Summary
A tenant who challenged the fixation of fair rent without obtaining a stay, and cleared the accumulated arrears only years later after the special leave petitions were dismissed, was held guilty of wilful default under Section 10(2)(i) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960. A two months' notice under the Explanation is not a precondition for eviction, and payments made under a 'without prejudice' order did not waive the landlord's rights. The eviction was upheld.
Issues
- Whether the lessee and his heirs committed wilful default in paying fair rent fixed by the Rent Controller while challenging that fixation without a stay.
- Whether absence of a two months' notice under the Explanation to Section 10(2)(i) of the 1960 Act bars eviction for wilful default.
- Whether payment of arrears in instalments under the Supreme Court's 'without prejudice' order, or pendency of the fair rent challenge, absolved the tenant of wilful default.
- Whether the High Court rightly declined to interfere in revision with the appellate order of eviction.
Provisions considered
- Section 10(2)(i), proviso and Explanation, Tamil Nadu Buildings (Lease and Rent Control) Act, 1960Following the majority in Sundaram Pillai, the Court held that without the Explanation's two months' notice the Controller still decides whether the default is wilful; notice merely creates a presumption of wilfulness and is not a condition precedent to eviction. (¶¶ 13, 18, 25, 26, 27, 28)
- Order XLI Rule 5(1), Code of Civil Procedure, 1908An appeal does not operate as a stay of the order appealed from; the tenant's challenge to fair rent without any stay left the fair rent order operative and payable. (¶¶ 14, 23, 24)
- Sections 23(2), 23(4) and 25, Tamil Nadu Buildings (Lease and Rent Control) Act, 1960Noted through the High Court decision in Giridharilal Chandak: the appellate order is final subject to revision, and admission of a revision without a stay does not suspend its operation. (¶ 23)
Held
- Where a tenant challenges the fixation of fair rent but neither seeks nor obtains a stay, the order remains operative; paying only a fraction of the fair rent and clearing the arrears belatedly after prolonged litigation is inconsistent with a bona fide doubt about liability and amounts to wilful default. (¶¶ 21, 22, 24)
- Pendency of appeals, revisions and special leave petitions against the fair rent order gave the tenant no protection from paying, since no stay had been obtained; uncertainty about the amount was no answer. (¶¶ 22, 24, 31)
- Under the majority view in Sundaram Pillai, binding on a two-Judge Bench, a two months' notice under the Explanation to Section 10(2)(i) is not indispensable: without notice the Controller decides whether the default is wilful, and where notice is given and not complied with, wilful default is presumed unless sufficient cause is shown. (¶¶ 25, 26, 27)
- The tenant's defaults bore the attributes of wilful default described in Sundaram Pillai. (¶ 28)
- The words 'without prejudice' in the order dismissing the tenant's special leave petitions meant that instalment payments made under it did not waive the landlord's right to recover rent or to seek eviction for wilful default. (¶ 29)
- Proceedings can become final at any level if not carried further; and a party owing money under a judicial determination that it challenges without seeking a stay cannot rely on the principle of finality to deny the other side its benefit. (¶ 30)
- The High Court rightly declined, in revision, to re-examine the concurrent factual findings of wilful default. (¶ 32)
Result
Appeal dismissed; the eviction order was upheld. Appellants granted six months to hand over vacant possession, subject to usual undertakings filed within a fortnight, failing which the landlord may execute. Parties to bear their own costs.