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Case Number

W.P No. 7460 of 2003

Attorney(S)

J.J Thakkar
A.K Abhyankar, Senior Advocate with R.S Patil

Judges

Dr. D.Y Chandrachud, J.

Acts

SECTION 3 BOMBAY RENTS HOTEL AND LODGING HOUSE RATES CONTROL ACT 1947
provisions of the Maharashtra Education (Cess) Act, 1962
Court.6. Clause (a) of sub-section (3) of section 12
section 12(3)(b) of the Bombay Rent Act.13.
Clause (b) of sub-section (3) of section 12,
section 12(3)(a) of the Bombay Rent Act
SECTION 27 GENERAL CLAUSES ACT
sub-section (3) of section 11
provisions of section 12(3)
provisions of section 13(1)
section 12(3)(b).

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Smart Summary

Structured Summary of the Provided Legal Opinion

Factual and Procedural Background

The landlord instituted a suit for possession of two tenanted rooms in Vanraj Bhuvan, Matunga, Mumbai, alleging default in payment of rent. A notice of demand dated 27 June 1972 claimed arrears calculated at Rs. 35.70 per month for February 1970 to September 1971 and Rs. 36.12 from October 1971. The landlord stated the notice was sent by registered post (acknowledgment due), was returned with the endorsement "refused", was also sent under Certificate of Posting, and a copy was pasted on the premises. In their Written Statement the tenants denied receipt of the notice and asserted readiness and willingness to pay rent.

At trial, evidence was led by both sides. The trial Court (Judge of the Court of Small Causes) dismissed the landlord's suit on 30 November 1991, holding that service of the notice had not been proved and, following the Supreme Court in Raju Kakara Shetty v. Ramesh Prataprao Shirole, concluded that education cess formed part of rent and was not payable monthly; hence section 12(3)(a) of the Bombay Rents Act did not apply and the matter was governed by section 12(3)(b). The trial Court found that the tenant had deposited arrears on or before the first hearing and thereafter paid regularly, entitling the tenant to the protection of section 12(3)(b).

The Appellate Bench of the Court of Small Causes reversed the trial Court. It held that the registered post gave rise to a statutory presumption of delivery (section 27, General Clauses Act), that the tenant had not rebutted that presumption (neither producing the sister who was present at the premises nor the postman), and that rent was payable at six-month intervals after payment of municipal taxes. The Appellate Bench concluded the tenant failed to comply with the notice or to apply for fixation of standard rent and thus a decree for eviction should be passed.

The present opinion reviews the Appellate Bench's judgment: it upholds the Appellate Bench's finding on service but holds that the Appellate Bench erred in treating the case as one governed by section 12(3)(a) rather than section 12(3)(b). The matter is remitted to the Appellate Bench for determination of whether the tenant complied with section 12(3)(b). The impugned judgment and order are quashed and set aside; there is no order as to costs.

Legal Issues Presented

Whether the notice of demand sent by registered post was properly served on the tenant (i.e., whether the statutory presumption of delivery arose and whether it was rebutted).
Whether the rent in the present case was "payable by the month" within the meaning of section 12(3)(a) of the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947, given that education cess (a permitted increase) was claimed.
Whether, if the case falls outside section 12(3)(a) and is governed by section 12(3)(b), the tenant had complied with the requirements of section 12(3)(b) (i.e., payment or tender of standard rent and permitted increases on or before the first day of hearing and continued payment thereafter), thereby precluding a decree for eviction.

Arguments of the Parties

Landlord's (Plaintiff) Contentions

The landlord asserted that the notice of demand was properly dispatched by registered post (acknowledgment due), was also sent under Certificate of Posting, and a copy was pasted on the premises; the postal packet was returned marked “refused”.
The landlord claimed arrears of rent and relied on the non-compliance with the notice to obtain eviction.
Before the Appellate Bench the landlord's position (as reflected in the Appellate Bench finding) included that rent was to be paid at six-month intervals after payment of municipal taxes and that upon receipt of the notice the tenant should have complied or applied for fixation of standard rent; that not having been done, eviction should follow.

