Important points
1. Wilful default in Section 10(2)(i) of the Tamil Nady Rent Control Act implies intentional or concious violation of obligation to pay the rent due; if default has occasioned on account of ignorance, accident or compulsion or circumstances beyond the Control of the tenant, it cannot be termed as ‘wilful default’.
2. Where prohibitory order issued to tenant by Income Tax department u/S 226(3) of the Income Tax Act, did not prohibit future rent to landlord, but tenant believed reasonably that the prohibitory order prohibited him from paying future rent and he did not pay rent to landlord, the meaning of Section 10(2)(i) of the Tamil Nadu Rent Control Act.
3. It is incumbent upon the authority, considering an application for eviction of a tenant under clause (c) of Section 10(3)(c) of the Tamil Nadu Rent control Act. Order passed without considering the proviso is unsustainable.
4. Where eviction petition o ground of wilful default is payment of rent was dismissed in revisional proceedings, in the guise fo raising additional ground, the landlord cannot be allowed to set up a new case of eviction on ground of requirement of additional accommodation.

Headnote:(i) Tamil Nadu Buildings (Lease and Rent Control) Act, 1960-Section 10(2)(i) r/w Section 226(3) of the Income Tax Act, 1961-Wilful default-‘Wilful default’ implies intentional or concious violation of obligation to pay rent due-Default occasined on account of ignorance, accident or compulsion or circumstance beyond Control of tenant cannot be termed as wilful default-Tenant served with prohibitary order u/s 226(3) of IT Act -Prohibitory order dated 6.3.1979 read that tenant was prohibited and restrained from making payment of “Certain debts alleged to be due”-Tenant stopping payment of monthly rent-Demand notice on 18.01.1988 by Income Tax Department and tenant paying arrears of rent to Tax Recovery Officer-Landlord’s plea that Prohibitary order was confined to existing debt till 6.3.1999 and did not cover future rent and failure to pay rent amounted to wilful default warranting eviction - Not sustainable-Tenant believed that by virtue of prohibitory order he was directed not to pay rent to landlord until further orders-Default cannot be said to be wilful default entailing in eviction-Section 10(2)(i) does not override Section 226(3) of Income Tax Act.
       Held : Section 10(2)(i) showns that a tenant will be in default of payment of the rent due by him in respect of the building if (a) he has not paid or tendered the rent due within fifteen days after the expiry of the time fixed in the agreement of tenancy with his landlord; or (b) in the absence of such agreement he has not paid or tendered the rent due by him by the last day of the month next following that for which the rent is payable, e.g., the rent for the month of January is not paid by February 28. But a default simplicitor in payment of rent is not a ground to order eviction of the tenant because the tenant is entitled to satisfy the Court/Controller that his default in paying or tendering the rent was not wilful. If the Court/Controller is satisfied that non-payment/tendering of rent was not wilful, it has to give the tenant a reasonable time which should bot exceed fifteen days, for payment/tendering of the rent due up to the date of such payment to the landlord and on the tenant so paying/tendering it has to reject the application seeking eviction of the tenant. But if the Court/Controller is not so satisfied, the default will be termed as ‘wilful default’ and the tenant will be liable to be evicted on that ground. (Para 8)
       Here ‘wilful default’ implise intentional or conscious violation of obligation to pay the rent due; it may also be on account of supine indifference or callous or recalcitrant conduct. But if the defalut has occasioned on account of ignorance, accident or compulsion or circumstances beyond the control of the tenant, it cannot be termed as ‘wilful default’. This has to be determined as a question of fact on the facts and in the circumstances of each case. (Para 15)
       In this case it is true that there is no direction in Ex. B-2 to the appellant not to pay future rent to the landlord from that date. But the tenant believed that, by virtue of the prohibitory order of the Tax Recovery Officer, he was directed not to pay the rent to the landlord who was also injuncted from receiving the rent until further orders of that authority. If there are reasonable grounds for his belief that he was prohibited and restrained from paying rent under Ex. B-2, and so the default has occurred due to statutory compulsion it cannot be said that he was committed wilful default in payment of rent. But if such an assumption is without any basis it would not relieve him of the consequences of wilful default. It is evident that the appellant was required to pay to the Tax Recovery Officer the amount due (rent) to the landlord and, accordingly, he paid the rent due for the period (A) commencing from Ex. B-2 to B-3 - 107 months. (Para 16)
