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PETITIONER: KANNAN & ANR.

       Vs.

RESPONDENT: TAMIL TALIR KALVI KAZHAGAM

DATE OF JUDGMENT:       15/05/1998

BENCH: K. VENKATASWAMI, A.P. MISRA

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T Misra,J.      Since both  the aforesaid appeals arise out of a common order, the subject matter of dispute including pleadings and documents being the same with common evidence resulting into a common order, hence they are being disposed of by means of this common judgment.      The present  appellants are the tenants and respondent, the landlord.  The short  question raised is whether, on the facts and  circumstances of  this case,  the appellants  are validly depositing  the  rent  under  Section  9(3)  of  the Pondicherry Buildings  (Lease And  Rent Control)  Act, 1969, (hereinafter referred  to  as  ‘the  act’),  could  they  be treated  as   defaulters  liable  for  eviction,  when  they continued to  deposit the said rent as aforesaid in spite of inter  se   dispute  between  the  landlord  culminating  by dismissal of the suit for default?      To appreciate  this point,  it is necessary to dwell on the facts  of this  case. Out  of the  two  appellants,  one appellant is  a tenant  in respect  of the  demised premises running the  cycle store  business in  HRCOP No. 132 of 1986 for a  monthly rent  of Rs.  75/- and  the other  appellant- tenant is running an Engineering Workshop for a monthly rent of Rs,  85/- in  HRCOP No. 133 of 1986. It is not in dispute that some  internal squabbles arose in the administration of Tamil Thalir  Kalvi Kazhagam  (hereinafter  referred  to  as ‘Kazhagam’) who,  in fact,  is the  landlord receiving  rent through its  President.  The  appellants  took  the  demised premises  on   lease  from  one  Mr.  Kogilasamy,  the  then President of  the said Kazhagam. Later, on 10th August, 1980 one Mr.  Thirumurgugan is said to have replaced the said Mr. Kogilasamy as  he was  elected to be the new President. This led to  an election  dispute between  the outgoing  and  the incoming President.  Thereafter, on  7th September, 1980 Mr. Thirumurgan, as  the  President,  issued  a  notice  to  the appellants directing  them to  pay the rent to the treasurer in  future,  though  the  name  of  the  treasurer  was  not indicated therein.  On the other hand, the earlier President Mr. Kogilasamy  still demanded  rent to  be paid  to him. In this background,  a bona fide doubt arose in the mind of the

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appellants as  to whom they should pay the rent. Hence, they filed RCOP Nos. 55 and 56 of 1982 before the Rent Controller under Section  9 (3)  of the  Act  for  permitting  them  to deposit the  present and  the future  rent.  The  appellants impleaded both the outgoing President Mr. Kogilasamy and the incoming President  Mr. Thirumurugan.  In spite  of  notice, none appeared.  The Rent  Controller consequently  permitted the appellants  to deposit  the rent.  The order of the Rent Controller reveals  that many  other  persons  also  claimed right to  collect the  rent of  the demised property. Though the election  of the  President, as  aforesaid, was  on 10th August, 1980 and the dispute erupting immediately thereafter bu the earlier President Mr. Kogilasamy filed a suit only in the year  1983, being O.S. No. 92 of 1983, before the Second Additional  Sub-Judge,   Pondicherry,  for   declaring   the election held  on 10th August, 1980 as null and void and for permanent injunction  restraining the  office  bearers  from carrying out the administration. The said suit was dismissed for default on the 6th February, 1984.      The  submission  of  the  respondent-landlord  is,  the period of  limitation being  30 years  for setting aside the said order, it was not necessary to wait for the said period of expire,  hence, notice  dated 8th August, 1985 was issued by the  incoming President  to the  appellants  to  pay  the arrears of  rent within  a week. Instead of paying the rent, as a  part of dilatory tactics, in reply, sought for certain clarifications  which   were  also   replied  back  on  25th November, 1985. The submission is, at least from the date of the aforesaid  suit of 1983 coming to an end and in any case from the  date of  the said notice there being no dispute it was obligatory  for the  appellants-tenants to have tendered the rent  to the  respondent-landlord, in not doing so, they defaulted by  continuing to  deposit the  rent as before the Rent Controller.      Section 9 of the said Act creates an avenue to a tenant to  deposit   the  rent   with  the  Controller  in  certain circumstances. Section  10 deals with grounds of eviction of a tenant.  It is  not in dispute that a defaulting tenant is liable  for   eviction.  The  respondent-landlord  filed  an application under  Section 10(2)(i) of the aforesaid Act for the eviction  of appellants-tenants on the ground of willful default. The  Rent Controller  dismissed the  said  petition holding  no   default.  The  First  Appellate  Court,  while considering the  question of  default, allowed the appeal on the sole  ground that  the appellants  have not followed the correct  procedure   by  not  depositing  the  rent  to  the prescribed authority.  Under the Act, as amended, it was the Deputy  Collector,  who  was  prescribed  Authority,  hence, deposit made  before the Rent Controller could not be proper deposit to  save them  from the  default. In revision before the High  Court, it  held the default on a different ground. It held  that when  the present  eviction proceedings  being initiated in 1986, no dispute inter se between the landlords being pending,  thus there  was  no  justification  for  the appellants to initiate proceedings under Section 9(3) of the Act. This  finding of the First Appellate Court, approved by the High Court, is quoted hereunder :-      "Eviction proceeding  was initiated      only in  1986, when  there  was  no      dispute between  he  landlords  and      hence there was no justification on      the  part   of   the   tenant   for      initiating    proceedings     under      Section 9(3) of the Act."      This finding, on the face of it, is perverse. There was

