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DA.t\1ADILAL AND OTHERS

PARASHRAM AND OTHERS

May 7, 1976

645

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[Y. V. CHANDRACHUD, R. S. SARKARIA AND A. C. GUPTA, JJ.] B

Madhya Pradesh Accommodation Control Act, 1961-S. 12(1y(a) and (f)

-Scope of-Death of tenant-Heritable interest in the premises-Legal repre~

sentatives-lf could clai1n statutory tenancy-If concept applicable in lndia­

Statutory tenant-If could sub-let the premises.

Rent-Payrnent-1/ could be n1ade by cheque.

.Procedure-Lower appellate court overlooked 1naterial evidence-Finding,

if bad in law-High Court-If could reverse.

Section 12(1) of the Madhya Pradesh Accommodation Contrnl Act, 1961,

enacts that notwithstanding anything to

the contrary contained in any other

law or contract no suit shall be filed in any civil court against a tenant for his

eviction from any accommodation except on one or more of the grounds

giVen

in the section. The ground given in cl. (a) is that the tenant has neither paid

nor tendered the whole of the arrears of the rent legally recoverable from him

within

two months of the date on which the notice had been served on him

by the

landlord and the ground in cl. (f) is that the accommodation let for

non.residential purpose

is required bona fide by the landlord for the purpose of

continuing or starting his business.

The appellants brought a suit under

s. 12(1 )(a) and (f) of

the Act for

ejectment

of their tenants. The suit was dismissed by the trial

court on the

ground

(i) that since the dispute as to the amount of rent payable by the

tenants had not been determined during

the pendency of the suit

Under s. 13(2)

no order for eviction could be made;

(ii) that there was no bona fide require·

ment of the premises

by the

appellants for their own business and (iii) that

the refusal by the appellant to accept the arrears of rent by cheque was valid

because tendering

by cheque was not valid tender in the absence of an agree·

ment to that effect.

The first appellate court decreed the suit. During the pendency of the

second appeal in the High Court the tenants died.

The High Court allowed

substitution of their legal representatives over·ruling the appellants' objection

that the deceased tenants were mere statutory tenants and that the right to

resist eiectment on the basis

of the Rent Control Act was merely a personal

right which

was not heritable.

On merits, the High Court held that (i) offer

of rent

by cheque amounted to valid tender by the

Jenant and (ii) the appel·

lants had failed to prove their case of bona fide requirement of the premises

for their own use.

Dismissing the appeal,

HELD : There

is no force in the contention that the defendants who

v.'ere

statutory tenants had no heritable interest in the demised premises-and on

their death the right to prosecute the appeal in the High Court had not

survived to their heirs and legal representatives. The preQecessors·in-interest

of the respondents had a heritable interest in the premises and consequently

the resPondents had the right to prosecute the appeal in the High Court. [655AJ

(I) (a) The concept of statutory tenancy under the E~glish Rent Acts and

under the Indian statutes rests on different foundations. The term statutory

tenancy which

is used for referring to a tenant whose tenancy has been tenni­

nated and who would be liable to

be evicted but for the protecting statute, is

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SUPREME COURT REPORTS [1976] SUPPLEMENTARY

borro\Ved from the English Rent Acts. Courts in England have held that a

statutory tenant h~ no esta.te or property in the premises" he occupies becalliie

he retains possession by virtue of the Rent Acts and not as being entitled

to a tenancy. But in this country it is not possible to proceed on the basis

that a tenant whose contractual tenancy has determined but who

is protected a~ainst evicti~n ~Y the sta~ute, ~as no right ~f. property b,ut only a person •. 'll

right to remain m occupation \VIthout ascerta1n1ng wha·t his rights are under

the statute. [654H: 653A-C]

Anand /ilivas (Private) Litnited v. Anandji Kalyanji Ped/ii & Ors. [1964] 4

SCR 892; Jagdish Chander Chatter{ee and Ors. v. Sri Kishan & Anr., [1973] 1

S.C.R. 850; Roe v. Russel. f!928l 2 K.B. 117: Haskins v. Lewis [1931] 2 K.B_

1(9); Keeves v. Dean [1923] (93) L.J.K.B. 203 (207) and Boyer v. Warbe~·

[1953] 2 Q.B. 234, referred to.

