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Komalam Ammal v. Ashoka Cycle And Motor Company
Structured Summary of the Provided Opinion
Factual and Procedural Background
This revision petition challenges the order of the Appellate Authority, Tiruchirapalli, in C.M.A. No. 29 of 1974. The petitioner is the landlady who had earlier obtained a favourable decision from the Rent Controller in H.R.C.O.P. No. 243 of 1972. The Rent Controller had held that the tenants committed a wilful default in payment of rents for nearly 33 months and that the tenants had ceased to occupy the premises; the Rent Controller directed surrender of vacant possession within two months.
The landlady's factual case (as stated in the petition) is that the schedule premises is non-residential and was leased on 16th June 1966 to the first respondent for a cycle spare-parts business at Rs. 150 per month. The business allegedly continued until February 1968, after which the premises were used (with the landlady's consent) for sale of steel furniture under the second respondent's name; that business stopped in August 1969 and the premises were thereafter unused. The landlady served a notice (Ex. A-9 dated 19th May 1972); the tenants replied (Ex. A-10 dated 8th July 1972) enclosing a cheque for Rs. 4,950 said to be rent for the period from September 1969 to the date of notice. The landlady sought eviction on grounds of wilful default and non-use.
The tenants' factual position was that, although the premises had been leased (the opinion records a date of 16th September 1966 in the tenants' statement), after rent was paid for September 1969 the landlady told them she would receive rents "in lump sum" and therefore monthly rents were not paid for 33 months until the demand notice; they state that immediately after the notice the arrears were paid and thereafter monthly rents were being paid. The tenants also denied that the premises were not in use, asserting the premises continued to be used for business.
Legal Issues Presented
- Whether the tenants committed a "wilful default" in payment of rent for approximately 33 months.
- Whether the tenants had ceased to occupy the premises (i.e., whether the premises were being used for the leased purpose during the relevant period).
- Whether the conduct of the landlady (alleged agreement to receive rents in a lump sum and inaction in demanding monthly rents) constituted a waiver or estoppel that precluded a finding of wilful default.
- Whether the evidence produced (sales tax returns, invoices, other documents) sufficiently established that the premises were in use by the tenants during the period in question.
Arguments of the Parties
Landlady's (Petitioner's) Arguments
- The schedule premises was let as a non-residential commercial shop (for cycle spare parts) on a monthly rent of Rs. 150; the tenants stopped using the premises after August 1969 and kept it unused.
- The tenants failed to pay rent for nearly 33 months and thus committed wilful default, entitling the landlady to eviction.
- The tenants' claim of an agreement to pay rent in a lump sum is unsubstantiated; there is no satisfactory evidence of such an agreement or its terms (no specified periodicity like quarterly or yearly was stated).
- The landlady (and her husband who handled rent collection and lived upstairs) denies any agreement to accept lump-sum payments and says demands had been made; the landlord relies on documentary and oral evidence (P.Ws. 1 and 2) to support this denial.
- Certain tenant-produced documents (Exhibits B-40 to B-47) were attacked as unreliable or interpolated (e.g., Ex. B-41), and the landlady criticized the tenants for not producing electricity bills and other books despite demands.
Tenants' (Respondents') Arguments
- After payment for September 1969, the landlady told the tenants she would accept rents in lump sum; as a result monthly payments were not made for 33 months but the arrears were paid immediately after the demand notice and monthly payments were resumed thereafter—hence no wilful default.
- The premises continued to be used for business during the period in question; evidence (including documents marked Ex. B-40 to B-47, sales tax returns and invoices) supports continued business activity.
