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  • Section 3(a) of the Control of Rent Act
  • Rent Control Act
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  • Section 3(a) of the Control of Rent Act
  • Rent Control Act
Smart Summary

Factual and Procedural Background

This is a defendant's appeal from a decree for ejectment relating to a shop which was let to the appellant by the plaintiff-respondent. On 24 February 1948 a decree for arrears of rent was passed against the appellant. Before that suit the respondent had given a notice for payment of arrears and the appellant had sent the arrears by money order, but the respondent refused the money order; consequently the decree for arrears was passed without costs.

Later, further rent fell into arrear. The respondent served a notice demanding (a) the arrears which had fallen due since the decree of 24 February 1948 and (b) the arrears already decreed on that date. Within one month the appellant paid only the post-decree arrears demanded; he did not pay the decreed arrears within that month but deposited them in court after the month had expired.

The respondent sued the appellant for ejectment, alleging that the appellant had wilfully defaulted in paying the arrears within one month of the notice. The trial court dismissed the ejectment suit, holding there was no wilful default. The lower appellate court reversed and entered a decree for ejectment, on the ground that the appellant had committed wilful default in not paying the decreed arrears. The lower appellate court interpreted the phrase "arrears of rent" in Section 3(a) of the Control of Rent Act to include decreed arrears.

The present appeal raises two questions identified by the court.

Legal Issues Presented

  1. Whether the words "arrears of rent" in Section 3(a) of the Control of Rent Act include decreed arrears of rent.
  2. Whether the appellant committed wilful default in failing to pay the decreed arrears within one month of receipt of the notice of demand.

Arguments of the Parties

Respondent's Arguments

  • The respondent contended that the appellant wilfully defaulted in paying the arrears demanded in the notice, and therefore was liable to be sued for ejectment under the relevant provision.
  • The respondent treated "arrears of rent" as including the decreed arrears and demanded both the post-decree arrears and the decreed arrears in the notice.

Appellant's Arguments

  • The appellant relied on the fact that, prior to the decree for arrears, he had sent the arrears by money order which the respondent refused to accept; he argued (as reflected in the opinion) that that refusal and his subsequent deposit of the decreed amount in court meant there was no wilful default.
  • Implicitly (and as addressed by the court), the appellant relied on conduct and circumstances which he considered amounted either to payment or to an absence of intentional non-payment within the statutory one-month period.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Gould v. The Mount Oxide Mines Ltd. That "wilful default" depends on context and does not necessarily connote dishonesty; it may mean a course of conduct consciously pursued. The court relied on this to support the view that "wilful default" in the rent-control context means intentional or deliberate non-payment rather than necessarily dishonest motive.
U.S.A. v. Murdock, 290 U.S. 389 That "wilfully" often denotes an act which is intentional, voluntary, or knowing; in criminal statutes it may imply bad purpose, but not necessarily in non-penal contexts. The court used this authority to distinguish penal/criminal connotations of "wilful" from its meaning in the present civil/non-penal statutory context, supporting a non-evil-motive interpretation.
Browder v. U.S.A., 312 U.S. 335 The phrase "wilfully and knowingly" can mean deliberately and with knowledge—not careless, negligent, or inadvertent conduct. The court quoted this to reinforce that "wilful" denotes deliberate conduct rather than mere negligence or inadvertence.
Spies v. U.S.A., 317 U.S. 492 That a voluntary and purposeful omission may meet the test of wilfulness; however, in the context of criminal punishment (and imprisonment for debt) courts sometimes read in additional elements like evil motive. The court relied on this distinction to assert that because the Rent Control Act's ejectment remedy is not penal, "wilful" here need not include evil motive—mere intentional omission suffices.
In re: Jayarama The word "wilfully" can mean absence of inadvertence or mistake and not a wrong view of law or ignorance—no criminal intent required. Used to support the proposition that wilfulness may be satisfied by deliberate conduct without requiring criminal intent or bad motive.
Faulger v. Steadman, (1872-1873 L.R. 8 Q.B. 65) Example where intentional refusal to leave railway land was wilful trespass; belief in entitlement did not negate intentionality. The court cited it to illustrate that intentional persistence in a course of conduct constitutes wilfulness even if the actor honestly believes in a right to act.
In re Mayor of London and Tubbs's Contract Where default was due to an easily accounted oversight, it was not wilful; the term "wilful" should distinguish intentional acts from accidental or unintentional ones. The court relied on this to emphasize that not every default is wilful—only deliberate or intentional defaults are—and to contrast cases of oversight with deliberate non-payment.
Lewis v. Great Western Railway Co. Bramwell L.J.'s definition of "wilful" in connection with "mis-conduct" as something opposed to accident or negligence. The court adopted this understanding in construing "wilful default" to mean deliberate, not accidental or negligent, conduct.
Lala Raj Narain v. Ram Prasad Vaish, 1952 A.L.J. 3 Where a tenant deposited arrears in court and informed the landlord he could withdraw them, the tenant bona fide intended to pay and thus any technical default was not intentional; such conduct did not constitute wilful default. The court distinguished the present case from that authority: in Lala Raj Narain the tenant bona fide thought he had complied, whereas here the appellant intentionally did not pay the decreed arrears within the month.

