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  • Nadu City Tenants Protection Act.
  • Nadu Rent Control Act,
  • Rent Control Act.
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Citation Codes
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citation codes
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Attorney(S)
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  • Nadu City Tenants Protection Act.
  • Nadu Rent Control Act,
  • Rent Control Act.
Smart Summary

Structured Summary of the Opinion — Revision under the Tamil Nadu Rent Control Framework

Factual and Procedural Background

Landlords (petitioners) filed an eviction petition before the Rent Controller (District Munsif), Srivilliputhur, alleging that the respondent (tenant) defaulted in payment of rent from Karthigai 1979 and denied the landlords' title to the building without bona fides.

Material factual assertions in the eviction petition included: the petitioners are joint owners of property bearing door No.315 (building, shed and adjacent open space) in Rajapalayam Town; the respondent took the property on monthly rent from 2.3.1970 at Rs.125 and, according to the petitioners, later at Rs.300 from 18.3.1980; the tenancy was oral; the tenant carried on a coal business; the 3rd petitioner received rent until Karthigai 1979 after which no rent was paid; a registered notice to vacate was issued on 21.1.1984 and the respondent replied on 27.1.1984 denying the petitioners' title; and a suit (O.S.No.505 of 1984) for recovery of rent arrears was filed in which the tenant admitted a tenancy for the site but claimed rent at Rs.125.

In his counter-statement the respondent admitted the petitioners' ownership of the site but denied their ownership of the building (claiming to have put up the construction), asserted the monthly rent was Rs.125 for the site, sought benefit under the Tamil Nadu City Tenants Protection Act, and challenged the Rent Controller's jurisdiction over the building tenancy claim. The landlords, conversely, relied on municipal property tax assessment entries and receipts (Exs.A-3, A-4) to show ownership of the building.

The Rent Controller, by order dated 4.3.1994, allowed the eviction application, holding the rental arrangement related to the building and that the denial of title was not bona fide. The tenant appealed (R.C.A.No.15 of 1994) and the Appellate Authority/Principal Subordinate Judge, Srivilliputhur, after re-examining evidence, held the denial of title to be bona fide and dismissed the eviction petition.

The landlords preferred the present revision challenging the Appellate Authority's order. The court heard both sides and this opinion disposes of that revision.

Legal Issues Presented

  1. Whether the rental arrangement between the parties related to the building (superstructure) or only to the site.
  2. Whether the tenant's denial of the landlords' title to the building was made bona fide (in good faith) so as to oust the Rent Controller's jurisdiction and prevent eviction.

Arguments of the Parties

Landlords' Arguments

  • They are joint owners of the property bearing door No.315, including the building and have received rent from the respondent since 2.3.1970.
  • The tenant defaulted in payment of rent from Karthigai 1979 and was liable to be evicted for default.
  • Exhibits A-3 and A-4 (municipal assessment entries and tax receipts) demonstrate that the building was assessed in the landlords' names and that they paid property tax for the building prior to and after 1970.
  • The denial of title by the tenant is not bona fide and thus eviction is warranted both for non-payment and denial of title.