       On the above facts, we are satisfied that there was reasonable basis for the tenant to assume that he was prohibited from paying the rent. It is also strengthened by the fact that during this period the landlord also did not make any demand. From the above discussion it becomes clear aforementioned period is on account of the fact that the appellant believed that under Ex. B-2 he was prohibited from paying any rent to the respondents. In such a situation, the default in payment of rent to the landlord during the period ‘A’, in our view, cannot be said to be wilful default. Therefore, this can not entail in the appellant’s eviction from the suit premises. (Para 18)
       The argument that the provisions of the Income-tax Act had no overriding effect over the provisions of the Rent Control Act and payment of rent to the Income tax Officer pursuant to Ex. B-2 and Ex. B-3 would not relieve the appellant of his obligation to pay the rent to the landlord cannot be accepted. There is nothing in the Act which comes in the way of the tenant in complying with the prohibitory order/order under Section 266(3) of the Income Tax Act issued by the Tax Recovery Officer without exposing himself to the risk of being treated as wilful defaulter. Under the rental agreement as well as under the Act the tenant is bound to pay the rent to the landlord. By virtue of the statutory notice of the Tax Recovery Officer the tenant is directed to pay the rent to the Tax Recovery Officer instead of paying it to the landlord in discharge of his liability to pay the income tax due by him. Clause (viii)of sub-Section (3) of Section 266 of the Income Tax Act declares that the person paying any amount in compliance with a notice issued under that section shall be fully discharged from his liability to the assessee to the extent of the amount so paid. In view of this provision, payment of rent by the tenant to the Tax Recovery Officer instead of to the landlord is indeed a payment not only in discharge of his contractual obligation and statutory obligation under the Act but also under the said provision of the Income Tax ACt. In such a case no landlord can be heard to say that though the tenant has paid the rent in compliance with the notice of attachment and notice under Section 266(3) of the Income Tax Act towards the discharge of income tax due by him covered by the certification issued under Section 222 of the Income Tax Act, yet such payment will have to be ignored for the purpose of the Act and the tenant will have to be treated as a wilful defaulter. (Paras 21 & 23)
       (ii) Income Tax Act, 1961-Section 226(3) r/w Section 10(2)(i) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960-Provision of Section 10(2)(i) of Rent Control Act do not overrides provisions of Section 226 of Income Tax Act. (Paras 21 & 23)
       (iii) Tamil Nadu Buildings (Lease and Rent Control) Act, 1960-Section 10(3)(a)(iii) and 10(3)(c)-Petition filed on ground of bona fide requirement was dismissed-Application before High Court during revision proceedings to raise additional ground of additional accommodation-High Court allowing application and ordering eviction on ground of requirement of additional accommodation-Unsustainable-Respondent landlord could not be permitted to make out a new case by seeking permission to raise additional grounds in revision.
       Held : There is fundamental difference between a case of raising additional ground based on the pleadings and the material available on record and a case of taking a new plea not borne out by the pleadings. In the former case no amendment of pleadings is required whereas in the latter it is necessary to amend the pleadings. The Court/Rent Controller in its descretion, with a view to do complete justice between the parties, may allow a party either to raise additional ground or take a new plea, as the case may be, if the circumstances so judtify like a plea based on subsequent events. Whereas in the former situation, the case can be disposed on the material on record but in the latter case the pleadings will have to be amended and for that reason the parties have to be given reasonable opportunity to file further pleadings and adduce necessary evidence. (Para 26)
       No exception can be taken to the order of the High Court allowing CMP to raise additional grounds in the C.R.P. But it would be of no consequence as there haas been no application for amendment of the pleadings. The respondents cannot be permitted to make out a new case by seeking permission to raise additional grounds in revision. (Para 27)
