf of the landlord against the delayed payments.'
48. In Syed Dastagiri Khadri v. K.S. Saleem Basha & ors. 1993 ALT (Supp.) (1) 144 = 1993 (2) APLJ 39 (SN), it is held that if by his conduct, the landlord has been receiving rents regularly (sic. irregularly), he cannot subsequently turn round and treat the late payment of rents as wilful default and base his claim for eviction on the ground of wilful default. This is subject to one exception where after accepting irregular payments in arrears, the landlord gives notice to the tenant that he will not accept irregular payment or where the irregular payment has been received under protest. Where such a notice is given by the landlord and thereafter the tenant commits wilful default or where arrears of rent have been received under protest, acceptance of rent would not preclude the landlord from claiming eviction on the ground of wilful default in payment of rent.
49. In the case of Dakaya alias Dakaiah v. Anjani, AIR1995 SC 383, the Apex Court has observed that, Section 10 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 is pan materia similar to Section 10 of the A.P. Rent Act, excepting that in Tamil Nadu Act an explanation has been added to the proviso to subsection (2) of Section 10 of the Tamil Nadu Act. The said explanation provides that for the purpose of Sub-section (2) of Section 10 of the Timil Nadu Act, default to pay or tender rent shall be construed as wilful, if the default by the tenant in the payment or tender of rent continues after the issue of two months notice by the landlord claiming the rent. Quoting the principle laid down in the case of S. Sundaram Pillai (11 supra), it is further held that the default per se cannot be construed as wilful and keeping in mind the beneficial purpose of the Rent Act to protect the eviction of the tenant. If the payment has been made before the institution of the suit, the cause of action for institution of the suit will vanish. In the case of Dakaya alias Dakaiah (17 supra), immediately on demand of payment of the rent, the tenant initially sent a sum of Rs. 375/- by money order and thereafter a demand draft for Rs.1,125/- covering the entire period of default from September, 1988 to November, 1988 was sent. Under these circumstances, the Apex Court found that there was no occasion to proceed on the footing that there was a wilful default for which an order of eviction of the tenant was to be passed. As the tenant had already sent the Bank Draft covering the entire default, there was no occasion also for the Rent Controller to direct deposit of arrears within the stipulated period.
50. Testing the facts of the case on the basis of the aforementioned position of law and logic, it is found that, on 15-11-1982 the deceased Shanti Bhargava, the respondent No. 2, had received in part the rent for the months of October and November, 1982 vide receipt, Ex.R-30 and the remaining amount of the rent for these months on 6-12-1982, vide Ex.R-29. Again, she received the rent for the months of February and March, 1984 on 11-4-1984 vide receipt Ex.R-2 P.W.1 has admitted the execution of the receipt, Ex.R-2. He has also accepted in cross-examination that the rent was received vide receipt, Ex.R-2 = Ex.P-4. They had been receiving the rents without protest. He has also admitted that they had received the rents from the petitioner-firm sometimes once in two months or three months and they have not endorsed on the rent receipts about their protest for late payment of rent. They never gave any notice to the petitioner-firm alleging irregular payment of rent. There was no quarrel between them and the petitioner-firm. He has further admitted that the petitioner-firm is a good firm and had reputed business. The learned appellate Court has not considered the alleged default in making the payment of rent for the month of June, 1979 and July, 1979, and rightly so, particularly in the light of this fact that during that time, the rent of the suit accommodation was Rs. 300/- per month and thereafter it was enhanced to Rs. 400/-per month and the respondents had received the rent for the subsequent months at the rate of Rs. 400/- per month without demanding the alleged arrears of rent for the months of June and July, 1979. At this stage, it would be pertinent to note that P.W.1 has admitted that he or the other landlord did not maintain any account and that he has got several other tenants also. In view of this circumstance it is difficult to accept the say of the P.W.1 that, the petitioner-firm did not pay the rent for the months of June and July, 1979 because there was no material available with the respondents to remember regarding the alleged default.
51. The learned lower Court, after discussing the evidence on record, has rightly concluded that the petitioner-firm had not paid the rent for the months of April, 84 to June, 1984 before institution of the case on 20-7-1984 and the same was paid vide receipt Ex.P-31, dated 5-8-1984. The reason is that, R.W.1 has not stated on oath that the rent was paid in due time and the receipt was executed on 5-8-84 and there is no specific pleading in this regard. The second reason is that contrary to the pleading R.W.1 has stated that he had sent the rent through money order, but has not filed any documentary evidence in an attempt to establish that.
