Sunday, 19 March 2017

Whether standard rent will be payable from date of filing of application for grant of standard rent?


However, it is to be noted that the direction to pay standard rent has been given from the date of execution of the sale deed in favour of the landlady. The standard rent has been directed to be paid from 1-3-2008 till filing of the suit. This finding has again been confirmed by the appellate Court. It is, however, to be noted that the landlady had sought determination of standard rent by filing an application in that regard alongwith the suit for eviction. The suit in question was filed in October 2010 and in the application for fixation of standard rent, a prayer was made to fix the same from 1-11-2010 onwards. When an application is moved for fixing standard rent under Section 8(1) of the said Act, on such standard rent being fixed, it would be ideal for the same to be directed to be paid from the date of the application. The reason for the landlady to seek determination of standard rent is because she found the same to be on a lower side. She therefore sought the same to be fixed by moving an application under Section 8(1) of the said Act. There could not have been a direction to pay the same retrospectively. Reference in this regard can be made to the decision of the Nagpur High Court in Kewalchand Kastoorchand v. Samirmal Jaini and another MANU/NA/0060/1952 : 1953 NLJ 294. It has been held by the Division Bench that once fair rent is determined, the same would have prospective operation and such fair rent can be directed to be paid from the date such application is moved.
IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)
Writ Petition No. 211 of 2015
Decided On: 30.06.2016
 Zainab Bee
Vs.
Prabhakar Rajaram Kharwade
Hon'ble Judges/Coram:A.S. Chandurkar, J.
Citation: 2017(2) MHLJ 374


1. Since both these writ petitions raised challenge to the judgment of the appellate Court between the same parties, they are being decided by this common judgment by issuing Rule and making the same returnable forthwith. Respective Counsel waive notice.
2. Writ Petition No. 211 of 2015 has been filed by the original plaintiff -landlady who had filed suit for eviction of the respondent -original defendant under provisions of Section 15, 16(1)(a),(g),(h) and (i) of the Maharashtra Rent Control Act, 1999 (for short, the said Act). The suit was decreed by the trial Court while the appellate Court allowed the appeal filed by the respondent partly and set aside the decree for eviction. The landlady being aggrieved by setting aside of the decree for eviction has filed the said writ petition. Writ Petition No. 6734/2015 is filed by the tenant challenging the judgment of the appellate Court to the extent of determination of standard rent @ Rs. 5000/- per month. For the sake of convenience, the parties would be referred to as landlady and tenant.
3. The premises in question admeasuring about 610 square feet area at House No. 839 is situated at Kamptee, District Nagpur. These premises including House No. 840 were initially owned by one Kishanlal Algare and Chotelal Algare. On 10-12-1981 said Kishanlal entered into an agreement for selling the suit property to the tenant who was already occupying the same. The tenant had filed suit for specific performance of aforesaid agreement against Kishanlal. The tenant was unsuccessful in obtaining the decree for specific performance and a direction to refund earnest money was issued. The decree for refund of earnest amount attained finality on 8-10-2003 when Second Appeal No. 232 of 2005 filed by the tenant came to be dismissed.
On 28-2-2008, the son of Kishanlal executed a sale deed of the aforesaid property in favour of the landlady. The tenant was in possession of House No. 839. On 28-11-2008, an intimation was given to the tenant by the landlady's vendor regarding aforesaid sale. At that point of time, the tenant was paying rent of Rs. 200/-per month. As the tenant did not pay rent to the landlady, a notice of demand came to be issued on 28-9-2010. As the tenant did not comply with the said notice, the landlady filed Regular Civil Suit No. 57/2010 for eviction of the tenant.
4. The tenant contested the aforesaid suit and denied the ownership of the landlady. According to the tenant, he was living in the said premises as owner thereof and not as a tenant. The landlady examined herself below Exhibit-29. The tenant examined himself and two other witnesses. After issue No. 1 was recasted, her son was examined. During pendency of the suit, the landlady filed an application for determination of standard rent @ Rs. 25000/- per month. The trial Court after considering the evidence on record decreed the suit and directed eviction of the tenant under provisions of Sections 15 and 16(1)(g) of the said Act. The trial Court also fixed the standard rent @ Rs. 5000/- per month from 1-3-2008 onwards with interest @ 9% per annum.
