Thursday, 31 October 2019

Whether tenant is voluntarily liable to pay permitted increase?

 Section 11 of the Maharashtra Rent Control Act entitles landlord to increase rent by 4% per annum after its commencement. It is, therefore, apparent that said increase by 4% is not automatic, but at the discretion of landlord. If particular landlord does not want to increase rent by 4%, law does not compel him to increase it. In other words, tenant is not voluntarily required to pay 4% more. The respondent landlord has not pointed out that before issuing notice at Exh. 29, he had after 01/4/2000 increased rent by 4%.

IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)

Writ Petition No. 1778 of 2005

Decided On: 07.11.2009

New Laxmi Cycle Company  Vs. Jagdishchandra

Hon'ble Judges/Coram:
B.P. Dharmadhikari, J.

Citation: 2009(6) MHLJ 906,2010 (1) ALLMR 189


1. The petitioner tenant before this Court is challenging the judgment dated 18/2/2005, delivered by the learned 5th Ad hoc Additional District Judge, Akola in Regular Civil Appeal No. 190 of 2003 and prays for dismissal of Regular Civil Suit No. 589 of 2001 filed by respondent landlord before the Civil Judge, Senior Judge, Akola. In that suit, eviction of the petitioner and possession was sought under Section 15 & 16 of the Maharashtra Rent Control Act, 1999. The 2nd Civil Judge, Junior Division, Akola on 02/5/2003 decreed the suit partly and directed the petitioner tenant to handover the possession within two months. It decreed the suit only on the ground that his bona fide need was proved by the respondent landlord.

2. In Regular Civil Appeal No. 190/2003, filed by the present petitioner, a cross objection or Counter appeal was filed by the landlord seeking entire relief as per plaint prayers. The learned 5th Ad hoc Additional District Judge, Akola, found that the landlord proved that the tenant was in arrears of rent, plus, taxes and permitted increase and interest, totaling to Rs. 9,471/, but held that, said issue was partly proved. If further held that the grievance about nuisance by the tenant was also substantiated. It found that bona fide need was not established by the landlord. It, therefore, maintained the decree of eviction, but on the ground of arrears of rent for the year 20012002 and for causing nuisance.

3. It is not in dispute that the petitioner is tenant of a godown situated in the area, known as 'Mangaldas Market' of Akola and his tenancy is yearly, commencing from Diwali and ending by Diwali of succeeding year. The rent is stated to be Rs. 3,360/for 12 months i.e. monthly rent of Rs. 280/. The respondent landlord issued notice dated 11/8/2001 to the petitioner and informed them that the petitioner has to pay advance yearly rent of Rs. 3,360/, amount of Rs. 280/for 'Adhik Mass' and municipal taxes. It was stated that the petitioner was in arrears of taxes for last two years and taxes for 12 months came to Rs. 1,478/. The landlord also stated that during the Diwali 2000 to Diwali 2001, there was Adhik Mass and petitioner did not pay the rent of Rs. 280/for said Adhik Mass. The landlord, therefore, demanded these amounts along with permissible interest of @ 15% per annum and threatened with suit for eviction as per Section 15 of the Maharashtra Rent Control Act, in default. He also mentioned that by carrying activity of assembling bicycles in open land in front of godown, the petitioner was creating nuisance and obstruction to landlord and other occupiers in Mangaldas Market. The petitioner was, therefore, called upon to stop that activity.

4. This notice was replied by the petitioner tenant on 22/8/2001, pointing out that the tenancy was yearly and rent of Rs. 3,360/was payable in advance. The tenant also stated that rent was not excluding municipal taxes. The demand for arrears of municipal taxes or for payment of separate rent for Adhik Mass was also denied. About nuisance, petitioner stated that there was no nuisance or obstruction to landlord or to other occupiers of the area and since beginning i.e. since the time of father of present respondent, petitioner was using open land for assembling bicycles and other related works. He also claimed that said open land in front of the godown, formed part and parcel of tenanted premises and it was being rightly used by him.