52. Now the question is whether the default in making the payment of rent from the months of April, 1984 to June, 1984, that is to say for 3 months, amounts to wilful default on the part of the petitioner-firm?.
53. As noted above the respondents were receiving the rents irregularly prior to the institution of the proceedings, that is case R.C. 302/84 (old) and they were receiving the rent once in two to three months. No notice before institution of the proceedings was given by the respondents. No objection was ever taken prior to the institution of the proceedings on 20-7-1984 for delayed payment. Under these circumstances, the conduct of the deceased respondent No. 2 and her husband Gopinath Bhargava as also of P.W.1 in receiving the rent offered belatedly and without objection or protest cannot be made a basis for ejecting the petitioner-firm on the ground of wilful default, particularly because it appears that the respondents had sprung surprise on the petitioner-firm without notice and suddenly by starting proceedings for eviction. The petitioner-firm had paid the rent for the months of July, 1984 to October, 1984 vide receipt Ex.R-32, dated 12-10-1984 during the pendency of the proceedings in R.C. 302/84 (old) because in the absence of pleading and proof it cannot be said that the respondent No. 2 had taken Rs. 1,200/- on 12-10-1984 while going on a pilgrimage. Even if it is assumed for the sake of argument that on 12-10-1984 the petitioner-firm had paid Rs. 1,200/- to the deceased land lady, it cannot be said that the rent for the months of July and August, 1984 was paid in time.
54. In the case of P. Rajanna (9 supra), it is held that default or wilful default only upto the date of filing of the petition can be a ground for eviction Under Section 10(2) (i) of the Rent Control Act, but not failure to pay the rent subsequent to filing of the eviction petition. Subsequent failure is only relevant for the purpose of proceeding Under Section 11 of the Rent Control Act.
55. The case of K. Lakshminarasaiah ( 6 supra) and the case of G. Murali Krishna (7 supra) as also the case of D.L. Satyanarayana (8 supra) are distinguishable on facts because even after knowing that he was under an obligation to pay the rent soon after expiry of the month of tenancy, the tenant committed default for month after month and did not pay the rent for six months in the case of K. Lakshminarasaiah (6 Supra), the tenant committed default of payment of rent in all 27 months in the case of G. Murali Krishna (7 supra) while the tenant had committed default for nearly two years in the case of D.L. Satyanarayana (8 supra). Such is not the case here. Delayed payment has been made only for the months of July and August, 1984, that is for two months, while payment for the month of September, 1984 was made in time and the rent for the month of October, 1984 was paid in advance vide receipt Ex.R-32. It is not out of place to mention that the rent for the month of November, 1984 was paid on 3-12-1984 and the rent for the months of December, 1984 and January, 1985 was paid on 4-2-1985 while the rent from the month of February, 1985 to January, 1986 was either paid in time or in advance.
56. The respondents have filed the second ejectment proceeding vide RCC 268/87 on 12-2-87 alleging that the petitioner-firm did not pay the rent for the month of February, 1986 and from the month of May, 1986 to February, 1987 within time. On assessment of the evidence on record, the lower appellate Court has found that the petitioner-firm did not pay the rent for the month of February, 1986 as claimed by it to have paid the same on 23-3-1986 vide postal acknowledgment Ex.R-3. According to the respondents, it was paid subsequently on 8-9-1986 along with the rent for the months of May, 1986 to September, 1986, vide receipt Ex.R-38.
57. R.W.1 has stated that he had sent the rent for the month of February, 1986 by money order. The acknowledgement is at Ex.R-3. It is pertinent to note that P.W.1 in cross-examination has accepted that the M.O. acknowledgment, Ex.R-3, dated 21-3-1986, bears the signature of his mother, that is to say the deceased respondent No.2. A perusal of the memo acknowledgment, Ex.R-3, shows that it bears the postal stamp dated 21-3-1986. Postal Receipt No. 8078, Ex.R-42, contains the postal seal dated 18-3-1986 and it also bears the name of the 2nd respondent since deceased. An amount of Rs. 400/- was sent through it.
58. The lower appellate Court wrongly observed in Para 18 of its judgment that, Ex.R-42, the money order, is dated 18-3-1987. It is further wrongly found that the returned or accepted money order coupon relating to Ex.R-42 had not been produced because as noted above the money order acknowledgment coupon is at Ex.R-3 which admittedly bears the signature of the 2nd respondent since deceased and it bears the postal receipt dated 21-3-1986. Under these circumstances, disagreeing with the lower appellate Court, I hold that the rent for the month of February, 1986 was paid by the petitioner-firm to the deceased 2nd respondent on 21-3-1986.
