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Madholal And Others v. Madan Mohan Agrawalla And Others
Structured Summary of the Opinion (Untwalia, C.J.) — Second Appeal
Factual and Procedural Background
The suit giving rise to this second appeal is Title Suit No. 1281 of 1965, originally instituted by Murlidhar (spelled "Marlidhar" in parts of the record) Agarwalla as the karta of a joint family to evict tenant-defendants from two shop-rooms belonging to the joint family. The tenant's tenancy stood in the name of Rurmal Jagarnath (the defendants' joint family firm), and the firm was impleaded as respondent No. 4. The House Controller had fixed the rent at Rs. 26 per month, payable by the end of the month following the month for which rent was due in the absence of a special contract. According to the plaintiffs' pleaded case, the tenants defaulted in payment of rent for certain months (variously pleaded, and earlier suits were also mentioned).
During the trial the original plaintiff died and his sons (plaintiff-respondents 1 to 3) were substituted on 1-7-1966. The trial court dismissed the eviction suit, finding valid notice under Section 106 of the Transfer of Property Act had been served, no default in payment of rent had occurred, and the plaintiffs did not require the premises for themselves. On appeal the lower appellate court reversed the trial court, decreeing the suit both on the ground of non-payment of rent under Section 11(1)(d) of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947 (the Act) and on the ground of personal necessity. Certain defendants appealed to this Court by way of second appeal. The second appeal was placed for hearing before a Division Bench as directed.
Legal Issues Presented
- Whether a decree for eviction could be sustained under Section 11(1)(d) of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947 unless there was default in payment of two months' rent "within the meaning of" that provision.
- Whether the lower appellate court's finding of two months' non-payment was legally correct and whether the onus had been wrongly cast on the defendants.
- Whether remittances of rent by postal money order constituted valid tender under the general law or, alternatively, were effective remittances under Section 13(1) of the Act (i.e., after a valid tender and refusal) so as to defeat an eviction claim based on arrears.
- Whether the decree for eviction based on personal necessity was tenable in law having regard to the Supreme Court decisions cited for the appellants (in particular, Smt. Phool Rani v. Naubat Rai Ahluwalia and Phiroze Bamanji Desai v. Chandrakant M. Patel), and whether the right to sue survived the death of the original plaintiff.
Arguments of the Parties
Appellants' Arguments (as advanced by Mr. J.C. Sinha and Mr. Sarkar)
- It was submitted that eviction under Section 11(1)(d) could not be decreed unless there was default in payment of two months' rent within the meaning of that clause.
- The appellate court's finding of two months' non-payment was incorrect and recorded by improperly throwing the burden of proof onto the defendants.
- The remittances by postal money order made on dates shown in the record were valid tenders and, alternatively, once the first money order had been refused subsequent remittances should be treated as remittances in terms of Section 13(1) of the Act.
- The decree based on personal necessity was said to be bad in law in view of authoritative Supreme Court decisions (Smt. Phool Rani and Phiroze Desai), which they relied upon to challenge the decree grounded in personal necessity and the survival of the cause of action after the death of the original plaintiff.
Respondents' / Plaintiffs' Case (as pleaded)
- The plaintiffs alleged that the defendants defaulted in rent for certain months and were therefore liable to eviction under Section 11(1)(d) of the Act.
- They asserted that the substituted plaintiffs (the sons) had become major and required the premises bona fide for personal use to start business; the premises belonged to the plaintiffs' joint family.
- The plaintiffs relied on service of notice under Section 106 of the Transfer of Property Act (deemed served on 4-12-1964) before filing the present suit.
