K.S. SHRIVASTAV

(1) THIS is tenants 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 forApril, 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 nonpayment 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, 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 vs. G. Pushpalammal and another, 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-sec. 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 Sec. 10 of the Rent Control Act,

a tenant can be ejected.

(25) IN the case of P.B. Gopal Rao vs. S. K. Murthy , 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 subsection

(3) of Sec. 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 Sec. 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 vs. N. Shankar Reddy, 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 landlords 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 canbe 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) vs. Ammukutty Amma and others, 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 Secs. 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. I 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 Gangarams 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 sec. lo (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-sec. (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 bona fide 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 bond fide 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 oft the ground that it is required bona fide 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 tenants 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 vs. R. Krishna, 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 another vs. P. Mahalakshmi and others,

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 vs. Kalasantha Radha Krishanaiah, 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, it is observed by a learned

single Judge of this Court in the case of P. Rajanna vs. K. Lalitha Reddy @

chinnamma Devi and Anr. that, the observation made by the learned single judge in

the case of D. L. Satyanarayana, 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 vs. Sait Nathmal Manik Chand, 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 moneyorder

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 vs. V. R. Pattabiraman, 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 websters Third New

International Dictionary and in Blacks 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 vs. G. Maniklal bhattad 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 vs. Naragani

Govinda Sehararao and another.

(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 wilful 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 vs. Shah Nihar Chand Waghajibai

gujarati, it has been held in the case of Rashik Lal and others vs. Shah Gokhuldas

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 vs. K. S. Saleem Basha and ors. , it is held that if by

his conduct, the landlord has been receiving rents regularly (sic. irregularly), he

cannot subsequently rum 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 vs. Anjani, the Apex Court has observed

that, Section 10 of the Tamil Nadu Buildings (Lease and Rent Control) act, 1960 is

pari 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 subsection

(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. I 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. I 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. I 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.