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PETITIONER: DAMADILAL AND OTHERS

       Vs.

RESPONDENT: PARASHRAM AND OTHERS

DATE OF JUDGMENT07/05/1976

BENCH: GUPTA, A.C. BENCH: GUPTA, A.C. CHANDRACHUD, Y.V. SARKARIA, RANJIT SINGH

CITATION:  1976 AIR 2229            1976 SCR  645  1976 SCC  (4) 855  CITATOR INFO :  R          1977 SC2262  (9)  D          1979 SC1121  (7)  R          1981 SC1956  (1)  RF         1982 SC1043  (14,19)  APR        1985 SC 796  (12,17,19,21,25,26,31,35)  R          1987 SC 117  (50)  D          1991 SC 899  (12)  E&A        1991 SC2053  (16,17,18)

ACT:      Madhya  Pradesh   Accommodation  Control  Act,  1961-S. .12(1)(a)  and   (f)-Scope  of-Death   of   tenant-Heritable interest in the premises-Legal repreentatives-If could claim statutory tenancy-If  concept applicable  in India-Statutory tenant-If could sub-let the premises.      Rent-Payment-If could be made by cheque.      Procedure-Lower  appellate  court  overlooked  material evidence-Finding, if bad in law-High Court-If could reverse.

HEADNOTE:      Section  12(1)  of  the  Madhya  Pradesh  Accommodation Control Act,  1961, enacts  that notwithstanding anything to the contrary  contained in any other law or contract no suit shall be  filed in  any civil court against a tenant for his eviction from any accommodation except on one or more of the grounds given in the section. The ground given in cl. (a) is that the  tenant has  neither paid nor tendered the whole of the arrears  of the rent legally recoverable from him within two months  of the  date on which the notice had been served on him by the landlord and the ground in cl. (f) is that the accommodation let  for non-residential  purpose is  required bona fide  by the  landlord for the purpose of continuing or starting his business.      The appellants brought a suit under s. 12(1)(a) and (f) of the  Act for  ejectment of  their tenants.  The suit  was dismissed by  the trial  court on  the ground (i) that since the dispute  as to the amount of rent payable by the tenants had not  been determined  during the  pendency of  the  suit under s.  13(2) no  order for  eviction could  be made; (ii) that there  was no  bona fide requirement of the premises by the appellants  for their  own business  and (iii)  that the

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refusal by  the appellant  to accept  the arrears of rent by cheque was  valid because  tendering by cheque was not valid tender in the absence of an agreement to that effect.      The first  appellate court decreed the suit. During the pendency of  the second appeal in the High Court the tenants died. The  High Court  allowed substitution  of their  legal representatives over-ruling  the appellants’  objection that the deceased  tenants were  mere statutory  tenants and that the right  to resist  ejectment on  the basis  of  the  Rent Control Act  was merely  a  personal  right  which  was  not heritable. On  merits, the High Court held that (i) offer of rent by  cheque amounted  to valid  tender by the tenant and (ii) the  appellants had  failed to prove their case of bona fide requirement of the premises for their own use.      Dismissing the appeal, ^      HELD: There  is no  force in  the contention  that  the defendants who  were  statutory  tenants  had  no  heritable interest in  the demised  premises and  on their  death  the right to  prosecute the  appeal in  the High  Court had  not survived to  their  heirs  and  legal  representatives.  The predecessors-in-interest of  the respondents had a heritable interest in  the premises  and consequently  the respondents had the  right to  prosecute the  appeal in  the High Court. [655A]      (1) (a)  The concept  of statutory  tenancy  under  the English Rent  Acts and  under the  Indian statutes  rests on different foundations.  The term  statutory tenancy which is used for  referring to  a  tenant  whose  tenancy  has  been terminated and who would be liable to be evicted but for the protecting statute, is 646 borrowed from  the English Rent Acts. Courts in England have held that  a statutory  tenant has  no estate or property in the premises  he occupies  because he  retains possession by virtue of  the Rent  Acts and  not as  being entitled  to  a tenancy. But  in this  country it is not possible to proceed on the  basis that  a tenant  whose contractual  tenancy has determined but  who is  protected against  eviction  by  the statute, has no right of property but only personal right to remain in  occupation without  ascertaining what  his rights are under the statute. [654H: 653A-C]      Anand Nivas (Private) Limited v. Anandji Kalyanji Pedhi JUDGMENT: v. Sri  Kishan &  Anr., [1973]  1 S.C.R. 850; Roe v. Russel, [1928] 2  K.B. 117;  Haskins v.  Lewis [1931]  2 K.B.  1(9); Keeves v.  Dean [1923]  (93) L.J.K.B. 203 (207) and Boyer v. Warbey [1953] 2 Q.B. 234, referred to.      (b)Tenancy has  its origin  in contract.  A  contracual tenant had  an estate  or property  in the subject matter of the tenancy  and heritability  is an incident of tenancy. It cannot  be  assumed  that  with  the  determination  of  the tenancy, the  estate  must  necessarily  disappear  and  the statute can  only preserve  his status of irremovability and not the  estate he  had in  the premises  in his occupation. [653D]      (c) The  definition of  a tenant  contained in  s. 2(i) makes a  person continuing in possession of a premises after the determination  of his  tenancy a tenant, unless a decree or order  for eviction  had been  made  against  him,  thus, putting him  on par  with a person whose contractual tenancy still subsists. [653]      (d) Section  14 which  deals with  restrictions on sub- letting read  with the definition contained in s. 2(i) makes it clear  that the  so-called statutory tenant has the right