5. It is in this background that the landlord filed suit under Section 15 & 16 of the Maharashtra Rent Control Act on 10/12/2001. The result of the litigation till adjudication in appeal is already mentioned by me above. It appears that tenancy was initially created in 1964.

6. In this background, Advocate Shri A.S. Chandurkar for petitioner tenant has contended that the Civil Court decreed the suit only on account of bona fide need and other grounds were rejected by it. The appellate court has set aside the said finding insofar as bona fide need is concerned and has granted permission on account of arrears of rent and nuisance.

7. Learned Counsel invites attention to the provisions of Section 15 of the Maharashtra Rent Control Act to show importance of notice by landlord to petitioner for such suit on the basis of arrears of rent. He argues that the notice on account of nonpayment of standard rent or permitted increase has to give time of 90 days to tenant to pay the same and only after such notice is issued and demand therein is not fulfilled, the suit for recovery of possession can be instituted. According to him, in present matter, notice dated 11/8/2001 (Exh. 29 in the suit) does not satisfy these requirements. He states that arrears for nonpayment of which decree has been given by the lower appellate court, is from Diwali 2001 to Diwali 2002. He points out that on 11/8/2001, rent for the said period had not fallen due and hence, no notice therefore could have been issued under Section 15. He further states that notice expressly mentions tax arrears for two years and no receipt of payment of rent for Adhik Mass. He states that this Adhik Mass is on account of 13th month, which comes in Hindu year and as per Section 32 of the said Act, the Hindu year or Hindu calender cannot be looked into, but only British calender is relevant. He further points out that lower appellate court has found that the landlord has not proved his entitlement to claim of Rs. 280/for said Adhik Mass and has also found that rent being paid by petitioner tenant, was inclusive of municipal taxes. According to him, therefore, the claim in the notice is found to be misconceived by the lower appellate court. He further states that apart from these two claims, there is no third claim in the notice and effort to read "permissible increases" in said notice in paragraph 1 is misconceived. He points out that the said paragraph nowhere uses the words 'permissible increase', but uses the words "with permissible interest of 15% per annum as per provisions of...". In view of these words, he argues that this demand of interest at 15% is in tune with Section 15(3) of the Maharashtra Rent Control Act. He argues that on this short ground, the impugned judgment in appeal needs to be quashed and set aside. On the issue of construction of such notices, he has placed reliance on the judgment of Hon'ble Supreme Court, reported at MANU/SC/0305/1984 : A.I.R. 1985 S.C. 136 in the case of Chimanlal v. Mishrilal and 1992 Mh.L.J. 436 in the case of Ramchandra Appaji Manjage, since deceased through L.R.s v. Mahavir Gajanan Mug.

8. On the issue of nuisance, learned Counsel argues that Section 16(1)(c) of the Act expressly requires annoyance or nuisance to the adjoining or neighbouring occupier. He points out that activity of assembling bicycles is going on just in front of the godown in open land and the appellate court has found that said open space, belonging to the landlord, is being used with implied consent by the tenant. He states that such user is going on since last several years and it was never objected to. Hence, to bring the suit within four corners of Section 16(1)(c), the nuisance and annoyance to such neighbour or occupier ought to have been established and as landlord did not examine any such neighbour or occupier, the permission as granted cannot be sustained. He, therefore, states that the writ petition as filed, deserves to be allowed.

9. Advocate Shri Joshi for the respondent in reply has contended that the open space admeasuring about 8000 sq.ft. in front of tenanted godown belongs to respondent landlord and it does not form part of tenanted premises. The landlord, therefore has every right to use and occupy the said open land and in fact he invites attention to the judgment of trial court to show that present respondent has 1/7th joint and undivided share in the said open plot. He contends that when labour of petitioner carry out work of assembling bicycles in said open space, it is obvious that respondent cannot use it and therefore, it causes nuisance or annoyance to him. He also invited attention to the notice and reply thereto as also to evidence on record in this respect.