- The defendants pleaded various defences including existence of other joint family members (necessary parties), an agreement for payment at Diwali, that they had tendered rent (and sent money by postal money order which, they said, had been refused), and that the premises were not required by the family for occupation.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Smt. Phool Rani v. Sh. Naubat Rai Ahluwalia, (1973) 1 SCC 688 : AIR 1973 SC 2110 | That an ejectment application filed by a plaintiff for occupation for himself and his family can be a personal action; on the particular wording of the relevant rent law (Delhi Rent Control Act in that case) the right to sue did not survive the death of the plaintiff and substituted heirs could not continue the identical personal cause of action. | The Court distinguished this authority: the present suit was by the karta on behalf of the entire joint family (a suit on behalf of the joint family rather than a purely personal action), and the plaint averred that the joint family owned the premises and required them for family occupation, so the cause of action survived for the substituted sons. |
| Phiroze Bamanji Desai v. Chandrakant M. Patel, (1974) 1 SCC 661 : AIR 1974 SC 1059 | The proposition (articulated by Bhagwati, J.) that there must be an element of "need"—not merely "desire"—before a landlord can be said to require premises for his own use and occupation. | The Court applied the principle by examining the lower appellate court's findings: the lower appellate court had considered evidence and found bona fide need; the present Court found no error in that evaluation and therefore upheld the finding of need for occupation. |
| Mohamood Hassan v. Parsuttam Pandey, 1964 BLJR 24 (Bench decision of this Court) | Interpretation of the words "the amount of two months' rent lawfully payable by the tenant" in Section 11(1)(d): it does not require that the two months be the last two months or consecutive months; a landlord may maintain ejectment upon default amounting to a sum equal to two months' rent. | The Court relied on this interpretation to support the view that non-consecutive months can amount to the "two months' rent" required by Section 11(1)(d), and therefore the appellate court's finding of arrears for two separate months could attract the provision. |
Court's Reasoning and Analysis
The Court's analysis proceeds in two principal strands: (A) interpretation and application of Section 11(1)(d) and Section 13(1) of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947 to the facts regarding tender and remittance of rent; and (B) the sufficiency of evidence for personal necessity and survival of the cause of action after the death of the original plaintiff.
A. Interpretation and application of Section 11(1)(d) and Section 13(1)
- The Court framed the core interpretive question as when an amount equal to "two months' rent lawfully payable by the tenant and due from him" can be said to be in arrears under Section 11(1)(d). It concluded that the provision requires arrear of an amount equal to two months' rent, and that the two months need not be consecutive.
- Relying on the Bench decision in Mohamood Hassan v. Parsuttam Pandey, the Court accepted that non-consecutive defaults bringing the total to two months' rent are capable of attracting Section 11(1)(d).
- The subordinate judge had found that specific months (June 1962 and April 1963) were in arrear because the endorsements on the money order coupons (dated 4-8-1962 and 4-6-1963 respectively) showed tender to the landlord after the last day of the month next following the month for which rent was payable, and no evidence as to the date of remittance was produced by the tenants. On that basis the subordinate judge concluded those months were in arrear.
- The Court analysed the distinction between two modes of tender/remittance:
- Under the general law, a postal money order operates through the post office as the agent of the tenant and the effective tender to the landlord is the date when the post office tendered the money to the landlord (which may be later than the date the tenant remitted funds to the post office).
- Under Section 13(1) of the Act, if the landlord has refused a valid tender by the last day of the next month, the tenant may remit rent by postal money order and continue subsequent remittances by money order; remittances under s.13(1) are therefore effective even if made after that last day, but only if the precondition (tender and refusal) is established.
- The subordinate judge had specifically found that although the defendants pleaded tender and refusal and remittance by money order, they adduced no evidence to support that sequence. Consequently the precondition for Section 13(1) was not proved and the Court treated the money orders as remittances under the general law (i.e., subject to the post office-agent timing). Thus the remittances were too late to prevent arrear status for the months in question.
- The Court rejected the appellants' contention that once a first money order was refused subsequent remittances should automatically be treated as Section 13(1) remittances: the Court held the pleadings and findings showed no compliance with the condition precedent in Section 13(1), so the later remittances did not acquire the protective character of s.13(1) remittances.
B. Personal necessity and survival of the cause of action
- The Court considered the two Supreme Court authorities cited by the appellants. It distinguished Smt. Phool Rani on the ground that that case concerned a personal action by the plaintiff for his own use (and the Delhi Rent Control Act's wording meant the right did not survive his death). By contrast, the present suit was brought by the Karta on behalf of the entire joint family; the plaint expressly pleaded ownership by the joint family and that the sons (substituted plaintiffs) required the premises for the joint family's occupation.
- Applying the principle from Phiroze Bamanji Desai that an element of "need" (not mere desire) is necessary to found an ejectment claim based on personal necessity, the Court examined the lower appellate court's assessment. The lower appellate court had evaluated evidence and concluded there was bona fide, reasonable requirement. The present Court found no error of law in that assessment and therefore accepted the finding of bona fide need.
- On that basis the Court held that the decree of the lower appellate court sustaining eviction on grounds including personal necessity was supportable on the record before it.
Holding and Implications
APPEAL DISMISSED.
Direct consequences and specific orders:
- The second appeal was dismissed as without merit.
- Costs were awarded to plaintiff respondents 1 to 3.
- The decree of the lower appellate court (decreeing the suit on the grounds of non-payment under Section 11(1)(d) and on personal necessity) is sustained by this Court.