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to sub-let  in common  with contractual  tenant and  this is because he  also has an interest in the premises occupied by him. [654D]      (2)(a) The  High Court  rightly held  that the  cheques sent to  the appellants amounted to valid tender of rent. It is well-established  that a cheque sent in payment of a debt on the request of the creditor, unless dishonoured, operates as a  valid discharge of the debt and if the cheque was sent by post  and was met on presentations the date of payment is the date when the cheque was posted. [655B-D]      (b) Rent  is payable  in the  same manner  as any other debt and the debtor has to pay his creditor in cash or other legal tender,  but there  can be no dispute that the mode of payment can  be altered  by agreement.  In the  contemporary society it  is reasonable  to suppose  payment by  cheque as implied  unless   the  circumstances   of  a  case  indicate otherwise. [655C]      (3) The  High Court  was  within  its  jurisdiction  in setting aside  the finding  of the lower appellate court and restoring that  of the  trial court  on the question of bona fide requirement  of the  premises by  the  appellants.  The lower appellate court overlooked a very material part of the evidence bearing  on the  question. It  is  well-established that if  a finding  of fact is arrived at ignoring important and relevant evidence the finding is bad in law. [651B-C]      Radha Nath  Seal v.  Haripada Jana & Ors. AIR 1971 S.C. 1049, followed.      Madan Lal  Puri v.  Sain Das  Berry AIR  1973 S.C. 585; Mattulal v. Radhey Lal AIR 1974 S.C. 1956; and Sarvate T. B. v. Nemi Chand 1966 M.P.L.J. 26, refered to.

&      CIVIL APPELLATE JURISDICTION: Civil Appeal 885/1968.      (From the  judgment and  order dated  6-11-1967 of  the Madhya Pradesh High Court in Second Appeal No. 913 of 1965). 647      S. V.  Gupte, R.  P. Pandey and S. S. Khanduja, for the appellants.      F. S.  Nariman, J. B. Dadachanji, P. C. Bhartari, K. L. John for the respondents.      The Judgment of the Court was delivered by      GUPTA, J. Damadi Lal, Sheo Prasad and Tirath Prasad who were members  of a  Hindu Joint  Family brought  a suit  for ejectment on  July 31,1962 against their tenants Begamal and Budharmal on the grounds mentioned in clauses (a) and (f) of section 12(1)  of the  Madhya Pradesh  Accommodation Control Act, 1961. The relevant provisions are in these terms:           "Sec. 12.  Restriction on eviction of tenants.-(1)      Notwithstanding anything  to the  contrary contained in      any other  law or  contract, no  suit shall be filed in      any Civil  Court against a tenant for his eviction from      any  accommodation   except  on  one  or  more  of  the      following grounds only, namely-           (a) That  the tenant has neither paid nor tendered      the  whole   of  the   arrears  of   the  rent  legally      recoverable from  him within  two months of the date on      which a  notice of  demand for  the arrears of rent has      been served  on him  by the  landlord in the prescribed      manner;           x         x         x         x         x           x         x         x         x         x           (f) that the accommodation let for non-residential      purposes is  required bona fide by the landlord for the

