S. Ali Ahmad, J.:— This is an appeal by the defendant. The suit was filed for eviction on the ground of default in payment of rent within the meaning of the Bihar Building (Lease, Rent and Eviction) Control, Act, 1947 (hereinafter to be called ‘the Act’) in the Court of the Munsif, 1st Court, Patna which was dismissed. The plaintiffs filed an appeal before the District Judge, Patna and the same was allowed. Hence, this appeal was filed in this Court which was first placed before a learned Single Judge but as the appeal involves complicated questions of law, it was referred to a Division Bench.
2. According to the plaintiff-respondent, the house in question belonged to them which they purchased from one Parsottamdas Jain by a registered sale-deed, date 12-1-1964 for a valuable consideration. The appellant, a partnership firm was a tenant in the ground floor of the house in question which previously was paving rent at the rate of Rs. 75/- per month, but by the order of the Rent Controller, it was reduced to Rs. 20/- per month. Since the plaintiff-respondents needed the house bona fide for their own occupation, they served a notice under section 106 of the Transfer of Property Act on the 12th March, 1964, determining the tenancy in favour of the appellant. It may be mentioned here that the tenancy was monthly, starting from Badi 1 and ending on Sudi 15th of the same month according to the Hindu Calendar. After determining the tenancy, the respondents filed Title Suit No. 121 of 1964 for eviction of the appellant on the ground of personal necessity. After the aforesaid title suit was filed, according to the plaintiff-respondents, the defendant-appellant defaulted in paying rent for a period beginning from Magh Badi 1 Sambat 2024 to Chait Sudi 15th Sambat 2025, corresponding to the period beginning from 16-1-1968 to 13-4-1968. On default in payment of rent, the plaintiff-respondents became entitled to a decree for eviction on the ground of non-payment of rent also. They, therefore, filed an application in the suit praying to amend the plaint by adding that the defendant had defaulted in paying rent for the aforesaid period and that a decree for eviction from the premises in question be passed on that account also. The prayer for amendment of plaint was opposed by the appellant which ultimately was disallowed by this Court. The respondents thereafter filed this suit after serving another notice, dated 6-2-1969 under section 106 of the Transfer of Property Act, which was dismissed by the trial Court but decreed on appeal by the lower appellate Court.
3. According to the defendant-appellant, the suit was not maintainable and was barred on account of waiver and estoppel. His case further is that the shop was originally let out on a monthly rental of Rs. 75/- but subsequently the Controller under the Act fixed fair rent of the shop, at Rs. 20/- per month with effect from 3rd May, 1965, which corresponds to Baisakh Sudi 2 Sambat 2022. It is further said that the orders fixing the fair rent with effect from 3-5-1965 were passed on 16-10-1965 and in between these two dates, the appellant continued to pay rent at the rate of Rs. 75/- per month till Agrahan Sudi 15th Sambat, 2022. It is further his case that thus an excess amount of Rs. 410.67 paise was paid to the plaintiffs towards rent and that he was entitled to refund of this amount. It is further said that even after the order of the House Controller, he went on paying rent at the rate of Rs. 20/- per month in the hope that the excess amount will be refunded. But in spite of several requests the plaintiffs did not return back the money and, therefore, the defendant gave a notice to the plaintiffs for the refund of the said amount but that also did not yield any result. In that situation, he claims that ultimately he started making adjustment of Rs. 20/- per month towards the rent. In that way, the rent from Magh Badi 1 Sambat 2024 and onwards were being adjusted at the rate of Rs. 20/- per month towards Rs. 410.67 paise paid in excess to the plaintiffs. An alternative plea that after termination of tenancy by a notice under section 106 of the Transfer of Property Act no rent was payable to the plaintiffs was also made and in that context it was said that as no rent was payable by the defendant there could be no default in payment of rent.
4. The trial Court negatived the defence that the suit was barred by either estoppel, waiver or acquiescence but it dismissed the suit holding that the excess amount of Rs. 410.67 paise was adjusted in part towards the rent for the period beginning from Magh Badi 1 Sambat 2024 to Chait Sudi 15th Sambat, 2025. On appeal, the Court below held that the defendant-appellant had defaulted in paying rent for the period alleged by the plaintiffs and as such decreed the suit.
5. In this Court Mr. K.D Chatterji, learned counsel for the appellant has first submitted that on the findings arrived at by the Court below Rs. 410.67 paise was paid in excess as rent to the plaintiff-respondent and that this amount was not refunded as claimed by the respondents and consequently the rent for the period beginning from Magh Badi 1 Sambat 2024 to Chait Sudi 15th Sambat, 2025 stood adjusted and, therefore, the finding of non-payment of rent recorded by the Court of appeal below as erroneous in law. Mr. Shreenath Singh, learned counsel for the respondents, on the other hand, urged that under section 8(2) of the Act it was open to the defendant-appellant either to claim refund of the excess amount paid or claim adjustment. According to him, since the appellant had claimed refund of the excess amount he could not claim adjustment. In support of their respective arguments, learned counsel for the parties have referred us to several decisions. But before I consider the cases, it will be useful to keep in mind section 8(2) of the Act which empowers the tenant to take refund of the excess amount paid as rent or to get it adjusted towards future rent. This sub-section reads thus:—
“When the fair rent of a building has been determined or re-determined, any sum in excess or short of such fair rent paid, whether before or after the date appointed by the Controller under sub-section (3), in respect of occupation for any period after such date, shall in case of excess, be refunded to the person by whom it was paid or at the option of such person, be otherwise adjusted and, in case of shortage, be realised by the landlord as arrears of rent from the tenant.”