(b) Tenancy has its origin in contract. A contractual tenant had an

estate or property in the subje_ct tnatter of the tenancy and heritability is an

incident of tenancy. It cannot be assumed that with the determination of the

tenancy, the estate must necessarily disappear and the statute can only preserve

his status of irremovability and not the estate he had in the premises in

his.

occupation. [653D]

{c) The definition of a tenant contained in

s. 2(i) makes a person

continu·

ing in possession of a premises after the determination of his tenancy a tenant,

unless a decree or order for eviction had been made. against him, thus, putting

D him on

par with a person whose contractual tenancy still subsists. [653G]

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(d) Section 14 which deals

v.ith restrictions on sub-letting read with the

~lefinition contained in s. 2(i) makes it clear that the so-called_ statutory tenant

has the right to sub-let

in

commo!ll with contractual tenant and this is because

he also has an interest in the prerrtises occupied by him. (654D]

(2)(a) The High Court rightly held that the cheques sent to the appellants

amounted to valid tender of rent.

It is well-established that a cheque sent

in payment of a debt on

the request of the creditor, unless dishonoured.

operates

as a valid discharge of the debt a,nd if the cheque was sent by post

and

\Vas met on presentaiion, the date of payment is the date when the cheque

was posted. [655B-Dl

(b) Rent is payable in the sa1ne manner as any other debt and the debtor

has to pay his creditor in cash or other legal tender, but there can be no

dispute that the mode of payrrtent can be altered by agreement. In the

contemporary society it

is reasonable to suppose payment by cheque as implied

unless the circumstances of a

case indicate otherwise. [655C]

( 3) The High Court was within its jurisdiction in setting flSide the finding

of the lower appellate court and restoring that of the trial court on

the

question of bona fide requirement of the premises by the

appeilants. The

lower appellate cou_rt overlooked a very material part of the evide!).ce bearing

on the question. It is well-established that if a finding of fact is arrived at

ignoring important and relevant evidence the finding is bad in law. [6518-C]

Radha Nath Seal v. Haripada Jana & Ors. AIR 1971 S.C. 1049, followed.

.Madan Lal Puri v. Sain Das Berry AIR 1973 S.C. 585; Mattulal v. Rad!iey

Lal AIR 1974 S.C. 1596; and Sarvate T. B. v. Nemi Chand 1966 M.P.L.J. 26,

referred

to .

CIVIL

APPELLATE JURISDICTION; Civil Appeal 88511968.

(From the judgment and order dated 6-11-1967 of the Madhya

Pradesh High Court in Second Appeal No. 913 of 1965).

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DAMADILAL v. PARASHRAM (Gupta, J.) 647

S. V. Gupte, R. P. Pandey and S. S. Khanduja, for the appellants.

F. S. Nariman, J. B. Dadachanji, P. C. Bhartari, K. L. John for

tile respondents.

The Judgment of the Court

was delivered by GUPTA, J. Damadi Lal, Sheo Prasad and Tirath Prasad who were

members of a Hindu Joint Family brought a suit for ejectment on July

31, 1962 against their tenants Begamal and Budharmal on the

grounds mentioned in clauses

(a) and (f) of section 12(1) of the

Madhya

Pradesh Accommodation Control Act, 1961. The relevant

.provisions are in these terms :

"Sec. 12. Restriction on eviction of tenants.-( 1) Not­

withstanding anything to the contrary contained in any other

law

or contract, no suit shall be tiled in any Civil Court

against a tenant for

his eviction from any accommodation

except on one or more

of the following grounds only,

namely-

( a) That the tenant has neither paid nor tendered the

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whole of the arrears of the rent legally

recoverable from him D

within two months of the date

on which a notice of demand

for the arrears of rent has been served on him by the land-

lord

in the prescribed manner;

x x x x x

x

x x x x

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(f) tl1at the accommodation Jet for non-residei1tial pur­

poses is required bona fide by the landlord for the purpose

of continuing or starting his business or that of any of his

major sons or unmarried daughters if he is the owner there­

of or for any person for whose benefit the accommodation

is

held and that the landlord or such person has no other

reasonably suitable non-residential accommodation

of his F

own in his occupation in the

city or town

concerned."