Implications regarding precedent and legal principles:
The Court applied existing statutory interpretation and precedents (as set out above) to the facts; it did not indicate that it was laying down a novel rule of law or overruling existing authority. The decision affirms (a) that Section 11(1)(d) may be attracted by arrears amounting in sum to two months' rent even if the months are not consecutive, and (b) that remittances by postal money order will only benefit a tenant under Section 13(1) if the statutory preconditions of tender and refusal are established on the record.
This summary is confined to the contents and reasoning expressly contained in the provided opinion and does not add factual or legal material beyond that opinion.
Untwalia, C.J:— This second appeal was placed for bearing before a learned single Judge of this court and has now been put up before us as it was directed to be placed before a Division Bench for hearing.
2. The suit out of which this appeal arises being title suit No. 1281 of 1965 was originally filed by Marlidhar Agarwalla, whose sons are plaintiff-respondents 1 to 3. He died during the pendency of the suit in the trial court, and the said respondents were substituted by virtue of order dated 1-7-1966. The suit was filed by the original plaintiff as karta of the joint family consisting of himself and his sons. The suit premises belonged to the joint family, and the tenant-defendants were sued for being evicted from them on the ground of non-payment of rent and personal necessity of the joint family of the original plaintiff. Several pleas were raised to resist the suit by the tenant-defendants. It was dismissed by the trial court. On appeal by plaintiff-respondents 1 to 3 the lower appellate court has decreed the suit on both the grounds. Some of the defendants have come up in second appeal to this court. The suit premises in occupation of the defendants consist of two shop-rooms. The tenancy stood in the name of Rurmal Jagarnath which was the joint family firm of the defendants. The firm was also impleaded as a defendant and is respondent No. 4. Eventually, under the order of the House Controller the rent of the premises was fixed at Rs. 26/- per month. As there was no special contract to the contrary, the rent was payable by the end of the month following the month for which rent was due. According to the plaintiffs' case, the defendants defaulted in payment of the rent for the months of November and December, 1958 and January, 1959. A suit for eviction was filed against them. It was decreed by the trial court, but in the lower appellate court it failed for want of notice under Section 106 of the Transfer of Property Act. The High Court affirmed the decision of me lower appellate court. Even after the institution of the previous suit the defendants did not pay any rent and hence they were liable to be evicted on the ground of non-payment of rent in accordance with Section 11(1) (d) of the Bihar Buildings (Lease, Rent and Eviction) Control, Act, 1947 (hereinafter called the Act). The sons of the original plaintiff, according to the case made out, had become major. It was necessary for them to find out some premises for starting their business and hence the suit premises were required bona fide for the personal use of the members of the joint family which was the owner of the premises in question. The present suit was filed after service of notice under Section 106 of the Transfer of Property Act which on refusal was deemed to have been served on them on 4-12-1964.
3. Amongst other pleas, one of the pleas raised in the written statement was that there were other members in the joint family of the plaintiff and they were necessary parties. There was an agreement between the parties that rent would be paid when demanded and that if the rent was not collected in time, then the entire rent due would be paid at the time of Diwali. The defendants did not make any default; still the plaintiffs filed a false suit in 1959. A case of personal necessity was pleaded in that suit, but it was held that there was no personal necessity. The further case of the defendants is that they always tendered rent and, on refusal by the plaintiff, they had been sending rent by postal Money order, which the plaintiff had been refusing to accept. By plaintiff, is meant the original plaintiff. It was also asserted that no son of the plaintiff was sitting idle and the suit premises were not required for the use of the family members of the plaintiff's joint family.
4. The trial court found that valid notice under Section 106 of the Transfer of Property Act had been served, there had been no default and that the plaintiffs did not require the premises in suit for themselves, meaning thereby the substituted plaintiffs. Accordingly, it dismissed the suit. The lower appellate court has reversed the decision of the trial court on both the points and has affirmed it on the point of notice, the result being that the suit has been decreed by the lower appellate court.
5. Mr. J.C Sinha, learned counsel for the appellants, submitted that the finding of the lower appellate Court on the point of non-payment of rent was vitiated in law and for two reasons, (i) that unless there was default in payment of two months' rent within the meaning of Section 11(1) (d) of the Act, a decree for eviction on the ground of non-payment could not be passed; and (ii) that the finding in respect of two alleged non-payments was not correct, and it had been recorded by wrongly throwing the onus on the defendants. Learned counsel further submitted that the decree of the lower appellate Court based on the ground of personal necessity was bad in law in view of the decisions of the Supreme Court in Smt. Phool Rani v. Sh. Naubat Rai Ahluwalia, (1973) 1 SCC 688 : AIR 1973 SC 2110 and Phirose Bamanji Desai v. Chandrakant M. Patel, (1974) 1 SCC 661 : AIR 1974 SC 1059.