The tenant being aggrieved by the aforesaid decree filed an appeal under Section 34 of the said Act. The appellate Court held that though the tenant was in arrears of rent, the default on his part was not willful. It further held that bonafide need of the landlady had not been proved. The appellate Court, therefore, set aside the decree for eviction but maintained the determination of the amount of standard rent at @ Rs. 5000/- per month. This judgment has been thus challenged by both the parties.
5. Shri R.I. Agrawal, the learned Counsel for the landlady submitted that the appellate Court was not justified in reversing the decree for eviction. According to him after the tenant failed in the suit for specific performance, his status as tenant of the premises stood established and, therefore, he was bound to accept the status of the plaintiff as his landlady. According to him, merely because the tenant had filed a counter claim for setting aside the sale deed dated 28-2-2008, the same would not result in wiping out the status of the defendant as a tenant of the suit premises. On the aspect of arrears of rent, he submitted that initially the vendor had given an intimation to the tenant on 28-11-2008. Thereafter, notice under Section 15(2) of the said Act was issued on 28-9-2010. However, the demand made therein was not complied with. The trial Court, therefore, had rightly decreed the suit on the ground of the tenant being in arrears of rent. The appellate Court despite recording a finding that the tenant had not paid any rent since the year 2008, erroneously observed that the default on his part was not willful. He, therefore, submitted that the decree passed by the trial Court in that regard could not have been disturbed.
6. On the aspect of bonafide need of the landlady, he submitted that the landlady, her son and his family members were residing in one premises which was insufficient for their needs. The landlady's son desired to run a computer institute and hence, there was need for additional premises. The trial Court had rightly held in favour of the landlady. However, the appellate Court did not consider material evidence on record and reversed this finding with regards to bonafide need. He submitted that the tenant was owning other premises and hence, no hardship would be caused to him if the decree for eviction was passed. He, therefore, submitted that the bonafide need of the landlady was made out and greater hardship would be caused to her.
On the aspect of the change of user of the premises, it was submitted that while the premises was let out only for residential purpose, the tenant was doing gold business in the suit premises. On this count, a decree on the ground of change of user ought to have been passed.
On the aspect of determination of standard rent, it was submitted that the same had been rightly determined at Rs. 5000/- per month. It was submitted that the premises were located in the heart of the city and near the main road. Therefore, both the Courts rightly held that the standard rent payable was Rs. 5000/- per month. He thus submitted that the decree for eviction as passed by the trial Court ought to be restored. In support of his submissions, he relied upon the following judgments:
[1] Vilaschand S/o Deochand Khedikar Vs. Bhimchand s/o Pannasao Jain, MANU/MH/0847/2011 : 2011(4) Mh.L.J. 864.
[2] Jugalkishore Kanhayyalal Khandelwal vs. Radheshyam s/o Biharilal Khandelwal, MANU/MH/0631/2012 : 2012(2) Mh.L.J. 737.
[3] Rasiklal s/o Revchand Shah and others vs. Paraskumar s/o Balchand Thole and others MANU/MH/0734/2014 : 2015(1) Mh.L.J. 382.
[4] Haribhauji Mahajan vs. Rajendra Shankar Dawknor and others MANU/MH/0880/2009 : 2009(6) Mh.L.J. 483.
[5] Bhaskar Bhagwant Shinde vs. Sou. Vasudha Madhukar Kadam and another, MANU/MH/0432/2005 : 2005(3) Mh.L.J.428.
[6] Chandiram Dariyanumal Ahuja vs. Akola Zilla Shram Wahtuk Sahakari Sanstha Akola MANU/MH/1800/2012 : 2013(1)Mh.L.J. 28.
[7] Rameshwar Nanakram Prajapal Vs. Sundrabai Keru Ghadage MANU/MH/0755/2012 : 2013(2) Mh.L.J. 178.
[8] Madhukar Punjaram Sonwane and another vs. Gajanan Vithal Khandekar MANU/MH/0330/2009 : 2009(3) Mh.L.J. 694.
[9] Sharadabai Anandrao Durgule vs. Ramchandra Manku Pol and others MANU/MH/1358/2008 : 2009(2) Mh.L.J. 225.
[10] Balwant P. Doshi vs. Shantaben Dhirajlal Shah and another MANU/MH/0537/2002 : 2002(4) Mh.l.J. 473.
[11] Prabhakar Venkobaji Manekar vs. Surendra Dinanath Sharma MANU/MH/0220/2015 : 2015(4) Mh.L.J. 351.