Tenant's (Defendant) Contentions

In the Written Statement the tenants denied receipt of the notice of demand and stated they were ready and willing to pay the rent.
At trial the Third defendant gave evidence denying that the notice had been tendered by the postman; evidence was led that persons (mother and sister) were present at the premises during office hours when the Third defendant was away.
The tenant relied (successfully at trial) on the point that education cess formed part of rent and was not payable monthly, so that section 12(3)(a) did not apply; the tenant had deposited arrears before first hearing and continued to pay thereafter, invoking protection under section 12(3)(b).

Petitioners' Submission before the Reviewing Court

The petitioners submitted that the Appellate Bench proceeded wrongly in treating the case as governed by section 12(3)(a) and that its approach on default was flawed.
They argued that the Appellate Bench incorrectly held that no separate agreement was necessary to quantify education cess monthly once it was established the tenant paid every six months; in their submission, in the absence of an agreement to quantify the cess monthly (which must be pleaded and proved), the rent could not be regarded as payable monthly.
It was contended that the landlord had not pleaded or proved any agreement to quantify the education cess on a monthly basis and therefore could not invoke section 12(3)(a).

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court in the Present Opinion
Raju Kakara Shetty v. Ramesh Prataprao Shirole, 1991 Bom. C.R 255; (1991) 1 SCC 570	Education cess is part of "rent" and constitutes a "permitted increase"; since cess is payable year-to-year, rent ceases to be "payable by the month" under section 12(3)(a) unless parties have by agreement quantified the cess for monthly payment.	The Court relied on Shetty to support the trial Judge's finding that education cess was part of rent and not payable monthly; therefore section 12(3)(a) did not apply absent an agreement to quantify cess on a monthly basis.
Chase Bright Steel Limited v. Shantaram Shankar Sawant, 1995 (1) Bom. C.R 561	Affirmation of the principle in Shetty that education cess is a permitted increase and affects whether rent is "payable by the month".	Cited as taking the same view as Shetty; supports the proposition that, absent monthly quantification by agreement, rent is not payable monthly.
Awabai Muncharji Cama v. M.N Kaka, 1986 Mah. RCJ 502	If any part of the rent is not payable monthly (however small), the entire rent cannot be said to be payable by the month; therefore education cess being not payable monthly means section 12(3)(a) would not be attracted.	Used to reinforce the trial Court's conclusion that the inclusion of education cess (not payable monthly) made the whole rent not payable by month.
Vaman v. Rajaram (Special Civil Application 2418 of 1971; unreported; decided 26 Feb 1976)	Where landlord claims reimbursement of education cess (permitted increases), the landlord must plead and prove payment of such cess to municipal authorities; no cause of action until the lessor has paid the cess.	Cited to underscore the obligation on a landlord to plead/prove payment of cess before claiming reimbursement from tenant; supports need for proof of an agreement to quantify cess monthly where relied upon.
Prakash Surya v. Rasiklal, (1978) 1 RCR 502	Consistent view (with other cases) that education cess forms part of rent and affects the monthly-payable question.	Referenced as part of the body of authorities taking a similar stance on cess as a component of rent.
Vanlila Vadilal Shah v. Mahendrakumar, AIR 1975 Guj. 163	Another authority consistent with the position that education cess forms part of rent.	Referenced as support for the view that cess is part of rent.
Charan Singh v. Shiv Rani, AIR 1981 SC 1284	Recognition of the presumption that a document sent by registered post, properly addressed and posted, is deemed to have been delivered (subject to rebuttal).	The Court relied on this authority to support the presumption of due service from registered post, and to uphold the Appellate Bench's treatment of service evidence.
Anil Kumar v. Nanak Chandra, AIR 1990 SC 1215	No inflexible rule as to whether bare testimony of a tenant suffices to rebut presumption of service; depends on facts and reliability of testimony.	Applied to explain that a tenant's denial can rebut service in appropriate circumstances, but where testimony is inherently unreliable or uncontested material witnesses are absent, the presumption may stand.
Green View Radio Service v. Laxmibai Ramji, 1991 Mh. L.J (S.C) 579 : 1991 (1) BCR 505	The presumption of service of a registered post can be rebutted by the addressee's testimony, but the adequacy of that rebuttal depends on veracity and surrounding circumstances; if believed, the burden shifts back to the sender.	Used to examine whether the tenant's bare denial sufficed to rebut presumption; the Court found in the present facts the denial was insufficient since corroborative witnesses were not produced.
Basant Singh v. Roman Catholic Mission, (2002) 7 SCC 531	Once it is proved that a registered letter was sent to a correct address, the addressee's conduct and the evidence adduced are important; a bald denial without corroborative evidence or examination of the postman may be insufficient to rebut the presumption.	The Court applied Basant Singh to the present facts to hold that the tenant failed to discharge the onus of rebutting the presumption because material witnesses (the sister, the postman) were not examined and the denial was uncorroborated.

