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PETITIONER:

M/S CHORDIA AUTOMOBILES

Vs.

RESPONDENT:

S. MOOSA & ORS.

DATE OF JUDGMENT: 29/02/2000

BENCH:

A.P.Misra, N.S.Hegde

JUDGMENT:

MISRA, J.

This appeal is directed against the eviction of the

appellant on account of default of payment of rent under

Section 10(2)(i) of the Tamil Nadu Buildings (Lease and Rent

Control) Act, 1960.

The appellant took the disputed shop situated at 71,

Usman Road, T. Nagar, Madras on rent in the year 1972 from

the erstwhile owner who sold this property to the present

respondents in the year 1977. The rent then paid by the

appellant was at the rate of Rs.275/- p.m. Thereafter, it

was raised to Rs. 343.75 p.m. from 1.4.1979. Next

enhanced to Rs.500/- p.m. w.e.f. 1.9.1985. In the year

1988 the appellant desired to change his business from spare

parts of two-wheelers to sale of tyres, then the rent was

again increased to Rs.750/- p.m. The appellant desired that

for selling of tyres he needs to install air-conditioner and

compressor with water connection for checking of tubes and

fitment of tyres. This also requires additional electricity

load, a water tap and a separate lavatory. For doing these,

the appellant offered and respondent agreed on condition

that the rent be further enhanced from Rs.750/- to

Rs.1,000/- p.m. On this oral agreement the appellant spent

about Rs.1,00,000/- on renovation. However, the respondent

failed to discharge their obligations for providing the

aforesaid additional facilities despite repeated requests.

On respondents failure to do so, the appellant filed a suit

against him that the landlord was not entitled to claim this

enhanced rent of Rs.1,000/- p.m. In support he stated that

on the ground floor there are nine shops including the one

with the appellant, similarly situated, but none of these

shops have any rental of Rs.1,000/- p.m.

Instead of complying with the said conditions, the

appellant received respondents notice dated 9.8.1989

through his advocate that the agreed rent of Rs.1,000/- p.m.

from 1.4.1989 has not been paid in spite of demands. Before

any reply could be sent the appellant was served with a copy

of the eviction proceedings dated 27.9.1989 under Section

10(2)(i) of the aforesaid Act. The appellant contested this

claim that enhancement agreed to pay Rs. 1,000/- was on a

clear understanding that the respondent would provide

separate toilet, water connection, additional electricity

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load etc. In fact, during the pendency of the said petition

the counsel for the appellant wrote a letter dated 17.1.1990

to the counsel of the respondent for getting the three-

phase electric connection for the shop in question.

Since there was a dispute in respect of rate of rent

the Rent Controller passed an order under Section 11 on

30.7.1990 directing the appellant to deposit Rs.17,250/-

towards the rent for the period 1.1.1989 to 31.7.1990. The

aforesaid amount was directed to be paid by 16.8.1990. The

appellant deposited the said amount in the treasury of the

court on 13.8.1990 and thereafter continued to pay/deposit

the rent at the rate of Rs.750/- p.m. initially in the

court and then directly to the respondents who thereafter

accepted the same. Thus, there has been no conceivable

default. However, the Rent Controller decreed the petition

of the respondent. The Rent Controller held that the

respondent did not pay the arrears of rent even till filing

of the counter in the said petition and it was paid only

when Order under Section 11 was passed which constitutes to

be wilful default. On appeal, the Appellate Authority

confirmed the said order. The Appellate Authority records,

in spite of receiving the aforesaid notice, Ex. P-2, the

appellant did not sent any reply to contradict the contents

of the said notice. Finally the revision was also

dismissed by the High Court against which the present appeal

has been preferred.

Learned counsel for the appellant submits that the

Rent Controller without application of mind held, appellant

to be wilful defaulter. The Appellate Authority also fell

into the same error, while confirming the order. It records

not sending any reply to the said notice dated 9.8.1989

amounts to non-controverting the facts and not depositing

the rent within the time stated therein constitute a case of

wilful default. Submission is, the authorities did not

properly construe Explanation I to Section 10 (2)(i) of the

Act. The said notice is dated 9.8.1989, thus wilful default

under the aforesaid provisions could only mature after

expiry of 60 days from the date of the notice and since

before the expiry of that period, the landlord filed

eviction petition on 20.9.1989, hence on that date the

appellant could not be said to be a wilful defaulter nor it

was possible for the appellant to send any reply, as the

eviction suit itself was filed before the expiry of the said

60 days. For ready reference Section 10(2)(i) is quoted

hereunder:-

10. Eviction of tenants.(1) A tenant shall not be

evicted whether in execution of a decree or otherwise except

in accordance with the provisions of this section or

sections 14 to 16:

