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Neutral Citations
2002 INSC 167
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Tamil Nadu Buildings (Lease and Rent Control) Act, 1960
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Cites
Cited by
Citation Codes
Neutral Citations
2002 INSC 167
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Tamil Nadu Buildings (Lease and Rent Control) Act, 1960
Smart Summary

Factual and Procedural Background

The landlord sought eviction of the tenant under Section 10(2)(i) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 (“the Act”) on the ground of alleged wilful default in payment of rent. Rent for the period June 1983 – November 1984 had not been directly paid to the landlord. On 7 December 1984 the landlord served a statutory notice demanding the arrears in accordance with the Explanation to Section 10(2). The tenant replied, pointing out that the rent had already been deposited in various concluded court proceedings between the parties.

Without waiting for the statutorily prescribed two-month period to expire, the landlord filed an eviction petition before the Rent Controller on 2 January 1985. On 18 January 1985, during the pendency of the eviction petition, the landlord withdrew the amounts the tenant had earlier deposited. The Rent Controller allowed the petition, and the High Court affirmed that decision. The tenant then approached the Supreme Court by way of a special-leave appeal.

Legal Issues Presented

  1. Whether, in the circumstances described, the tenant could be regarded as having committed “wilful default” in payment of rent under Section 10(2)(i) of the Act.

Arguments of the Parties

Landlord's Arguments

  • The tenant was obliged to pay or tender rent to the landlord each month within fifteen days of the close of the tenancy month; depositing rent in other concluded proceedings did not satisfy this obligation.
  • Such deposits were made at the tenant’s own peril and could not be relied upon to purge the default.

Tenant's Arguments

  • Once the landlord invoked the Explanation to Section 10(2) by issuing a notice, he was required to wait the full two-month period before initiating eviction proceedings.
  • During that two-month window, other means of assessing wilful default were excluded; hence, filing the petition earlier rendered the allegation of wilful default unsustainable.
  • The tenant had, in any event, already deposited the arrears, which the landlord later withdrew.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
S. Sundaram Pillai v. V.R. Pattabiraman, (1985) 1 SCC 591 Interpretation of Section 10(2)(i) of the Act: when a landlord gives two-month notice under the Explanation, failure to pay within that period is a prerequisite to establish wilful default; the Rent Controller lacks discretion to treat default as wilful before expiry of the notice period. The Court relied on this authority to hold that filing the eviction petition before the two-month notice period expired precluded a finding of wilful default; accepting the landlord’s contrary submission would render the Explanation “otiose and nugatory.”

Court's Reasoning and Analysis

The Supreme Court examined Section 10(2)(i), its proviso, and the Explanation, reiterating the construction adopted in S. Sundaram Pillai. It stressed that:

  • If a landlord elects to issue a two-month demand notice, he must await its expiry before initiating eviction proceedings; only then can a tenant’s failure constitute wilful default absent sufficient cause.
  • The landlord in the present case filed the eviction petition merely twenty-six days after serving notice, violating the statutory scheme.
  • Prior to filing, the tenant had informed the landlord that the arrears stood deposited in concluded court cases, and the landlord subsequently withdrew those amounts before the notice period elapsed.
  • Given these facts, and in light of the binding interpretation in Sundaram Pillai, the tenant could not be branded a wilful defaulter.

Holding and Implications

Appeal Allowed; eviction petition dismissed; High Court judgment set aside.

Immediate Effect: The tenant is protected from eviction on the ground of wilful default, and no costs are awarded. Broader Implication: The decision re-affirms that once a landlord issues a two-month arrears notice under Section 10(2) of the Act, any eviction action taken before the notice period lapses is premature and cannot sustain a finding of wilful default, thus reinforcing the precedent set in S. Sundaram Pillai.

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    Raja Muthukone (Dead) By Lrs. v. T. Gopalasami And Another

    Order

    1. A suit for eviction of the tenant on the ground available under clause (i) of sub-section (2) of Section 10 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 (hereinafter referred to as “the Act” for short) has been ordered to be decreed by the High Court. Feeling aggrieved thereby the tenant has filed this appeal by special leave.

    2. For our purpose it would suffice to set out only a few relevant facts which, at this stage, are not in controversy. The rent for the months of June 1983 to November 1984 was not paid by the tenant to the landlord. On 7-12-1984 the landlord served a notice on the tenant claiming the rent in arrears as contemplated by the Explanation to sub-section (2) of Section 10. The notice was served. The tenant replied to it. It appears that there were multiple legal proceedings initiated before different fora, between the landlord and the tenant, which had all stood concluded. In two or three of such proceedings, the tenant had deposited the amount of rent. The dates of deposit are not known but the fact remains that the rent which was claimed as in arrears, was actually deposited. The factum of rent having been deposited in such proceedings was stated by the tenant in his reply to the notice. However, without waiting for the period of two months, the landlord filed a petition for eviction of the tenant on 2-1-1985 before the Rent Controller. Subsequent to the filing of these proceedings for eviction, on 18-1-1985 the landlord moved a petition, called the cheque memo, withdrawing the rent deposited by the tenant in different proceedings and the amount was also withdrawn.

