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Bithaldas Chandak v. Lalbehari Dutt & Sons
Structured Summary of Opinion — Rankin, J.
Factual and Procedural Background
The plaintiff instituted a suit for ejectment on 3 February 1920. The plaintiff had taken an assignment on 12 August 1919 from Lachminarain Sadani of a term under an indenture dated 20 September 1918 (made between the Archbishop of Calcutta and Lachminarain Sadani). The defendants, the firm Messrs Lalbehari Dutt and Sons, had occupied two rooms in the premises even before Lachminarain Sadani's lease. Lachminarain Sadani had raised the rent to Rs. 175 per month. After the plaintiff's assignment, the defendants paid rent to the plaintiff and took receipts for August and September 1919, but fell into arrears from October 1919 onward.
The written statement in the suit was filed on 26 April 1920. The Rent Act came into force in Calcutta on or about 5 May 1920 (the opinion also refers to 6 May 1920 for the three-month calculation). No amendment of pleadings was made to reflect the Rent Act. The defendants paid no rent between October 1919 and June 1921, when they paid into the hands of the Rent Controller a sum of over Rs. 3,000 said to represent rent from October 1919 until May 1921. The matter came before Rankin, J., in June 1921 as a short cause.
Prior to the Rent Act, the defendants were admitted monthly tenants who had been given notice (in November) determining their tenancy at the end of December; on that footing the landlord would have been entitled to re-entry at end of December. The plaint contained additional explanations for the plaintiff's desire to recover possession; the written statement raised matters concerning the alleged purpose of repairs.
Legal Issues Presented
- Whether the defendants fall within the meaning of "tenant" for the purposes of section 11 of the Rent Act (with reference to the definition in section 2).
- Whether the defendants are excluded from the benefits of section 11 by reason of sub-section 5 (i.e., for failure to pay arrears within the statutory period arising from the coming into force of the Rent Act).
- Whether the landlord could rely upon the proviso to section 11 as a landlord requiring the premises bona fide for the purpose of building or re-building (the court considered this question but did not fully investigate it).
- Whether equitable relief could be claimed by the defendants to avoid forfeiture for non-payment of rent (as argued by the defendants' counsel).
Arguments of the Parties
Plaintiff's Arguments (as presented in the opinion)
- Counsel for the plaintiff (Mr. Banerji) contended that after the determination of tenancy at the end of 1919 the defendants were mere trespassers and that what they owed after that point was mesne profits rather than "rent" within the meaning of the Rent Act.
- The plaintiff maintained that he had attempted on several occasions to collect rent but was unable to obtain payment from the defendants.
Defendants' Arguments (as presented in the opinion)
- Counsel for the defendants (Mr. Kanjilal) sought leave to raise the protections of the Rent Act, offering the issue whether the defendants had fulfilled the conditions of section 11.
- The defendants asserted a custom that the landlord should send and collect rent (the durwan did not come), and that the plaintiff never came to collect despite requests; they relied on a letter in June 1920 from a firm (Hustamull Chunilal) claiming that the plaintiff was not the proper person to be paid.
- It was advanced on the defendants' behalf that equity could relieve against forfeiture for non-payment of rent.
- The defendants pointed to earlier rent payments to the plaintiff (receipts for August and September 1919) and relied on surrounding facts (a quarrel involving Lachmi Chand) that they said caused them to withhold further payments until June 1921.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The court first determined that a decree for ejectment must be entered. The judge analysed whether the defendants were "tenants" under section 11 of the Rent Act, guided by the definition in section 2 ("any person by whom or on whose account rent is payable for any premises"). The plaintiff's contention that arrears after termination were merely mesne profits was considered, but the judge concluded the defendants were within the meaning of "tenant" for the purposes of section 11. The judge supported that view by reference to section 12 (noting that section 12 contemplates persons against whom orders for recovery of possession were made before the Rent Act came into force and allows the court to give relief if it would not have made the order had the Act been in operation).
The court then addressed sub-section 5 of section 11, which the judge treated as intended to give tenants three months within which to pay arrears and thereby qualify for the Rent Act's protections. The judge calculated that three months would take the defendants to August 1920 (from the date the Act came into force in early May 1920). The defendants had been in arrear since October 1919 and had paid nothing between that date and June 1921 (until the deposit with the Rent Controller). The judge found the defendants had not paid the arrears within the statutory three-month window.