[12] Narendra Vyankatesh Tambat vs. Pravinkumar Khushalchand Tated MANU/MH/1384/2015 : 2016(1) Mh.L.J. 215.
[13] Dr. Ambica Prasad v. Md. Alam and another MANU/SC/0393/2015 : AIR 2015 SC 2459.
[14] Ganesh Kisandas Lashkare vs. Mahabirprasad Chaurasia MANU/MH/3342/2015 : 2016(3) Mh.L.J. 862.
7. Shri M.M. Agnihotri, the learned Counsel for the tenant on the other hand submitted that the appellate Court had rightly held against the landlady while setting aside the decree for eviction. He submitted that even though the tenant had not succeeded in obtaining a decree for specific performance against the erstwhile landlord, the title of the landlady had not been finally established. The sale deed executed in favour of the landlady was under challenge by filing a counter claim and even though the trial Court had dismissed the counter claim, a challenge to the same was still pending. On this count he submitted that the tenant could not be treated to be a willful defaulter. If the title of the landlady was not established and there was a cloud on the same, failure on the part of the tenant to pay rent could not be labelled as willful default.
8. On the aspect of bonafide need, he submitted that the evidence of the landlady did not inspire confidence as she had clearly admitted that the premises in her occupation were sufficient for her family. He submitted that the landlady had not given any details about extent of the need of her son and that she had also not stated about number of her family members. After issue No. 1 was recasted by the trial Court, the son of the landlady had been examined. Though he ought to have led evidence only on the recasted issue, he led evidence on all the issues and it was on the basis of his evidence that the trial Court had decreed the suit. According to the learned Counsel, the evidence of the son of the landlady on the aspect of bonafide need could not have been taken into consideration. The appellate Court, therefore, rightly held against the landlady. He also submitted that there was no change of user of the premises inasmuch as the same were in use for residence as well as for business.
As regards the determination of standard rent, it was submitted that there was no evidence whatsoever that the suit premises could fetch rent of Rs. 5000/- per month. According to him, rent of Rs. 200/- per month had been increased to Rs. 5000/- per month which was on a higher side. He submitted that under Section 11 of the said Act, an increase to the extent of 4% per annum only was permissible. He further submitted that the standard rent as determined could not have been directed to be paid at 9% per annum as decreed. He, therefore, submitted that the judgment passed by the appellate Court to that extent deserves to be modified.
9. I have given due consideration to the respective submissions and I have gone through the documents filed on record. On the relationship of landlady and tenant, the facts on record indicate that though the tenant had filed suit for specific performance of agreement dated 10-12-1981 that was entered into with Kishanlal Algare, he could succeed only in obtaining a decree for refund of earnest amount. After said decree attained finality, the landlady purchased the suit property on 28-2-2008. A notice of attornment and an intimation to that effect was given to the tenant. Though it is true that the tenant had filed a counter claim for cancellation of the aforesaid sale deed which was executed in favour of the landlady and the proceedings in that regard were still pending, the same would not have the effect of effacing the relationship of landlady or tenant or of clothing the tenant with title as legal owner of the suit premises. As observed by the Hon'ble Supreme Court in Dr. Ambica Prasad (supra), a transferee from a landlord would step into the shoes of the landlord with all rights and liabilities.
Even if the sale deed dated 28-2-2008 is cancelled, the title of the property would revert back to the vendor -Prabhakar who was the son of Kishanlal. The status of Prabhakar would continue to be that of a tenant. It would only be a case of a change of landlord/landlady. Hence, the contention that as the proceedings with regard to challenge to the sale deed dated 28-2-2008 were pending, said Prabhakar could not be treated as a tenant cannot be accepted. Both the Courts have rightly held the plaintiff to be the landlady pursuant to the sale deed in her favour and the subsequent intimation dated 28-11-2008 as per Exhibit-44.