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    purpose of  continuing or starting his business or that      of any  of his  major sons or unmarried daughters if he      is the  owner there  of or  for any  person  for  whose      benefit the accommodation is held and that the landlord      or such  person has  no other  reasonably suitable non-      residential accommodation  of his own in his occupation      in the city or town concerned." Plaintiffs’  case   under  section  12(1)(a)  was  that  the defendant tenants  had defaulted  in   paying rent  for  the period October  1, 1961 to May 31, 1962 and did not also pay or tender  the amount  in arrears  within two  months of the service of the notice of demand. Clause (f) of section 12(1) was invoked on the allegation that the accommodation let was required bona  fide by  the plaintiffs  for the  purpose  of starting their  own business. Before the suit was instituted the plaintiffs  had determined the tenancy from May 31, 1962 by a  notice dated May 7 1962. The house in dispute which is in Bazar  Chowk  in  District  Satna  was  let  out  to  the defendants at a monthly rent of Rs. 275/- for the purpose of their business.  The plaintiffs  reside  in  village  Nadan, Tahsil Maihar, where they carry on their business.      The trial  court  by  its  judgment  and  decree  dated November 11, 1964 dismissed the suit for eviction. There was some dispute between 648 the  parties   as  to  the  rate  of  rent;  ultimately  the plaintiffs admitted that the rent was fixed at Rs. 175/- per month with  effect from  August 1,  1961 by the Rent Control Authority and  a sum  of Rs. 1200/-, which was the amount in arrears, had  been tendered  to the  plaintiffs by cheque on May 26,  1962 which  the plaintiffs  refused to  accept. The trial court  was of  opinion  that  the  refusal  was  valid because "tendering  by cheque  is no  valid  tender"  unless there was  an agreement  that payment  by  cheque  would  be acceptable and that the defendants were therefore defaulters within the  meaning of section 12(1)(a). However, in view of the dispute as to the amount of rent payable by the tenants, which was  not determined during the pendency of the suit as required by  section 13(2),  the trial  court held  that  no order for  eviction under  section 12(1)(a) could be made in this case  and passed  a decree  for Rs. 1200/- in favour of the plaintiffs.      On the  question of  the plaintiffs’ requirement of the premises for  their own  business,  the  trial  court  found itself unable  to accept  the evidence  adduced on behalf of the plaintiffs.  Of the witnesses examined by the plaintiffs on the  point, the  evidence of  P.Ws. 1,  3 and  4 was  not relied on  because none  of them  was considered  to  be  an independent witness  and, further,  because it  was apparent from their  evidence that  what they said was what they were tutored to  say by the plaintiffs. The other three witnesses were plaintiffs Damadi Lal and Tirath Prasad (P.W.2 and P.W. 6 respectively) and Radhey Sham (P.W. 5), a son of plaintiff Sheo Prasad.  They were  also  disbelieved  because  of  the following reasons.  Damadi Lal  tried to give the impression that plaintiffs  had no  business except  the cloth business and the grocery shop at Nadan. He tried to conceal that they had a  moneylending business  and also  agricultural  lands. Tirath Prasad  stated that  the main source of income of the family was  from the  moneylending business.  Tirath  Prasad also disclosed that the plaintiffs had already a partnership business in  cloth at  Satna though  Damadi Lal  and P.W.  5 Radhey Sham  did not admit this. It also appears in evidence that the  plaintiffs had  yet another  cloth business  at  a place called  Ramnagar which was managed by Radhey Sham. The