10. While addressing the court on the issue of arrears of rent, learned Counsel has invited attention to the statutory provisions to point out, how the notice dated 11/8/2001 needs to be construed. He contends that such notice issued by the landlord to tenant needs liberal interpretation and in support of his contentions, has relief upon the judgments. He further states that notice has used the word "permissible interest" in paragraph 1, but then that word is a drafting error and it ought to have been "permissible increase". In this background, he relies upon provisions of Section 7(14) of the Act to point out what is standard rent and states that 5% increase in annual rent of Rs. 3,360/is contemplated by said provisions. Then he invites attention to the provisions of Section 11 to urge that, that section further enhances rent by 4% and as Maharashtra Rent Control Act became applicable from 01/4/2000, the landlord has rightly demanded said 4% increase. To show that agreed or contractual rent needs to be treated and recognized as contract rent, he has relied upon judgment MANU/MH/0097/1973 : 1972 Mh.L.J. 896, in the case of Filmistan Pvt. Ltd. v. Municipal Commissioner Greater Bombay. According to him, after all these additions, actual annual rent works out to Rs. 3,669/and the petitioner tenant has never paid that rent. He points out that the cheque sent by tenant on 04/1/2002 was only for Rs. 3,360/and amount of rent deposited by him in the Court on 19/7/2002 is also Rs. 3,360/. He states that thus, as permissible increase has not been deposited, this cannot be treated as compliance with notice and with provisions of Section 15 of the Maharashtra Rent Control Act. To urge that the words "permissible interest" need to be construed as "permissible increase", he has placed reliance upon judgment reported at 1982 Mh.L.J. 254 in the case of Chhaganlal Mulchand Jain v. Narayan Jagannath Bangh. In this background, he has also invited attention to the provisions of Section 15(1) and Section 15(3) of the said Act to urge that when after filing of suit the amount is sought to be deposited by the tenant, entire amount "then due" must be deposited by him. He, therefore, states that the amount due on 19/7/2002 after taking into account the annual rent of Rs. 3,669/ought to have been deposited and as that has not been deposited, the petitioner tenant cannot be treated as ready and willing to pay the rent even during the pendency of the matter, as contemplated by Section 15(1). To show that the such readiness and willingness must continued even during pendency of the suit or appeal, Advocate Shri Joshi has relied upon MANU/SC/0354/1977 : A.I.R. 1977 S.C. 1707 in the case of Mistry Premjibhai Vithaldas v. Ganeshbhai Keshavji ; MANU/MH/0040/1992 : 1991 (4) Bom.C.R. 354 in the case of Ladlesaheb Shah Ahmed Sayyed v. Arifulasha Kadari Dargah Trust ; 1995(1) Bom.C.R. 561 in the case of Chase Bright Steel Limited v. Shantaram Shankar Sawant and Anr. and MANU/MH/0382/2004 : 2004 (4) Mh.L.J. 1020 in the case of Lalji Ramnath Pande v. Smt. Hawabi Abdulla Shaikh.

11. According to him, even if it is presumed that there is some confusion or variance in the notice, in view of the specific pleadings in the plaint, the tenant was aware of the commitment made and in the light of above judgments, it was incumbent upon the petitioner tenant to deposit that amount to show his bona fides as also readiness and willingness. He, therefore, states that there is no merit in the petition and it is liable to be dismissed.

12. Learned Advocate Shri Chandurkar, in his reply, has stated that request for liberal interpretation of notice is misconceived as notice itself is invalid. He points out that when claim made in the notice is excessive, law treat notice as invalid. He further points out that there was no demand for 5% increase or 4% increase in notice and suit based on said notice needs to be viewed in this background.