- The tenants suggested that having more than one premises (e.g., storage and showroom) is common in trade, and possession of another premises some distance away does not prove non-occupation of the leased premises.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Raju v. Ramasawami Naicker (1954) 2 M.L.J. 51 : 67 L.W. 573 : A.I.R. 1945 Mad. 1016 | The principle that a debtor cannot be held to have wilfully defaulted in repayment when the creditor does not display anxiety in collecting dues; where a creditor has agreed to a particular time for payment, non-payment before that time is not default. | The court relied on the reasoning in this decision to support the conclusion that the landlord's inaction (absence of demands over the relevant period) made the tenants' assertion of a lump-sum arrangement probable and that non-payment during that period could not be treated as wilful default. |
| Sastha v. Subramania Pillai (1972) T.L.N.J. 438 | Cited for a proposition regarding whether the conduct of a landlady will amount to waiver. | The court observed that this decision was relied upon by the landlady but expressly concluded that the Sastha decision had no application to the facts of the present case. |
Court's Reasoning and Analysis
The court proceeded through a fact-focused analysis applying the legal principles cited in the record:
- The factual foundation: it was undisputed that rents were unpaid for approximately 33 months. The Rent Controller found wilful default and cessation of occupation; the Appellate Authority reversed that finding. The revision petition challenged the appellate authority's conclusion.
- On the question whether there was an agreement to accept rents in lump sum: the tenants asserted such an arrangement after September 1969; the landlady and her husband denied it. The court closely examined the evidence, including P.W. 1's admissions.
- Material admission by P.W.1: although P.W.1 stated he demanded rent for September–November 1969, he admitted that from December 1969 until the issue of the formal notice under Exhibit A-19 he had made no demands for rent. The court treated this inaction as significant.
- The court applied the principle from Raju v. Ramasawami Naicker that a creditor who does not display anxiety in collecting dues cannot, in fairness, treat the debtor as wilfully defaulting. The court held that the landlord's failure to press for rent suggested she had effectively agreed to accept lump-sum payments "as and when required."
- On the question of occupation/use of premises: the tenants produced documents (Exs. B-40 to B-47), sales tax returns and invoices to show business activity. The court noted limitations in some of that material (e.g., sales tax returns lacked the department's seal and could not be acted upon reliably). The landlady's attacks on the exhibits (alleged interpolations, failure to produce electricity records) were also considered.
- The court found the landlady's evidentiary efforts insufficient to prove non-use: she did not summon electricity department records or examine neighbours who could have corroborated non-use; she had accepted the tenants' explanation that the trade changed with her consent (from cycle parts to steel furniture) and the tenants maintained another premises some distance away, which could be consistent with normal commercial practice of having separate storage/showroom facilities.
- On balance, taking the landlord's inaction regarding demands together with the surrounding circumstances (residence upstairs, husband handling rents, lack of demand for an extended period), the court concluded that the appellate authority correctly inferred there was no wilful default by the tenants for the 33-month period.
- The court also observed that the Sastha decision relied upon by the landlady did not apply to the facts here.
Holding and Implications
Holding: The civil revision petition is dismissed and the appellate authority's order dismissing the petition for eviction was upheld. The court found that the landlady had, by conduct and inaction, agreed to receive rents in lump sum and consequently the failure to pay monthly rents over the relevant period could not be treated as wilful default.
Direct consequences:
- The order of the Appellate Authority (which dismissed the eviction petition) stands; the landlady's prayer for eviction was rejected.
- No costs were awarded against the parties (the opinion records "No costs").
Broader implications: The opinion does not state that a new legal precedent was created; the court applied existing principles (as in Raju v. Ramasawami Naicker) to the facts and determined that the landlord's conduct amounted to agreement/waiver, precluding a finding of wilful default. The decision's effect is limited to the parties and the factual matrix described.
1. This revision petition is filed as against the order of the Appellate Authority, Tiruchirapalli in C.M.A. No. 29 of 1974. The landlady has preferred this revision petition. The Rent Controller in H.R.C.O.P. No. 243 of 1972 held in her favour by holding that there has been a wilful default, in the payment of rents for nearly 33 months and that the tenants had ceased to occupy the premises and therefore are bound to surrender vacant possession of the premises within 2 months from the date of the order.