Court's Reasoning and Analysis

The Court proceeded in two principal strands: (A) service of the notice; and (B) applicability of section 12(3)(a) versus section 12(3)(b) given the claim for education cess and related factual findings.

(A) Service of the Notice

The Court noted the statutory presumption under section 27 of the General Clauses Act that a postal packet sent by registered post is deemed delivered. This presumption places the initial onus on the sender but allows the addressee to rebut it.
The Court surveyed Supreme Court authorities (Charan Singh; Anil Kumar; Basant Singh) and relevant state-court treatment (Green View) to extract the governing principle: a bare denial by the addressee may rebut the presumption in appropriate circumstances, but where that denial is uncorroborated, inherently unreliable, or material witnesses are not produced (e.g., the postman), the presumption will generally stand.
Applying these principles to the present facts, the Court observed that although the Third defendant denied receipt, other potential eyewitnesses (the sister who was present at the premises when the Third defendant was away, and the postman) were not called. The postal endorsements showing transmission were before the Appellate Bench. On this basis the Court found the Appellate Bench's conclusion on service—i.e., that the presumption of due service was not rebutted—did not warrant interference.

(B) Applicability of section 12(3)(a) v. section 12(3)(b)

The Court recapitulated the statutory scheme in section 12(3): clause (a) applies where rent is payable by the month and there is no dispute as to standard rent or permitted increases; clause (b) applies to all other cases and provides a statutory window for a tenant to avert eviction by paying or tendering the due amount on or before the first day of hearing and continuing regular payment thereafter.
The Court relied on Shetty and related authorities to emphasise that education cess is a permitted increase and, being payable year-to-year, generally takes the case outside section 12(3)(a) unless the parties have by agreement quantified the cess on a monthly basis.
The trial Judge had found (and the Appellate Bench did not disturb) that permitted increases included the education cess, that the cess formed part of rent, and that there was no agreement to make the cess payable monthly. Given these findings and the law in Shetty, the Court held the Appellate Bench erred in treating the case as governed by section 12(3)(a). The Court emphasized that the existence of an agreement to quantify the cess monthly must be pleaded and proved; no such proof was adduced here.
Because the Appellate Bench had not considered whether the tenant had complied with section 12(3)(b) (the trial Court had found compliance), and because the question of compliance with section 12(3)(b) involves factual determinations within the Appellate Bench's appellate jurisdiction, the Court concluded the proper course was to remit the matter to the Appellate Bench to determine whether the tenant was entitled to the benefit of section 12(3)(b).

Synthesizing the two strands, the Court reached a mixed conclusion: it would not interfere with the Appellate Bench's finding on service, but it would set aside and remit the Appellate Bench's order insofar as the Appellate Bench treated the case as covered by section 12(3)(a) and failed to examine compliance with section 12(3)(b).

Holding and Implications

Holding:

The Court quashed and set aside the impugned judgment and order of the Appellate Bench of the Court of Small Causes and remitted the matter back to the Appellate Bench for a determination whether the tenant was entitled to the benefit of section 12(3)(b) of the Act. The Court upheld the Appellate Bench's finding on service and did not interfere with it. The petition was disposed of and there was no order as to costs.