10. In so far as the aspect of arrears of rent is concerned, rent of Rs. 200/- per month was being paid by the tenant to the erstwhile landlord. Notice under Section 15(2) of the said Act dated 28-9-2010 (Exhibit-46) was received by the tenant on 29-9-2010. The tenant sent his reply dated 13-10-2010 (Exhibit-49), but did not pay any arrears of rent as demanded. Admittedly, after receiving the suit summons, the arrears of rent were not deposited in terms of provisions of Section 15(3) of the said Act. Moreover, in the written statement filed by the tenant he took a specific stand in para 29 thereof that he was residing in the suit house as owner of the same and not as a tenant. It is in this background and admitted position that the trial Court held that the tenant was in arrears of rent and hence, liable to be evicted on that count. The appellate Court upheld the finding of the trial Court that the tenant had not paid rent since the time the landlady had purchased the suit house. Said finding has been recorded in para 26 of the judgment of the appellate Court, however, by observing that the default on his part was not willful. The appellate Court refused to uphold the decree for eviction on that count. The finding recorded by the appellate Court cannot stand to the scrutiny of law. On the admitted position that the arrears of rent had not been paid after receipt of notice under Section 15 (3) of the said Act, there was no other option but to pass a decree for eviction on the ground of arrears of rent.
Even assuming that the tenant intended to dispute the relationship between the parties, he ought to have complied with provisions of Section 15(3) of the said Act without prejudice to his defence. Having failed to do so and the title of the landlady having been established, the only conclusion that can be drawn is that the defendant was the tenant of the landlady and was liable to pay her rent. This conclusion is supported by the ratio of the decisions in Chandiram Ahuja and Prabhakar Manekar (supra). Moreover, there is also no deposit of rent during pendency of the suit or the appeal. This non-deposit is also fatal to the case of the tenant as observed in Bhaskar Shinde and Hari Mahajan (supra). The finding of the appellate Court in that regard is liable to be set aside.
11. On the aspect of bonafide need of the suit premises, it is to be noted that in the plaint it had been pleaded that the premises in occupation of the landlady was insufficient for herself and her family members. Her son wanted to start his own business in the premises as he was running his computer institute in a rented premises. In support of his pleadings, the plaintiff examined herself below Exhibit-29. In her cross-examination, she stated that in the front portion of her house, her son had opened a shop which she admitted was sufficient for said purpose. She then stated that the house occupied by her was sufficient for the need of her family. The trial Court while recording her evidence has then observed that the landlady after stating the aforesaid then took a pause and stated that the space of the house occupied by her was not sufficient. The landlady was cross examined on 27-3-2012. It appears that the landlady closed her side of her evidence after which the tenant examined himself and two other witnesses. The suit was then fixed for final arguments. At that stage, the trial Court on 2-5-2013 recasted issue No. 1. Originally issue No. 1 related to the ownership of the suit house and after it was recasted, the same was on the question whether the plaintiff was the landlady of the premises. The case was then again fixed for leading evidence on the recasted issue. Thereafter, the son of the plaintiff filed his affidavit in lieu of evidence and he was then cross-examined below Exhibit-127. It appears that he led evidence on all the issues though the direction was only to lead evidence on recasted issue No. 1. The landlady's son then deposed about his bonafide need. In view of the fact that the landlady had closed her evidence after examining herself and after recasting of issue No. 1, the trial Court had permitted leading of evidence only on the recasted issue, it would not be permissible to rely upon the deposition of landlady's son on the aspects other than his deposition as to the relationship between the parties. Both the Courts failed to take into consideration this vital aspect. The question of bonafide need would, therefore, have to be examined by excluding the deposition of the landlady's son who was examined only to prove the recasted issue.
12. As noted above, in the evidence of the landlady on the aspect of bonafide need she stated in general terms that the premises in her occupation were insufficient for her family members. In view of her admissions in her cross-examination that her son had started computer business in the front portion of the premises which was sufficient for doing said business and the further admission that the house occupied by her was sufficient for the need of the family which statement she then sought to contradict cannot be treated as sufficient evidence to hold in favour of the landlady. The trial Court after a brief discussion and by observing that her son was running computer institute in a tenanted premises recorded a finding in favour of the landlady. The appellate Court, however, reversed this finding on the ground that there were no details given about her bonafide requirement. Considering the aforesaid facts, the view taken by the appellate Court of holding against the landlady on the question of bonafide need is a possible view of the matter on the basis of evidence on record not requiring interference in writ jurisdiction.
The decisions in Rameshwar Prajapal, Madhukar Sonwane, Shardabai Durgule, Balwant Doshi and Narendra Tambat (supra) hold that the landlord is the best judge of this need and that genuineness of the requirement cannot be at par with dire need. However, if the evidence in that regard is found short of making out a case for bonafide need, such finding cannot be recorded in favour of the landlady. The aspect of hardship therefore loses its significance as the bonafide need has not been proved. Hence, the ratio of the decision in Vilaschand Khedikar (supra) cannot be applied to the facts of the present case.