6. In my opinion, there is no substance in any of the points urged on behalf of the appellants in this case. Section 11(1) (d) of the Act reads as follows:—
“11. (1) Notwithstanding anything contained in any contract or law to the contrary but subject to the provisions of the Industrial Disputes Act, 1947 and to those of Section 12, where a tenant is in possession of any building, he shall not be liable to eviction therefrom except in execution of a decree passed by the Court on one or more of the following grounds:—
* * * *
(d) where the amount of two months' rent lawfully payable by the tenant and due from him is in arrears by not having been paid within the time fixed by contract or, in the absence of such contract, by the last day of the month next following that for which the rent is payable or toy not having been validly remitted or deposited in accordance with Section 13”;
7. The question for consideration is when could two months' rent lawfully payable by the tenant and due from him be said to be in arrears. Non-payment for any one month does not bring about the liability to be evicted on the ground of non-payment; non-payment must be of the amount of two months' rent. If the rent for one month is not paid within the time fixed by the contract or, in absence of such contract, by the last day of the month next following that for which the rent is payable, then the rent for one month is in arrear. And if rent for another month similarly falls in arrear, then the ground for eviction is made out under Section 11(1) (d) of the Act. For attracting the said provision of law there need not necessarily be default in ‘payment of two consecutive months’ rent. If that were so, then the latter phrase in clause (d) will not have full play and nonpayment of rent for one month by the last day of the month next following cannot be said to be in arrear. The learned subordinate Judge in appeal has found that the rent for the months in June 1962 and April 1963 remained in arrears by not having been validly remitted by the last day of the month next following. Rent for the months of June and July 1962 was remitted by Money order. The endorsement of refusal on the money order coupon is Ext. B/20, it is dated 4-8-62. No evidence was given as to when that amount was remitted. Similarly, rent for the months of April and May 1963 was remitted by Money order (Ext. C/26). The endorsement of refusal is Ext. B/15 and is dated 4-6-1963. Thus, the learned subordinate Judge has concluded that the rent for April was not tendered in time and so was not tendered in time the rent for June 1962. Learned counsel for the appellants submitted that since the liability to be evicted was not incurred by non-payment of rent of one month only, rents remitted by Money order and tendered on 4-6-1963 for April and May 1963 was a valid tender. So was valid tender when rents for two months of June and July 1962 were remitted on 4-8-1962. In am unable to accept this argument as correct. The tender of rent on 4-6-1963 for the month of April 1963 was out of time and so was the rent for June 1962 on 4-8-1962, unless of course the case could come under Section 13(1) of the Act. If the case could not come under Section 13(1), then the money ought to have been tendered by the post office to the landlord by the last day of the next following month. It was immaterial when it was remitted by the tenant. If the tender of money through the agency of the post office by money order was in accordance with the general law, then the post office acted as the agent of the tenant and the tender to the landlord would be on the date when it tendered to him the money sent by Money order. If of course the case could be covered by Section 13(1) of the Act, then remittance by money order would necessarily be after the last day of the next following month, and when the tenders were made on 4-6-1963 and 4-8-1962 the remittance by money order must have been made earlier.
8. Section 13(1) of the Act says:—
“When a landlord refuses to accept any rent lawfully payable to him by a tenant in respect of any building, the tenant may remit such rent, and continue to remit any subsequent rent which becomes due in respect of such building, by postal money order to the landlord.”
9. The tender to the landlord can be made by the last day of the month next following that for which the rent is payable, and, on refusal by the landlord to accept, the tenant may remit such rent, that means the rent for that month, by Money order and continue to remit any subsequent rent also which becomes due in respect of the building. In order to escape the liability of being evicted on the ground of non-payment of rent, as expressly provided for in clause (d) of sub-section (1) of Section 11 of the Act, rent must toe validly remitted or deposited in accordance with Section 13. If there is a tender and refusal by the last day of the month, then it goes without saying that remittance by money order has got to be within a reasonable period after the refusal on the last date. That brings about a distinction between the tender through Money order under the general principles of law and remittance by money order under Section 13(1). The tender under the former must be before the expiry of the last day of the month next following that for which the rent is payable. Under the latter, remittance may be even after the expiry of that date. In order to take the case out of the general law the requirement of Section 13(1) must be complied with. In this case the learned subordinate Judge has found that although a case was made out in the written statement of tender and refusal and then remittance by Money order, no evidence was adduced in support of this case and, therefore, there was no tender to or refusal by the landlord of the rent for any month. That being so, the provisions of Section 13(1) were not attracted in this case. All the remittances made by Money order must be deemed to be remittances made in accordance with the general principles of law, treating the post office as the agent of the tenant.
