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PETITIONER: RAKAPALLI RAJA RAMA GOPALA RAO

       Vs.

RESPONDENT: NARAGANI GOVINDA SEHARARAO & ANR.

DATE OF JUDGMENT12/09/1989

BENCH: AHMADI, A.M. (J) BENCH: AHMADI, A.M. (J) SHETTY, K.J. (J)

CITATION:  1989 AIR 2185            1989 SCR  Supl. (1) 115  1989 SCC  (3) 255        JT 1989 (3)   629  1989 SCALE  (2)542

ACT:     A.P.  Buildings  (Lease, Rent & Eviction)  Control  Act, 1960: Section 10(2)--Tenant--Eviction--On ground of  ’wilful default’--To  be shown default was intentional,  deliberate, calculated and conscious with full knowledge, of its  conse- quences.     Non-payment  of  rent by tenant under bona  fide  belief that he was entitled to purchase property under a prior oral agreement  pursuant to which he paid earnest  money--Whether ’wilful’. Words and Pharases: ’Wilful’--Meaning of.

HEADNOTE:     The  respondents  purchased the demised  premises  by  a registered sale-deed dated 7th December, 1977 for Rs.70,000. The  appellant  was in actual possession of a  part  of  the premises as a tenant of the vendors at the date of purchase. After the purchase the respondents served the appellant with a  notice dated 13th December, 1977 calling upon him to  pay the  rent due, and deliver vacant possession of the  demised premises. The appellant replied to the notice on 29th Decem- ber,  1977  alleging that the vendors had orally  agreed  on 14th  October, 1977 to sell him the property for  Rs.70,000, and had received Rs.5,000 as earnest money, and that he  was under no obligation to pay the rent and vacate the premises, since he was ready and willing to purchase the property. The respondents  sent a reply denying the existence of any  such oral agreement.     A  suit  for eviction, was thereafter filed by  the  re- spondents claiming rent from December 1977 to May 1978  from the  appellant, and since the same was not paid, the  appel- lant  it was contended had rendered himself liable to  evic- tion on the ground of wilful default.     The  courts below held that the appellant failed to  pay the  rent, and concluded that he was a wilful defaulter  and passed a decree for ejectment against him. In the appeal to this Court, on the question: whether it can be said 116 that the tenant’s default to pay or tender rent from  Decem- ber 1977 to May 1978 was not wilful to avail of the  benefit

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of  the  proviso  to clause (i) of the  sub-section  (2)  of Section  10 of the Andhra Pradesh Building (Lease, Rent  and Eviction) Control Act, 1960. The Court, allowing the appeal.     HELD: 1. An act is said to be wilful if it is intention- al, conscious and deliberate. [119A]     S.  Sundaram  Pillai  etc. v.  V.R.  Pattabiraman  etc., [1985] 2 SCR 643, refered to.     2. In order to secure eviction for non-payment of  rent, it  must be shown that the default was intentional  deliber- ate,  calculated  and conscious with full knowledge  of  its consequences. [119G]     3.  In  cases where the tenant has defaulted to  pay  or tender the rent, he is entitled to an opportunity to pay  or tender the same if his default is not wilful. The proviso to sub-section (2) of Section 10 is couched in negative form to reduce  the rigour of the substantive provision  in  Section 10(2) of the Act. [118H; 119A]     4. The appellant-tenant in the instant case, did not pay or  tender  the  rent from December 1977 to  May  1978,  not because he had no desire to pay the rent to the  respondents but  because he bona fide believed that he was  entitled  to purchase  the property under the oral agreement  of  October 14, 1977. He had also paid Rs.5,000 by way of earnest  under the  said oral agreement. He, therefore, bona fide  believed that he was entitled to purchase the property under the said oral agreement and since he had already paid Rs.5,000 by way of earnest thereunder he genuinely believed he was under  no obligation to pay the rent to the respondents. [119E-F]     5. This is not a case of a tenant who has failed to  pay the  rent without any rhyme or reason. He was not averse  to paying the rent but he genuinely believed that he was  under no  obligation to do so as he had a prior right to  purchase the property. [119H; 120A]     6.  This  is  a case where the  Controller  should  have invoked the proviso to sub-section (2) of Section 10 of  the Act  and called upon the appellant to pay the  arrears  from December 1977 to May 1978 within a certain time. Failure  to do so has resulted in miscarriage of justice. The 117 ejectment  decree cannot therefore, be allowed to stand  and is  accordingly  set aside. The.matter will go back  to  the Controller who will give the benefit of the aforesaid provi- so to the appellant. [120A-B]