Respondent's (Tenant's) Arguments

  • Admitted the petitioners' ownership of the site but denied that they are owners of the building, asserting that he (the tenant) put up the construction and therefore is assessed as the owner of the building.
  • Claimed the monthly rent is only Rs.125 (contradicting the landlords' later claim of Rs.300).
  • Relied on property tax assessment entries and tax receipts in his name (Ex.B-6, Ex.B-7 and related documents) to show the building had been assessed in his name and that he had paid property tax from 1970 onwards.
  • Asserted entitlement to protections under the Tamil Nadu City Tenants Protection Act and contended the Rent Controller had no jurisdiction to entertain an application as to the building tenancy if none existed.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Joseph v. Thomas, 1987 2 K.L.T. 1029 Defines the test for "bona fide" denial of title: the denial must be based on a very fair and reasonable supposition supported by strong or substantial grounds or sufficient materials; the court must have objective satisfaction that the tenant had that state of mind and that the chances of success in civil court are fairly on the higher side. The court applied this standard to assess whether the tenant's denial of title had sufficient materials; it concluded the tenant lacked substantial materials and thus the denial was not bona fide.
White v. Feast, L.R. 7 Q.B. 353 Authority cited to support the principle that a defendant asserting a bona fide claim must give sufficient evidence to show they acted under a fair and reasonable supposition of right; honest belief alone may not be enough. The court relied on this notion to explain that mere honest belief or payment of property tax is insufficient unless supported by substantial evidence that the tenant had a reasonable expectation of ownership.
Welsh Brick Industries Ltd. In re (1946) 2 All E.R. 197 Observation that there is no difference between the phrases "bona fide disputed" and "disputed on some substantial grounds" in the context of disputes that oust jurisdiction. The court used this principle to underline that the tenant's denial needed to be disputed on substantial grounds, which the court found absent here.
K.A. Aboobacker v. N. Girija, A.I.R. 1995 Ker. 221 Division Bench approval of the Joseph v. Thomas standard — reiterating that a court must have satisfaction of strong or at least substantial grounds in support of a plea before ousting its jurisdiction. The court cited this approval to reinforce the standard and concluded the tenant had no such substantial grounds; therefore the appellate finding of bona fides was untenable.

Court's Reasoning and Analysis

The court focused on the central issue whether the denial of the landlords' title by the tenant was bona fide. It proceeded by examining the documentary evidence placed before both the Rent Controller and the Appellate Authority, notably Ex.A-3 (tax receipts in the landlords' names for 1979-80 to 1984-85), Ex.A-4 (assessment register entries from 1965-66 onwards showing petitioners entered as owners of the building at door No.315), Exs.B-5 and B-6 (assessment registers for 1981-82 to 1992-93 showing assessment entries for both parties under different assessment numbers), and Ex.B-7 (various tax receipts from 1970 onwards showing payments by the tenant).

The Appellate Authority's approach had been to give weight to the assessment entries from 1981-82 onwards (Exs.B-5 and B-6) showing the building assessed in the tenant's name and to conclude that the denial of title was bona fide because the tenant appeared assessed as owner. The present court found that approach incomplete because the Appellate Authority omitted to consider Ex.A-4 properly — a municipal record dating back to 1965-66 showing the landlords assessed as owners of the building before 1970.

The court reasoned that if the building was already assessed in the landlords' names before the tenancy began in 1970, the tenant, in claiming to have put up the construction, bore the onus to produce corroborative evidence (plans, licence, permission of landlord). No such evidence was produced by the tenant. Payment of property tax by the tenant alone did not establish ownership where earlier municipal records showed the landlords as owners.

Applying the Joseph v. Thomas standard (and related authorities), the court required objective, substantial materials that would make it likely that a civil court would uphold the tenant's plea. After comparative evaluation of the documents, the court concluded there were not sufficient materials to show the tenant's denial of title was based on a fair and reasonable supposition with strong grounds; rather the evidence supported the landlords' claim that the building existed before the tenancy commenced.

On rent, the court noted conflicting testimony as to the rate (landlords claimed Rs.300 from 18.3.1980; admitted earlier rent was Rs.125). Given the paucity of convincing evidence, the court held the correct rate to be Rs.125. It was also found admitted that the tenant had not paid rent from Karthigai 1979. Coupling the unjustified denial of title with the admitted non-payment, the court affirmed the Rent Controller's finding that the tenant was a wilful defaulter.

Procedurally, the court relied on its jurisdiction under Section 25 of the Tamil Nadu Rent Control Act to interfere with the Appellate Authority's judgment because a material piece of evidence (Ex.A-4) had been omitted from consideration and that omission materially affected the decision.

Holding and Implications

Holding: The revision is allowed; the judgment of the Appellate Authority is set aside; the denial of title by the tenant is held not to be bona fide; the tenant is liable to be evicted as a willful defaulter; revision allowed with costs throughout.

Implications: The direct effect is that the Appellate Authority's finding that the denial of title was bona fide is overturned and the tenant is subject to eviction on grounds of non-payment of rent and denial of landlords' title. The court restored the original finding of the Rent Controller that the tenant was a wilful defaulter. The opinion does not purport to lay down a new legal precedent beyond applying established principles on the test for bona fide denial (as drawn from cited authorities); it confines its decision to the facts and documents in this case.