Court's Reasoning and Analysis

The court proceeded in two linked strands of analysis: statutory interpretation of "arrears of rent" and the factual/legal meaning of "wilful default."

On the meaning of "arrears of rent": The court held that the words have no technical meaning that would exclude decreed arrears. Unpaid rent becomes an arrear when due and remains an arrear so long as it is unpaid, whether or not a suit has been brought and a decree obtained. The mere passing of a decree does not convert the arrear into something other than an arrear; it only merges the cause of action in the decree and provides additional remedies for realisation. Thus there is no reason to construe "arrears of rent" in Section 3(a) as limited to undecreed arrears. The court added a policy point: if non-payment of undecreed arrears within one month justifies ejectment, there is a fortiori justification where the arrears are decreed and remain unpaid.

On "wilful default": The court analysed authorities to conclude that "wilful" in the present non-penal statutory context denotes deliberate or intentional conduct rather than accident or inadvertence; it need not carry an element of evil motive or dishonesty. The court reviewed authorities (domestic and foreign) demonstrating that (a) wilful conduct is consciously pursued and opposed to negligence or oversight, and (b) in civil contexts the word need not imply bad motive. Applying that standard to the facts, the court found that the appellant intentionally refrained from paying the decreed arrears within the statutory one-month period. The appellant knew he was committing default and deliberately did so; the motives for that intention were irrelevant. The court explicitly distinguished the present facts from Lala Raj Narain v. Ram Prasad Vaish, where the tenant had deposited monies in court and believed he had complied with the notice—there the default, if any, was not intentional.

The court also rejected the appellant's contention that the earlier refusal by the respondent to accept money orders extinguished liability or excused non-payment of the decreed arrears when later demanded. The court held that the earlier refusal did not wipe off the appellant's liability; the decree still bound the appellant and the demand for the decreed arrears had to be complied with. The appellant could not rely on the earlier refusal to justify non-payment after the decree.

On these bases—(1) that "arrears of rent" encompass decreed arrears and (2) that the appellant's failure to pay the decreed arrears within the required period was deliberate—the court concluded that the lower appellate court was correct in holding that the appellant committed wilful default and that ejectment was permissible under the statutory provision.

Holding and Implications

Holding: The decree of the lower appellate court is affirmed and the appeal is dismissed.

Implications:

  • Direct effect: The appellant's challenge to the ejectment decree fails; the decree for ejectment against him stands.
  • Statutory interpretation consequence: The court's ruling establishes, for the purposes of this opinion, that the phrase "arrears of rent" in the statutory provision under consideration includes arrears which have been decreed but remain unpaid.
  • On the concept of "wilful default": The decision confirms that, in the rent-control/ejectment context (a non-penal statutory provision), "wilful default" means an intentional or deliberate failure to pay demanded arrears within the statutory period; it does not require proof of dishonest motive or evil intent.
  • No broader precedent beyond this opinion is claimed in the text: the opinion does not assert that it is laying down a new general rule beyond its statutory construction and application to the facts; the immediate consequence is the affirmation of ejectment in this case.

Disposition recorded in the opinion: Appeal dismissed.