13. In so far as the question of change of user of the suit premises is concerned, there was no issue framed by the trial Court in that regard. The landlady also did not make any grievance in that regard after the issues were framed. The eviction on that count was considered by the appellate Court and it held that as part of the premises were being used for residential purpose and other part of the premises were used for business purposes not amounting to change of user, the said finding does not call for any interference.
In view of aforesaid discussion, I find that the landlady would be entitled for a decree for eviction only on the ground of arrears of rent. The appellate Court while refusing to pass a decree on the said count despite holding the tenant to be in arrears completely misdirected itself. As the conclusion recorded by the appellate Court in that regard is contrary to the material on record and results in grave miscarriage of justice to the landlady, a case for interference in writ jurisdiction has been made out.
14. On the aspect of fixation of standard rent, it is to be noted that the trial Court after considering the documents at Exhibits 36 and 38 which were exhibited in the evidence of the landlady and after taking into account the area of the suit premises, the locality and the tax assessed by the Municipal Council came to the conclusion that the standard rent would be Rs. 5000/- per month. The appellate Court after re-examining this evidence confirmed the aforesaid finding of the trial Court. As both the Courts have determined the standard of rent on the basis of material available on record, said finding cannot be said to be so perverse so as to warrant interference in writ jurisdiction.
However, it is to be noted that the direction to pay standard rent has been given from the date of execution of the sale deed in favour of the landlady. The standard rent has been directed to be paid from 1-3-2008 till filing of the suit. This finding has again been confirmed by the appellate Court. It is, however, to be noted that the landlady had sought determination of standard rent by filing an application in that regard alongwith the suit for eviction. The suit in question was filed in October 2010 and in the application for fixation of standard rent, a prayer was made to fix the same from 1-11-2010 onwards. When an application is moved for fixing standard rent under Section 8(1) of the said Act, on such standard rent being fixed, it would be ideal for the same to be directed to be paid from the date of the application. The reason for the landlady to seek determination of standard rent is because she found the same to be on a lower side. She therefore sought the same to be fixed by moving an application under Section 8(1) of the said Act. There could not have been a direction to pay the same retrospectively. Reference in this regard can be made to the decision of the Nagpur High Court in Kewalchand Kastoorchand v. Samirmal Jaini and another MANU/NA/0060/1952 : 1953 NLJ 294. It has been held by the Division Bench that once fair rent is determined, the same would have prospective operation and such fair rent can be directed to be paid from the date such application is moved.
15. In the present case, the trial Court as well as the appellate Court proceeded to direct the tenant to pay standard rent from 1-3-2008 onwards which was not even the prayer of the landlady. The application for determination of standard rent having been filed in October 2010, there could not have been any direction to pay the same from an earlier date even prior to such an application being made. Similarly, under provisions of Section 8 of the said Act, a further direction to pay standard rent at 15% per annum is also without jurisdiction. The trial Court by observing that the amount of standard rent was liable to be paid with interest @15% per annum acted beyond its jurisdiction. The appellate Court has reduced the rate of interest to 9% per annum which direction is also without jurisdiction. The decree to that extent is, therefore, liable to be modified. It would have to be held that the standard rent of the premises of Rs. 5000/- per month would be liable paid from 1-11-2010 onwards. The amounts deposited by the tenant during pendency of the appeal would have to be adjusted accordingly.
16. In view of aforesaid discussion, then following order is passed:
(a) It is held that the landlady is entitled for a decree of eviction of the tenant only on the ground of arrears of rent under Section 15 of the said Act.
(b) The finding as regards standard rent of the premises being Rs. 5000/- per month is upheld subject to same being payable from 1-11-2010 onwards. The direction to pay interest on the amount of standard rent is set aside.
(c) The judgment passed by the appellate Court in R.C.A. No. 345/2013 is modified to the aforesaid extent.
(d) Rule in both the writ petitions is disposed of in aforesaid terms with no order as to costs.
17. At this stage, Shri M.M. Agnihotri, the learned counsel for the petitioner in Writ Petition No. 6734/2015 seeks stay to the operation of this judgment. The request is opposed by the learned Counsel for the respondent. In the facts of the case, the decree for eviction shall not be executed for a period of six weeks from today.
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