JUDGMENT:     CIVIL  APPELLATE JURISDICTION: Civil Appeal No. 3812  of 1989.     From the Judgment and Order dated .1.2.89 of the  Andhra Pradesh High Court in Revision Petition No. 302 of 1989. K.N. Bhatt, M.J. Paul and Kailash Vasdev for the Appellant. A. Subba Rao for the Respondents. The Judgment of the Court was delivered by AHMADI, J. Special leave granted.     This  tenant’s  appeal  raises the  question  whether  a tenant  who omits to pay or tender the rent  in  respect  of the demised premises under the belief that he had a right to purchase  the property under a prior agreement to  sell  and was,  therefore, not obliged to pay the rent can be said  to be  a wilful defaulter within the meaning of the proviso  to sub-section (2) of Section 10 of the A.P. Buildings  (Lease, Rent & Eviction) Control Act, 1960 (hereinafter called  ’the Act’).  Section 10(1) lays down that a tenant shall  not  be evicted  except  in accordance with the provisions  of  this

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section  or  sections 12 and 13 of the Act.  Clause  (i)  of sub-section  (2) of that section next provides that a  land- lord who seeks to evict his tenant may apply to the Control- ler  for  a direction in that behalf and the  Controller  on being  satisfied that the tenant has not tendered  the  rent due by him within fifteen days after the expiry of the  time fixed  in the agreement of tenancy or in the absence of  any such  agreement by the last day of the month next  following that for which the rent is due, shall make an order  direct- ing  the tenant to put the landlord in possession. This  is, however, subject to the proviso which reads under:               "Provided  that  in  any  case  falling  under               clause  (i),  if the 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 fifteen  days,               to  pay or tender the rent due by him  to  the               landlord  upto  the date of  such  payment  or               tender and               118               on  such  payment or tender,  the  application               shall be rejected." The proviso, therefore, makes it clear that if the  Control- ler is satisfied that the tenant’s default is not wilful  he may give the tenant an opportunity to pay or tender the rent due  by  him to the landlord and on such payment  or  tender being made within the time allowed, the landlord’s  applica- tion  for  eviction shall be rejected. The benefit  of  this proviso is available to only those tenant who are not guilty of  wilful  default. In the present case, the  courts  below have  come to the conclusion that the tenant’s  default  was wilful  and hence the benefit of the proviso was not  avail- able  to him. The question then is whether  this  conclusion reached  by  the courts below can be sustained on  he  facts found proved.     The  facts  lie  in a narrow  compass.  The  respondents purchased  the  demised premises by a  registered  sale-deed dated 7th December, 1977 for Rs.70,000. The appellant was in actual  possession of a part of the premises as a tenant  of the  vendors at the date of purchase. After the purchase  of the  property  the respondents served the appellant  with  a notice dated 13th December, 1977 calling upon him to pay the rent due and deliver vacant possession of the demised  prem- ises. The appellant replied to the notice on 29th  December, 1977  alleging  that the vendors had orally agreed  on  14th October, 1977 to sell the property to him for Rs.70,000  and had received Rs.5,000 as earnest. The appellant,  therefore, contended  that he was under no obligation to pay  the  rent and  vacate the premises since he was ready and  willing  to purchase the property. The respondents sent a reply  denying the  existence of any such oral agreement and filed  a  suit for  eviction. It may here be mentioned that on the date  of the  purchase of the property the rent was paid to the  ven- dors up to the end of November 1977. The respondents, there- fore,  claimed the rent from December 1977 to May 1978  from the  appellant. Since the appellant failed to pay  the  rent for the said period the courts below came to the  conclusion that he was a wilful defaulter and passed a decree in eject- ment against him. The tenant has, therefore, come in  appeal to this Court.     The  short question then is whether it can be said  that the  tenant’s  default to pay or tender rent  from  December 1977  to May 1978 was not wilful to avail of the benefit  of the proviso extracted above. It may be noticed that in cases