    Chhotey Lal v. L. Chhakki Lal

    Desai, J.:— This is a defendant's appeal from a decree for ejectment passed against him. The dispute is about a shop which admittedly was let out to the appellant by the plaintiff-respondent.

    2. On the 24th February, 1948 a decree for arrears of rent was passed against the appellant. Previous to the institution of that suit the respondent had given a notice for payment of the arrears and the appellant had sent the arrears by money order, but the money order had been refused by the respondent. Consequently the decree was passed without costs. Subsequently rent again fell into arrear and the respondent gave a notice to the appellant demanding the arrears that had fallen due since the passing of the decree on 24th February, 1948, and also the arrears decreed on that date. The appellant sent only the arrears that had fallen due subsequent to the passing of the decree, within the period of one month. He did not send the decreed arrears but deposited them in court after a month. The respondent thereupon sued the appellant for ejectment from the shop contending that he had wilfully defaulted in paying the arrears within a month of the receipt of the notice demanding the same. The suit was dismissed by the trial court which held that there was no wilful default on the part of the appellant but has been decreed by the lower appellate court on the ground that he committed wilful default in not paying the decreed arrears. The lower appellate court took the view that the words ‘arrears of rent’ in Section 3(a) of the Control of Rent Act include not only undecreed arrears, but also decreed arrears, of rent. Two questions arise (1) whether the words ‘arrears of rent’ include decreed arrears of rent and, (2) Whether the appellant committed wilful default.

    3. The words ‘arrears of rent’ have no technical meaning. Rent that is not paid on the date on which it falls due becomes an arrear of rent and it remains so even though a suit is brought for its recovery and decreed. The only effect of the passing of the decree is that the cause of action is merged in the decree and that the landlord can realise the decreed amount in a certain manner; it has not the effect of changing the arrear of rent into something other than arrear of rent. So long as the rent has not been paid, whether a decree has been passed for the same or not, it is rent in arrear. It remains ‘rent’ even if a decree is passed, and so long as it is not paid it is in arrear. There is no reason for thinking that the words ‘arrears of rent’ in Section 3(a) means only undecreed arrears of rent.

    4. If a tenant can be ejected on the ground of his failure to pay undecreed arrears of rent within a month of the receipt of a notice of demand, there is all the greater reason for his being ejected on the ground of his failure to pay the arrears of rent within a month of the receipt of a notice of demand inspite of a decree for the same having been passed against him. A tenant who does not pay the arrears of rent in spite of a decree having been passed against him undoubtedly stands in a weaker position than one against whom no decree has been passed. Because the landlord can realize the decreed arrears by executing the decree, he gets no licence for not paying them at all, or unless a warrant of attachment or arrest is issued against him. The lower appellate court rightly held that the appellant did not pay all the arrears of rent rightly demanded from him within a month of the receipt of the notice of demand.

    5. The default of the appellant was undoubtedly wilful. It was deliberate or intentional and not caused by any accident or any circumstance beyond his control. He intended not to pay the decreed arrears of rent; why he intended so is absolutely irrelevant. What is material is the existence of the intention not to pay the demanded arrears, and not the reason or motive for that intention. Therefore there arises no question of mala fiides or dishonest intention.

    6. In Gould v. The Mount Oxide Mines Ltd.,1, it was said by Issac, J. that ‘wilful default’ is a term which must depend for its precise connotation on the subject matter and the context, that it does not connote dishonesty, and that in that case it meant a course of conduct consciously pursued. In U.S.A v. Murdock 290 U.S 389 78 L.E 381., it was laid down by Roberts, J. that the word ‘wilfully’ often denotes an act which is intentional or voluntary or knowingly as distinguished from accidental, though when used in a criminal statute, it generally means an act done with a bad purpose, without justifiable excuse, stubbornly, obstinately, perversely. A provision in a statute punishing a person who ‘wilfully and knowingly’ used any passport obtained by making false statement was considered in Browder v. U.S.A 85 L.E 862 312 U.S 335., and it was held that the words ‘wilfully and knowingly’ do not suggest that fraudulent use is an element of crime. Reid, J. said:

    “wilfully and knowingly can be taken only as meaning deliberately and with knowledge and not something which is careless or negligent or inadvertent.”