Implications:

Direct effect on the parties: The Appellate Bench's eviction decree (as set out in its judgment) cannot stand in its present form because the Appellate Bench did not consider whether the tenant complied with section 12(3)(b). The Appellate Bench must re-examine that factual and legal question on remand.
Service issue: The finding that the registered-post notice gave rise to a presumption of delivery, which was not adequately rebutted by the tenant in the evidence before the Appellate Bench, remains intact and was not disturbed by the Court.
No new precedent: The Court's decision applies established authorities (notably Shetty and decisions on service by registered post) to the facts and remits the factual issue of compliance with section 12(3)(b) to the appellate forum; it does not purport to lay down a novel legal principle beyond the application of existing case law.
Other matters: The Court recorded that findings of the Appellate Bench regarding bona fide requirement were not challenged and that no arguments were addressed on that issue in the present proceedings.

Order accordingly.

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Madhavsingh Tulsidas Since Deceased Through Lrs. Uday Madhavsingh Palicha And Another v. Bhaktiben Narandas Paleja Since Deceased Through Lrs. Jawahar Narandas Paleja And Others

The Appellate Bench of the Court of Small Causes reversed the findings of the trial Judge and decreed the landlord's suit for eviction on the ground of a default by the tenant in the payment of rent.

2. The landlord sued for possession of two tenanted rooms situated in ‘K’ Block, on the Second Floor, of a building called Vanraj Bhuvan, at Bhau Daji Cross Lane, Matunga, Mumbai. The landlord issued a notice of demand claiming arrears of rent from the tenants on 27th June, 1972. The arrears were calculated at the rate of Rs. 35.70 p.m for the period from February, 1970 till September, 1971 and at the rate of Rs. 36.12 from the month of October, 1971. According to the landlord, the notice of demand was remitted by registered post with an acknowledgment due and the postal packet was returned with the remark, “refused”. It was averred that a notice had also been sent Under Certificate of Posting. Another notice was stated to have been pasted on the premises. In the Written Statement, the tenants denied receipt of the notice of demand and claimed that they were ready and willing to pay the rent.

3. Evidence was adduced before the trial Court by the parties. The trial Judge dismissed the suit on 30th November, 1991. The trial Court held that service of the notice of demand was not proved. The Third defendant stepped into the witness box and denied that the notice had been tendered by the postman. The trial Judge held that parties reside in close proximity in the same block of tenements and upon the denial by the Third defendant of the service of the notice, the landlord failed to establish service of the notice of demand. Insofar as the ground for eviction was concerned, the trial Judge held, following the judgment of the Supreme Court in Raju Kakara Shetty v. Ramesh Prataprao Shirole, 1991 Bom. C.R 255, that education cess payable under the Maharashtra Education (Cess), 1962 is not payable monthly and since it forms part of the rent, the rent was not payable monthly. There was, the trial Court held, no agreement between the parties that the education cess would be paid with the rent on a monthly basis. In that view of the matter, section 12(3)(a) of the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947 as it then stood, was held not to be attracted and the case was to be governed by section 12(3)(b). The tenant was held to be entitled to the protection of section 12(3)(b) since on or before the first day of the hearing of the suit, the tenant had duly deposited the arrears of rent and that thereafter, the rent had been deposited regularly as and when it fell due.

4. The Appellate Bench of the Court of Small Causes has reversed the judgment of the trial Court. Insofar as the question of service is concerned, the Appellate Bench held that there is a presumption under section 27 of the General Clauses Act that postal packet which is sent by registered post has been delivered. Thereafter, the burden was cast upon the tenant to rebut the presumption. The Third defendant who was one of the heirs of the original tenant, was not present during office hours at his residence, but his mother and sister who were residing there were present at the premises. The mother expired by the time evidence was adduced. But, though the sister was available to give evidence, she was not produced as a witness. The Appellate Bench noted that the tenant had not adduced the evidence of the Postman in support of his case that the notice had not been delivered. The Court noted that the postal packet bore the postal endorsement of the postal offices through which the notice had been transmitted and the presumption of good service which arose under the law had not been duly rebutted. Insofar as the ground for eviction is concerned, the finding of the Appellate Bench in the present case is that the rent was to be paid at the interval of every six months after the payment of Municipal taxes. Upon receipt of the notice, the defendants were either required to comply with the notice or to file an application for standard rent in the event that there was any dispute in regard to the rent which had been claimed. The tenant having failed to do so, the Court was of the view that a decree for eviction has to be passed.