2. The landlady being the petitioner herein, filed the petition claiming that the schedule premises is a non-residential one and it was leased out on 16th June, 1966 in favour of the first respondent, for carrying on a business in cycle spare parts, on a monthly rent of Rs. 150. It is stated further there in, that till February, 1968, first respondent was carrying on business in cycle spare parts. But afterwards, the landlady was informed that the business in cycle spare parts is to be carried on in another premises and that the schedule premises will be utilised for the sale of steel furnitures to which she consented and the name and style of the business is that of the second respondent. This business was also stopped in August, 1969 and since then the premises had been kept without being used for any purposes and therefore the landlady sent a notice through her advocate under Ex. A. 9 on 19th May, 1972 to which a reply was received under Ex. A-10 dated 8th July, 1972 along with a cheque for a sum of Rs. 4,950 being the rent payable by the tenants for the period, September, 1969 till date of notice. Hence, she had asked for eviction on the ground of wilful default and for failure to utilise the premises for the purpose for which it has been leased out.
3. This claim was opposed by the tenants stating that no doubt the premises had been taken on lease on 16th September, 1966, but after the rent was paid for the month of September, l969, the landlady had told the tenant that she will receive the amount in lump sum and therefore monthly rents were not paid for 33 months till the demand notice was received under Ex. A-9 and immediately thereafter the entire rent had been paid and subsequently the monthly rents are being paid, and therefore, there was no wilful default. About the cessation of business, it was contended that the premises was being used for the business carried on by the respondents and the claim to the contrary is false.
4. Mr. B. Raghaviah, learned Counsel for the petitioner landlady, strenuously pleads that the appellate authority had not properly comprehended about the wilful default, when admittedly for 33 months rent had not been paid by the tenant. Fortunately in this case, there is no dispute about not-payment of rent for the period in question. The version of the tenants is that after the rent was paid for September, 1969, the landlady had told the tenants that she will receive the amount in lump sums and hence the rents were not paid on due dates. This claim is stoutly denied by the landlady and her husband, who has been examined as P.W. 1 and who is said to be a practising lawyer, has stated in his evidence that the property belongs to his wife, and that he has been looking after the affairs regarding collection of rents, and that both of them reside in the upstairs portion and his office is also located in the upstairs portion of the premises. He states that at no point of time, either himself or his wife had agreed to receive the rents in lump sum, and inspite of demands, the rent was not paid for 33 months.
5. Mr. P. Ragaviah, learned Counsel for the petitioner, by referring to the evidence of P. Ws. 1 and 2 extensively contends that there is no satisfactory evidence about any agreement to receive the rents in lump sum, and even if it be so, it would not have been for any indefinite period and the tenants did not say as to what was the agreement about receipt of rents in lump sum. It is not as if the landlady had agreed to receive the rents once in three months or six months at the end of a year. No such period is whispered by the tenants. Therefore there being an improbability of an agreement by the landlady to receive the rents in lump sum, the failure to pay rents on demand, will by itself constitute a wilful default. He relies upon the decision reported in Raju v. Ramasawami Naicker (1954) 2 M.L.J. 51 : 67 L.W. 573 : A.I.R. 1945 Mad. 1016 in support of this contention. In this case, it will be seen that the period of non-payment is not less than 33 months. The landlady and her husband, who is in advocate, resids in the upstairs portion. Even though Mr. P. Ragaviah, learned Counsel for the petitioner herein, would contend that it is not for the landlady to demand the rents and that the entire obligation is only on the tenant to see the landlady and pay the rents on time, the improbability of the tenants being allowed to be in possession of the property for 33 months without a single demand for payment of rent being made by the landlady and her husband looms large in this matter. P W. 1 in his evidence states that after receipt of the rent for August, 1969 on 9th September, 1969 he made the demand for the rents payable for the months of September to November, 1969 and that the rents were not paid. He had not sent any notice of demand. He admits that for the period of December, 1969, till issue of notice under Exhibit A-19 he had never made any demand for rents. It is this inaction on the part of the landlady's husband, who is quite conversant with the ingredients which would result in 'wilful default' and the right to get an order of eviction, leads to the conclusion that the version of the tenants that the first respondent had been told by the landlady that she would receive the rents in lump sum is quite probable. Even in the decision relied upon by Mr. P. Ragavaiah learned Counsel for the petitioner, the learned Judge has held that a debtor can hardly, be said to be wilful in repayment when the creditor doss not display any anxiety in collecting his dues. If there is an agreement to pay rents at a particular time, it is impossible to see how there can be any default in the payment of it, before the stipulated time has arrived, In that case, it was held:
It is also noteworthy that the landlord has not filed a single written demand by him for the rent which was in arrear. A debtor can hardly be said to be wilful in repayment when the creditor does not display any anxiety in collecting his dues.