On credibility, the court preferred the plaintiff's account that he had sought rent on several occasions and had been unable to obtain it, and rejected the defendants' claim that the durwan never came and the plaintiff never attempted collection. The court observed that although the defendants had received receipts for at least two months' rent from the plaintiff after assignment, they later stopped paying. The court also noted there was no evidence of any communication by the defendants in June 1920 requesting to pay the disputed sums into court or to a neutral party.
The judge explained the operation of sub-section 4 (where a landlord refuses to accept rent, the tenant may deposit it with the Controller within a fortnight) and observed that while a tenant is not obliged to deposit with the Controller, a tenant who wishes to preserve rights under sub-section 5 may do so by paying the Controller when the landlord refuses to accept rent.
The court declined to investigate further the landlord's claimed need for the premises for building or re-building under the proviso to section 11, deeming it unnecessary in light of the defendants' failure to satisfy sub-section 5.
Addressing the defendants' equitable argument, the judge rejected the contention that equity could relieve here in the same manner as against forfeiture for a fixed-term tenant. The court distinguished between the position of a tenant with a fixed term (where equity might relieve against forfeiture for non-payment) and a monthly tenant who had accepted a month's notice; in the latter case, absent the Rent Act, the court would not grant the defendant a larger interest than he contracted for. The Rent Act only grants stability to tenants who comply with its conditions (pay rent and perform obligations); it does not extend that protection to those who fail to do so.
Holding and Implications
Holding: The court ordered that a decree for ejectment be entered in favour of the plaintiff.
The court's practical directions and immediate consequences for the parties were:
- The defendants are not entitled to the protections of section 11 of the Rent Act because they failed to pay arrears within the three-month period prescribed by the statute; accordingly they cannot rely on the Rent Act to resist ejectment.
- The defendants will not be physically ejected immediately: the court allowed them until the end of July (the opinion was given toward the end of June). As a condition of remaining until the end of July, the defendants must pay the July rent (Rs. 175). They have until 15 July to pay that sum in order to remain until the end of July.
- The amount of mesne profits appeared to be undisputed (the opinion states there does not seem to be dispute on this point).
- The money paid into the hands of the Rent Controller (a sum of over Rs. 3,000) requires a "sensible arrangement" for withdrawal (the court directed that such an arrangement must be made).
- The plaintiff was awarded costs on Scale No. 2.
The opinion does not purport to set or announce any broader precedent beyond the application of the Rent Act's provisions to the facts of this case; the decision's practical effect is limited to the parties and the statutory interpretation applied in these proceedings.
Additional Case Participants Noted in the Opinion
- Counsel for the plaintiff: Mr. Banerji.
- Counsel for the defendants: Mr. Kanjilal.
- Solicitors for the plaintiff: Messrs Hazard and Ray.
- Solicitor for the defendants: Mr. G. N. Dutt.
- Judge: Rankin, J.
End of summary. This summary is strictly confined to information explicitly contained in the provided opinion.