Plaintiffs' case under section 12 ( 1) (a) was that the defendant tenants

had defaulted in paying rent for ·the period October 1, 1961 to May

31, 1962 and did not also pay or tender the amount in arrears withi•

two months of the service of the notice of demand. Clause (f) of

section 12(1) was invoked on the allegation that the accommodation G

let

was required bona fide by the plaintiffs for the purpose of

starting

their own business. Before the suit was instituted the plaintiffs had

determined the tenancy from May 31, 1962 by a notice dated May 7,

1962. The house in dispute which is in Bazar Chowk in District Satna

was Jet out to the defendants at a monthly rent of Rs. 2751-for the

purpose

of their business. The plaintiffs reside in village Nadan,

Tahsil Maihar, where they carry on their business.

H The trial court by its judgment and decree dakd November 11.

1964 dismissed the snit for eviction. There was some disoute hetween

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SCPREME COURT REPORTS (1976] SUPPLEMENTARY

the parties as to the rate of rent; ultimately the plaintiffs admitted that

the rent was fixed at Rs. 1751-per month with effect from August

1,

1961 by the Rent Control Authority and a sum of Rs.

1200/-, which

was the amount

in arrears, had been tendered to the plaintiffs by

cheque on May 26, 1962 which the plaintiffs refused to accept.

The

trial court was of opinion that the refusal was valid because "tendering

by cheque is no valid tender" unless there was an agreement that pay­

ment

by cheque would be acceptable and that the defendants were

therefore defaulters within the meaning of section

12(1)(a). How­

ever,

in view of the dispute as to the amonnt of rent payable by the

tenants, which

was not determined during the pendency of

the suit as

required

by section 13 ( 2), the trial court held that no order for evic­

tion

under section 12(1)(a) could be made in this case and passed'"a

decree for Rs. 1200

1

--in favour of the plaintiffs.

On the question of the plaintiffs' requirement of the premises for

their own business, the trial court found itself unable to accept the

evidence adduced on behalf of the plaintiffs.

Of the _witnesses

examined

by the plaintiffs on the point, the evidence of P.Ws. 1, 3

and

4 was not relied on because none of them was considered to be an

independent witness and, further, becansc it was apparent from their

evidence that what they said

was what they were tutored to say by the

plaintiffs. The other three witnesses were plaintiffs Damadi Lal

and

Tirath Prasad (P.W. 2 and P.W. 6 respectively) and Radhcy Sham

(P.W.

5), a son of plaintiff She6 Prasad. They were also disbelieved

because of the following reasons. Damadi Lal tried to

give the impres­

sion that plaintiffs had no business except the cloth business and the

grocery shop at Nadan.

He tried to conceal that they had a money­

lending business and also agricultural lands. Tirath Prasad stated that

the main source of income of the family

was from the moneylending

business. Tirath

Prasad also disclosed t!J.at the ,plaintiffs had already

a partnership business in cloth at Satna though Damadi Lal and P.W. 5

Radhcy Sham did not admit this.

It also appears in evidence that the

;plaintiffs had yet

another· cloth business at a place called Ramnagar

which

was managed by Radhey Sham. The plaintiffs claimed that

they would start a business at Satna, but Damadi Lal's evidence

is that

they had

no income or saving. Tirath Prasad also said that their in­

come

was not even sufficient for their maintenance. Admittedly,

plaintiffs had

in their possession one room in the house which

was let

out to the defendants. The plaintiffs did not adduce any evidence to

show how the said accommodation

was unsuitable or insufficient for

them to start their own business.

It was also admitted that the plain­

tiffs had filed a suit for ejectment on an earlier occasion, but the defen­

dants having agreed to pay increased rent the suit was not proceeded

with. According to the defendants the present suit

was instituted on

the defendants' refusal to increase the rent further to Rs.

500/-a

month.

For the above reasons the trial court did not accept the case of

bona

fide requirement holdnig that P.W. 2, P.W. 5 and·P.W. 6 were in

the habit of suppressing the truth to snit their own purpose.

