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2025 Supreme(SC) 1485

SUPREME COURT OF INDIA
J.B. PARDIWALA AND R. MAHADEVAN, JJ.
Sagar Gorakh Chothve And Another – Appellant
Versus
Vilas Eknath Kadam And Another – Respondent
Petition for Special Leave to Appeal (C) No. 30818 of 2024 [Arising out of impugned final judgment and order dated 13-09-2024 in WP No. 3700/1996 passed by the High Court of Judicature at Bombay]
Decided on : 03-01-2025

Headnote:(A) Rent Act - Section 12(3)(a) and (b) - Tenants facing eviction due to non-payment of rent - Conditions for decree of eviction stated; once fulfilled, the Court must issue eviction - Education cess categorized as permitted increase and can be included in rent calculations - Legal observances on mutual agreements regarding tax reimbursement and rent payment structure. (Paras 2-5)

(B) Eviction and Rent Control - Statutory rights of landlords regarding education cess recovery elucidated, affirming that agreed arrangements for rent do not negate the statutory definitions. (Paras 5-6)

Facts of the case:
Petitioners, tenants, faced eviction for non-payment related to rent and education cess. The High Court affirmed the eviction decree made by subordinate courts and allowed time for vacating the premises.

Findings of Court:
High Court upheld the position that the statutory provisions necessitated eviction due to the tenant's non-compliance with rent payment requirements.

Issues: The Court addressed whether the tenants were protected from eviction under Section 12(3) and the interpretation of what constitutes permitted increases under the Act.

Ratio Decidendi: The Court found that the conditions outlined in Section 12(3)(a) were met, and education cess constitutes a permitted increase permissible under the Rent Act, distinguishing cases based on payment frequency.

Result: Petition dismissed; eviction order upheld.

Table of Content
1. eviction due to non-payment of rent. (Para 1)
2. conditions for eviction under section 12 of the act. (Para 2)
3. time granted to vacate after judgment. (Para 3 , 4)
4. permitted increase includes education cess. (Para 5)
5. high court's decision is upheld. (Para 6 , 7 , 8)
6. pending applications are resolved. (Para 9)

ORDER :

1. The petitioners herein are tenants. They have suffered a decree of eviction on the ground of non-payment of rent.

2. In paras 17 and 18 respectively of the impugned judgment, the High Court has observed thus:-

"17). The next point for consideration is applicability of Clause (a) or Clause (b) of sub-section (3) of Section 12 to the present case. Section 12(3)(a) becomes applicable where the rent is payable by month and where there is no dispute about standard rent or permitted increases and where the arrears of rent are for a period of six months or more. Once these three conditions are fulfilled, the act of tenant in neglecting to pay rent within one month after receipt of demand notice mandates the Court to pass a decree for eviction. It appears that prior to 28 March 1963, the words used in Section l2(3) (a) were 'the Court may pass a decree' which are substituted by the words 'the Court shall pass a decree' by amending Act of 1963. Thus, once the conditions of Section I2(3)(a) are satisfied, no discretion is left to the Court but to pass a decree for eviction.

18). In cases other than the one covered by Section 12 (3)(a), decree for eviction cannot be passed if on the first date of hearing of the suit or before such date as the Court may fix, the tenant deposits the arrears of standard rent and permitted increases. Use of the words 'in any other case' would obviously mean a case where (i) the rent is not payable by a month, (ii) the dispute exists regarding standard rent or permitted increases, (iii) the arrears of rent are in respect of the period not exceeding period of six months. This is the reason My Mr. Joshi has attempted to suggest that the rent was not payable by month in the present case. His contention is premised on demand made by Plaintiffs for education cess of 60 paise in the notice. ... (emphasis added)"

3. The High Court has dismissed the petition filed by the petitioners herein thereby affirming the judgment and decree passed by the courts below.

4. The High Court has granted 12 weeks time to the petitioners to vacate the premises.

5. As rightly observed by the High Court, the issue is squarely covered by the decision of this Court in the case of Raju Kakara Shetty v. Ramesh Prataprao Shirole and Another reported in (1991) 1 SCC 570, wherein this Court has observed as under:

"It is, therefore, obvious that the landlord has a statutory right to recover the amount of education cess paid by him in respect of the demised premises from the tenant-occupant and such recovery shall not be an unlawful increase under of Section 7 of the Act but would squarely fall within the expression 'permitted increases' as defined by Section 5(7) of the Act. This statutory right to recover the amount of education cess in respect of the demised premises from the occupant tenant can be quantified by agreement of parties so long as the amount quantified does not exceed the total amount actually paid by the owner by way of education cess. In the present case, it is nobody's contention that the amount of Rs 120 per month payable by way of education cess and other taxes was in excess of the amount actually payable under the relevant statutes to the local authority. The Gujarat High Court has taken a consistent view that where the tenant is obliged under the terms of the tenancy or by virtue of the statute to pay the tax dues to the landlord, since such taxes which form part of the rent are payable annually the case ceases to be governed by Section 12(3)(a) and falls within the purview of Section 12(3)(b) of the Act. In Maheshwari Mills Ltd. [(1962) 3 Guj LR 574] under the terms of the tenancy the tena

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