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AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Section 8(5) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960
  • Section 8(2) of the Act
  • Section 8 of the A.P Buildings (Lease, Rent and Eviction) Control Act, 1960
  • Section 8 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960
  • Section 8 of the Act, Rajasthan Premises (Control of Rent and Eviction) Act, 1950
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • Section 19-A(3)(c), Section 19-A(4) of the Act
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Section 8(5) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960
  • Section 8(2) of the Act
  • Section 8 of the A.P Buildings (Lease, Rent and Eviction) Control Act, 1960
  • Section 8 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960
  • Section 8 of the Act, Rajasthan Premises (Control of Rent and Eviction) Act, 1950
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • Section 19-A(3)(c), Section 19-A(4) of the Act
Smart Summary

Factual and Procedural Background

The appellant had been a tenant of the suit premises even before the respondent landlords purchased the property. By mutual consent, rent was increased to ₹500 per month in May 1990 and was paid up to October 1990. Alleging default thereafter, the landlords served a default notice on 1-11-1993, which the tenant denied on 20-11-1993. On 7-2-1994, the landlords filed an eviction petition before the Rent Controller based on (i) default in payment of rent and (ii) their personal requirement of the premises.

On 15-3-1994 the tenant sought permission under Section 8(5) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 to deposit rent in court. On 25-4-1995 the Rent Controller allowed that application and dismissed the eviction petition, holding that any default was not wilful; no finding was given on personal need.

The landlords appealed. The Rent Control Appellate Authority reversed the decision, finding that the tenant had defaulted and had not complied with Section 8(2) of the Act. Eviction was ordered; no finding was recorded on personal need. Civil revision petitions by the tenant to the High Court were dismissed on 24-12-1999. The tenant then filed the present appeals before the Supreme Court.

Legal Issues Presented

  1. Whether strict compliance with every procedural step prescribed in Section 8 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 is mandatory for a tenant before seeking the statutory benefit of depositing rent in court.

Arguments of the Parties

Appellant’s Arguments

  • The tenant had deposited all arrears of rent in court; this constituted substantial compliance with Section 8, eliminating any default.
  • The landlords refused to accept rent sent by money order, compelling the tenant to approach the court; equity therefore favoured the tenant.
  • The High Court adopted an unduly technical approach that should be relaxed in favour of the tenant, given the remedial nature of rent control legislation.

Respondent Landlords’ Arguments

The opinion does not contain a detailed account of the landlords’ legal arguments.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Kuldeep Singh v. Ganpat Lal, (1996) 1 SCC 243 A tenant can benefit from statutory protection only after strict compliance with every prerequisite step; legal fictions cannot be extended beyond their purpose. Used to hold that deposit of rent in court without fulfilling prior procedural steps under Section 8 cannot erase default.
M. Bhaskar v. J. Venkatarama Naidu, (1996) 6 SCC 228 When landlord evades acceptance of rent, the tenant must serve notice, await bank nomination, send money order, and only then seek to deposit in court. Cited to reaffirm that bypassing the sequential procedure disentitles the tenant from claiming absence of wilful default.
Bengal Immunity Co. Ltd. v. State of Bihar, AIR 1955 SC 661; (1955) 2 SCR 603 Legal fictions must be confined to the purpose for which they are created. Invoked to emphasise that statutory deeming provisions cannot be stretched to excuse non-compliance with explicit procedural requirements.

Court’s Reasoning and Analysis

The Supreme Court held that Section 8 lays down a step-by-step procedure: (1) tenant issues notice to landlord to specify a bank; (2) if specified, tenant deposits rent there; (3) if not specified, tenant remits rent by money order; (4) only on landlord’s refusal of the money order may the tenant apply to the Controller to deposit rent. Each step is a statutory precondition for the next.

The tenant admittedly did not issue the notice required by Section 8(2), nor did he remit rent by money order under Section 8(4). Instead, he invoked Section 8(5) directly. Citing Kuldeep Singh and M. Bhaskar, the Court reiterated that statutory benefits are available only upon strict, not substantial, compliance. Rent control legislation, though beneficial to tenants, must be applied according to its precise terms; equitable or lenient considerations cannot override explicit statutory mandates.

Consequently, the Court affirmed the findings of default by the Appellate Authority and the High Court and rejected the plea for a “technical” relaxation.

Holding and Implications

APPEALS DISMISSED.

The Supreme Court upheld the eviction decree on the ground of default in payment of rent, concluding that the tenant’s failure to follow the sequential procedure under Section 8 barred him from statutory protection. The decision directly affirms the landlords’ right to evict; it does not create new precedent but reinforces existing jurisprudence requiring strict compliance with rent-deposit procedures before tenants can claim immunity from eviction.