       Under Section (3)(a) it is incumbent on the landlord to show that he or any member of his family is not occupying any building (residential or non-resdential, as the case may be) for his own occupation or for the purpose of keeping a vehicle or for purposes of a business (as the case may be) which he or any member of his family is carrying on, in the city, town or village concerned which is his own. But for the purpose of clause (c) the landlord will indeed be occupying a part of a building of which the remaining part is in occupation of the tenant. Further whereas recovery of possession of a non-residetial building under Section (3)(a) bars a second application under that clause, no such bar exists in case of clause (c). For granting relief to the tenant under clause (a) the aspect of hardship to the tenant is alien but under clause (c) the Controller is enjoined to reject the application of the landlord for eviction if he is satisfied that the hardship which may be caused to the tenant by directing the tenant to put the landlord in possession of the portion of the building in possession of the tenant, will outweigh the advantage to the landlord. Under clause (c) the tenant is also entitled to the indulgence of being granted reasonable time for the putting the landlord in possession of the building, which may be extended from time to time up to the maximum period fo three months. (Para 29)
       From the above discussion, it is evident that the requirements of clause (a) are different from the requirements of clause (c). For purposes of clause (c), the following additional facts will be necessary viz. - whether the landlord is occupying only a part of the building whether residential or non-residential and whether the tennt is occupying the whole or any portion of the remaining part of the building and the facts relevant to the consideration with regard to comparative hardship to the landlord and tenant. Such facts are to be brought on record because they are not subject-matter of consideration in an application filed under sub-section (3)(a). In a case where original application for eviction is based, inter alia, on the ground in clause (a) of sub-Section (3) and an application for amendment of eviction petition is allowed permitting to raise further ground uder clause (c) either by the Appellate Authority or the Revisional Authority, the appropriate course will be to remand the case to the Rent Controller for giving opportunity to the opposite party to file futher pleading and adduce such evidence relevant to the issue, as they desire. Inasmuch as the petition filed by the respondents and allowed by the High Court was to raise additional ground in the revision and not to amend the eviction petition, we are of the view it is not a fit case to remand the matter to the Rent Controller. (Para 30)
       (iv) Tamil Nadu Buildings (Lease and Rent Control) Act, 1960-Section 10(3)(c)-Eviction ob ground or requirement of additional accommodation - Conditions precedent to order eviction-Provisions of clause (c) have overriding effect over clause (a)-Recording of finding under proviso to Section 3(c) is a must.
       Held : On an analysis of provisions of Section 10(3)(c) the following points emerge :
        (1) The provisions of clause (c) have overriding effect over clause (a);
        (2) Clause (c) applies to a case where,
        (i) the landlord is occupying only a part of building;
        (ii) the tenant is occupying the whole or any portion of the remaining part of the building;
        (iii) the landlord requires additional accommodation for residential or for non-residential purposes of a business which he is carrying on;
        (iv) the landlord is seeking an order from the Rent Controller directing the landlord be put in possession of that portion or part of the building which is in possession of the tenant;
        (3) if the landlord makes out a case under clause (c) the Controller has to evaluate the hardship that will be caused to the tenant if he is evicted from the portion in his occupation and the advantage that will be gained by the landlord; if he is satisfied that the hardship to the tenant will outweigh the advantage to the landlord, the Controller has to reject the application for eviction of tenant; and
        (4) in the event of the Controller ordering eviction he is empowered to give the tenant a reasonable time for putting the landlord in possession of that portion or part of the building of which eviction is ordered and to extend the same from time to time but not exceeding three months. (Para 28)
       It is incumbent upon the authority, considering an application for eviction of a tenant under clause (c) of Section 10(3)(c) of the Tamil Nadu Rent control Act. Order passed without considering the proviso is unsustainable. (Para 31).