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DAMADILAL v. PARASHRAM (Gupta, J.) 649

On appeal by the plaintiffs, the first appellate court reversed the

decision of the trial court and decreed the suit. The appellate court

agreed with the trial court that sending a cheque did not amount t? a

valid tender of rent and, as the tenants did not apply under section

13(2), they were not entitled to protection against eviction on the

ground

of default As regards the plaintiffs' case of requirement,

the

court found, that the criticism of the plaintiffs' witnesses was net justi­

fied. The appellate court thought that the fact that Tirath Prasad was

carrying on a cloth business

at

Satna which Damadi Lal had kept back

froin court was irrelevant in view of the plaintiffs' claim that some

members of the family wanted

to start a new business at

Satna.

According to the appellate court the further fact that P.W. 5 Radhcy

Sham was running a cloth business at Ramnagar was indicative of the

growing need of the plaintiffs' family. The room in the plaintiffs'

possession in the disputed house was not found suitable or sufficient

for a wholesale business that the plaintiffs intended to start. Refer­

ring to the trial court's finding that the plaintiffs had no money to start

a new business at Satna, the court found that the eviden~e did not

support this. The appellate court therefore held that the plaintiffs re­

quired the premises for their own business.

Dissatisfied with this decision, the defendants preferred a second

!appeal to t11e High Court. During the pendency of the second appeal

in High Court both the defendants died. Budharmal died on or about

January 27, 1966 and his legal representatives were brought on record

and substituted iu his place without objection. Begamal died

on

March 2, 1967 and his heirs applied for being brought on record in his

place as appellants. The plaintiffs made an application praying for an

order that the appeal had abated as a consequence

of the death of both

the defendants.

In this application the plaintiffs contended that

Budharmal and Begamal were

"merely statutory tenants and their right

to resist ejeetment on the basis of Madhya Pradesh Accommodation

Control Act was merely a personal right" which was not heritable and

had "not devolved upon their heirs". By its order dated July 26, 1967

the High Court allowed the application for substitution made by

Begamal's heirs overruling the plaintiffs' objection.

Ultimately on November 6, 1967 the High Court allowed the

appeal setting aside the decree of the lower appellate court and restor­

ing that of the trial court dismissing the suit.-The High Court found

that the defendants were not in arrears of rent. Differing from both

the courts below the High Court held that the cheque which the defen­

{lants had sent to the plaintiffs

in payment of the amount in arrears

within a month of the service of the writ of summons on him amounted

to a valid tender of rent as required by section 13, and in view of sec­

tion

12(3) no order for eviction could be made.

Section 12(3) pro­

vides that no order for eviction of a tenant shall be made on the

ground of default if the tenant makes payment or deposits rent as re­

quired by section

13. This. is what the High

Court held on the validity

of tender of rent by cheque :

"The question is as to whether, instead of presenting the

cash, if a cheque is sent to the landlord, that is sufficient ten-

der of the arrears of rent

or not ...... In the highly deve-

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loped society, payment by cheque has bec_ome more con­

venient mode of discharging one's obligation.

If a cheque

is an instrument which represents and produces cash and

is treated as such by businessmen, there is no reason

.why

.the archaic principle of the common law should be followed

in deciding the question

as to whether the handing

. over of

the cheque

is not a

sufficient tender of the arrears of rent if

.the chequ~ is drawn for that amount. It is no doubt true

that the issuance of the cheque does not operate

as a dis­

charge of

the obligation unless it is encashed, and it is

tre~ted as a conditional payment, yet, in my view, this is

a sufficient tender of the arrears if the cheque is not dis­

honoured. In the present day society, I am of the

view.

an implied agreement should be inferred that if the payment

is made by a cheque, that mode of payment would be ac­cepted."

On the ground of bona fide requirement, the High Court found that

there was no evidence to show that the plaintiffs had sufficient funds

to start the wholesale business for which they sought to get posses­

sion of the disputed premises. This

is a point which

has· a bearing

on •he genuineness of the plaintiffs' claim. The High rourt took

note of the fact that the plaintiffs made an attempt to keep back

from the Court that they were carrying on business at two more

places. one at Satna, and another at Ramnagar. In this connection

the High Court also referred to the defendants' case that the plaintiffs

sought to increase the rent from Rs. 275/-to Rs. 500/-a month and

that

when the defendants had the rent reduced by the Rent Controller

to

Rs. I 75/-per month, the present suit was filed. The High Court

fouud that these circumstances which the trial court took into con­

sideration were ignored by the lower appellate court.