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no initiation  of any  proceeding afresh  in 1986,  in fact, proceeding was  initiated only  in the  year  1982,  it  was continuing only.  This by  itself changes  the complexion of the interpretation.  There was not initiation of proceedings after  the   eviction  proceedings  in  the  year  1986.  To adjudicate and  appreciate the  controversy, Section  9 (3), (4) and (5) are quoted hereunder :-           " Section  9 (3):   Where  any      bona fide  doubt or  dispute arises      as to the person who is entitled to      receive the  rent for any building,      the tenant  may deposit  such  rent      before such  authority and  in such      manner as  may  be  prescribed  and      shall report  to the Controller the      circumstances  under   which   such      deposit was  made by  him  and  may      continue to  deposit any rent which      may  subsequently   become  due  in      respect of  the building before the      same  authority  and  in  the  same      manner until  the doubt  is removed      or the  dispute  is  settled  by  a      settlement between  he  parties  or      until the Controller makes an order      under  clause  (b)  of  sub-section      (4), as the case may be.      (4) (a)  : The controller to whom a      report is  made  under  sub-section      (3) shall, if satisfied that a bona      fide doubt or dispute exists in the      matter,   direct    that,   pending      removal of  the doubt or settlement      of the  dispute as  aforesaid,  the      deposit be  held by  the  authority      concerned.      (4) (b)  : If the Controller is not      so satisfied,  he  shall  forthwith      order   payment   of   the   amount      deposited to the landlord.      (5) :  Where the  Controller passes      an order  under clause  (a) of sub-      section (4)  any  amount  deposited      under  sub-section   (3)   may   be      withdrawn only by the person who is      declared by a competent Court to be      entitled thereto,  or in  case  the      doubt  or  dispute  is  removed  by      settlement  between   the  parties,      only by  the person  who is held by      the Controller  to be  entitled  to      the amount or amounts in accordance      with such settlement."      Under sub-section  (3) where any bona fide doubt in the mind of  the tenant or dispute about a landlord arises as to the person  who is entitled to receive the rent, to save the tenant of the consequences of default, a tenant is permitted to deposit  the rent in such manner as prescribed through an application before the Controller. It is within the premises of this  said sub-section,  learned senior  counsel, Sh.  S. Sivasubramaniam, appearing  for the appellants, submits that after the  said election  of the President in 1980 a dispute erupted between  the two  or  more  than  two  claimants  to receive the  rent and  such a situation persisted almost for two years,  hence a  bonafide doubt arose in the mind of the