13. Perusal of provisions of Section 16(1)(c) of the Maharashtra Rent Control Act shows that the tenant should be guilty of conduct, which is nuisance or annoyance to the adjoining or neighbouring occupier. Thus, the law require respondent landlord to show that activity of bicycle assembling undertaken in open plot in front of tenanted godown by petitioner tenant was causing nuisance or annoyance to the adjoining or neighbouring occupier. In this light, the suit notice at Exh.29 only mentions nuisance and it does not mention that the respondent is in occupation of any premises or portion in the vicinity thereof and was put to any annoyance or nuisance. It is not in dispute that the said user of open plot is with implied consent of the landlord and no objection thereto was raised at any time by him. The grievance of annoyance and nuisance has been made for the first time in Exh.29. No neighbour or other occupier in the vicinity of tenanted premises has been examined by the respondent. The landlord himself entered the witness box. He produced certain photographs to show the position of the open plot being used by the tenant. The petitioner tenant has admitted those photographs. However, it has not been put to him that because of his user of open plot any nuisance or annoyance is caused to the neighbours. In his examination-in-chief, the landlord has stated that because of this activity, the road is closed for him and also for other godown owners. He further stated that the noise also created nuisance. In cross examination he has denied that business of tenant in those premises does not result in any nuisance to others. His further cross examination shows that he has personally not occupied any premises or structure in the vicinity of said godown or open plot. He has not examined any other godown owner or any other occupier of any property in the vicinity to substantiate his contention. Lack of proof of user, no complaint by any adjoining occupier or owner and non14 examination or any such neighbour by respondent, clearly show the absence of case under Section 16(1)(c) of the Act. Merely because respondent has got 1/7th share in the said open plot, it cannot be said that the activity carried out in that open plot with his implied consent, constitutes nuisance or annoyance. Test is actual nuisance or annoyance and that too to the neighbouring occupier. The words "guilty of" or "has been convicted of" in said Section 16(1)(c) also deserve their due importance in said scheme. The lower appellate Court has only considered the fact that respondent landlord is owner of 1/7th portion of said open space and has inferred nuisance and annoyance because of the activity of petitioner by relying upon photographs. The said approach is totally erroneous and contrary to the requirement and spirit of Section 16(1)(c) of the Act. Its finding against issue No. 3 in paragraph 16 of the impugned judgment is, therefore, unsustainable.

14. The provisions of Section 15, which deal with relief against forfeiture show that the landlord is not entitled to recover possession so long as tenant pays or is ready and willing to pay the amount of standard rent and permitted increase. No suit for recovery of possession on account of nonpayment thereof can be instituted until expiration of 90 days next after the notice demanding such standard rent or permitted increase is served upon the tenant. Its Sub-section 3 thereafter grants further protection to tenant and it states that no decree for eviction can be passed in said suit, if within a period 90 days from the date of service of suit summons, tenant pays or tenders in court the standard rent and permitted increase 'then due' together with simple interest on the amount of arrears @ 15% per annum. The bare reading of Section, therefore, clearly shows the importance to notice given in its scheme. It also shows that interest at 15% can be demanded annually on the amount of arrears, which the tenant deposits in the court after institution of the suit and within 90 days of service of suit summons.

15. In the present matter, suit notice at Exh.29 contains said demand only in paragraph 1. Relevant portion of said paragraph is as under:

You are monthly tenant as per Vikram Sanvant Gujrathi Hindu Calender. It was agreed to pay rent for all months of a year commending from Diwali and Ending by Diwali of succeeding year in advance. In the year having Ashik Mass, you used to make payment for 13 months. Your monthly rent is Rs. 280/per month and in the year of 12 months, the advance rent payable is Rs. 3360/.

This rent is exclusive of municipal taxes. The municipal taxes are payable by you for which separate receipt is issued by my client. You are in arrears of taxes for last two years. You are called upon to make payment of amount of taxes to my client. The amount of taxes for a year of 12 months comes to Rs. 1478/.