The High

Court accordingly held that the

plairitiffs had failed to prove their

case of bona

fide requirement, set aside the decree of the

appellate·

court, and restored that of the trial court dismissing the suit.

Before us, Mr. Gupte for the plaintiff-appellants raised three con­

ttntio1JS : (I) Begamal and Budharmal both of whom were statutory

tenants had no heritable interest in the demised premises and, on

their death, the right to prosecute the appeal in the High Court did

not survive

to their heirs and legal representatives; (2) payment by

cheque was not

a valid tender of rent and accordingly the suit should

have been decreed on the ground of default; and

(3) the High Court

had no jurisdiction in second appeal to reverse the finding of the

first appellate court on the question of reasonable requirement which

was a finding of fact.

In support of his first contention Mr. Gupte relied on two decisions

of this

Court, Anand Nivas (Private) Ltd. v. Anandji Kalyanii Pedhi

& Ors.(') and Jagdish Chander Chatterjee and Ors: v. Sri Kishan &

A nr. (') The statute considered in Anand Nivas' case was Bombay

(l) [l964]4S.C.R.892.

(2) [1973] IS. C.R. 850.

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DAMADILAL v .. PARASHRAM (Gupta, J.) 651

Rems, U .. <otel and Lod·g. i11_g Rates Con. trol Ac.t,. 1947 as amended in

195\i. The question there was, whether a tenant whose tena9cy had

been terminated had any right to mblet the premises. Of the three

learned Judges composing the Bench that heard the appeal, Hidaya­

tullah .and Shah JJ .. held that a statutory tenant, meaning a tenant

whose tenancy has determined but who continues in possession, has

no power of subletting. Sarkar

J

.. delivered a dissenting opinion. Shah

J. who spoke for himself and Hidayatullah J. observed in the course

of their Judgment :

"A statutory tenant has no interest in the premises oc­

cupied· by him, and he has no estate to assign or transfer.

A statutory tenant is, as we have already observed, a person

who on determination of his contractual right,

is permitted to remain in occupation so long as he observes and performs

th.e conditions of the tenancy and pays the standard rent

and permitted increases. His personal right of occupation

is incapable of being transferred or assigned, and he having

no interest in the property there

is no estate on which sublet­

ting may

operate."

It appears from the Judgment of Shah J. that "the Bombay Act mere­

ly grants conditional protection to a statutory tenant and dues not in­

vest him with the right to enforce the benefit of any of the terms

and conditions the original tenancy". Sarkar J. dissenting heid that

word 'tenant'

as defined in the Act included both a contractual tenant-,

a tenant whose lease is subsisting as also a statutory tenant, and the

latter has the same power to sublet

as the former. According to

Sarkar

J. even if a statutory tenant had no estate or property in the

demised premises, the Act had undoubtedly created a right in

such a

tenant

in respect of the property which he could transfer. Jagdish

Chander Chatterjee's

case dealt with the Rajasthan Premises (Control

of Rent and Eyiction) Act,

1950, and the question for decision was

whether

on the death of a statutory tenant his heirs succeed to the

tenancy so

as to claim protection of the Act. In this case it was held

by Grover and

Palekar JJ., relying on Anand Nivas' cas~, that after

the termination of contractual tenancy, a statutory tenant enjoys only

a personal right

to continue in possession and on his death his heirs

do not 'inherit any estate

or interest in the original tenancy.

Both these cases,

Anand Nivas and Jagdish Chander Chatterjee,

procee<! on the basis that a tenant whose tenancy has been terminated,

described

as statutory tenant, has no estate or interest in the premises

but only a personal right to remain in occupation.

