AMICUS AI
Citation Codes
Neutral Citations
1999 INSC 296
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Section 11 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960
  • Section 11 of the Act
  • Section 11(1) of the Act
  • Section 5, Subsection 2 of the 1983 Income Tax Act
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Cites
Cited by
Citation Codes
Neutral Citations
1999 INSC 296
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Section 11 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960
  • Section 11 of the Act
  • Section 11(1) of the Act
  • Section 5, Subsection 2 of the 1983 Income Tax Act
Smart Summary

Factual and Procedural Background

The appellants (tenants) entered into an agreement on 6-10-1982 with the erstwhile owner of the premises—Church of South India Trust Association—to purchase the disputed building and paid ₹3 lakhs as part consideration. Disputes over the balance consideration led the Church to repudiate the agreement on 12-4-1984. The tenants filed a suit for specific performance on 29-8-1986. While that suit was pending, the Church sold the property on 12-11-1986 to the first respondent, V.P. Venuguduswami, who thus became the landlord.

On 27-8-1987 the new landlord instituted eviction proceedings under the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 (“the Act”) alleging, inter alia, default in payment of rent from 12-11-1986 to 31-7-1987. The Rent Controller, by order dated 23-7-1990, directed the tenants to deposit the arrears by 3-8-1990 under Section 11(1) of the Act. Non-compliance led to an eviction order on 7-8-1990.

The tenants filed two appeals against the orders of 23-7-1990 and 7-8-1990, depositing the arrears on 22-8-1990 as a pre-condition for the appeals. On 27-10-1992 the Appellate Authority allowed both appeals, holding the tenants not liable to deposit rent. The landlord’s Civil Revision Petitions (Nos. 3195-3196/1993) were allowed by the Madras High Court, reinstating the eviction. The present Supreme Court judgment addresses the tenants’ further appeal.

Legal Issues Presented

  1. Whether the tenants had shown “sufficient cause” under Section 11(4) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 for their failure to deposit arrears and continuing rent within the time fixed by the Rent Controller.
  2. Consequently, whether the eviction order passed for non-compliance with Section 11 should be set aside or affirmed.

Arguments of the Parties

Appellants’ (Tenants’) Arguments

  • The payment of ₹3 lakhs towards part performance of the purchase agreement and the filing of a suit for specific performance constituted “sufficient cause” for not depositing rent within the prescribed time.
  • On that basis, the Supreme Court should condone the delay, allow deposit of the entire arrears now, and remand the matter to the Rent Controller for adjudication on merits.

The opinion does not detail the respondent’s counter-arguments.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Court analysed Section 11 of the Act, emphasising four statutory requirements: (i) deposit of all arrears, (ii) continued deposit of rent falling due during proceedings, (iii) compliance within the prescribed time and manner, and (iv) eviction upon default unless “sufficient cause” is shown. It construed “sufficient cause” to require sincerity, bona fides, reasonableness, and circumstances beyond the tenant’s control.

Applying these principles, the Court found:

  • The tenants failed to deposit arrears by 3-8-1990 and made no contemporaneous application to explain the default.
  • They denied the landlord-tenant relationship before the Controller, asserting ownership, which the Court viewed as inconsistent with a bona fide request for condonation.
  • The deposit made on 22-8-1990 was merely to satisfy the statutory pre-condition for appeals and did not evidence good faith compliance.
  • No monthly rent was deposited after the initial arrears, contrary to Section 11(1).
  • The plea of mistaken belief was raised only after their suit for specific performance had been finally dismissed, rendering it an after-thought lacking bona fides.

Accordingly, the tenants failed to establish “sufficient cause” under Section 11(4), and the High Court’s order restoring eviction was upheld.

Holding and Implications

Appeals Dismissed.

Direct Effect: The eviction order against the tenants stands, and no costs are awarded. Broader Implications: The judgment reiterates that tenants must strictly comply with Section 11 deposit requirements and that “sufficient cause” demands bona fide, timely explanations; however, no new legal precedent beyond the application of settled principles was created.

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    Sankaran Pillai (Dead) By Lrs. v. V.P Venuguduswami And Others

    V.N Khare, J.— The appellants herein are the tenants (hereinafter referred to as “the tenant”). It appears that on 6-10-1982 the tenant entered into an agreement with the erstwhile owner of the building, namely, the Church of South India Trust Association for purchase of the premises in dispute. It is stated that the appellants paid a sum of Rs 3 lakhs towards the part payment of consideration amount under the said agreement. It further appears that subsequently certain disputes arose with regard to the mode of payment of the balance amount as a result of which on 12-4-1984 the Church repudiated the agreement. On 29-8-1986 the tenant filed a suit for specific performance of the agreement referred to above. While the aforesaid suit was pending, the Church on 12-11-1986 executed a sale deed in respect of premises in dispute in favour of the first respondent, namely, V.P Venuguduswami. After purchasing the aforesaid premises the purchaser who became the landlord of the premises filed a suit on 27-8-1987 for ejectment of the appellant tenant on various grounds, including the default in payment of arrears of rent for a period beginning from 12-11-1986 to 31-7-1987. It is not disputed that the premises in dispute are governed by the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 (hereinafter referred to as “the Act”). Since one of the grounds for ejectment was default in payment of rent, the Rent Controller on 23-7-1990 passed an order under sub-section (1) of Section 11 of the Act directing the tenant to deposit the arrears of rent by 3-8-1990. The tenant did not comply with the order dated 23-7-1990. Since the order dated 23-7-1990 remained non-complied with, the Rent Controller by an order dated 7-8-1990 passed an order for eviction of the tenant. The tenant preferred two separate appeals, one of which was directed against the order dated 23-7-1990 and the other related to the order dated 7-8-1990. On 22-8-1990, the tenant deposited the arrears of rent before the appellate authority as the said deposit was a condition precedent for the appeal being heard on merits. The appellate authority by an order dated 27-10-1992 allowed both the appeals holding that the tenant was not liable to deposit the arrears of rent. The subsequent purchaser, namely, the respondent aggrieved by the aforesaid order preferred civil revision petitions before the High Court of Judicature at Madras which were numbered as Civil Revision Petitions Nos. 3195-3196 of 1993. The High Court allowed the revision petitions and that is how the tenant is in appeal before us.