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plaintiffs claimed  that they  would  start  a  business  at Satna, but  Damadi Lal’s evidence is that they had no income or saving. Tirath Prasad also said that their income was not even   sufficient   for   their   maintenance.   Admittedly, plaintiffs had  in their  possession one  room in  the house which was  let out to the defendants. The plaintiffs did not adduce any  evidence to  show how the said accommodation was unsuitable or  insufficient for  them  to  start  their  own business. It was also admitted that the plaintiffs had filed a suit  for  ejectment  on  an  earlier  occasion,  but  the defendants having  agreed to pay increased rent the suit was not proceeded  with. According to the defendants the present suit was  not  instituted  on  the  defendants’  refusal  to increase the rent further to Rs. 500/-a month.      For the  above reasons  the trial  court did not accept the case  of bona fide requirement holding that P.W. 2, P.W. 5 and  P.W. 6  were in the habit of suppressing the truth to suit their own purpose. 649      On appeal  by the plaintiffs, the first appellate court reversed the  decision of  the trial  court and  decreed the suit. The  appellate court  agreed with the trial court that sending a  cheque did  not amount  to a valid tender of rent and, as  the tenants did not apply under section 13(2), they were not  entitled to  protection against  eviction  on  the ground of  default.  As  regards  the  plaintiffs’  case  of requirement, the  court found,  that the  criticism  of  the plaintiffs’ witnesses was not justified. The appellate court thought that  the fact  that Tirath Prasad was carrying on a cloth business  at Satna which Damadi Lal had kept back from court was  irrelevant in  view of the plaintiffs’ claim that some members of the family wanted to start a new business at Satna. According  to the  appellate court  the further  fact that P.W.  5 Radhey  Sham was  running a  cloth business  at Ramnagar  was   indicative  of   the  growing  need  of  the plaintiffs’ family.  The room  in the plaintiffs’ possession in the  disputed house  was not found suitable or sufficient for a  wholesale business  that the  plaintiffs intended  to start. Referring  to the  trial  court’s  finding  that  the plaintiffs had  no money  to start  a new business at Satna, the court  found that the evidence did not support this. The appellate court  therefore held that the plaintiffs required the premises for their own business.      Dissatisfied  with   this  decision,   the   defendants preferred a  second appeal  to the  High Court.  During  the pendency of  the  second  appeal  in  High  Court  both  the defendants died. Budharmal died on or about January 27, 1966 and his  legal representatives  were brought  on record  and substituted in  his place without objection. Begamal died on March 2,  1967 and  his heirs  applied for  being brought on record in  his place  as appellants.  The plaintiffs made an application praying  for an order that the appeal had abated as a  consequence of  the death  of both  the defendants. In this application the plaintiffs contended that Budharmal and Begamal were  "merely statutory  tenants and  their right to resist  ejectment   on   the   basis   of   Madhya   Pradesh Accommodation Control Act was merely a personal right" which was not  heritable and  had "not devolved upon their heirs". By its  order dated July 26, 1967 the High Court allowed the application  for   substitution  made   by  Begamal’s  heirs overruling the plaintiffs’ objection.      Ultimately on  November 6,  1967 the High Court allowed the appeal  setting aside  the decree of the lower appellate court and  restoring that  of the trial court dismissing the suit. The  High Court  found that the defendants were not in