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    E. Palanisamy v. Palanisamy (Dead) By Lrs. And Others

    Arun Kumar, J.— These appeals are directed against a common judgment dated 24-12-1999 of the High Court disposing of two revision petitions. Briefly the facts giving rise to the present appeals are that the appellant was a tenant in the suit premises since before its purchase by the respondent landlords. In May 1990, by mutual consent of the parties rent of the suit premises was enhanced to Rs 500 per month. Admittedly, rent up to October 1990 was received by the landlords, thereafter as per the case of the respondents, the tenant defaulted in payment of rent. The appellant filed suit for injunction in the civil court praying that the landlords be restrained from threatening to dispossess the appellant from suit premises. In the said suit, an interim injunction was granted in favour of the appellant. On 1-11-1993, the landlords issued a default notice alleging that the tenant had committed default in payment of rent and was, therefore, liable to eviction. The tenant replied to the said notice on 20-11-1993 denying any default on his part in payment of rent. Ultimately, on 7-2-1994, an eviction petition was filed before the Rent Controller by the landlords on two grounds viz. (i) default in payment of rent, and (ii) personal need of the landlords for occupying the premises.

    2. On 15-3-1994, the tenant made an application under Section 8(5) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 (hereinafter referred to as “the Act”), for permission to deposit the amount of rent in court. The Rent Controller allowed the said application vide order dated 25-4-1995. The eviction petition filed by the landlords was dismissed on the same date. The Rent Controller held that it could not be said that the tenant had committed default in payment of rent. The Rent Controller further observed that even assuming there was default on the part of the tenant, it could not be said to be wilful default, therefore, the eviction petition was dismissed. No finding was given on the second ground for eviction regarding personal need of the landlords for occupying the premises. The landlords filed appeals before the Rent Control Appellate Authority against both the orders of the Rent Controller. Both the appeals were allowed by the Appellate Authority. The Appellate Authority held that the tenant had committed default in payment of rent. It relied on admission on the part of the tenant himself as available in the evidence of the tenant that at least from May 1993, no rent had been paid. The tenant is said to have deposited the rent in court during the pendency of the proceedings. However, the question for consideration before the Appellate Authority was whether the tenant had committed default in payment of rent. The Appellate Authority held that the tenant had committed default, and therefore, the eviction petition was allowed. It was observed by the Appellate Authority that even after the petition had been filed by the landlords, the tenant did not think of offering the rent to the landlords. Further, the tenant did not issue notice as required under Section 8(2) of the Act calling upon the landlords to notify the bank where the tenant could make the deposit of rent. On the basis of the evidence on record, the Appellate Authority held that the tenant had committed default in payment of rent, and therefore, the eviction petition was allowed. No finding was, however, recorded on the second ground of eviction. Based on the failure of the tenant to follow procedure and deposit rent of suit property under Section 8(2) of the Act it was held that the tenant having failed to comply with the procedure prescribed in that behalf under the Act the decree for eviction had to follow. The tenant filed civil revision petitions against both the orders of the Rent Control Appellate Authority in the High Court. Both the revision petitions were dismissed by the High Court vide the impugned judgment dated 24-12-1999. Hence the presents appeals by the tenant.

    3. The sole question for consideration in these appeals is whether the provisions of Section 8 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 are to be strictly complied with by the tenant before he can seek benefit under the said provisions regarding deposit of rent in the court. In this connection, relevant provisions of Section 8 of the Act need to be quoted:

    “8. Landlord liable to give receipt for rent or advance.—(1) * * *
    (2) Where a landlord refuses to accept, or evades the receipt of, any rent lawfully payable to him by a tenant in respect of any building, the tenant may, by notice in writing require the landlord to specify within ten days from the date of receipt of the notice by him, a bank into which the rent may be deposited by the tenant to the credit of the landlord:
    Provided that such bank shall be one situated in the city, town or village in which the building is situated or if there is no such bank in such city, town or village, within five kilometres of the limits thereof.
    Explanation.—It shall be open to the landlord to specify from time to time by a written notice to the tenant and subject to the proviso aforesaid, a bank different from the one already specified by him under this sub-section.
    (3) If the landlord specifies a bank as aforesaid, the tenant shall deposit the rent in the bank and shall continue to deposit in it any rent which may subsequently become due in respect of the building.
    (4) If the landlord does not specify a bank as aforesaid, the tenant shall remit the rent to the landlord by money order, after deducting the money order commission.
    (5) If the landlord refuses to receive the rent remitted by money order under sub-section (4), the tenant may deposit the rent before the Controller and continue to deposit with him any rent which may subsequently become due in respect of the building.”

    4. It would be seen from the above provisions that while the landlord is required to issue a notice of default, on refusal by the landlord to accept rent, the tenant is required to call upon the landlord by way of a notice to specify the name of a bank in which rent could be deposited by the tenant to the credit of the landlord. If the landlord specifies the name of the bank to deposit the rent, there is an obligation on the part of the tenant to make the deposit of arrears of rent in the account of the landlord. However, if the landlord does not specify the name of a bank in spite of being called upon by the tenant through a notice, the tenant is required to send the amount of arrears through a money order to the landlord after deducting the commission payable on the money order. If the landlord still refuses to accept the rent, the tenant is entitled to file an application before the Rent Controller seeking permission to deposit the arrears of rent under sub-section (5) of Section 8 of the Act.