Note: This summary is prepared strictly from the content of the provided opinion and does not add or infer facts beyond those explicitly stated in the text.

    K.S.R. Srirangaraja And Others v. Ponniah Thevar

    Landlords in R.C.O.P.No.13 of 1988 on the file of Rent Controller (District Munsif), Srivlliputhur, are the revision petitioners.

    2. Eviction petition was filed by petitioners on the ground that the respondent had defaulted in payment of rent from Karthigai 1979 and also on the ground that the tenant has denied the title of the landlords without any bona fide.

    3. The material averments in the eviction petition could be summarised thus:

    The petitioners claimed that they are joint owners of petition scheduled property bearing door No.315, with building and shed with adjacent open space in Tenkasi Road, Rajapalayam Town. It is their case that the respondent took schedule property on a monthly rent of Rs.125 from 2.3.1970 and later at the rate of Rs.300 per month from 18.3.1980. The tenancy is oral and according to the Tamil calendar month. The respondent is carrying on Leco coal business in the schedule property. The 3rd petitioner was receiving the rent on behalf of petitioners and he has paid rent till Karthigai 1979 and thereafter he has paid no rent. On 21.1.1984, a registered notice was issued asking the tenant to vacate the premises in view of default in paying rent. A reply notice was sent on 27.1.1984 whereby he denied the right of the petitioner over the building. The petitioners filed O.S.No.505 of 1984 for recovery of arrears filed O.S.No.505 of 1984 for recovery of arrears of rent. In that suit, the respondent admitted the tenancy in respect of site and contended that the monthly rent is only Rs.125 and not Rs.300. Under these circumstances, the petitioners were compelled to file the eviction petition under Rent Control Act.

    4. In the counter statement filed by the respondent he admitted that the petitioner are the owners of the site, but not of building, According to him he has put up the construction and the monthly rent is Rs.125 for the site. He also claimed that he is entitled to the benefit of Tamil Nadu City Tenants Protection Act. According to him, the Rent Controller has no jurisdiction to entertain the application since there is no tenancy arrangement in respect of building. The claim of the landlords that the building required demolition and reconstruction was also denied.

    5. The Rent Controller as per order dated 4.3.1994, allowed the application. It held that the rental arrangement was in respect of building and denial of title is not bona fide.

    6. Aggrieved by the order, respondent herein filed R.C.A.No.15 of 1994 on the file of the Appellate Authority/Principal Subordinate Judge, Srivilliputhur. Appellate Authority re-considered the entire evidence and held that the denial of title is bona fide and eviction petition was dismissed.

    7. It is against the said order, landlords are preferred this revision.

    8. Heard both sides.

    9. The only question that requires consideration is, whether there was a rental arrangement in respect of the building as contended by the landlords or whether there is denial of title over the superstructure raised by the tenant in bona fide. If it is found that there is rental arrangement in respect of the building, then it has to be held that the tenant is liable to be evicted both on the ground of default in payment of rent and also on the ground that the denial of title is not bona fide and consequently, he is liable to be evicted, If it is found that the denial of title is bona fide. the remedy of the landlords is only to move a civil court for appropriate relief.

    10. So, the main question to be considered in this revision is, whether the denial of title of the landlord is bona fide or not.

    11. P.W.1 is the 3rd petitioner, He speaks in terms of the eviction petition. Learned counsel for the landlords relied on Exs.A-3 and A-4 to contend that the building belongs to them and the local authority were also assessed the building situated in the property in their names. As against the said contention, learned counsel for the respondent submitted that during the very same period, he was also assessed to property tax and he had been paying property tax from the year 1970 onwards. Ex.B-7 is relied on for the said purpose. He also contended on the basis of Ex.B-6 that the building has been assessed in his name whereas the site is assessed in the names of landlords.