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arrears of  rent. Differing  from both  the courts below the High Court  held that  the cheque  which the  defendants had sent to  the plaintiffs  in payment of the amount in arrears within a  month of the service of the writ of summons on him amounted to  a valid  tender of  rent as required by section 13, and in view of section 12(3) no order for eviction could be made.  Section 12(3)  provides that no order for eviction of a  tenant shall  be made  on the ground of default if the tenant makes payment or deposits rent as required by section 13. This  is what  the High  Court held  on the  validity of tender of rent by cheque:           "The  question   is  as  to  whether,  instead  of      presenting the  cash,  if  a  cheque  is  sent  to  the      landlord, that  is sufficient  tender of the arrears of      rent or not........In the highly deve- 650      loped  society,  payment  by  cheque  has  become  more      convenient mode  of discharging  one’s obligation. If a      cheque is  an instrument  which represents and produces      cash and is treated as such by businessmen, there is no      reason why  the archaic  principle of  the  common  law      should be  followed in  deciding  the  question  as  to      whether the  handing  over  of  the  cheque  is  not  a      sufficient tender  of the arrears of rent if the cheque      is drawn  for that amount. It is no doubt true that the      issuance of  the cheque does not operate as a discharge      of the  obligation unless  it is  encased,  and  it  is      treated as a conditional payment, yet, in my view, this      is a  sufficient tender of the arrears if the cheque is      not dishonoured.  In the  present day  society, I am of      the view,  an implied agreement should be inferred that      if the  payment is  made by  a  cheque,  that  mode  of      payment would be accepted." On the ground of bona fide requirement, the High Court found that there  was no  evidence to show that the plaintiffs had sufficient funds  to start  the wholesale business for which they sought to get possession of the disputed premises. This is a  point which  has a  bearing on  the  guanines  of  the plaintiffs’ claim. The High Court took note of the fact that the plaintiffs  made an  attempt to keep back from the Court that they  were carrying on business at two more places, one at Satna,  and another  at Ramnagar.  In this connection the High Court  also referred  to the  defendants’ case that the plaintiffs sought to increase the rent from Rs. 275/- to Rs. 500/- a  month and  that when  the defendants  had the  rent reduced by  the Rent  Controller to Rs. 175/- per month, the present suit  was filed.  The High  Court found  that  these circumstances which  the trial court took into consideration were ignored  by the  lower appellate  court. The High Court accordingly held  that the  plaintiffs had  failed to  prove their case of bona fide requirement, set aside the decree of the appellate  court, and  restored that  of the trial court dismissing the suit.      Before  us,  Mr.  Gupte  for  the  plaintiff-appellants raised three  contentions:(1) Begamal  and Budharmal both of whom were statutory tenants had no heritable interest in the demised premises and, on their death, the right to prosecute the appeal  in the High Court did not survive to their heirs and legal  representatives; (2)  payment by cheque was not a valid tender  of rent  and accordingly  the suit should have been decreed  on the  ground of  default; and  (3) the  High Court had  no jurisdiction  in second  appeal to reverse the finding of  the first  appellate court  on the  question  of reasonable requirement which was a finding of fact.      In support  of his first contention Mr. Gupte relied on

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two decisions  of this  Court, Anand Nivas (Private) Ltd. v. Anandji Kalyanji Pedhi & Ors. and Jagdish Chander Chatterjee and Ors.  v. Sri  Kishan &  Anr. The  statute considered  in Anand Nivas’ case was Bombay 651 Rents, Hotel  and Lodging Rates Control Act, 1947 as amended in 1959.  The question  there was,  whether a  tenant  whose tenancy had  been terminated  had any  right to  sublet  the premises. Of  the three  learned Judges  composing the Bench that heard the appeal, Hidayatullah and Shah JJ. held that a statutory  tenant,   meaning  a  tenant  whose  tenancy  has determined but  who continues in possession, has no power of subletting. Sarkar J.delivered a dissenting opinion. Shah J. who spoke  for himself  and Hidayatullah  J. observed in the course of their Judgment:           "A  statutory   tenant  has  no  interest  in  the      premises occupied  by him,  and he  has  no  estate  to      assign or  transfer. A  statutory tenant is, as we have      already observed,  a person who on determination of his      contractual right, is permitted to remain in occupation      so long  as he  observes and performs the conditions of      the tenancy  and pays  the standard  rent and permitted      increases.  His   personal  right   of  occupation   is      incapable of  being transferred  or  assigned,  and  he      having no  interest in  the property there is no estate      on which subletting may operate." It appears from the Judgment of Shah J. that "the Bombay Act merely grants  conditional protection  to a statutory tenant and does  not invest  him with  the  right  to  enforce  the benefit of  any of  the terms  and conditions  the  original tenancy". Sarkar  J. dissenting  held that  word ’tenant’ as defined in  the Act  included both  a contractual tenant-, a tenant whose lease is subsisting as also a statutory tenant, and the  latter has  the same power to sublet as the former. According to  Sarkar J.  even if  a statutory  tenant had no estate or  property in  the demised  premises, the  Act  had undoubtedly created  a right  in such a tenant in respect of the  property  which  he  could  transfer.  Jagdish  Chander Chatterjee’s case dealt with the Rajasthan Premises (Control of Rent  and Eviction)  Act,  1950,  and  the  question  for decision was  whether on the death of a statutory tenant his heirs succeed  to the  tenancy so  as to claim protection of the Act. In this case it was held by Grover and Palekar JJ., relying on  Anand Nivas’ case, that after the termination of contractual  tenancy,  a  statutory  tenant  enjoys  only  a personal right  to continue  in possession  and on his death his heirs  do not  inherit any  estate or  interest  in  the original tenancy.      Both these  cases,  Anand  Nivas  and  Jagdish  Chander Chatterjee, proceed on the basis that a tenant whose tenancy has been  terminated, described  as statutory tenant, has no estate or interest in the premises but only a personal right to remain  in occupation.  It would  seem as  if there  is a distinct category of tenants called statutory tenants having separate and fixed incidents of tenancy. The term ’statutory tenancy’ is borrowed from the English Rent Acts. This may be a convenient  expression for  referring to  a  tenant  whose tenancy has  been terminated  and who  would be liable to be evicted but  for the  protecting statute, but courts in this country have  sometimes borrowed  along with  the expression certain notions regarding such tenancy from the 652 decisions of the English courts. In our opinion it has to be ascertained how  far these notions are reconcilable with the provisions  of   the  statute  under  consideration  in  any