It would seem

as if there is a distinct category of tenants called statutory tenants

having separate and

fixed incidents of tenancy. The term 'statutory

tenancy'

is borrowed from the English Rent Acts. This may be a

convenient expression for referring to a tenant whose tenancy has been

terminated and who would be liable to be evicted but for the protect­

ing statute, but courts in this country have sometimes borrowed along

with the expression certain notions regarding such tenancy from the

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decisions of the English courts. In our opinion it ha_s. to be ascertain­

ed how far these notions are reconcilable with the provisions of the

statute under consideration in any particular case. The expression

'statutory tenancy' was used in England in several judgments under

the Increase of Rent and Mortgage Interest (War Restrictions) Act,

1915, to refer to a tenant protected under that Act, but the

term. got

currency from the marginal note to section

15 of the Rent and Mort­

gage Interest (Restrictions) Act,

1920. That section which provided

inter alia that a tenant who by virtue of that Act retained possession

of any dwelling house

to which the Act applied, so Jong as he retained

possession, must

observe and would be entitled to the ~enefit of all

the terms and conditions of the original contract of tenancy which were

consistent with the provisions of the Act, carried the .description in the

margin "conditions of statutory tenancy". Since then the term has

been used in England

to describe a tenant protected under the subse­

quent statutes until section 49(1) of the Housing Repairs and Rent

Act, 1954 for

the first time define 'statutory tenant' and 'statutory

tenancy'. 'Statutory tenant'

was defined as a tenant

"who retains pos­

session

by virtue of the Rent Acts and not as being entitled to a ten­

ancy, and

it was added.

" 'statutory tenancy' shall be construed ac­

cordingly". This definition of 'statutory tenancy' has been incorpor­

ated in the Rent Acts

of 1957 and 1965. In England

"statutory ten­

ancy" does not appear to have had any clear and fixed incidents; the

concept

was developed over the years from the provisions of the suc­

cessive Rent Restrictions Acts which did not contain a clear indication

as to the character of

sm;h tenancy. That a statutory tenant is en­

titled

to the benefit of

the terms and conditions of the original contract

of tenancy so far as they were consistent with the provisions of the

statute did not,

as Scrutton L. J. observed in Roe v.

Ru«<ell,C) "help

very much when one came to the practical facts of life". according to

him "citizens are entitled to complain that their legislators did not

address their minds

to the probable events that might happen in cases

of statutory tenancy, and consider how the legal interest they were

granting

was affected by those probable

events". He added, " .... it

is pretty evident that the Legislature never coµsidered as a whole the

effect on the statutory tenancy of such ordinary incidents

as death,

bankruptcy, voluntary assignment, either inter

vivos or by will, a total

or partial subletting; but from

time to time put into one of the series

of Acts a.provision

as to one of the incidents without considering how

it fitted in with the general nature of the tenancy which those incidents

might affect". On the provisions which gave no clear and compre­

hensive idea of

the nature of a statutory tenancy, the courts in England

had been slowly

"trying to frame a consistent theory"".(') "making

bricks with very insufficient statutory straw".(

3

)

Evershed

M. R. in

Boyer v. Warbey(4) said : "The character of the statutory tenancy, I

(I) f]928]2K.B.117.

(2) Scrutton L. J. in Has!cinsv. Lewis[I93I] 2 K.B. I (9)

(3) Scrutton L.J. in Keeves v. Dean [1923] (93) L.J.K.B. 203 (207).

(4) [1953]2 Q.B. 234.

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DAMADILAL v. PARASHRAM (Gupta, !.) 653

have already said, is a very special one. It has earn~ many epithets,

including •·monstrum horrendum", and perhaps it has never been

fully thought out by Parliament". Courts in England have held that a

statutory tenant has no estate or property in the premises he occupies

because he retains possession by virtue

of the Rent Acts and not as

being entitled to a tenancy; it has been said that he has only a personal

right to remain in occupation, the statutory right of

"irremovability",

and nothing more.

We find it difficult to appreciate how in this country we can pro­

ceed on the basis that a tenant whose contractual tenancy

has deter­

mined but

who is protected against eviction by the statute, has no right

of property but only a personal right to remain in occupation, without

ascertaining what

his rights are under the statute. The concept of a

statutory tenanr having no estate or property in the premises

which he

occupies

is derived from the provisions of the English Rent Acts. But

it

is not clear how it can be assumed that the position is the same in

this country without any reference to the provisions of the relevant

statute. Tenancy has

its origin in contract. There is no dispute that

a contractual tenant has an estate or property in the subject matter

of the tenancy, and heritability is an incident of the tenancy. It can­

not

be assnmed, however, that with the determination of the tenancy

the estate must necessarily disappear and the statute can only preserve

his status of irremovability and not the estate he had in the premises in

his occupation. It is not possible to claim that the

"sanctity" of

contract cannot be touched by legislation. It

is therefore necessary

to examine the provisions of the Madhya Pradesh Accommodation

Control Act,

1961 to find out whether the respondents' predecessors­

in-interest retained a heritable interest

in the disputed premises even

after the termination of their tenancy.