10. Mr. Sarkar who followed Mr. Sinha submitted on behalf of the appellants that refusal of the first money order will make the remittances by subsequent money orders in accordance with Section 13(1) of the Act, and the two defaults found for two months by the learned subordinate Judge were well covered by the remittances under Section 13(1). In my opinion, the argument is not correct. Reading the pleading of the defendants and the findings recorded by the learned Subordinate Judge, it is clear to me that at no point of time there was any remittance by Money order in accordance with S. 13 on the fulfilment of the condition mentioned therein, and the subsequent remittances, therefore, were not clothed with the character of subsequent remittances under Section 13(1) of the Act.
11. In this connection, reference may be made to the Bench decision of this court in Mohamood Hassan v. Parsuttam Pandey, 1964 BLJR 24. Mahapatra, J., with whom Tarkeshwar Nath, J. agreed, has said at page 30, Column 2:
“Section 11(1) (d) does not speak of arrears consisting of the last two months' rent before the suit or rent of any two consecutive months. The view that I have taken about the meaning of the words ‘the amount of two months’ rent lawfully payable by the tenant' enables the landlord to maintain a suit for ejectment of a tenant who defaults to pay or remit or deposit in court on account of rent a sum equal to two months' rent.”
12. On the point of sustaining the decree on the ground of personal necessity, the two Supreme Court decisions cited on behalf of the appellants are clearly distinguishable. In (1973) 1 SCC 688 : AIR 1973 SC 2110, the ejectment application had been filed by the plaintiff for occupation as a residence for himself and the members of his family. The application was dismissed by the Additional Rent Controller. The plaintiff went up in appeal. During the pendency of the appeal he died. His heirs consisting of his widow, son and two married daughters were substituted. On the wordings of the Delhi Rent Control Act it was held that it was a personal action by the plaintiff and he could claim eviction when he required the premises for his own use as well as for use of his family members who were dependent upon him, yet it would be for his personal use. The right to sue did not survice after his death. Different considerations were bound to arise for finding out the necessity of the substituted heirs which would be a distinct and different cause of action. In the instant case, as I have said above, it was not a suit by the late Murlidhar Agarwalla on his own behalf and for his personal necessity only. It was a suit on behalf of the entire joint family, he being the Karta. In paragraph 4 of the plaint it was said:
“That the plaintiffs aforesaid joint family is the owner of the premises situated in Municipal holding No. 103, Bazar Mahalla of Jugsalai town.”
13. And then in paragraph 9 the statement was:
“That all the sons of the plaintiff have now become major and three of them are sitting idle and it is necessary for them to carry on business mainly of foodgrains and grocery but for want of accommodation they have not been able to start any business.
The suit premises are required by the plaintiff's joint family for their own occupation.”
14. I am, therefore, of the opinion that the necessity pleaded was one of the entire family. On the death of Murlidhar Agarwalla his sons could be substituted and they could prosecute this litigation on the same cause of action and consequently the right to sue survived.
15. In the case of Phiroze Bamanji Desai, (1974) 1 SCC 661 : AIR 1974 SC 1059 it was pointed out by Bhagwati, J. at page 1063, paragraph 7, that the District Judge had taken the correct view of the law that
“there must be an element of need before a landlord can be said to ‘require’ premises for his own use and occupation. It is not enough that the landlord should merely desire to use and occupy the premises, what is necessary is that he should need them for his own use and occupation.”
16. Since the High Court had wrongly interfered with the decree for eviction made by the court below, the Supreme Court set aside the order of the High Court and maintained the decree of the District Judge.
17. In the instant case, the lower appellate court in its judgment has appraised the evidence, discussed it elaborately from paragraphs 17 to 20 and, believing that there is need for the plaintiffs to occupy the suit premises bona fide, ultimately recorded the finding in paragraph 21 that the plaintiffs do require the disputed premises for their own use and occupation reasonably and in good faith. I find no error of law in the recording of the finding aforesaid.
18. For the reasons stated above, I hold that this second appeal is without any merit. It is accordingly dismissed with costs payable to plaintiff respondents 1 to 3.
19. S.K Jha, J.:— I agree.
20. Appeal dismissed.
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