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particular case. The expression ’statutory tenancy’ was used in England  in several  judgments under the Increase of Rent and Mortgage Interest (War Restrictions) Act, 1915, to refer to a  tenant protected  under that  Act, but  the  term  got currency from  the marginal  note to  section 15 of the Rent and Mortgage Interest (Restrictions) Act, 1920. That section which provided  inter alia  that a  tenant who  by virtue of that Act  retained possession of any dwelling house to which the Act  applied, so  long as  he retained  possession, must observe and  would be  entitled to  the benefit  of all  the terms and  conditions of  the original  contract of  tenancy which were  consistent  with  the  provisions  of  the  Act, carried  the   description  in  the  margin  "conditions  of statutory tenancy".  Since then  the term  has been  used in England to  describe a tenant protected under the subsequent statutes until section 49(1) of the Housing Repairs and Rent Act, 1954  for the  first time defile ’statutory tenant’ and ’statutory tenancy’.  ’Statutory tenant’  was  define  as  a tenant "who  retains possession  by virtue  of the Rent Acts and not  as being entitled to a tenancy, and it was added, " statutory tenancy’  shall be  construed  accordingly".  This definition of  ’statutory tenancy’  has been incorporated in the Rent  Acts of  1957  and  1965.  In  England  "statutory tenancy" does  not appear  to have  had any  clear and fixed incidents; the concept was developed over the years from the provisions of  the successive  Rent Restrictions  Acts which did not  contain a  clear indication  as to the character of such tenancy.  That a  statutory tenant  is entitled  to the benefit of the terms and conditions of the original contract of  tenancy   so  far  as  they  were  consistent  with  the provisions of  the  statute  did  not,  as  Scrutton  L.  J. observed in Roe v. Russell, "help very much when one came to the practical facts of life", according to him "citizens are entitled to  complain that their legislators did not address their minds  to the  probable events  that might  happen  in cases of  statutory tenancy,  and  consider  how  the  legal interest they  were granting  was affected by those probable events". He  added,  "....it  is  pretty  evident  that  the Legislature never  considered as  whole the  effect  on  the statutory tenancy  of  such  ordinary  incidents  as  death, bankruptcy, voluntary  assignment, either  inter vivos or by will, a  total or  partial subletting; but from time to time put into  one of the series of Acts a provision as to one of the incidents  without considering how it fitted in with the general nature  of the  tenancy which  those incidents might affect".  On   the  provisions   which  gave  no  clear  and comprehensive idea of the nature of a statutory tenancy, the courts in  England  had  been  slowly  "trying  to  frame  a consistent theory",  "making bricks  with very  insufficient statutory straw".  Evershed M.  R. in  Boyer v. Warbey said: "The character of the statutory tenancy, I 653 have already said, is a very special one. It has earned many epithets, including "monstrum horrendum", and perhaps it has never been  fully thought  out  by  Parliament".  Courts  in England have  held that  a statutory tenant has no estate or property in  the premises  he occupies  because  he  retains possession by  virtue of  the Rent  Acts and  not  as  being entitled to  a tenancy;  it has been said that he has only a personal right  to remain in occupation, the statutory right of "irremovability", and nothing more.      We find  it difficult to appreciate how in this country we can  proceed on the basis that a tenant whose contractual tenancy has determined but who is protected against eviction by the statute, has no right of property but only a personal