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appellants, so  they made  an application  under  this  sub- section for  lending  rent  after  complying  with  all  the procedures as  prescribed. On  this, the  Controller  issued notices to both the contesting claimants for the post of the President but  in  spite  of  this  notice,  none  appeared. Thereafter, as  ordered, the appellants deposited the arrear of rent and continued to deposit the rent regularly in terms of the  order. Hence, in such circumstances it was submitted that it  would not  constitute to  be a  default  for  their eviction.      On the  other hand learned senior counsel appearing for the landlord-respondent, Mr. R. Venkataramani, repelling the arguments submitted with great vehemence, the dispute, if at all, which  precipitated in filing the aforesaid suit in the year 2983  by  Mr.  Kogilasamy,  was  really  dismissed  for default on  the 6th  February, 1984.  Thereafter, no dispute remained, hence non-tendering of rent to the landlord by the appellants-tenants, who  were also  parties to  the same, in spite of  the notice dated 8th August, 1985 through counsel, clearly constitutes to be a default liable for eviction. For this, strong  reliance is  placed on  the following words of the said sub-section (3) :-      "............until  the   doubt  is      removed or  the dispute  is settled      by  the  decision  of  a  competent      Court or  by a  settlement  between      the parties or until the Controller      makes an  order under clause (b) of      sub-section (4),......"      The submission  is that  sub-section (3)  only  permits continuing deposits until the doubt is removed or dispute is settled by  the decision  of a competent court which, in the present case, is by the dismissal of the aforesaid suit.      Having heard learned counsel for the parties and having considered the submissions, we find that this submission has no force. The use of the words "...the dispute is settled by the decision  of a  competent court"  refer to settlement of dispute by  a competent  court not  dismissal of  a suit for default. In this case, it is not disputed that a dispute did arise inter  se between  the landlords  and if  that be,  it could only be said to have been settled by a competent court by adjudication  of the  lis between the two. Not where suit is dismissed  for default. A dismissal for default is not  a settlement of  a dispute  by a  competent court. Further the very sub-section  uses the  words;  "....  by  a  settlement between the parties or until Controller makes an order".      The present  is not  a case  of settlement  between the parties. The  simple option  left with the respondent was to have approached the Controller (prescribed Authority), where the matter  was pending, for an order and on it being passed the respondent  would have  received back  all the deposited rent and  thereafter would  have obligated the appellants to pay the  future rent  to the  landlord. In view of this, the dispute not  being  settled  by  any  competent  court,  the preceding words;  "unitl  the  doubt  is  removed",  are  of significance. In  a case  of this kind, is it inferable that merely on  dismissal of suit for default, the doubt would be said to have been removed from the mind of a tenant, even if he was  a party  to such  a suit.  On the  contrary, hope of removal of  all possible  doubts by decision in the suit was dismissed for  default. The  doubt, which  was prior  to the suit, returned back. The preamble of the Act states :-           "to regulate  the  letting  of      residential   and   non-residential      buildings and  the control of rents

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    of   such    buildings   and    the      prevention of unreasonable eviction      of tenants  therefrom in  the Union      Territory of Pondicherry."      This refers  to regulate  the letting  of building  and control of  rents and prevention of unreasonable eviction of tenants. This primarily confers benefit to the tenants. This is to protect any tenant from the exploitation of landlords. However, this  Act  also  ensures  that  landlord  regularly receives the rent due to him and in case nay tenant defaults under the  Act he  renders himself  liable for  eviction. It ensures that if any rent payable to the landlord is not paid without any  reasonable cause  or on mere pretext to whom to pay the  rent, is  not paid, such tenant is evicted from the premises in  question. So  the act  balances the interest of both, the  tenant and  the landlords. That is why the tender of rent  under sub-section (3)) is only when there is a bona fide doubt  as to whom the rent is payable. Whether there is or there  is no  bona fide  doubt or dispute, the Controller can adjudicate  in case  a tenant approaches. In case, there is no  bona fide doubt or dispute or the Controller does not reach such  conclusion, he  cannot get  protection under the Act. But  it protects the tenant otherwise. Hence, a channel was devised  to protect  the tenants  from being  treated as defaulters. In  such circumstances, a tenant can continue to pay the  rent to  the prescribed  authority instead  of  the landlord. On  the facts  of this  case, it is not in dispute that in  the year  1980 a dispute did arose which caused the appellants to doubt as to whom rent be payable, hence tender of the rent to the Controller in the year 1982 was bona fide and valid.  The question  which remains for adjudication is, as submitted  by  the  learned  counsel  Mr.  Venkataramani, whether after  the aforesaid  1983 suit  came to an end, the rent should  have been  tendered to  the landlord or not? We have already  recorded our  findings above, mere culmination of the  suit in the present case would  have no effect as to create any  obligation on  the tenant to stop tendering rent under Section  9(3) and  start paying  to the  landlord.  In other words,  in case  he  continues  to  deposit  the  rent regularly  with   the  Prescribed  Authority  it  would  not constitute to be a case of default under the Act.      In the  background of  this  case,  the  way  the  suit culminated without  adjudication of  the rights  between the parties, on dismissal of the suit for default and period for setting aside  still subsisting  even on  the date  when the said notice  was sent,  in such  circumstances it  cannot be said that  there could  not be  any doubt in the mind of the tenants or  earlier doubt  stands removed. If submission for the respondent  is accepted,  the very object of the Act and protecting interest  of tenant  under sub-  section  (3)  of Section 9,  would be  defeated. It would be against the very spirit and  the objective of the Act which is to prevent the unreasonable eviction  of tenants.  It is not a case that he has not  tendered the  rent. He  is a  tenant in the demised premises since  the year 1969. He has never defaulted and is paying the  rent regularly. He has continued to pay the rent even after  dispute arose  after waiting  for some  time and after making  an application  under Section  9(3) before the Rent Controller.      When two  or more interpretations are possible, the one which subserves  to the  object should  be accepted. We find sub-section (3) of Section 9 contemplates deposit of rent in case of  bona fide  doubt or  dispute. This  is  to  salvage tenant from  eviction. However,  this   would depend  on the facts of  each case.  Thus, where  there  are  two  possible