6. A reading of this sub-section makes it quite clear that in case the tenant makes a demand for refund of the excess amount paid as rent the landlord is obliged to refund the same. But in case the tenant makes an option to get the excess amount of rent adjusted towards future rent it will be so done. Sections 60 and 61 of the Indian Contract Act are also relevant in this connection. According to section 60 of the Indian Contract Act, the creditor has the right of appropriation up to the very last moment. The right terminates when the creditor has made an appropriation and communicated it to the debtor. Section 61 of the Contract Act provides that where neither party makes any appropriation, payments are to be applied in the discharge of debt in order of time. The crux of these two sections appears to me that where adjustment is claimed then the party claiming it must communicate his intention. Same view was taken in the case of Lesson v. Lesson(1), where it was held that “an appropriation of payment cannot be inferred from an intention in the mind of the debtor uncommunicated to the creditor. It can only be inferred from the circumstances known to both parties.”
7. The House of Lords in the case of Cory Brothers and Company Ltd. v. The Owners of the Turkish Steamship “Mecca”(2) had occasion to consider the principle regarding appropriation of payment and right to appropriate. Their Lordships observed that “when a debtor pays money on account to his creditor and makes no appropriation to particular items, the creditor has the right of appropriation and may exercise the right upto the last moment, by action or otherwise; the application of the money is governed, not by any rigid rule of law, but by the intention of the creditor, expressed, implied or presumed”. The principle laid down in this case was later relied on in the case of Seymour v. Fickett(3) by Lord Justice Vaughan Williams when his Lordships observed that “when a payment made by a debtor to his creditor has not been appropriated by the former, the creditor is entitled to elect how he will appropriate the payment “upto the very last moment” (as was said by Lord Macnaghten in The Mecca (1897 Appeal Cases at page 294), and he may make an appropriation even when he is being examined as a witness in an action by him against the debtor”. In Halsbury's Laws of England (4th Edition), Vol. 9, at page 349, paragraph 505 this subject has been dealt with as follows:—
“Where several distinct debts are owing by a debtor to his creditor the debtor has the right when he makes a payment to appropriate the money to any of the debts that he pleases, and the creditor is bound, if he takes the money to apply it in the manner directed by the debtor. If the debtor does not make any appropriation at the time when he makes the payment, the right of appropriation devolves on the creditor.
An appropriation by the debtor need not be made in express terms, but must be communicated to the creditor or be capable of being inferred, it may be inferred where the nature of the transaction or the circumstances of the case are such as to show that there was an intention to appropriate.”
8. Thus, according to Lord Halsbuiy also appropriation by the debtor either must be communicated to the creditor or at least be capable of being inferred from transactions or the circumstances of the case that there was an intention to appropriate.
9. The authorities referred to above lead me to the irresistible conclusion that a creditor has unfettered right to appropriate advance in any manner he likes, All that is necessary is that his intention to appropriate should be communicated to the other side or in case there is no such communication then subsequent transaction and circumstance must lead the other side to infer that the right to appropriate has been exercised. Having determined the position, I now proceed to examine if the appellant has been able to establish that the rent for three months stood adjusted out of Rs. 410.67 paise that was paid in excess to the plaintiff-respondents.
10. By a notice, dated 15-11-1965 (Ext. B), the appellant called upon the plaintiff-respondents to refund Rs. 410.67 paise towards rent. It was also said in that notice that in case the amount was not refunded then the “amount shall be adjusted from the future monthly rental of Rs. 20/- per month from 2-12-1965 onwards with interest at Re. 1/- per cent per month and cost hereof till finally adjusted which please note”. According to the plaintiff-respondents, they refunded the amount on receipt of the notice (Ext. B) but the finding is against them. The position, therefore, is that the excess money was not refunded by the plaintiffs. Since the excess money was not refunded, it was not necessary for the appellant to pay rent for subsequent months until July, 1966, when Rs. 410.67 paise was to be fully adjusted. But the appellant in spite of serving the notice went on remitting rent to the plaintiffs month after month at the rate of Rs. 20/- per month till December, 1967. The rent so remitted was being accepted by the respondents. The appellant by remitting the rent after service of the notice (Ext. B) gave a complete go by to the notice and the option of getting the rent adjusted for subsequent months starting from 2-12-1965 was waived. The respondents also accepted the rent for all these months till December, 1967. Therefore, the conduct of the parties subsequent to the notice (Ext. B) was that month to month rent was offered by the appellant and accepted by the respondents. Till then there was not one single circumstance on the basis of which it could be inferred that the appellant intended to get future rent from 16-1-1968 onwards adjusted. It is true that the appellant had a right till the last moment to have the rent for future months adjusted subject, of course, to the law of limitation. But, that intention had either to be communicated to the respondents or had to be capable of being inferred by the respondents by the surrounding circumstances before he had become a defaulter within the meaning of section 11 of the Act. It was not open to the appellant not to pay rent for more than two months (as he had already become defaulter) and then claim adjustment for the first time in the written statement when the suit was filed for eviction on that ground and that is what has been done by him. In these circumstances, the Court of appeal below was, therefore, justified in holding that the appellant could not claim adjustment and, therefore, its finding that the appellant had defaulted in paying rent for the period beginning from Magh Badi 1 Sambat 2024 to Chait Sudi 15th Sambat 2025 is correct.