Section

2(i) of the Madhya Pradesh Accommodation Control Act,

l961 defines 'tenant' to mean, unless the context otherwise requires :

"a person by whom or on whose account or behalf the

rent

of any accommodation is, or, but for a contract express

or implied,

would be payable for any accommodation and

includes any person occupying the accommodation

as a sub­

tenant and also any person continuing in

possession· after the

termination of

his tenancy whether before or after the com­

mencement of this Act; bnt shall not include any person

against

whom any order or decree for eviction has been

made".

The definition makes a person continuing in possession after the

determination of his tenancy a tenant unless a decree or order for

eviction

has been made against him, thus putting him on par with a

person

whose contractual tenancy still subsists. The incidents of such

tenancy

and a contractual tenancy must therefore be the same unless

any provision of the Act conveyed a contrary intention. That nuder

this Act

such a tenant retains an interest in the premises, and not

merely a personal right of occupation, will also appear from section

14

which contains provisions restricting the tenant's power of sublett­

ing. Section 14

is in these terms :

A

B

c

D

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654 SUPREME COURT REPORTS (1976] SUPPLEMENTARY

A "Sec. 14 Restrictions on sub-letting.-(!) No tenant shall;

B

c

D

E

F G

H

without the previous consent in writing of the landlord-

( a) sublet the whole or any part of the accommodation

held \JY him as a tenant; or

{b) transfer or assign his rights in the tenancy or

in any

part thereof.

(2) No landlord shall claim or receive the payment ot

any sum

as premium or pugree or claim or receive any

con··

sideration whatsoever in cash or in kind for giving hjs con·

sent to the sub-letting of the whole or any part of th·e 2:com·

modation held by the tenant.'"

There

is nothing to suggest that this section does not apply to all ten­

ants as defined

in section 2(i). A contractual tenant has an estate

01 interest in premises from which he carves out what he gives to the

sub-tenant. Section

14 read with section 2(i) makes it clear that

the so-called statutory tenant has the right to sub-let

in common with a

contractual tenant and this

is because he also has an interest in the

premises occupied by

him. Considering the position of the sub-tenant

of a statutory tenant in England, Lord

De_nning said in Solomon v.

Orwell.(') "When a statutory tenant sub-lets a part of the premises

he does not thereby confer any estate or interest

in the

sub-tenant. A

statutory tenant has no estate or interest in himself and he cannot

carve something out of nothing. The sub-tenant, like the statutory

tenant, has only a personal right or privilege." In Englanc! the

statutory tenant's right to sub-let

is derived from specific

provisions

of the Acts conceding this right to him; in the Act we are concerned

with in this appeal, the right

flows from his status as a tenant. This

is the basic difference between the English Rent Restrictions Acts and

the Act under consideration and similar other Indian statutes. In a

Special Bench decision of the Calcutta High Court,

Krishna Prasad

Bose v. Sm. Saraiubala Dasi,(

2

)

Bachawat J. considering the

question

whether a statutory tenant continuing in occupation by virtue of the

West Bengal Premises Rent Control (Temporary Provisions)' Act,

1950 could sub-let the premises let to him, said :

"The Rent Control and Tenancy Acts create a special

world of their own. They speak of life after death. The

statutory tenancy arises phoenix-like out of the ashes of the

contractual tenancy. The contractl\lll tenant may die hut

the statutory tenant may

live

lone thereafter. The statutorv

tenant

is an ex-tenant and yet

h~ is a tenant." ·

The concept of statutory tenancy under the English Rent Acts and

under the Indian statutes like the one we arc concerned with in this

appeal rests

on different foundations. It

n;ust therefore be held that

(1) [1954] l All l".R. 874.