(2) A landlord who seeks to evict his tenant shall

apply to the Controller for a direction in that behalf. If

the Controller, after giving the tenant a reasonable

opportunity of showing cause against the application, is

satisfied

(i) that the tenant has not paid or tendered the rent

due by him in respect of the building, within fifteen days

after the expiry of the time fixed in the agreement of

tenancy with his landlord or in the absence of any such

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agreement, by the last day of the month next following that

for which the rent is payable, or

.. Provided that in any case falling under

clause (i) if the Controller is satisfied that the tenants

default to pay or tender rent was not wilful, he may,

notwithstanding anything contained in section 11, give the

tenant a reasonable time, not exceeding fifteen days, to pay

or tender the rent due by him to the landlord up to the date

of such payment or tender and on such payment or tender, the

application shall be rejected.

Explanation I: For the purpose of this sub- section,

default to pay or tender rent shall be construed as wilful,

if the default by the tenant in the payment or tender of

rent continues after the issue of two months notice by the

landlord claiming the rent.

{Emphasis supplied}

In support that there was no default, it is submitted

that always in the past, the rent was regularly collected by

the agent of the landlord as for some reasons he did not

come to collect the amount fell in arrears. Further, as

dispute arose of the hike of the rent with effect from

1.4.1989, the arrears fell due, thus on these facts, it

would not constitute to be a case of wilful default.

Further, Explanation to Proviso of Section 10(2) makes it

clear that the wilful default could only be if the tenant

defaults after the expiry of two months from the date of the

notice, and as this period did not expire when the suit was

filed, the finding of wilful default is liable to be set

aside. However, when an order was passed under Section

11(4) fixing tentative rent the amount so determined was

paid within the period granted. For all these reasons, even

if it could be said that there was default, it would not a

wilful default. This aspect had not been considered by any

of the authorities including High Court, which summarily

dismissed the revision. He has also taken us to the chart

filed by the appellant, to show that he never defaulted in

the past except the disputed one since the year 1972. The

default referred to in the notice is for the period 1.1.1989

to 31.3.1989 at the rate of Rs.750/- p.m. and from 1.4.1989

to 31.7.1989 at the rate of Rs.1,000/- p.m. So far arrears

for the second period 1.4.1989 to 31.7.1989, admittedly

there was a dispute of rate of rent. For the first period,

i.e., from 1.1.1989 to 31.3.1989, for a period of three

months, the case is that as rent was being collected

regularly earlier by the agent of the landlord and as he did

not come to collect the same, the arrears fell due. It is

further submitted, the chart shows for the subsequent period

also that appellant has been paying rent regularly without

any default.

On the other hand, learned counsel for the respondent

submits that fixation of rent under Section 11 and payment

thereafter is no defence for the default. This adjudication

is interim in nature and is subject to the final decision by

the court. Further, in spite of notice, neither any reply

was sent by the appellant nor the amount was tendered. Even

thereafter he took number of adjournments before the Rent

Controller, hence all this constitute to be a case of a

wilful default.

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We have heard learned counsel for the parties and

examined their submissions and made overall assessment to

judge, whether any wilful default was committed or not by

the tenant. It is not disputed by the landlord that the

appellant is a tenant of this accommodation since 1972 and

was regularly paying the rent in the past. The only default

is, as aforesaid, for the disputed period from 1.1.1989 to

31.3.1989 at the rate of Rs.750/- p.m. and from 1.4.1989 to

31.7.1989 at the rate of Rs. 1000/- p.m. These facts

reveal that there is a default towards payment of rent by

the tenant for the aforesaid period. The only question is,

whether this default on these facts would constitute to be

or could be construed to be a wilful default? We proceed to

examine the law on these facts. The statute has given a

benefit to a tenant viz., if there is default in payment of

rent and a notice is sent by the landlord of such default,

then the default would mature into a wilful default only if

the default continues in other words the defaulted amount is

not paid within a period of two months from the date of

notice. In the present case, notice was sent on 9.8.1989,

thus the said two months would have expired only on the

9.10.1989. In other words, in case the tenant could have

paid the said amount within this period, it would not be a

case of wilful default. We find in the present case after

sending the said notice, the landlord did not wait for the

expiry of the said period and before that filed the eviction

petition R.C.O.P. No. 2963 of 1989 on 20.9.1989 alleging

the wilful default and further if the suit itself was filed

before the said period there could be no question of sending

any reply to the said notice. Next, we find notice

contained amount which fell into arrears is of two periods.