Judgment

Syed Shah Mohammed Quadri, J.-This appeal arises from the common order of the High Court of Madras in CRP Nos. 1582, 1705/93 and CMP No. 13064/96 in CRP No. 1705/93 passed on March 27, 1997. The appellant is the tenant and the respondents are the landlords of the cycle shop bearing No. 70, Main Road, Eruvadi (hereinafter referred to as ‘the premises’).

2. The appellant took the premises on monthly rent of Rs. 60/- from one Shahul Hameed, predecessor-in-interest of the respondents, in 1974. On March 6, 1979, the appellant was served with a prohibitory order by the Tax Recovery Officer, Income Tax Department, Tirunelveli, which was followed by another order issued by the same authority under Section 226(3) of the Income Tax Act on January 18, 1988. From the date of service of the prohibitory order the appellant stopped payment of monthly rent to the respondents. But on receiving the notice on January 18, 1988, he paid rent for the entire period to the Tax Recovery Officer.

3. On the ground that the appellant had committed wilful default in payment of rent for the periods : (A) March 6, 1979 to February 24, 1988 and (B) February 24, 1988 to February 15, 1990 and on the ground that he required the premises for his own use and occupation, the said Shahul Hameed (landlord) filed R.C.O.P. No. 2 of 1990 for eviction of the appellant (tenant) before the Rent Controller (District Munsiff Court) Valliyur under Sections 10(2)(i) and 10(3)(a)(iii) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 (for short ‘the Act’) on August 17, 1990. The appellant contested the petition denying the pleas of wilful default in payment of rent as well as of personal requirement of the landlord. The learned Rent Controller dismissed that petition on April 30, 1991. Aggrieved thereby, the respondents filed R.C.A. No. 43 of 1991 before the Appellate Authority, Tirunelveli. In appeal, it was held that the ground of bona fide requirement of the respondents-landlords was not proved; however, the ground of wilful default in payment of rent was found against the appellant-tenant and accordingly eviction of the appellant was ordered on April 12, 1993. Against that order both the appellant and the respondents filed Revisions before the High Court - CP No. 1582 of 1993 was filed by the appellant and CRP No. 1705 of 1993 was filed by the respondents. In their C.R.P. the respondents filed CMP No. 13064 of 1996 seeking permission to amend the grounds of revision and to raise the additional ground under Section 10(3)(c) of the Act for additional accommodation. The petition was opposed by the appellant. However, the High Court allowed the CMP. In the CRPs it was held that the appellant committed wilful default in payment of rent and the additional ground under Section 10(3)(c) was established. Thus, the High Court confirmed the order of eviction by the common order, referred to above. It is against that order, the present appeal is filed by special leave.

4. Dr. A.F. Julian, learned counsel for the appellant, urged that by cirtue of the prohibitory order issued by the Income Tax Department on march 6, 1979, the appellant was prevented from paying the rent to the landlord and, therefore, non-payment of rent to the landlord after that date cannot be termed as ‘wilfut default’. He submitted that after receiving notice under Section 226(3) of the Income Tax Act on January 18, 1988, the appellant paid the rent to the Income Tax Department on February 24, 1988. He next contended that having lost on the plea of bona fide personal requirement under Section 10(3)(a)(iii), the landlord could not have been permitted to make out an entiely new case by way of additional ground under Section 10(3)(c) of the Actand in any event as the High Court did not consider the requirements of the proviso to Section 10(3)(c) of the Act, the order under appeal deserved to be set aside.

5. Mr. M.B. Kumar, learned counsel for the respondents, argued that wilful default in pay

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1999 Supreme(SC) 866

Cases Referred (2)