In Samvant year 2057 i.e. from Diwali 2000 to Diwali 2001, there was Adhik mass. You did not make payment for Adhik Mass. You are called upon to pay Rs. 280/being arrears of rent of Adhik Mass. If you fail to make payment of this amount along with permissible interest of 15% per annum as per provisions of Maharashtra Rent Control Act, my client shall file suit for eviction on this count against you as per Section 15 of Maharashtra Rent Control Act.

Thus, the notice states that petitioner was in arrears of tax for two years and of rent for Adhik Mass. Provisions of Section 32 of Maharashtra Rent Control Act, which mandate the regulation of tenancy month or tenancy year by British calender, rule out any Adhik Mass and hence, demand of Rs. 280/on account of said rent in that notice is erroneous and liable to be ignored. As a matter of fact, the lower appellate Court has also not granted said amount. The other of demand is only of Rs. 1478/i. e. Municipal taxes. The lower appellate court has found that rent being paid was inclusive of municipal taxes and hence, it was responsibility of respondent landlord to pay the same. Thus, lower appellate court has found that demand of on both these counts from petitioner tenant was misconceived and unsustainable. Thus, claim of arrears contained in Exh.29 was negated by it. However, thereafter the lower appellate court has proceeded further to consider the aspect of arrears of rent that too for the period beginning from Diwali 2001 till Diwali 2002 i.e. for Samvat 2058. The petitioner tenant is found to be in arrears of said rent and decree for eviction has been passed against him for not paying said rent. The appellate Court has found that the petitioner did not pay contractual rent of Rs. 3,360/with permissible increase of 4% and his cheque sent on 04/1/2002 was also not for complete amount. It has considered this aspect at length and ultimately decreed the suit of respondent for said sum.

16. It is, therefore, necessary to find out whether portion of notice reproduced above can, by applying any principals of interpretation, be construed to show that it contained such demand. As I have already mentioned above, the notice is issued on 11/8/2001. Diwali in year 2001 was in November 2001. Thus, in August, 2001, the rent for Samvat 2058 i.e. Diwali 2001 to Diwali 2002 was not due and could not have been stated to be in arrears. From records, it appear that the parties have admitted that the rent was payable in advance. However, exact implication thereof has not come on record. Whether the rent was payable immediately after commencement of new tenancy year or was payable before such commencement and if payable before commencement, the time at which the same was to be paid, has not come on record at all. The burden to show that on 11/8/2001, the tenant was in arrears of rent for year from Diwali 2001 to Diwali 2002 was upon respondent landlord. In present matter, that burden has not been discharged at all. The lower appellate court has also not considered that angle. It is, therefore, more than clear that the rent for period from Diwali 2001 to Diwali 2002 i.e. for Samvat 2058 was not in arrears on 11/8/2001 and therefore, could not have formed subject of Exh.29. There is nothing in the portion of notice reproduced above to show that such a rent was demanded by landlord from tenant

17. Next effort of Advocate Shri Joshi is to show the fact that the contractual rent amount of Rs. 3,360/or its payment was not sufficient to save the petitioner tenant as the said amount ought to have been hiked by 5% and 4% respectively and total amount of standard rent with permissible increase, thus amounting to Rs. 3,669/, ought to have been paid. He has attempted to cross first hurdle by stating that words "permissible interest" appearing in portion of the notice reproduced above, need to be read as words "permissible increase". However, the words "permissible interest" are followed by words "15% per annum as per provisions of". Thus, this demand of 15% interest is in tune of provisions of Section 15(3) and hence it cannot be said that word "interest" is drafting error. Even if word "interest" is presumed to be drafting error and it is substituted by word "increase", the permissible increase shown by Advocate Shri Joshi is only of 9% and not 15%. Advocate Shri Joshi has stated that after the word "permissible" the word "increase" should have been inserted before the word "interest". The effort is again without any merit, in view of specific demand of amount made in earlier part of said paragraph. The fact that this was a drafting error must have come to the notice of respondent while preparing the suit and it could have been pleaded in the suit and then could have substantiated by leading evidence. I, therefore, find the effort futile.