11. Mr. Ghatterji next contended that the notice under section 106 of the Transfer of Property Act was served on the appellant on 13-3-1964 and as a result of this notice the tenancy was terminated. According to him, thereafter the appellant became only a statutory tenant and as such, no rent was payable by him. The appellant according to learned counsel, therefore could not be said to have defaulted in paying rent for the period in question. Mr. Chatterji in support of this argument has referred to the case of Anand Nivas Private Ltd. v. Anandji Kalyanji's Bedhi(4) and the case of J.C Chatterjee v. Shri Sri Kishan Tandon(5). The question as to whether rent is payable or not after termination of tenancy by a notice under section 106 of the Transfer of Property Act was considered by us in the case of Madhmudan Prasad Agarwal v. Srimati Shusama Dasi(6) disposed of on 28-3-1978. We held on a consideration of the aforesaid two cases of the Supreme Court and the case of Damadilal v. Parashram(7) that rent was payable by the tenant even after the termination of tenancy by a notice under section 106 of the Transfer of Property Act and a decree for eviction could be passed for non-payment of rent for a period subsequent to the termination of tenancy by a notice. In that view of the matter, this argument also has to be rejected.
12. The third point raised by Mr. Chatterji is that the suit was not maintainable as the respondents had earlier filed Title Suit No. 121 of 1964 for the same relief. According to him, the relief prayed for in both the two suits, namely, Title Suit No. 121 of 1964 and the suit out of which this appeal arises was that the appellant be evicted from the suit premises. His argument is that the proper course for the respondents was to file an application for amendment of the plaint of Title Suit No. 121 of 1964 and to have the ground of non-payment of rent also incorporated therein. This argument also has no substance. The respondents did file an application for amendment of plaint in Title Suit No. 121 of 1964 and wanted the fact of non-payment of rent subsequent to the filing of the suit to be added in that plaint. They also prayed that a decree for eviction from the suit premises be passed also on the ground that the appellant had defaulted in paying rent for more than two months. But the prayer was opposed and the learned Munsif before whom the case was pending held that the amendment prayed for was not possible. Against that order Civil Revision No. 754 of 1968 was filed by the respondents. The appellants opposed this civil revision also and contended that the amendment sought for will not only change the nature of the suit but will also introduce a ground for ejectment which will amount to supplying a new cause of action. Mahapatra, J. (as he then was) accepted the contention of the appellants and held that “the present attempt on the part of the plaintiff to introduce by way of amendment another ground for ejectment will be supplying a new cause of action.” The learned Judge, therefore, dismissed the civil revision application. The position, therefore, is unambiguously clear. The appellant having succeeded in opposing the prayer for amendment of the plaint are now stopped from challenging the maintainability of the present suit on that account and further as between the parties it was finally decided that default in payment of rent subsequent to the filing of Title Suit No. 121 of 1964 gave a fresh cause of action to the respondents. That being so, the present suit cannot be said to be not maintainable.
13. Lastly Mr. Chatterji urged that the suit was not maintainable by virtue of section 10 of the Code of Civil Procedure. The section reads thus:—
“No Court shall proceed with the trial of any suit in which the matter in issue is also directly and substantially in issue in a previously instituted suit between the same parties or between parties under whom they or any of them claim litigating under the same title where such suit is pending in the same or any other Court in (India) having jurisdiction to grant the relief claimed or in any Court beyond the limits of (India) established or continued by the (Central Government) and having like jurisdiction, or before (the Supreme Court).
14. A perusal of this section makes it clear that it does not deal with the maintainability of the suit. It only provides that the trial of a suit filed subsequently shall be stayed if in a previously instituted suit between the same parties the matter in issue is directly and substantially the same. Even if it be assumed that it affect the maintainability of the suit this section has no application to the facts of this case. The fact in issue in Title Suit No. 121 of 1964 was as to whether the respondents required the house in good faith for their own occupation while the fact in issue in the present suit is as to whether the appellant had defaulted in paying rent for more than two months. Therefore, although the relief claimed for in the two suits is the same the issue and cause of action in the two cases is not the same. That being the position, section 10 of the Code of Civil Procedure does not help Mr. Chatterji. The suit, therefore, cannot be said to be not maintainable under this section also.
15. In the result, I do not see any merit in this appeal which must be dismissed with costs. Hearing lee Rs. 110/-.
16. Lalit Mohan Sharma, J.:— I agree.