The Judgment of the Court was as follows:—
Rankin, J.:— In this case there must be a decree for ejectment. The suit was brought for ejectment on the 3rd February 1920 and it appears and indeed it is admitted that the Plaintiff on the 12th August 1919 took an assignment from. Lachminarain Sadani of a term ??? an indenture bearing date the 20th September 1918 and made between ??? Archbishop of Calcutta and Lachniinaram Sadani. The Defendant firm, Messrs Lalbehari Dutt and sons, had been in occupation of two rooms in the premises for some time before Lachminarain Sadani was granted his lease. Lachminarain Sadani raised the rent to Rs. 175 per month. After the Plaintiff took an assignment of the term the Defendants paid that rent to the Plaintiff and took two receipts for the month of August and the month of September 1919. They began to fall into arrears from the month of October 1919 and in point of fact they paid no rent at all until the time when in June of this year, 1921, they paid into the hands of the Rent Controller under the Rent Act a sum of over Rs. 3,000 being the rent from October 1919 until May of this year. In the meantime on the 3rd February this suit was instituted. On the 26th April 1920 the written statement was filed. On or about the 5th May the Rent Act came into force in Calcutta. What has happened is, that notwithstanding the Rent Act, no amendment of pleadings has taken place and the suit in some way, which I do not quite understand, comes on now in June 1921 before me as a short cause. Prior to the Rent Act the position was shortly this. The Defendants, as they quite admit, were monthly tenants. In November they got more than a month's notice determining their tenancy at the end of December, and at the end of December, therefore, the Landlord, in this case the Plaintiff, was entitled to re-entry. That position is the position pleaded in the plaint with this exception that the plaint contains some irrelevant matters purporting to explain why the Plaintiff desired to have his premises back again. Before the Rent Act came into force it was, so far as I know, entirely irrelevant for the landlord, whose tenancy had been properly determined by a notice to quit, to explain why he wanted to have his rights. The written statement, however, deals with certain matters by way of showing that the purpose of repairs which the landlord had alleged was not one which made it necessary for the landlord to be allowed to re-enter. When the Rent Act came into force the matter took a different complexion. Nothing was done to put the pleadings into order, and before me at the opening of the case the landlord desired to maintain that he came within the proviso to sec. 11 of the Rent Act, as being a landlord who required the premises for the purpose of building or re-building. That matter has not been enquired into by me for the reason that it did not appear to me probable that this course would be necessary. If it had been necessary, I should certainly have on some terms allowed the Defendants an opportunity of investigating into that question. However Mr. Kanjilal, who has very ably conducted the case for the Defendant, has offered me, on the question of the Rent Act, the issue as to whether the Defendants have fulfilled the conditions of sec. 11. Undoubtedly, as I am giving him leave to raise the Rent Act, he has to show that he has fulfilled those conditions. So far as they are concerned, the first question is, whether the Defendants here are within the meaning of the words “so long as the tenant pays rent to the full extent allowable by this Act.” Mr. Banerji for the Plaintiff takes the point that in this case the tenancy had been determined at the end of 1919, so that in May 1920, he says, the Defendants were mere trespassers. When one comes to consider the meaning to be attached to the word “tenant,” one has the definition under sec. 2 to guide one. That states “any person by whom or on whose account rent is payable for any premises.” In answer to that Mr. Banerji naturally says that mesne profits are not rent. What a trespasser has to pay for his trespass is not rent. Therefore he puts the problem before me whether the Defendant company are within the meaning of sec. 11 at all. I think the Defendant company are within the meaning of “tenant” in sec. 11 and are tenants in the special sense in which that word is used. It seems to me that this is shown by sec. 12 which contemplates the case of a person who has had an order made against him for recovery of possession of property before the operation of the Rent Act, and it goes on to say that if the Court is of opinion that the order of decree would not have been made if this Act had been in operation, the Court can even yet give relief. In strictness of language, decree for the recovery of possession of property is never made against a tenant. If there has been a tenancy and the decree is upon a, forfeiture, it is on the footing that the term was forfeited either before suit or at the latest by the issue of the writ. In the same way against a tenant-at-will or a tenant-in-sufferance, the issue of the writ would determine the tenancy. So far as I know it is never correct that a decree for recovery of possession should go against a person who is in strict sense a tenant. Mr. Kanjilal had drawn my attention to the fact that in the English Rent Act the word “tenant” has been given a very special and specially wide meaning, I should say that persons in the position of the Defendants are not outside the scope of sec. 11 on the ground that they are not tenants.
I now come to the question whether the Defendants here have not been shown to be hit by sub-sec. 5 of sec. 11. The position was that when the Rent Act came into force they were in arrear with their rent since October 1919, and until June of 1921, when they paid money to the Rent Controller, they did nothing in the way of paying rent at all.
Sub-sec. 5 is intended, as I think, to give persons who are tenants three months within which they may pay up and put themselves in the position of being entitled to claim the benefits of the Rent Act. If a person is in arrear in May 1921 with his rent, he still has three months in which he can pay up those arrears under the first part of that sub-section. Three months in this case would take us to August 1920, as a matter of fact the 5th or 4th. By that time this Defendant had done nothing to pay up any of the arrears that were standing over since October 1919. He says with regard to that-two things. First of all he says it was for the Plaintiff by the custom to send and collect rent, that the durwan never came, that the Plaintiffs never, came although the Defendants were asking them to come and collect their own rent. The Plaintiff's story is that he went for the rent on some three occasions and could not get the rent. Of these two stories I have no hesitation at all in believing the Plaintiff and rejecting the story of the Defendant.