In this case no anxiety had been displayed by the landlady in the matter of collecting the rent dues. The circumstances, the admission made by P.W. 1, the fact that the landlady and her husband (an advocate) are residing in the upstairs portion of the premises and there being no evidence to show that any demand had been made for payment of rents, all lead to the irresistible conclusion that the landlady and her husband have agreed to receive the rents in a lump sum as and when they require. That is what R.W. 1 deposes by stating:
In this view, the appellate authority was perfectly correct in holding that the conduct of the landlady and the circumstances above stated, show that there has been no wilful default in payment of rents for the period of thirty three mouths in question.
6. The premises was closed from 4th September, 1969. It is stated that the premises was let on lease only for the purpose of the cycle shop and subsequently, apart from failure to pay the rents, the premises also had been kept closed. To rebut this claim the tenants had marked several documents and in particular the appellate authority had taken Ex B-40 to B-47 into account, which show that business was being carried on during the period in question and the sales tax monthly returns and invoices show that the tenants were carrying on business. Sales tax returns produced do not bear the seal of the department and hence cannot be acted upon.
7. Mr. Ragavaiah, learned Counsel referred to Ex. B-41 and pleads that there is no entry in that exhibit about the suit premises and that in other exhibits, the number regarding the suit premises has been interpolated, and hence they cannot be relied upon. He also refers to the petition filed by the landlady demanding the tenants to produce the electricity consumption bills, bill books, day books and assessment orders and ledgers belonging to the tenants, but inspite of it, they have not been produced Regarding Electricity bills, landlady residing in upstair portion, could have easily proved by summoning the records of the Electricity Department to show that the schedule premises did not utilise any electricity during the relevant period but she had not done so. When the sales tax returns and invoices have been produced, still it is not be claimed that all the books kept by the tenants regarding their business should be produced in a proceeding like this, wherein the limited aspect to be considered in whether the premises was used by the tenant or not. The claim made by the landlady that the premises was locked without being used, is not supported by the other independent evidence. She could have examined the neighbours of the property, which she has avoided. It is admitted that though originally the premises has been given for carrying on trade in cycle spare parts, later on with the consent of the landlady, business in steel furniture was started. The tenants have get another premises which is 16 shops away. In cases like this, it is not uncommon for the commercial community to have more than one premises, one for storing the materials and utilising the other premises as show room etc. When the evidence adduced by the landlady is insufficient, it will not be open to her to remark that, because certain books of accounts and other ledgers demanded by her had not been produced in the proceedings, adverse conclusion should be drawn against the tenants. The decision reported in Sastha v. Subramania Pillai (2972) T.L.N.J. 438, for the proposition as to whether the conduct of the landlady will amount to waiver, has been relied upon. But that decision can hare no application to the facts of this case.
8. In this case, it has been satisfactorily made out that the landlady had agreed to receive the rents in a lump sum and when she has so agreed, in a petition filed under Act XVIII of 1960, she cannot contend that mere non-payment of rent on being established, it will have to be construed as a wilful default. Therefore the appellate authority was in order in rejecting both the contentions and in turn dismissing the petition filed for eviction. Therefore this civil revision petition is dismissed. No costs.
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