5. The suit for eviction was instituted prior to the amendment of section 12. Section 12(3) of the Act, at the material time, read as follows:

“12(3)(a) Where the rent is payable by the month and there is no dispute regarding the amount of standard rent or permitted increases, if such rent increases are in arrears for a period of six months or more and the tenant neglects to make payment thereof until the expiration of the period of one month after notice referred to in sub-section (2), the Court shall pass a decree for eviction in any such suit for recovery of possession.

(b) In any other case no decree for eviction shall be passed in any such suit if, on the first day of hearing of the suit or on or before such other date as the Court may fix, the tenant pays or tenders in Court the standard rent and permitted increases then due and thereafter continues to pay or tender in Court regularly such rent and permitted increases till the suit is finally decided and also pays costs of the suit as directed by the Court.”

6. Clause (a) of sub-section (3) of section 12 operates in a situation where the rent is payable by the month and there is no dispute regarding the amount of standard rent or permitted increases. In such a case, in the event that the rent is in arrears for a period of six months or more and the tenant neglects to make payment thereof after the expiration of a period of one month after the service of a notice of demand, a decree for eviction would follow. Clause (b) of sub-section (3) of section 12, however, operates in any other case, that is to say, a case which is not governed by clause (a). In the category of cases governed by clause (b), the statute provided that no decree for eviction shall be passed if on the first day of hearing of the suit or, on or before such other date, as the Court may fix, the tenant pays or tenders in Court, the standard rent and permitted increases then due and thereafter, continues to pay or tender in Court regularly such rent and permitted increases till the suit is finally decided and also pays costs of the suit as directed by the Court. Explanation (I) to section 12 provided as follows:

“Explanation I. — In any case where there is a dispute as to the amount of standard rent or permitted increases recoverable under this Act the tenant shall be deemed to be ready and willing to pay such amount if, before the expiry of the period of one month after notice referred to in sub-section (2), he makes an application to the Court under sub-section (3) of section 11 and thereafter pays or tenders the amount of rent or permitted increases specified in the order made by the Court.”

7. In Raju Kakara Shetty v. Ramesh Prataprao Shirole, 1991 Bom. C.R 255, (1991) 1 SCC 570, a Bench of three Learned Judges of the Supreme Court considered the effect of the provisions of the Maharashtra Education (Cess) Act, 1962 under which the primary responsibility to pay the tax on lands and buildings was cast on the owner of the land or, as the case may be, of the building. Section 13 provided, however, that on the payment of the amount of tax, the owner shall be entitled to receive that amount from the person in actual occupation of the land and building during the period for which the tax was paid. The landlord has, therefore, a statutory right to recover the cess paid by him in respect of the premises demised to the tenant-occupant. In Shetty's case, the Supreme Court held that education cess is a part of rent and, when this was claimed in addition to the contractual or standard rent, it constituted a permitted increase within the meaning of the Act. Being payable on a year to year basis, rent ceased to be payable by month within the meaning of section 12(3)(a):

“There can be no doubt that such an increase falls within the definition of permitted increases under section 5(7) of the Act. It, therefore, seems to be well-settled that education cess is a part of ‘rent’ within the meaning of the Act and when the same is claimed in addition to the contractual or standard rent in respect of the demised premises it constitutes a permitted increase within the meaning of section 5(7) of the Act and being payable on a year to year basis, the rent ceases to be payable by the month within the meaning of section 12(3)(a) of the Act.”

8. However, that would not preclude the parties from quantifying by agreement, the amount liable to be paid each month at a figure not exceeding the total liability under the statute. Hence, it is open to the landlord and the tenant to quantify the amount of tax payable by the tenant on a monthly basis in which case the rent would still continue to be paid by month within the meaning of section 12(3)(a). The Supreme Court observed thus:

“We see no reason why we should take the view that even where the parties mutually agree and quantify the tax amount payable by the tenant to the landlord on monthly basis, the rent should not be taken to be payable the month within the meaning of section 12(3)(a) of the Act. A statutory right to recover the tax amount by way of reimbursement can be waived or limited by the holder of such right for the recovery can be regulated in the manner mutually arranged or agreed upon by the concerned parties so long as it is not in violation of statute. If for convenience and to facilitate payment, the parties by mutual consent, work out arrangement for the enforcement of the owners statutory right to recover the tax amount and for discharging the tenant-occupant's statutory obligation to reimburse the owners, we see no reason for refusing to uphold such a contract and if thereunder the parties have agreed to the tenant-occupant discharging his liability by a fixed monthly payment not exceeding his liability by a fixed tax liability, the said monthly payment would constitute ‘rent payable by the month within the meaning of section 12(3)(a) of the Act’.”