    7. Another provision making it an offence for anyone to fail ‘wilfully to pay a tax or make a return came up for discussion in Spies v. U.S.A 317 U.S 492 87 L.E 418.. It was observed in that case that ‘mere voluntary and purposeful, as distinguished from accidental, omission to make a timely return might meet the test of wilfulness. ‘But in view of the traditional aversion to imprisonment for debt, the Supreme Court understood the word ‘wilful’ to include some element of evil motive and want of justification. We are not concerned in the present case with any criminal or penal statute. The provision that a landlord can file a suit for ejectment against a tenant who wilfully defaults in paying the arrears in spite of notice of demand is certainly not a penal provision. The Rent Control Act does not penalise anything which was not liable to punishment previously. On the contrary, before the enactment of the Rent Control Act a landlord had a right to sue for ejecting a tenant whose tenancy had been terminated without assigning any reason. That right has been curtailed by the Rent Control Act except when there is wilful default on the part of a tenant. Therefore, allowing a landlord to sue a tenant who is guilty of wilful default is not a penal caluse and there arises no question of including in the meaning of wilfulness an element of evil motive. Even irrespect of a provision in a criminal statute punishing one for wilfully submitting an untrue return it was held that the word ‘wilfully’ meant absence of inadvertence or mistake and not a wrong view of the law or ignorance of law and that no criminal intent to submit an untrue return was necessary; see In re: Jayarama5. In Faulger v. Steadman 1872-1873 L.R 8 Q.B 65., a man without paying the licence fee that was due from him to the railway, kept his carriage on the land belonging to the railway and refused to leave. He was held to be a wilful trespasser within the meaning of a statute punishing a person who “shall wilfully trespass upon a railway”. His plea that he believed the land to be a public thoroughfare and that consequently he was not a wilful trespasser was rejected because he intentionally and purposely stayed on the railway land although fancying that he was entitled to remain there. “Wilful default” was discussed by the Court of Appeal In re Mayor of London and Tubbs's contract7. There was default in that case but as it was not intentional but due to an oversight and that too an oversight easily accounted for, it was held to be a perversion of the word “wilful” to hold it wilful. Lopes L.J said on page 538:

    “If it were treated as wilful there would be no distinction between what was intentional and what was unintentional and accidental.” The learned Lord Justice approved of Lewis v. Great Western Railway Co.,8, in which Bramwell L.J defined “wilful” when used in connection with “mis-conduct” as something opposed to accident or negligence.

    8. My conclusion is that if there is a default and that default is committed intentionally or deliberately, it is wilful defaut, regardless of the reason why the default was intended. The appellant knew that he was committing defaut and deliberately committed it. It is not that he did not intend to commit the default or that he did not think that it was a defalt. He, therefore, cannot derive any benefit out of Lala Raj Narain v. Ram Prasad Vaish 1952 A.L.J 3., where the arrears had been deposited by the tenant in court and in reply to the notice he informed the landlord that he could withdraw the money from the court. Clearly the tenant there did not intend not to pay the arrears. When he asked the landlord to withdraw the money from the court he bona fide thought that he was paying the arrears and complying with the notice. Therefore, even if there was a default (inasmuch as he actually did not pay the arrears to the landlord) it was not intentional, or deliberate.

    9. That the appellant used to pay his rent regularly in the past is quite irrelevant. His default on this occasion does not cease to be a wilful default on account of his being regular in payment in the past.

    10. The argument that there was no default, or no wilful default, because the respondent had refused to accept the money orders for the arrears before the decree was passed is devoid of force. The refusal of the respondent to accept the money orders did not wipe off the appellant's liability. The appellant remained liable to pay the arrears though he might not be liable to pay she costs of the suit brought by the respondents to recover them. In spite of the previous refusal, the appellant was bound to pay the decreed arrears; that was the decree passed against him. Further when the respondent demanded the decreed arrears through notice, the appellant was bound to pay them. He could not refuse to pay them on the ground that the respondent had refused the previous tender. The decree passed by the lower appellate court is affirmed and the appeal is dismissed.

    11. Appeal dismissed.

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    Comments

    Chhotey Lal v. L. Chhakki Lal
    (Oct 8, 1952)