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interpretations,  the  one  which  prevents  a  tenant  from unreasonable eviction be accepted.      Learned counsel for the respondent strongly relied upon the case  Kameshwar Singh  Srivastava Vs.  IV  Add1.  Distt. Judge, Lucknow and Others (1986) (4) SCC 661) :-           "We should  not be  understood      to have  laid down  that the tenant      should  deposit   rent   in   court      instead of  paying the  same to the      landlord.  Primarily  a  tenant  is      under a  legal  obligation  to  pay      rent to  the landlord  as and  when      due and if he fails to pay the same      on demand  from the landlord and if      he is  in arrears  for a  period of      more than  four months  he would be      liable to ejectment. Where there is      a bona  fide dispute  regarding the      landlord’s right to receive rent on      account  of   there  being  several      claimants  or   if   the   landlord      refuses to  accept the rent without      being several  claimants or  if the      landlord refuses to accept the rent      without     there     being     any      justification  for  the  same,  the      tenant would  be entitled  to  take      proceedings under Section 30 of the      Act and  deposit the  rent in  paid      the   rent    to   the    landlord,      consequently he  would be  relieved      of his  liability of  eviction.  It      does not  however follow  that  the      tenant is entitled to disregard the      landlord or  ignore his  demand for      payment  of   rent  to   him.   The      provisions  of  the  Act  safeguard      tenant’s interest  but it  must  be      kept in  mind that  the  landlord’s      right to  receive rent  and in t he      event  of  the  tenant’s  being  in      arrears of  rent for  a  period  of      more than four months, his right to      evict the  tenant is  preserved. If      the tenant  makes  the  deposit  in      court  without   there  being   any      justification for the same or if he      refuses to pay the rent even on the      service of  notice of demand by the      landlord, he  would  be  liable  to      eviction.  However   the   question      whether the  tenant is justified in      depositing the  rent in  court  and      whether   deeming    provision   of      Section 30(6)  would be  available,      to relieve  him from  the liability      of eviction would depend upon facts      of each  case. As  noted earlier on      the special  facts of  the  instant      case we  have no  doubt in our mind      that  the  appellant  had  relieved      himself  from   the  liability   of      eviction and  he was not in arrears      of rent  for a  period of more than      four months."

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    On the  facts of this case, this decision is of no help to the  respondent. This  refers to a case where the deposit of rent  in Court in without any justification or refusal to pay the  rent even  after notice in a case where there is no bona fide  doubt in the mind of a tenant in terms of Section 9(3) or  even after  removal of  such doubt. However, on the facts of  this case,  as aforesaid,  we come to irresistible conclusion that  the appellants-tenants had not defaulted in the payment  of rent  and they  could  not  be  held  to  be defaulters liable for eviction as doubt could not be said to have been erased.      So far  decision of the First Appellate Court that rent was not deposited before proper authority, hence constituted to be  default is  also not  sustainable. It  is an admitted case,  when   appellants-tenants  made  an  application  for deposit of  rent in  the year  1982 the proper authority was the Rent  Controller before  whom  the  rent  was  deposited regularly.  The     respondent’s   contention  is  based  on amendment to  Section 9(3)  of the  Act brought  in the year 1984  where  the  Prescribed  Authority  became  the  Deputy Collector. We  feel that  in the  absence of  any submission made by  the respondent  either before the authorities whose orders are  impugned or even before us with reference to the Amending Act  as to  the consequences  of pending proceeding initiated prior  to the  Amending Act, inference contrary to the appellants  cannot be  drawn. This apart, the matter was still pending  before  the  prescribed  Authority  of  which respondent had notice that they could have raised this issue there.  Hence  we  do  not  find  any  merit  even  to  this submission of the respondent.      Hence, for the aforesaid reasons, both the judgment and order  dated   28th  November,  1988  passed  by  the  First Principal District  Judge, Pondicherry,  the first Appellate Authority, and the revisional orders of the High Court dated 17th September,  1988,  are  hereby  quashed.  However,  the landlord-respondent can withdraw the rent deposited with the prescribed Authority  by obtaining  orders from it. Both the appeals are allowed. Cost on the parties.