9. The same view, it may be noted, was taken by the Supreme Court in Chase Bright Steel Limited v. Shantaram Shankar Sawant, 1995 (1) Bom. C.R 561 where Shetty's case was cited with approval. In two judgments of Learned Single Judges of this Court, the provisions of section 12(3) were interpreted in the context of the liability to pay cess. In Awabai Muncharji Cama v. M.N Kaka, 1986 Mah. RCJ 502 it was held thus:

“Where the rent consists of a part or portion which is not payable monthly can it be said that the rent is payable by the month? If a part of the rent is not payable by the month then certainly the rent (the whole of it) is not payable by the month, and it would seem to make no difference that the part which is not payable monthly is very small or insignificant when contrasted with the other rent or the other permitted increases which may be payable monthly. If any part of the rent is not payable monthly, then it has to be held that rent which must mean the entire rent is not payable by the month. … The education cess would form part of the rent and that the Court would be constrained to hold that the rent was therefore not payable by the month and that therefore section 12(3)(a) would not be attracted.”

10. In an unreported judgment, M.N Chandurkar, J. (as he then was) held in Vaman v. Rajaram, Special Civil Application 2418 of 1971 decided on 26th February, 1976 that:

“In a suit where the landlord wants to claim possession on the ground that the tenant is a defaulter because he has not paid the amount of education cess, which are permitted increases, it will be therefore obligatory on the plaintiff-landlord to specifically plead and prove the fact of such payment of education cess to the municipal authorities. Indeed from the provisions of section 13(1) it is clear that there is no cause of action for claiming reimbursement from the tenant until the lessor has paid the amount of education cess in respect of which he wants to make a claim against the defendant.”

11. The same view was taken by the Gujarat High Court in Prakash Surya v. Rasiklal, (1978) 1 RCR 502 and in Vanlila Vadilal Shah v. Mahendrakumar, AIR 1975 Guj. 163.

12. In the present case, the trial Judge in the Court of Small Causes held, following the judgment of the Supreme Court in Shetty's case that from the facts of the present case, it was clear that the permitted increases claimed in the notice of demand included education cess. The trial Judge held that no evidence was adduced by the plaintiff and there was not even a suggestion that there was an agreement to pay the permitted increases together with the rent on a monthly basis. The trial Court consequently concluded as follows:

“However, in view of the legal position, the education cess is included in the rent. The education cess is not payable monthly. There is no agreement between the plaintiff and defendant to pay education cess by month. As the education cess is included in the rent which is not payable by month, it is held by our High Court that the entire rent cannot be said to be payable monthly. It is not necessary to specifically plead in the Written Statement that … education cess rent is not payable by month. By virtue of law, the education cess becomes part of the rent. In absence of agreement between the plaintiff and landlord, education cess is payable six monthly. In the present case before me there is no agreement between the plaintiff and defendant to pay Education cess along with the monthly rent. Therefore, I hold that as the education cess is included in the rent claimed by the plaintiff, the rent is not payable by month and therefore the plaintiff is not entitled for decree under section 12(3)(a) of the Bombay Rent Act and the case of the plaintiff will fall under section 12(3)(b) of the Bombay Rent Act.”

13. When the matter was carried in appeal to the Appellate Bench of the Small Causes Court that Court also found that as a matter of fact, rent was to be paid at an interval of every six months after the payment of Municipal taxes. The finding which the Appellate Bench recorded in para 35 of its judgment is to the following effect:

“On the basis of the case laws if we consider the facts in the present case it is admitted by the defendant No. 3, who is the only witness of defendants that there was an agreement as to when rent was to be paid. Rent was to be paid at interval of every six months after payment of Municipal Taxes. Till 1965 the defendant No. 3 and his brother used to pay rent of the suit premises and after that defendant No. 3 is paying rent of the suit premises. So above discussed evidence establishes that this defendant was paying rent of the suit premises after every six months.”