    5. Mr Sampath, the learned counsel for the appellant argued that since the appellant tenant had deposited the arrears of rent in court, it should be taken as compliance with Section 8 of the Act. This would mean there is no default on the part of tenant in payment of rent and therefore, no eviction order could have been passed against the appellant on that ground. According to the learned counsel, the court should not take a technical view of the matter and should appreciate that it was on account of refusal of the landlords to accept the rent sent by way of money orders that the tenant was driven to move the court for permission to deposit the arrears of rent. Since there is a substantial compliance with Section 8 inasmuch as the arrears of rent stand deposited in court, a strict or technical view ought not to have been taken by the High Court. We are unable to accept this contention advanced on behalf of the appellant by the learned counsel. The rent legislation is normally intended for the benefit of the tenants. At the same time, it is well settled that the benefits conferred on the tenants through the relevant statutes can be enjoyed only on the basis of strict compliance with the statutory provisions. Equitable consideration has no place in such matters. The statute contains express provisions. It prescribes various steps which a tenant is required to take. In Section 8 of the Act, the procedure to be followed by the tenant is given step by step. An earlier step is a precondition for the next step. The tenant has to observe the procedure as prescribed in the statute. A strict compliance with the procedure is necessary. The tenant cannot straight away jump to the last step i.e to deposit rent in court. The last step can come only after the earlier steps have been taken by the tenant. We are fortified in this view by the decisions of this Court in Kuldeep Singh v. Ganpat Lal (1996) 1 SCC 243 and M. Bhaskar v. J. Venkatarama Naidu (1996) 6 SCC 228.

    6. The counsel for the appellant did not dispute that the tenant had not fulfilled the conditions prescribed in Section 8 of the Act before making deposit of rent in court. Hence similar circumstances and while dealing with almost similar provisions contained in the Rajasthan Premises (Control of Rent and Eviction) Act, 1950, this Court in Kuldeep Singh v. Ganpat Lal (1996) 1 SCC 243 held:

    “8. In the present case, the appellant is seeking to avail of the benefit of the legal fiction under Section 19-A(4) of the Act. It is settled law that a legal fiction is to be limited to the purpose for which it is created and should not be extended beyond that legitimate field. [See Bengal Immunity Co. Ltd. v. State of Bihar AIR 1955 SC 661, (1955) 2 SCR 603 (SCR at p. 646).] The appellant can avail of the benefit of Section 19-A(4) if the deposit of Rs 3600 made by him in the Court of Munsif (South), Udaipur, on 29-10-1982, by way of rent for the months of May 1982 to October 1982, can be treated as a payment under Section 19-A(3)(c) so as to enable the appellant to say that he was not in default in payment of rent. Under Section 19-A(3)(c) the tenant can deposit the rent in the court only if the conditions laid down in the said provision are satisfied. It is the admitted case of the appellant that these conditions are not satisfied in the present case. The deposit which was made by the respondent in court on 29-10-1982 cannot, therefore, be regarded as a deposit made in accordance with clause (c) of sub-section (3) of Section 19-A and the appellant cannot avail of the protection of sub-section (4) of Section 19-A and he must be held to have committed default in payment of rent for the months of May 1982 to October 1982. This means that the decree for eviction has been rightly passed against the appellant on account of default in payment of rent for the period of six months.”

    7. Again in M. Bhaskar v. Venkatarama Naidu (1996) 6 SCC 228 with reference to similar provisions contained in the A.P Buildings (Lease, Rent and Eviction) Control Act, 1960, this Court observed that when the landlord is evading payment of rent, the tenant has to follow the procedure prescribed under Section 8 of the Act i.e to issue notice to the landlord to name the bank and if he does not name the bank, the tenant has to file application before the Rent Controller for permission to deposit rent. The tenant did not follow that procedure. Omission to avail of the prescribed procedure disentitles the tenant to plead that there was no wilful default on his part. The landlord was, therefore, entitled to seek eviction on the ground of wilful default in payment of rent on the part of the tenant.

    8. Admittedly the tenant did not follow the procedure prescribed under Section 8. The only submission that was advanced on behalf of the appellant was that since the deposit of rent had been made, a lenient view ought to be taken. We are unable to agree with this. The appellant failed to satisfy the conditions contained in Section 8. Mere refusal of the landlord to receive rent cannot justify the action of the tenant in straight away invoking Section 8(5) of the Act without following the procedure contained in the earlier sub-sections i.e sub-sections (2), (3) and (4) of Section 8. Therefore, we are of the considered view that the eviction order passed against the appellant with respect to the suit premises on the ground of default in payment of arrears of rent needs no interference. The impugned judgment of the High Court, therefore, does not call for interference. These appeals are dismissed. We are informed that the landlords have already taken possession of the suit premises, in pursuance of the High Court judgment.

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    E. Palanisamy v. Palanisamy (Dead) By Lrs. And Others
    (Oct 31, 2002)