Nazimuddhin Ahmed Represented By ... vs K.

Narasimha Rao on 19 February, 1993

Madras High Court

Nazimuddhin Ahmed Represented By ... vs K. Narasimha Rao on 19 February, 1993
Equivalent citations: (1993) 2 MLJ 39
Author: Bellie
ORDER Bellie, J.

1. The tenant is the revision petitioner. The Rent Controller passed an order of eviction against the
tenant on the petition filed by the landlord and that order has been confirmed by the appellate
authority. Against that the tenant has filed this civil revision petition.

2. The landlord filed the eviction petition on the ground that the tenant failed to pay rent at the rate
of Rs. 150 per mensem from July, 1990 to November, 1990 and this was inspite of a notice issued by
the landlord dated 16.11.1990 calling upon the tenant to vacate the premises, and therefore there
was wilful default in payment of rent.

3. The tenant denied that there was wilful default He contended that the landlord consented that the
tenant could effect repairs to the premises and the amount spent for that could be adjusted towards
the rents from July, 1990, and he (tenant) effected repairs to the premises spending a sum of Rs.
1,000. However on receipt of notice from the landlord he sent a demand draft for Rs. 750 as rent for
five months along with a reply and the landlord has received the same. Hence it is not correct to say
that he committed wilful default in payment of rent.

4. The Rent Controller as well as the appellate authority rejected the contention of the tenant that
the landlord consented to effecting repairs by the tenant and deduct the amount spent towards rents
from July, 1990. They held that the tenant committed wilful default in payment of rent Hence both
the courts below concurrently held that the tenant is liable to be evicted.

5. Against this the tenant has preferred this civil revision petition. In the C.R.P., Mr. T.P. Sankaran,
learned Counsel appearing for the revision petitioner-tenant has raised a question of law against the
order of eviction. The learned Counsel submits that there is an advance of Rs. 3,000 towards rent
paid by the tenant to the landlord, and as per Section 7(2) of the Tamil Nadu Buildings (Lease and
Rent Control) Act, the landlord shall not receive an advance exceeding one month's rent, and if he
has received an advance of more than that amount he shall refund the same to the tenant, or at the
option of the tenant that amount shall be otherwise adjusted, and the landlord having that money
with him which is much more than the alleged arrears for five months he cannot plead that there
was wilful default in payment of rent and therefore the orders of eviction passed by the courts below
are erroneous.

6. It is not disputed that the Landlord is having a sum of Rs. 3,000 with him as advance. It is also
not disputed that as per Section 7(2) the landlord may receive one month's rent only as advance and
not more than that. Therefore, a sum of Rs. 2,850 of the tenant's money is lying with the landlord
with-out any right on the landlord for that. At this stage, to appreciate the contention raised by Mr.
Sankaran, it would be better to reproduce here Section 7(2).

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 Nazimuddhin Ahmed Represented By ... vs K. Narasimha Rao on 19 February, 1993

7(2) Where the fair rent of a building has not been so fixed--

(a) the landlord shall not claim, receive or stipulate for the payment of, any premium or other like
sum in addition to the agreed rent: Provided that the landlord may receive, or stipulate for the
payment of, an amount not exceeding one month's rent, by way of advance;

(b) save as provided in Clause (a), any sum paid in excess of the agreed rent, whether before or after
the date of the commencement of this Act, in consideration of the grant, continuance or renewal of
the tenancy of the building after the date of such commencement, shall be refunded by the landlord
to the person by whom it was paid or, at the option of such person, shall be otherwise adjusted by
the landlord.

7. This section makes it very clear that any amount paid by the tenant in excess of the agreed rent
and one month advance if stipulated by the landlord shall be refunded by the landlord to the tenant
Thus, there is a mandate of law to the landlord to refund that amount even though the tenant has
not asked for that But an option is given to the tenant to tell the landlord to adjust that amount
towards rent and that the landlord shall do.

8. The question is when the landlord has not refunded the said excess amount as enjoined on him by
law, even though the tenant has not asked him to adjust that amount towards the arrears of rent,
can it be said that the tenant has committed wilful default in payment of rent Obviously not When
the tenant's amount is with the landlord which the landlord ought to have refunded and he failed to
do so, and the amount is more than the alleged arrears of rent, it does not lie in the mouth of the
landlord to say that the tenant committed default much less wilful default in payment of rent
because rent amount payable by the tenant and even more is already with the landlord.