59. It is interesting to note that the chart giving details of payment of rent by the petitioner-firm filed by the respondents shows that the rent for the months of March and April, 1986 was paid separately through money order, but no date evidencing the receipt of payment of rent for the months of March and April, 1986 has been given by the respondents. There is evidence on record that earlier to that, rent for the months of April' 1986 was twice tendered by the petitioner-firm through M.O. No. 0688 which is at Ex.R-23 and again through M.O. No. 0729 which is at Ex.R-24.The lower appellate Court has wrongly held that no reliance can be placed on the postal receipts which are at Ex.R-23 and R-24, particularly in the light of the fact that the respondents themselves admitted to have received the rent for the month of April, 1986, though have not given the date of receipt of the rent for the month of April, 1986.
60. Thus, it is seen that the petitioner-firm had paid in time the rent for the month of February, 1986. Similarly the rent for the month of April, 1986 was also paid in the month of April, 1986, vide acknowledgement, Ex.R-1 read with the certificate of the postal authorities which is at Ex.P-25. An amount of Rs. 2,100/- was paid to the respondents through their Counsel Sri Balaswamy Gupta vide acknowledgment, Ex.R-38, on 8-9-1986. On that day, the rent for the months of May, 1986 to August, 1986, that is to say for four months amounting to Rs. 1,600/- only was due. Adjusting the amount of Rs. 1,600/- against the payment of Rs. 2,400/-, balance amount of Rs. 800/-was paid for the months of September and October, 1986 in advance by receipt Ex.R-38. It is noteworthy that in the receipt Ex.R-38, it has not been mentioned as to the months for which the rent has been received. Then, an amount of Rs. 2,000/- was paid to the said Sri Balaswamy Gupta, Advocate, for the respondents vide receipt, Ex.R-40, dated 18-2-1987. Through this Ex.R-40, the rent for the months of November, 1986 to February, 1987, that is to say for four months, is said to have been paid. It is true that in the receipt, Ex.R-40, it is mentioned that the rent from the month of October, 1986 to February, 1987 was paid on 18-2-1987, but it appears to be wrong because as I have found earlier, the rent for the month of October, 1986 had already been paid vide, Ex.R-38. The rent for the month of February, 1987 was paid in advance on 18-2-1987. Under these circumstances, it can be safely concluded that as on the date of filing the petition R.C.C. 268/87, dated 12-2-1987, the petitioner-firm was not at all in arrears of rent. It would not be out of place to mention that through notice dated 26-5-1986, which is at Ex.R-33, the 1st respondent had categorically informed Sri Abdul Karim, the partner of the petitioner-firm that the rent for the month of February, 1986 had not been paid and, therefore, until that was paid, the respondents would not accept the money order for the subsequent months. This warning was repeated in the subsequent letter dated 24-6-86 which is at Ex.R-32. Not only that, through letter, Ex.P-36, dated 5-7-1986, the claim was reiterated and it was denied that the rent for the month of February, 1986 was received on 21-3-1986 through money order. I have already found that the rent for the month of February, 1986 was paid to the respondents on 21-3-1986 vide M.O. acknowledgement, R-3, read with M.O. Coupon, R-42, and, therefore, it cannot be asked again to pay the rent for the month of February, 1986. I have also found that the rent for the subsequent months had been sent to the respondents, forming, example, rent for the month of April, 86 through money order was sent and was twice refused by the respondents, but later they received it on 29-4-1986. They had categorically refused to accept the rent for the future months until the rent for the month of February, 1986 was paid. For these reasons, no fault can be found with the petitioner-firm in not regularly sending the rent through money order, in view of the abnormal conduct of the respondents in sending warning after warning, though they knew that their allegation of not receiving the rent for the month of February, 1986 was wrong and they again wrongly refused to accept the future payments. How under these circumstances, it can be said that the petitioner-firm had committed wilful default in not making the payment of rent in time? The oversight of the aforementioned material facts and position of law has led the lower appellate Court to conclude that the petitioner-firm was a wilful defaulter.
61. I have found that before institution of the second proceeding 238/87 on 12-2-1987, the petitioner-firm had paid the upto date arrears of rent and, therefore, on the authority of Dakaya alias Dakaiah (17 supra), I hold that the cause of action for filing the 2nd petition No. 238/87 had vanished and disagreeing with the lower appellate Court, I hold that the petitioner-firm cannot be ejected from the suit accommodation.
62. In result, both the revision petitions, that is CRP 910/1996 and CRP 911/1996 are allowed. However, in the circumstances of the case, I leave the parties to bear their own costs throughout.