    12. On a comparative assessment of these evidence, the Appellate Authority held that the denial of title is bona fide.

    13. The original records were called for and the same were also perused. Ex.A-3 series are the receipts issued in the name of landlords from 1979-80 to 1984-85. It could be seen there from that the landlords have paid property tax for the building. Ex.A-4 shows that from 1965-66 onwards, the names of the petitioners were entered as owners of the building bearing door No.315. Prima facie, Exs.A-3 and A-4 show that the petitioners are the owners of the building. Ex.B-5 which is for the year 1981-82 to 1992-93 shows that petitioner's names have been entered as owners of the building bearing door No.315 and the annual assessment also stands in their names. But, at the same time, Ex.B-6 shows that from 1981-82 to 1992-93 the respondent's name is also included. But, there is one difference between Exs.B-5 and B-6 viz., the landlord's names seem to have been assessed for value for extent of premises as per assessment No.9015. But, so far as the respondent is concerned, he has been assessed of annual value of the building as per assessment No.9016, Ex.B-7 series are the various tax receipts from the year 1970 onwards which will show that the tenant has paid tax for the building as per the assessment made in Ex.B-6.

    14. From Ex.A-4, it could be seen that the building is situated in Ward No.12, but the same is now included in Ward No.8.

    15. Merely because, the assessment stands in the name of the tenant, can it be said that he is the owner of the buildingě The Appellate Authority held that the assessment in so far as the building is concerned stands in the name of the tenant and unless the landlords explain the circumstances under which, the assessment was made in the name of the tenant, his contention has to be taken as bona fide. But, I find that the Appellate Authority has omitted to consider one material point. The property tax assessment register covered under Exs.B-5 and B-6 are only from the years 1981-82 to 1992-93, but Ex.A-4 is from 1965-66 onwards. In Ex.A-4, the landlords were assessed for the building also and they were asked to pay property tax at the rate of Rs.45.80. Only from the year 1970-71, I find that the names of the landlords were included for the annual value of the premises. Before 1970-71, even in respect of the building, it was assessed only in the name of petitioners herein. The genuineness of Ex.A-4 is not disputed by anyone. The Appellate Authority has not considered the effect of Ex.A-4 in its correct perspective. It gave importance only to the property tax assessment covered by Exs.B-5 and B-6.

    16. In this case, the rental arrangement began only in the year 1970. It was thereafter, the assessment seems to have been made in the name of the respondent.

    17. If there was already assessment in the names of the landlords in respect of the building, it is for the tenant to explain that he put up a construction and that there was vacant site. Ex.A-4 shows that long before 1970, there was building in the property.

    18. The tenant is basing his claim only on the basis of this assessment. When the tenant contends that he has put up a construction, he has to produce necessary plan and licence and also the permission of the landlord to put up a construction. Absolutely, no evidence have been let in by the tenant to susbtantiate the same. The Appellate Authority made a comparative assessment of Ex.B-5 and Ex.B-6 and alone and held that the premises has been assessed in the name of landlords and the building is assessed in the name of landlords and the building is assessed in the name of the tenant. Therefore, there is a prima facie case in favour of the tenant when he denied the title. That approach of the Appellate Authority cannot be correct when Ex.A-4 disproves his case. In 1970, when the tenancy began, there was building is proved under Ex.A-4, that is a material piece of evidence which the Appellate Authority did not consider.

    19. Under Sec.25 of the Tamil Nadu Rent Control Act, this Court is entitled to interfere if a material piece of evidence is omitted to be considered and the non-consideration has materially affected the decision of the case. The judgment rendered by the Appellate Authority which has considered Ex.A-4 is therefore liable to be set aside while exercising powers under Sec.25 of the Act.

    20. Once I hold that there was a building long before 1970, and when there is a failure on the part of the tenant to prove that he has put up a construction, the only inference that can be drawn is that the denial of title is not bona fide. In this connection, what is the scope of enquiry of the bona fide denial of title. In Joseph v. Thomas 
1987
2 K.L.T. 1029. His Lordships Justice K.T.Thomas (as he then was) considered this question in paragraph 5 of the judgment which read thus