The amount for the period 1.4.1989 to 31.7.1989 was

admittedly in dispute. In fact for this reason during

pendency, a proceeding to fix interim rent under section 11

was initiated. The tenant reasonably thought to pay the

same after its adjudication and in fact deposited the same

the moment it was adjudicated. So far the earlier period,

i.e. 1.1.1989 to 31.3.1989 for three months, the case of

the appellant is that tenants long dependency in the past,

on the agent of the landlord to collect the rent and as he

did not come, thus rent could not be tendered, thus this

could not be a case of wilfully not paying the rent. It may

be, as enhancement of rent came in dispute, the agent did

not come to collect the rent. We have given our full

consideration, and find submission for the appellant has

force, which has not been adverted to by any of the three

courts below. This coupled with Explanation to the proviso

of Section 10 (2)(I) as two months did not expire from the

date of notice when suit was filed it could not to be a case

of wilful default.

Wilful default means an act consciously or

deliberately done with open defiance and intent not to pay

the rent. In the present case the amount of rent defaulted

firstly is on account of fact that the agent of the landlord

did not come to collect the rent for some reason. Further,

notice of default contained disputed rent. This fact

coupled with the fact that eviction suit was filed before

maturing a case of wilful default in terms of the

Explanation to the proviso of Section 10(2). The dispute of

rent admittedly was genuine. Further, we find conduct of

the appellant throughout in the past being not of a

defaulter or irregular payer of rent. Thus, all these

circumstances cumulatively come to only one conclusion that

the appellant cannot be held to be a wilful defaulter.

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In S. Sundaram Pillai and Ors. Vs. V.R.

Pattabiraman and Ors. (1985 [1] SCC 591) this Court had

occasion to consider the word Wilful default under Section

10(2) of the aforesaid of the Tamil Nadu Buildings (Lease

and Rent Control) Act, 1960 which is reproduced below:-

Before, however, going into this question further,

let us find out the real meaning and content of the word

wilful or the words wilful default. In the book A

Dictionary of Law by L.b. Curzon, at page 361 the words

wilful and wilful default have been defined thus:

Wilful- deliberate conduct of a person who is a free

agent, knows that he is doing and intends to do what he is

doing.

Wilful default Either a consciousness of

negligence or breach of duty, or a recklessness in the

performance of a duty.

In other words, wilful default would mean a

deliberate and intentional default knowing full well the

legal consequences thereof. In Words and Phrases, Volume

11-A (Permanent Edition) at page 268 the word default has

been defined as the non-performance of a duty, a failure to

perform a legal duty or an omission to do something

required. In volume 45 of Words and Phrases, the word

wilful has been very clearly defined thus:

Wilful intentional; not incidental or

involuntary;

- done intentionally, knowingly, and purposely,

without justifiable excuse as distinguished from an act done

carelessly; thoughtlessly, heedlessly or inadvertently;

- in common parlance word wilful is used in sense of

intentional, as distinguished from accidental or

involuntary.

P. 296 Wilful refers to act consciously and

deliberately done and signifies course of conduct marked by

exercise of volition rather than which is accidental,

negligent or involuntary.

In Volume III of Websters Third New International

Dictionary at page 2617, the word wilful has been defined

thus :

governed by will without yielding to reason or without

regard to reason; obstinately or perversely self-willed.

The word default has been defined inVol. I of

Websters Third New International Dictionary at page 590

thus :

to fail to fulfil a contract or agreement, to accept a

responsibility; to fail to meet a financial obligation.

In Blacks Law Dictionary (Fourth Edn.), at page 1773

the word wilful has been defined thus:

Wilfulness implies an act done intentionally and

designedly; a conscious failure to observe care;

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conscious; knowing; done with stubborn purpose, but not

with malice.

The word reckless as applied to negligence, is the

legal equivalent of wilful or wanton.

Thus, a consensus of the meaning of the words wilful

default appears to indicate that default in order to be

wilful must be intentional, deliberate, calculated and

conscious, with full knowledge of legal consequences flowing

therefrom. Taking for instance a case where a tenant

commits default after default despite oral demands or

reminders and fails to pay the rent without any just or

lawful cause, it cannot be said that he is not guilty of

wilful default because such a course of conduct manifestly

amounts to wilful default as contemplated either by the Act

or other Acts referred to above.

For the foregoing reasons and as per our findings we

come to the irresistible conclusion that all the three

courts below committed error in law in holding tenant to be

a wilful defaulter. So, we hold even if he was in default

it is not a case of wilful default. We hold that the

appellant committed no wilful default. Accordingly, the

impugned orders and judgments of all the three courts are

hereby set aside. The appeal is allowed. However, on the

facts and circumstances of the case, the costs on the

parties.