14. Therefore, it is necessary to emphasise that the Appellate Court did not disturb the finding of the trial Judge that (i) The permitted increases which were claimed by the landlord included the education cess; (ii) The education cess was a part of the rent; (iii) The education cess was not payable monthly and that as a result neither was the rent payable on a monthly basis; and (iv) There was no agreement between the parties to the effect that the liability of the tenant towards the landlord would be quantified on a monthly basis. The Appellate Bench held that when the conduct of the defendant has been established that he was paying the rent every six months, there was no necessity to have a separate agreement. The Appellate Bench, however, held that upon receipt of the notice of demand, the only option available to the tenant was either to comply with the notice or to file an application for the fixation of standard rent. That not having been done, it was held that a decree for eviction would have to follow.

15. On behalf of the petitioners, it has been submitted that the entire approach of the Appellate Bench is flawed inasmuch as the Appellate Bench proceeded on the basis that it was section 12(3)(a) of the Act that would be the governing provision. There is merit in the submission that the judgment of the Appellate Bench of the Court of Small Causes is unsustainable on the issue of default. The Appellate Bench of the Court of Small Causes, it is to be noted, does not disturb the finding of the trial Judge that the permitted increases in the present case included the education cess and that since the cess was not payable monthly, it could not be said that the rent was payable by the month. This finding of the trial Court was borne out by the evidence on the record and is consistent with the law enunciated by the Supreme Court in Shetty's case. The judgment of the Supreme Court in Shetty's case recognises that it would be open to the landlord and the tenant by an agreement between them to quantify the liability of the tenant towards the education cess on a monthly basis in which case, the education cess together with the rent would continue to be payable monthly. In the event that there is such an agreement it has to be pleaded and proved. In the present case, the Appellate Bench does not find the existence of any such agreement in the evidence. On the contrary, the Appellate Court proceeds on the assumption that no such separate agreement was necessary, once it was established that the rent was to be paid on a six monthly basis by the Third defendant. The entire approach of the Appellate Bench is to my mind completely flawed because in the absence of an agreement of the nature referred to in Shetty's case, the inevitable conclusion is that the rent is not payable monthly since the education cess which is a part of the rent was not payable by the month. In the present case, it is of course to be noted that the suit has been instituted by the tenant against his sub-tenant, but that would not make any difference because even in such a case, it is necessary for the plaintiff to plead and prove the existence of an agreement by which the education cess was liable to be paid together with the rent on a monthly basis. That admittedly is not the case here. The landlord's evidence does not show any reference to an agreement by which the liability towards education cess was, quantified on a monthly basis, to be payable with the rent. The distinction made by Counsel between what is payable and what is paid does not carry the case any further, the ingenuity of the submission notwithstanding. It was for the landlord to establish the existence of an agreement as held by the Supreme Court. That was not done.

16. The Appellate Bench was clearly, therefore, in error in proceeding on the basis that it was section 12(3)(a) that applies. The trial Court was correct in coming to the conclusion that the case was governed by section 12(3)(b). The trial Court held that the tenant was entitled to the benefit of section 12(3)(b). The finding of fact that was arrived at by the trial Court was that the tenant had on or before the first date of hearing deposited the entire arrears of rent and that he had thereafter been regularly depositing the rent as and when it fell due. There is no finding in that regard in the impugned judgment of the Appellate Bench. This position was not disputed by Counsel. That is essentially a matter which must be considered by the Appellate Bench of the Court of Small Causes. The question of compliance with section 12(3)(b) involves several factual determinations. The Appellate Bench of the Small Causes Court exercises an appellate jurisdiction on the judgments of trial Judges in that Court. Since the issue relating to section 12(3)(b) has not been considered by the Appellate Bench, it would be necessary to remand the case for a determination thereon. I am, therefore, of the considered view that it would be necessary to remit the matter back to the Appellate Bench for determining the question as to whether there was compliance of section 12(3)(b).