Then it is said that in June 1920 a letter was received from a firm of Hustamull Chunilal, claiming that the Plaintiff was not the proper person to be paid the rent. As a matter of fact Lachminarain, the previous landlord, had told the Defendant himself that he was assigning to the Plaintiff. The Defendants had paid rent in respect of two months at least to the Plaintiff and accepted his receipt. Further it appears now that some body had a quarrel with Lachminarain, namely, Lachmi Chand, a partner in the firm of Hustamull Chunilal. Because this gentleman in June sent from Bikaneer this letter to the Defendants, the Defendant says that he did not pay his rent at all to any body until June of 1921. No proof has been adduced before me of any letter written by or on behalf of the Defendants in June of 1920 to the Plaintiff asking about this matter, or seeking to pay the money into Court or into the hands of any neutral party.
I regret to say that as the legislature has seen fit to forbid all the benefits of the Rent Act to any tenant who has not within three months from 6th May 1920 paid all arrears of rent due by him in respect of the said premises, it is not possible for me to hold that the Defendants are entitled to them. It may be said that on the Plaintiff's view after the beginning of 1920 what was due was not strictly rent but more strictly mesne profit; but as I have pointed out, the Defendant cannot claim the benefits of this section at all except by saying that he is in the position of a tenant within the meaning of the section, and of course he cannot have it both ways. He cannot claim, as he does claim and has all along claimed, to be in possession not as trespasser but as a tenant, and also claim to be under the words “so long as the tenant pays rent. In sec. 11,” and also for the purpose of sub-sec. 5 say that it is not rent at all. The second half of sub-sec. 5 is this: “and also unless he pays the rent due by him to the full extent allowable by this Act within the time fixed in the contract with his landlord or in the absence of any such contract by the 15th day of the month next following that for which rent is allowable.’ In the same way also the Defendant here can make no pretence that he has done anything of the sort.
Under sub-sec. 4 where a landlord refuses to accept the rent, the tenant may deposit it with the Controller within a fort-night of its becoming due. It is said that he is not bound to deposit it with the Controller. That is perfectly true. He is not bound to bring himself within sub-sec. 5 at all; but if he wants to come under sub-sec. 5 so as not to lose the benefits of the Rent Act, then, where the landlord refuses to accept it as rent, he may pay to the Controller and thus preserve his rights.
In these circumstances it seems to me that it is entirely unnecessary to go into the question of whether these premises are bonâ fide required for the purpose of building or re-building.
Mr. Kanjilal has argued that the question under sub-sec. 5 is a mere question of non-payment of rent and that equity can relieve against any forfeiture for non-payment of rent. I must say at once that contention is entirely unfounded. If the. Defendant apart from the Rent Act had a term, say 2, 3 or 5 years, and the landlord was proposing to forfeit that term by reason of non-payment of rent, equity could relieve against that forfeiture. But apart from the Rent Act if he had not a term but was only a monthly tenant and had his month's notice, there would have been no equity on the part of the Defendant to insist upon the Court giving him any larger interest in the property than he had agreed to with his landlord.
That being the position apart from the Rent Act, the Defendants would have no defence here at all. The Rent Act puts the tenant who complies with its Conditions into much the same position as a tenant who is entitled to a term. At all events it gives him some fixity of tenure so long as the Rent Act is in force; but that privilege is given to a tenant who pays his rent and performs his conditions and to no one else.
The result is that not being within sec. 11 by reason of the non-payment of rent, the Defendant has got no equity at all to ask the Court to give him the special relief provided by the Rent Act in the plain teeth of the section which says that such relief should go only to the tenant who has paid.
As regards the question of ejectment this is now towards the end of June, and I do not propose that the Defendants should be ejected until the end of July. This is reasonable. The Defendants must pay the rent for July as a condition; They will in any case have till the 15th July. If by that time they pay Rs. 175 for July rent they will get till the end of July.
As regards the amount of mesne profits, there does not seem to be dispute.
As regards the money that has been paid to the Rent. Controller, there must be some sensible arrangement for withdrawing that.
The Plaintiff; will get costs oil Scale No. 2.
Messrs Hazrd and Ray, Solicitors, for the Plaintiff.
Mr. G.N Dutt, Solicitor, for the Defendants.
M.C.G
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