(2)

65 Cal. W.N. 293 (297-298).

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DAMADILAL v. PARASHRAM (Gupta, J.) 655

the predecessors-in-interest of the present respondents had a heritable A

interest in the premises and consequently the respondents had the

right to prosecute the appeal in the High Court. Mr. Gupte's first

submission thus fails.

On the grouod of default, it is not disputed that the defendants

tendered the amount

in arrears by cheque within the prescribed time.

The question is whether this

was a lawful tender. It is well-established B

that a cheque sent in payment of a debt on the request of

th" creditor,

unless dishonoured, operates as valid discharge of the debt and,

if the

cheque

was

sent by post and was met on presentation, the date of pay­

ment

is the date when the cheque was posted. The question how-

ever still remains whether

in the absence of an agreement between the

parties, the tender of rent

by cheque amounts to a valid discharge

of

the obligation. Earlier, we have extracted a passage from the High C

Court's Judgment on this aspect of the case. We agree with the view

taken by tha High Court on the point. Rent is payable iii the same

manner

as any other debt and the debtor has to pay

his creditor in

cash or other legal tender, but there can be no dispute that the mode

of payment can be altered by agreement. In the contemporary society

it

is reasonable to suppose such agreement as implied

unless the

circumstances of a case indicate otherwise.

In the circumstance of this D

case, the High Court,

in our opinion, rightly held that the cheque sent

to the plaintiffs amounted to valid tender of rent. The second con­

tention urged on behalf of the appellants must also be rejected.

Mr. Gupte's last contention relates to the plaintiffs' bona

tldc re­

quirement of the premises. The trial court found

on the evidence

that the plaintiffs' claim

was

unjustifi.ed. The first court of appeal

reversed that finding and held that the plaintiffs' requirement

was bona

fide. The High Court in second appeal agreed

wi\IJ.. the trial court

in holding that the landlord had no bona

fide requirement. Mr. Gupte

contended that the

High Court had no jurisdiction in

second appeal

to upset the finding of the lower appellate court on this issue which,

according

to him, was a finding of fact. Mr. Nariman for the res­

pondent relied on the decision of this Court

in Madan Lal

Puri v.

Sain Das Berry(') to argue that the question was a mixed question

of law and fact and that it was within the jurisdiction of the High

Court

in second appeal to examine the correctness of the finding. In

answer Mr. Gupte referred to another decision of this Court

Mattu/al

v. Radhey Lal(') which, relying on an earlier decision of this Court

in

Sarvate T. B. v. Nemi Chand, (

3

)

held that such a finding was one

of fact and not a finding on a mixed question of law and

fact. We

do not think that for the purpose of this case we need express any

opinion on the apparent conflict between these

two decisions.

Plain­

tiffs' case was that they had cloth and grocery business at village Nadan

and that they desired to start a wholesale cloth and grocery business

at Satna. The trial court's finding was based inter alia on the evidenoe

(I) AIR !973S.C.R.585.

(2) A.LR. 1974 S.C.1596.

(3) 19661\1.P.L.l. 26.

E

F •

G

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A

B

c

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656 SUPREME COURT REPORTS (1976] SUPPLEMENTARY

that the plaintiffs had not adequate funds to start a new wholesale

business. The lower appellate court reversed the finding of the trial

court

on the ground that there was no evidence that the plaintiff had

no money to start a new business; the lower appellate court's finding

rests

maillly on this consideration. The High Court pointed out that

plaintiff Damadidas alias Damadi Lal (P. W. 2) stated in his evidence

that their income from the business

at Nadan was sufficient

"only

for meeting the expenses of livelihood"; plaintiff Tirath Prasad

(P.W. 6) also admitted that "our present income is not sufficient even

for our maintenance because there are many members in the family".

It thus appears that the lower appellate court overlooked a very mate­

rial

part of the evidence bearing on the question. It is well establish­

ed that

if a finding of fact is arrived at ignoring important and rele­

vant evidence, the finding

is bad in law. (see Radha Nath Seal v.

Haripada Jana &

Ors.(1). We therefore think that the High Court

was within its jurisdiction in setting aside the finding of the lower

appellate court and restoring that of the trial court on this poinL

In the result the appeal fails and is dismissed but in the circum­

stances of the case

we make no order as to costs.

P.B.R. Appeal dismissed.

(1) A.LR. 1971 S.C. 1049.

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