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where the tenant has defaulted to pay or tender the rent  he is  entitled to an opportunity to pay or tender the same  if his  default is not wilful. The proviso is couched in  nega- tive form to reduce 119 the rigour of the substantive provision in Section 10(2)  of the  Act. An Act is said to be wilful if it is  intentional, conscious  and  deliberate.  The  expressions  ’wilful’  and ’wilful default’ came up for consideration before this Court in S. Sundaram Pillai etc. v.V.R. Pattabiraman etc.,  [1985] 2 SCR 643. After extracting the meaning of these expressions from different dictionaries (See: pp. 659 & 660) this  Court concluded at p. 661 as under.               "Thus a consensus of the meaning of the  words               ’wilful  default’  appears  to  indicate  that               default  in order to be wilful must be  inten-               tional, deliberate, calculated and  conscious,               with  full  knowledge  of  legal  consequences               flowing therefrom". Since the proviso with which we are concerned is couched  in negative form the tenant can prevent the decree by  satisfy- ing  the Controller that his omission to pay or  tender  the rent  was not wilful. If the Controller is so  satisfied  he must  give  an opportunity to the tenant to  make  good  the arrears  within a reasonable time and if the tenant does  so within  the  time prescribed, he must reject  the  landlords application for eviction. In the present case, it is not  in dispute  that the tenant did not pay the rent from  December 1977  to May 1978 before the institution of the suit.  Under the  eviction notice served on him in December 1977  he  was called  upon to pay the rent from December, 1977  only.  The appellant-tenant did not pay or tender the rent from  Decem- ber 1977 to May 1978 not because he had no desire to pay the rent  to the respondents but because the bona fide  believed that he was entitled to purchase the property under the oral agreement  of 14th October, 1977. He had also paid  Rs.5,000 by way of earnest under the said oral agreement. True it is, his suit for specific performance of the said oral agreement has since been dismissed but he has filed an appeal which is pending.  He,  therefore,  bona fide believed  that  he  was entitled to purchase the property under the said oral agree- ment  and since he had already paid Rs.5,000 by way of  ear- nest  thereunder he was under no obligation to pay the  rent to  the  respondents. In order to secure eviction  for  non- payment  of  rent,  it must be shown that  the  default  was intentional, deliberate, calculated and conscious with  full knowledge  of  its consequences. Here is a tenant  who  felt that  even  though he had invested Rs.5,000 as  earnest  the vendor  has  sold the property to the respondents  in  total disregard  of his right to purchase the same. This is not  a case of a tenant who has failed to pay the rent without  any rhyme or reason. He was not averse to paying the rent but he genuinely believed that he was under no obligation to do  so as he had a prior 120 right  to purchase the property. We are, therefore,  of  the opinion  that this is a case in which the Controller  should have  invoked the proviso and called upon the  appellant  to pay  the  arrears from December 1977 to May  1978  within  a certain  time. Failure to do so has resulted in  miscarriage of  justice.  We  are, therefore, of the  opinion  that  the ejectment decree cannot be allowed to stand.     In  the  result we allow this appeal and set  aside  the eviction  decree. The matter will go back to the  Controller with a direction that he will give the benefit of the provi-

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so extracted above to the appellant in accordance with  law. Parties will bear their own costs. N.V.K.                                                Appeal allowed. 121