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right to remain in occupation, without ascertaining what his rights are  under the  statute. The  concept of  a statutory tenant having no estate or property in the premises which he occupies is  derived from the provisions of the English Rent Acts. But  it is  not clear  how it  can be assumed that the position is  the same  in this country without any reference to the  provisions of  the relevant statute. Tenancy has its origin in  contract. There  is no dispute that a contractual tenant has  an estate  or properly  in the subject matter of the tenancy, and heritability is an incident of the tenancy. It cannot  be assumed,  however, that with the determination of the tenancy the estate must necessarily disappear and the statute can  only preserve  his status of irremovability and not the  estate he had in the premises in his occupation. It is not  possible to  claim that  the "sanctity"  of contract cannot be  touched by legislation. It is therefore necessary to  examine   the   provisions   of   the   Madhya   Pradesh Accommodation Control  Act, 1961  to find  out  whether  the respondents’ predecessors-in-interest  retained a  heritable interest in the disputed premises even after the termination of their tenancy.      Section  2(i)   of  the  Madhya  Pradesh  Accommodation Control Act,  1961 defines  ’tenant’  to  mean,  unless  the context otherwise requires:           "a person  by whom  or on  whose account or behalf      the rent  of  any  accommodation  is,  or,  but  for  a      contract express  or implied,  would be payable for any      accommodation and  includes any  person  occupying  the      accommodation as  a  sub-tenant  and  also  any  person      continuing in  possession after  the termination of his      tenancy whether  before or  after the  commencement  of      this Act; but shall not include any person against whom      any order or decree for eviction has been made". The definition makes a person continuing in possession after the determination of his tenancy a tenant unless a decree or order for  eviction has  been made against him, thus putting him on  par with  a person  whose contractual  tenancy still subsists. The  incidents of  such tenancy  and a contractual tenancy must  therefore be  the same unless any provision of the Act  conveyed a  contrary intention. That under this Act such a  tenant retains  an interest in the premises, and not merely a personal right of occupation, will also appear from section  14   which  contains   provisions  restricting  the tenant’s power of subletting. Section 14 is in these terms: 654           "Sec.  14   Restrictions  on  sub-letting.-(1)  No      tenant shall,  without the  previous consent in writing      of the landlord-           (a)  sublet  the   whole  or   any  part   of  the                accommodation held by him as a tenant; or           (b)  transfer or  assign his rights in the tenancy                or in any part thereof.           (2) No landlord shall claim or receive the payment      of any sum as premium or pugree or claim or receive any      consideration whatsoever  in cash or in kind for giving      his consent to the sub-letting of the whole or any part      of the accommodation held by the tenant." There is nothing to suggest that this section does not apply to all  tenants as  defined in  section 2(i).  A contractual tenant has  an estate  or interest in premises from which he carves out  what he gives to the sub-tenant. Section 14 read with  section   2(i)  makes  it  clear  that  the  so-called statutory tenant  has the  right to sub-let in common with a contractual tenant  and this  is  because  he  also  has  an interest in  the premises  occupied by  him. Considering the