9. Mr. Sankaran, in, support of his contention relied on a Supreme Court decision in Modem Hotel,
Gudur v. K. Radhakrishnaiah . In that case which arose under the Andhra Pradesh Buildings (Lease,
Rent and Eviction) Control Act, 1960, an advance of Rs. 5,000 paid by the tenant was lying with the
landlord, and that amount was higher than the rent that was due on the date of petition for eviction
on the ground of wilful default in payment of rent. In the lease deed there was a stipulation that the
said advance amount of Rs. 5,000 shall be paid back to the tenant after the expiry of the lease
period. It was argued on behalf of the tenant that, When the landlord had Rs. 5,000 on tenant's
account with him which he was holding for years without paying interest and against the clear
statutory bar, there could be no justification for granting a decree of eviction on the plea of arrears
of rent.

The Court said, In view of the fact that the stipulation that the amount would be refundable at the
end of the tenancy is null and void under Section 7(3) of the Act, the amount became payable to the
tenant immediately and the landlord with Rs. 5,000 of the tenant with him could not contend that
the tenant was in default for a smaller amount by not paying the rent for some months.

It is clear that as per this decision of the Supreme Court, in our case, the landlord cannot contend
that there was wilful default in payment of rent. It may be mentioned here that Section 7 of the

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 Nazimuddhin Ahmed Represented By ... vs K. Narasimha Rao on 19 February, 1993

Tamil Nadu Buildings (Lease and Rent Control) Act is in pari materia with Section 7 of the Andhra
Buildings (Lease, Rent and Eviction) Control Act.

10. However, Mr. T. V. Ramanujam, learned Counsel appearing for the landlord cites another
decision of the Supreme Court in Nand Lal Agarwal v. Ganesh Prasad Sah , which was rendered
under the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1977 and submits that as per this
decision without the tenant calling upon the landlord to adjust the amount lying with the landlord
which was paid in excess of the rent, he cannot contend that there was no wilful default in payment
of rent, and in our case the tenant having failed to exercise such an option it is not open to him to
plead that there was no arrears of rent. This decision viz., Nand Lal Agarwal v. Ganesh Prasad Sah ,
of the Supreme Court is earlier to the abovesaid decision of the Supreme Court in Modem Hotel,
Gudur v. K. Radhakrishnaiah . Of course the earlier decision has not been referred to in the later
decision but even then the later decision, besides being later in point of time, in my view,
considering what I have stated above interpreting Section 7(2) of the Tamil Nadu Buildings (Lease
and Rent Control) Act, lays down the correct position of law.

11. It was brought to my notice a decision of this Court by a single Judge in P.S. Venkatarajan v. T.A.
Govindarajan , wherein both the abovesaid two decisions of the Supreme Court were cited. In this
case, according to the learned Judge, in the later decision of the Supreme Court in Modem Hotel,
Gudur v. K. Radhakrishnaiah , not only the earlier decision in Nand Lal Agarwal v. Ganesh Prasad
Sah, has not been referred to but also the question whether the advance amount of Rs. 5,000 of the
tenant with the landlord would tantamount to automatic adjustment of the arrears of rent due from
the tenant does not appear to have been specifically adverted to and considered. The learned Judge
has further stated that on the contrary the decision of the Supreme Court in the earlier decision in
Nand Lal Agarwal v. Ganesh Prasad Sah is in accordance with Section 7(2) of the Act and also the
earlier decisions of this Court and then the learned Judge has stated that in these circumstances the
later decision of the Supreme Court in Modern Hotel, Gudur v. K. Radhakrishnaiah , would not be of
any assistance to the tenant. With great respect I am unable to agree with this view of the learned
Judge.

12. I have given above the arguments advanced by the counsel for the tenant in the decision in
Modern Hotel, Gudur v. K. Radhakrishnaiah and the view expressed by their Lordships with
reference to Section 7(3) of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act,
1960. At the risk of repetition it may be referred to here the view expressed by their Lordships
regarding the advance amount of Rs. 5,000 that, the amount became payable to the tenant
immediately and the landlord with Rs. 5,000 of the tenant with him could not contend that the
tenant was in default for a smaller amount by not paying the rent for some months.

I find that the Supreme Court in Modem Hotel, Gudur v. K. Radhakrishnaiah has clearly considered
the effect of Section 7(3) of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act,
1960 in regard to the excess advance amount paid by the tenant lying in the hands of the landlord.
Thus considering I hold that the tenant-revision petitioner has not committed wilful default in
payment of rent as pleaded by the landlord-respondent.

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 Nazimuddhin Ahmed Represented By ... vs K. Narasimha Rao on 19 February, 1993

13. In the result, therefore, the civil revision petition is allowed, the order of eviction passed by both
the Courts below are set aside and the eviction petition is dismissed. Considering the circumstances
of the case there will be no order as to costs throughout.

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