17. Insofar as the service of the notice is concerned, the finding of the Appellate Bench does not warrant interference. The notice of demand was remitted by registered post to the tenant. The “presumption of due or proper service if the document sought to be served is sent by properly addressing, pre paying and posting by registered post to the addressee …. irrespective of whether any acknowledgment due is received from the addressee or not” finds recognition in the judgment of the Supreme Court in har Charan Singh v. Shiv Rani, AIR 1981 SC 1284 at para 7 p. 1288. The presumption of service of a letter sent by registered post can be rebutted by the addressee. In Anil Kumar v. Nanak Chandra, AIR 1990 SC 1215 the Supreme Court held that there is no hard and fast rule on the question as to whether the bare testimony of the tenant is sufficient to rebut service. In certain cases, the unchallenged testimony of a tenant may be sufficient to rebut the presumption but where it is inherently unreliable, the position would be different. The same view emerges from the judgment of the Supreme Court in Green View Radio Service v. Laxmibai Ramji, 1991 Mh. L.J (S.C) 579 : 1991 (1) BCR 505:

“The presumption of service of a letter sent by registered post can be rebutted by the addressee by appearing as witness and stating that he never received such letter. If the acknowledgment due receipt contains the signatures of the addressee himself and the addressee as a witness states that he never received such letter and the acknowledgment due does not bear his signature and such statement of the addressee is believed then it would be a sufficient rebuttal of the presumption drawn against him. The burden would then shift on the plaintiff who wants to rely on such presumption to satisfy the Court by leading oral or documentary evidence to prove the service of such letter on the addressee. This rebuttal by the defendant of the presumption drawn against him would of course depend on the veracity of his statement. The Court in the facts and circumstances of a case may not consider such denial by the defendant as truthful and in that case such denial alone would not be sufficient. But if there is nothing to disbelieve the statement of the defendant then it would be sufficient rebuttal of the presumption of service of such letter or notice sent to him by registered post.”

18. In Basant Singh v. Roman Catholic Mission, (2002) 7 SCC 531, the Supreme Court held that the conduct of the defendant acquires importance, once it is proved that summons has been sent by registered post to a correct and given address. In Basant Singh's case, the premises were occupied by two defendants jointly of whom one appeared and examined himself and stated that he did not receive the registered letter. The other defendant did not appear and no evidence on his behalf was led to rebut the presumption regarding summons sent to him by registered post with acknowledgment due. The Supreme Court held that save and except for a bald statement that the registered letter was not tendered, no evidence whatsoever was led to rebut the presumption. The postman who would have been a material witness and whose evidence would have a bearing on the proper adjudication of the issue was not examined. In these circumstances, the Supreme Court held that the onus which had been cast by the statute had not been duly discharged.

19. The principle which has been laid down by the Supreme Court in Basant Singh will apply to the facts of the present case. As the Appellate Bench noted, the Third defendant who stepped into the witness box, deposed that the notice has not been delivered to him. The mother and sister of the Third defendant who were also heirs of the deceased tenant, were admittedly present at the residence when the Third defendant was away at work between 10 a.m and 5 p.m The Appellate Bench noted that though the mother had expired, the sister was still available to give evidence. However, the evidence of the sister was not adduced. A material witness who was available for rebutting the presumption was not produced in evidence. The finding of fact which has been arrived at is consistent with the law laid down by the Supreme Court. A bald statement by the addressee that he had not received a summons is in the facts of this case, clearly not sufficient to rebut the presumption of due service. The Appellate Bench has considered the evidence in considerable detail has referred to the postal endorsements of the concerned Post Offices in regard to the transmission of the postal packets. That part of the finding does not warrant interference in the exercise of the supervisory jurisdiction under Article 227 of the Constitution.

20. In these circumstances and for the reasons already indicated, the impugned Judgment and Order of the Court of Small Causes is quashed and set aside. The matter shall stand remitted back to the Appellate Bench for determining whether the tenant would be entitled to the benefit of the provisions of section 12(3)(b) of the Act. Before concluding, it would be necessary to record that the findings of the Appellate Bench in regard to the issue of bona fide requirement have not been questioned in these proceedings. No arguments were addressed before the Court on that issue.

21. The petition is accordingly disposed of in these terms. There shall be no order as to costs.