    3. The short question which arises for consideration is whether in such facts and circumstances the tenant can be said to have committed a wilful default in paying or tendering the rent to the landlord.

    4. According to the learned counsel for the landlord, the tenant was bound to pay or tender rent to the landlord, month by month, within fifteen days of the expiry of each tenancy month and if the tenant had deposited the rent in certain proceedings, which had already stood concluded, then he did so at his own peril and he cannot take advantage of such deposits for purging the default. The submission of the learned counsel for the tenant is that if the landlord chooses to serve a notice claiming the rent in terms of the Explanation abovesaid, then he must wait for a period of two months for payment or tender of rent by the tenant and it is only in the event of the latter's failure to pay the rent in the notice period that he may be considered to be a defaulter. In the event of giving a notice, other modes of adjudging the tenant a wilful defaulter, except by reference to the Explanation abovesaid, are excluded.

    5. The submission of the learned counsel for the tenant finds support from the three-Judge Bench decision in S. Sundaram Pillai v. V.R Pattabiraman (1985) 1 SCC 591. Having taken into consideration the provisions of Section 10(2)(i), and the proviso and the Explanation to sub-section (2), Fazal Ali, J., speaking for the majority, stated his conclusions as under:

    “(1) Where no notice is given by the landlord in terms of the Explanation, the Controller, having regard to the four conditions spelt out by us has the undoubted discretion to examine the question as to whether or not the default committed by the tenant is wilful. If he feels that any of the conditions mentioned by us is lacking or that the default was due to some unforeseen circumstances, he may give the tenant a chance of locus poenitentiae by giving a reasonable time, which the statute puts at 15 days, and if within that time the tenant pays the rent, the application for ejectment would have to be rejected.
    (2) If the landlord chooses to give two months' notice to the tenant to clear up the dues and the tenant does not pay the dues within the stipulated time of the notice then the Controller would have no discretion to decide the question of wilful default because such a conduct of the tenant would itself be presumed to be wilful default unless he shows that he was prevented by sufficient cause or circumstances beyond his control in honouring the notice sent by the landlord.”

    Vide para 63, His Lordship observed:

    “Indeed, if the landlord chooses to give two months' notice to his tenant and he does not pay the rent, then, in the absence of substantial and compelling reasons, the Controller or the court can certainly presume that the default is wilful and order his eviction straightaway. We are unable to accept the view that whether two months' notice for payment of rent is given or not, it will always be open to the Controller under the proviso to determine the question of wilful default because that would render the very object of Explanation otiose and nugatory.”

    6. The submission made on behalf of the landlord that even if two months' notice for payment of rent is given still it will be open to the Controller under the proviso to determine the question of default, was discarded by Fazal Ali, J. by placing on record his opinion that such a view, if accepted, would render the very object of the Explanation otiose and nugatory. The same submission which was expressly discarded in the case of S. Sundaram Pillai (1985) 1 SCC 591 has been advanced before us and obviously we cannot entertain the same. In the case at hand, once the landlord gave a notice to the tenant claiming the rent in arrears, he should have waited for a period of two months from the date of service of notice and it is only on non-payment or non-tender of rent within the period of two months that the landlord could have initiated the proceedings for eviction on the ground of wilful default and then it would have been for the tenant to satisfy the Rent Controller that in spite of non-payment of rent for a period of two months from the date of service of notice, he was not a defaulter for reasons. In the present case, there is the additional fact that before the initiation of the proceedings for eviction, the factum of the tenant having deposited the rent in the court, though in the proceedings which had stood terminated, was brought to the notice of the landlord and the landlord having initiated the proceedings for eviction withdrew the amount of rent and on the date when he sought for withdrawal, a period of two months from the date of notice had not expired. In such circumstances, in view of the law laid down in the case of S. Sundaram Pillai (1985) 1 SCC 591 the tenant cannot be held to be a wilful defaulter.

    7. For the foregoing reasons, the appeal is allowed. The impugned judgment of the High Court is set aside and the petition for eviction filed by the landlord is directed to be dismissed. No order as to costs.

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    Comments

    Raja Muthukone (Dead) By Lrs. v. T. Gopalasami And Another
    (Mar 21, 2002)