    Learned counsel for the respondent-tenant contended that if the Rent Control Court is satisfied that the denial is made honestly, and not with the oblique idea to protract the dispute, the Rent Control court has to record a finding. Bona fide (or good faith) is a familiar term in legal parlance. Honesty of course is one of the attributes of good faith, but that is not enough. In certain contexts that which is done with due care and attention is said to have been done in good faith. But the word bona fide , when used in relation to jurisdictional permutation, has a wider import and a higher degree than the other two attributes. The aspect of bona fides in the context in which it is mentioned in the proviso may be referable to the state of mind of the tenant. But when a court has to come to a finding regarding such state of mind, there must be objective satisfaction for court that the tenant had that state of mind. The court, whose jurisdiction stands ousted on a finding that a certain plea or assertion made by a party is bona fide, must be in a position to hold, that the plea is based on a very fair and reasonable supposition. In holding so, the court must have the satisfaction that there are strong or at least substantial grounds or sufficient materials in support of the plea. The court must be in a position to say that the chances of the plea being upheld by the civil court are fairly on the higher side. Then alone the Rent Control Court is justified in finding that the denial of landlord's title is bona fide. In White v. Feast L.R. 7 Q.B. 353,

    Cockburn, C.J. met the problem of deciding about summary jurisdiction of Magistrate under a certain statute. When defendant set up a case of bona fide claim of right, his Lordships observed that the defendant is not entitled to call upon such magistrate to hold their hands unless he gives them sufficient evidence to convince them that he acted under a fair and reasonable. supposition that he had a right to do the act, ALTHOUGH HE MAY HAVE HONESTLY BELIEVED THAT HE WAS JUSTIFIED IN DOING ACT . Lord Greene, M.R. Welsh Brick Industries Ltd. IN RE. (1946)2 All E.R. 197, did not think that there is any difference between the words bona fide disputed and the words disputed on some substantial grounds . The observation was made in the background of a contention that a petitioning creditor had no locus standi, in winding up proceedings, to present a petition because his alleged debt was the subject of a bona fide dispute, and that the country court judge should have dismissed the petition on the ground that winding up proceedings are not the appropriate procedure for dealing with disputed debits. The aforesaid observations lend support to the view which I take that there cannot be a finding that tenant's denial title bona fide unless the denial is based on a very fair and reasonable supposition of the plea on the strength of strong and substantion materials. [Italics supplied]

    21. The abovesaid decision as approved by a Division Bench in K.A.Aboobacker v. N.Girija K.A.Aboobacker v. N.Girija K.A.Aboobacker v. N.Girija A.I.R. 1995 Ker. 221. After extracting the above passage it was held thus:

    We too are of the view that the court whose jurisdiction stands ousted must have the satisfaction that there are strong or at least substantial grounds or sufficient materials in support of the plea of the petitioner and the chances of the plea being upheld by the civil court must be fairly on the higher side. In this case we see no such substantial grounds or sufficient materials in support of the plea of the petitioner [Italics supplied]

    22. On assessing the evidence that is produced in this case, it can be safely

    concluded that there is no chance of the plea of the tenant being upheld by the civil court and there is a higher chance of the plea of the landlord being accepted by the civil court.

    23. I have already said that the reliance placed by the tenant is only on the assessment years from 1981-82 onwards covered by Exs.B-5 and B-6 and various property tax receipts from 1970 onwards. At the time of tenancy began in 1970, there was building, the payment of tax by itself alone will not counter ownership on the tenant and he cannot deny title.

    24. It is admitted the the tenant has not paid rent from Karthigai 1979 onwards. According to the landlords, the rate of rent is Rs.300 to substantiate that the rate of rent is Rs.300 we have only the evidence of P.W.1 and the counter evidence of D.W.1 In view of the lack of evidence, I have to hold that the rate of rent is only Rs.125. Even, the admitted rate of rent is not paid to the landlord from Karthigai 1979. When he denies the title of the landlord and the same is coupled with non-payment of rent, it has only to be presumed that he did not want to pay rent intentionally. The finding of the Rent Controller that the tenant is a wilful defaulter is correct and the said finding is restored.

    25. In the result, I set aside the judgment of the Appellate Authority that the denial of title is not bona fide and the tenant is also liable to be evicted on the ground that he is willful defaulted. The revision is allowed with costs throughout.

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    K.S.R. Srirangaraja And Others v. Ponniah Thevar
    (Jan 3, 2000)