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position of the sub-tenant of a statutory tenant in England, Lord Denning  said in  Solomon v.  Orwell. "When a statutory tenant sub-lets  a part  of the premises he does not thereby confer any estate or interest in the sub-tenant. A statutory tenant has  no estate  or interest  in himself and he cannot carve something  out of  nothing. The  sub-tenant, like  the statutory tenant,  has only  a personal right or privilege." In England  the  statutory  tenant’s  right  to  sub-let  is derived from  specific provisions of the Acts conceding this right to  him; in  the Act  we are  concerned with  in  this appeal, the right flows from his status as a tenant. This is the basic  difference between  the English Rent Restrictions Acts and  the Act  under  consideration  and  similar  other Indian statutes. In a Special Bench decision of the Calcutta High Court,  Krishna Prosad  Bose v.  Sm.  Sarajubala  Dasi, Bachawat J.  considering the  question whether  a  statutory tenant continuing in occupation by virtue of the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950 could sub-let the premises let to him, said:           "The  Rent  Control  and  Tenancy  Acts  create  a      special world  of their  own. They  speak of life after      death. The statutory tenancy arises phoenix-like out of      the ashes  of the  contractual tenancy. The contractual      tenant may  die but  the statutory tenant may live long      thereafter. The  statutory tenant  is an  ex-tenant and      yet he is a tenant." The concept of statutory tenancy under the English Rent Acts and under  the Indian statutes like the one we are concerned with in  this appeal rests on different foundations. It must therefore be held that 655 the predecessors-in-interest  of the present respondents had a heritable   interest  in the premises and consequently the respondents had  the right  to prosecute  the appeal  in the High Court. Mr. Gupte’s first submission thus fails      On the  ground of  default, it is not disputed that the defendants tendered  the amount  in arrears by cheque within the prescribed  time. The  question is  whether this  was  a lawful tender.  It is well established that a cheque sent in payment of  a debt  on the  request of  the creditor, unless dishonoured, operates as valid discharge of the debt and, if the cheque was sent by post and was met on presentation, the date or  payment is the date when the cheque was posted. The question however  still remains whether in the absence of an agreement between  the parties, the tender of rent by cheque amounts to  a valid discharge of the obligation. Earlier, we have extracted  a passage  from the High Court’s Judgment on this aspect of the case. We agree with the view taken by the High Court  on the point. Rent is payable in the same manner as any  other debt and the debtor has to pay his creditor in cash or other legal tender, but there can be no dispute that the mode  of payment  can be  altered by  agreement. In  the contemporary  society  it  is  reasonable  to  suppose  such agreement as  implied unless  the circumstances  of  a  case indicate otherwise.  In the  circumstance of  this case, the High Court,  in our  opinion, rightly  held that  the cheque sent to the plaintiffs amounted to valid tender of rent. The second contention  urged on  behalf of  the appellants  must also be rejected.      Mr. Gupte’s  last contention relates to the plaintiffs’ bona requirement  of the  premises. The trial court found on the evidence that the plaintiffs’ claim was unjustified. The first court  of appeal  reversed that  finding and held that the plaintiffs’ requirement was bona fide. The High Court in second appeal  agreed with.  the trial court in holding that

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the  landlord  had  no  bona  fide  requirement.  Mr.  Gupte contended that  the High Court had no jurisdiction in second appeal to  upset the finding of the lower appellate court on this issue  which, according  to him, was a finding of fact. Mr. Nariman  for the  respondent relied  on the  decision of this Court  in Madan   Lal  Puri v.  Sain Das Berry to argue that the  question was  a mixed question of law and fact and that it  was within  the jurisdiction of the Court in second appeal to  examine the correctness of the finding. In answer Mr.  Gupte  referred  to  another  decision  of  this  Court Mattulal v. Radhey Lal which, relying on an earlier decision of this Court in Sarvate T. B. v. Nemi Chand, held that such a finding  was one  of fact  and not  a finding  on a  mixed question of  law and  fact. We  do not  think that  for  the purpose of  this case  we need  express any  opinion on  the apparent conflict  between these  two decisions. Plaintiffs’ case was that they had cloth and grocery business at village Nadan and  that they  desired to start a wholesale cloth and grocery business  at Satna.  The trial  court’s finding  was based inter alia on the evidence 656 that the  plaintiffs had  not adequate  funds to start a new wholesale business.  The lower  appellate court reversed the finding of  the trial  court on the ground that there was no evidence that  the plaintiff  had no  money to  start a  new business; the  lower appellate  court’s finding rests mainly on this  consideration. The  High  Court  pointed  out  that plaintff Damadidas  alias Damadi Lal (P. W. 2) stated in his evidence that  their income  from the  business at Nadan was sufficient "  only for  meeting the expenses of livelihood"; plaintif Tirath  Prasad (P.W.  6) also  admitted  that  "our present income  is not  sufficient even  for our maintenance because there  are many  members  in  the  family"  It  thus appears that  the lower  appellate court  overlooked a  very mate rial  part of  the evidence bearing on the question. It is well establish ed that if a finding of fact is arrived at ignoring important and relevant evidence, the finding is bad in law.  (see Radha  Nath Seal  v. Haripada  Jana &  Ors. We therefore  think   that  the   High  Court  was  within  its jurisdiction in  setting aside  the  finding  of  the  lower appellate court  and restoring  that of  the trial  court on this point.      In the  result the appeal fails and is dismissed but in the circumstances of the case we make no order as to costs. P.B.R.                                     Appeal dismissed. 657