    2. Learned counsel appearing for the appellant urged that the facts that the tenant after having entered into an agreement with the erstwhile owner of the building paid considerable amount of money towards part performance of the agreement and his further filing of suit in the civil court for specific performance of the agreement constituted sufficient cause under sub-section (4) of Section 11 of the Act for non-depositing the arrears of rent within time, as well as monthly rent which became due in respect of the building and, therefore, this Court may, after condoning the delay, permit the appellant to deposit the entire arrears of rent and remand the matter to the Rent Controller to enable the appellant to contest the application filed by the landlord for his eviction from the premises on the ground of default in payment of rent. In order to appreciate the argument of learned counsel, it is necessary to look into the relevant provisions of Section 11 of the Act. Sub-sections (1), (2) and (4) of the Act runs as under:

    “11. (1) No tenant against whom an application for eviction has been made by a landlord under Section 10 shall be entitled to contest the application before the Controller under that section, or to prefer any appeal under Section 23 against any order made by the Controller on the application, unless he has paid or pays to the landlord, or deposits with the Controller or the appellate authority, as the case may be, all arrears of rent due in respect of the building up to the date of payment or deposit, and continues to pay or to deposit any rent which may subsequently become due in respect of the building until the termination of the proceedings before the Controller or the appellate authority, as the case may be.

    (2) The deposit of rent under sub-section (1) shall be made within the time and in the manner prescribed.

    (4) If any tenant fails to pay or to deposit the rent as aforesaid, the Controller or the appellate authority, as the case may be, shall, unless the tenant shows sufficient cause to the contrary, stop all further proceedings and make an order directing the tenant to put the landlord in possession of the building.”

    3. A perusal of the aforesaid provisions shows that where an application for eviction has been filed against a tenant on the ground of default in payment of rent the tenant is required (i) to deposit all the arrears of rent due in respect of the building with the Controller or the appellate authority, as the case may be; (ii) the tenant is further required to pay or deposit the rent which may subsequently fall due in respect of the building until the termination of the proceedings; (iii) the said deposit of rent is required to be paid or deposited within the time provided and in the manner prescribed; and (iv) if the deposit of rent is not made, the Controller or the appellate authority, as the case may be, shall, unless the tenant shows sufficient cause to the contrary, stop all proceedings and pass an order of eviction against the tenant. It is true that the Controller or the appellate authority, as the case may be, if the tenant shows sufficient cause may permit the tenant to contest the application filed by the landlord for his eviction. The question that is required to be seen is, what does the expression “sufficient cause” mean in sub-section (4) of Section 11 of the Act. It is no doubt true that the expression “sufficient cause” has to be liberally construed to do substantial justice between the parties. But the expression “sufficient cause” necessarily implies an element of sincerity, bona fide, and reasonableness. It has to be shown by the tenant who has not deposited the rent within time, as directed by the Controller, that non-deposit of the rent was beyond his control and there was no element of negligence or inaction or lack of bona fides on his part in not depositing the rent within time. Viewed in this light, what we find in the present case is that the tenant was required to deposit the rent by 3-8-1990. But the arrears of rent were not deposited by that date. On 7-8-1990, when the order of eviction was passed, no application was moved by the tenant before the Rent Controller for revoking the order striking out defence as he could not deposit the arrears of rent on account of reasons beyond his control. On the contrary, the tenant denied the relationship of landlord and tenant before the Rent Controller. The tenant's subsequent deposit of the arrears of rent before the appellate authority being requirement of law for hearing the appeal on merits, cannot be treated as bona fide deposit. Further, the tenant did not deposit the month to month rent as required under Section 11(1) of the Act and reiterated his stand that he is a landlord and not a tenant of the premises in dispute. Even before the High Court it was not the case of the tenant that under some bona fide mistake he could not deposit the arrears and month to month rent and, therefore, delay may be condoned. It appears that, after the Supreme Court affirmed the dismissal of the suit filed by the tenant for specific performance of the agreement, the tenant has now come forward with a plea that since he under mistaken belief did not deposit arrears and month to month rent and, therefore, default may be condoned. As noticed earlier, this plea of non-depositing of arrears of rent on account of sufficient cause was not a case set up by the tenant before the Rent Controller, the appellate authority and the High Court. The tenant's consistent stand was that he was not required under law to deposit any arrears of rent and month to month rent as he himself was the landlord of the premises. This plea of the tenant now advanced is an afterthought and is not bona fide and, therefore, we do not find it to constitute “sufficient cause” as to condone the non-deposit of arrears and also month to month rent which was required to be deposited by the tenant. We, therefore, do not find any merit in the submission of the learned counsel for the appellants.

    4. In view of the above, the appeals fail and are dismissed. However, in the circumstances, there shall be no order as to costs.

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    Comments

    Sankaran Pillai (Dead) By Lrs. v. V.P Venuguduswami And Others
    (Jul 29, 1999)