18. The permissible increase of 5% is sought by relying upon provisions of Section 7(14) which defines standard rent. What is being pressed into service is its Clause (a) because said clause only permits increase of 5%. However, it is to be noticed that said clause envisages determination of standard rent by some court or authority under relevant Rent Control Legislation. If there is already said determination and standard rent is already fixed, then that rent increased by 5% has been treated as standard rent for the purposes of Maharashtra Rent Control Act. In the present matter, it is an admitted position that provisions of C.P. and Berar Letting of Houses and Rent Control Order, 1949 were applicable to the tenancy in question before the Maharashtra Rent Control Act came into force and under said Rent Control Order, the standard rent of suit godown was never fixed. It is, therefore, clear that there is no question of increasing the annual rent of Rs. 3,360/by 5% in the present matter. In view of this legal position, it is apparent that effort of Advocate Shri Joshi to add words to the notice to capitalize on the error committed by lower appellate court cannot be fruitful.

19. Section 11 of the Maharashtra Rent Control Act entitles landlord to increase rent by 4% per annum after its commencement. It is, therefore, apparent that said increase by 4% is not automatic, but at the discretion of landlord. If particular landlord does not want to increase rent by 4%, law does not compel him to increase it. In other words, tenant is not voluntarily required to pay 4% more. The respondent landlord has not pointed out that before issuing notice at Exh. 29, he had after 01/4/2000 increased rent by 4%. It is to be noticed that said increase would then apply even for rent payable for period from Diwali 2000 to Diwali 2001. Such an increase or arrears on that account are not pointed out or pleaded by the respondent. In view of this position, it is apparent that effort to justify such 4% increase granted by lower appellate court as a part of standard rent or as a part of permissible increase must fail.

20. Various judgments cited before me by both the sides consider the question of interpretation of notice. However, interpretation of notice depends upon the facts and circumstances in which it has been issued. In the present facts, in the light of law applicable and considered above, I do not find it necessary to make reference to those judgments. It is more than clear that suit notice at Exh.29 cannot be interpreted to include a demand for permissible increase of 5% and 4%. It is also apparent that even if it is presumed that such demand was made by the landlord from petitioner factually, the demand would not have been sustainable. It is, therefore, clear that the cheque forwarded on 04/1/2002 by the petitioner to respondent was towards the rent of Rs. 3,360/agreed between the parties and fulfilled the requirement of Section 15(3). Not only this, but the deposit in the court on 19/7/2002, therefore, cannot be treated as violation of said provision. The respondent landlord has refused to receive said cheque and therefore, he could not have been permitted to take advantage of his own wrong.

21. Advocate Shri Joshi had, however, also urged that after 19/7/2002, the tenant has not deposited any amount in the court and therefore, it cannot be presumed that he was ready and willing to deposit the rent as contemplated by Section 15(1) of the Rent Act. It is no doubt true that the judgments cited by Advocate Shri Joshi show that because of language of Section 15(1) read with Section 15(3), the tenant has to show his readiness and willingness to pay the amount by continuing to deposit the standard rent amount and permissible increase, regularly in the court during pendency of the suit and appeal. The argument is misconceived in the present facts because this Court has found that tenant was not in arrears at all. The provisions will apply if it is found that tenant was in arrears and grant of relief to him against forfeiture, therefore, needs consideration.

22. In the circumstances, the judgment dated 18/2/2005 delivered in Regular Civil Appeal No. 190/2003 by the District Judge, Akola with decree therein, is quashed and set aside. The Regular Civil Suit No. 589/2001 filed by respondent against petitioner before the 2nd Civil Judge, Junior Division, Akola is dismissed.

23. Writ Petition is, therefore allowed. Rule accordingly. However in the circumstances of the case there shall be no order as to costs.


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