A tenant can raise a dispute regarding standard rent even after the suit is filed by his written statement, and such a dispute would be sufficient to take the case out of the ambit of Section 12(3)(a) of the Bombay Rents Hotel and Lodging House Rates Control Act, 1947.

Headnote:
Bombay Rents Hotel and Lodging House Rates Control Act, 1947 - Section 12(3)(a) and 12(3)(b) - Applicability - Dispute regarding standard rent - Explanation I and Section 11(4) - Interpretation.
Fact of the Case:

The petitioner, a landlord, filed a petition against the decision of the District Court, Kolhapur, which upheld the trial court's decision to not grant the petitioner's claim for ejectment of the respondent tenant. The tenant had failed to pay rent from December 1963 to May 1965, and the petitioner had served a notice under Section 12(2) of the Rent Act calling upon the tenant to pay the rent or deliver possession. The tenant replied to the notice, asserting that the entire amount had been paid but that the petitioner had not issued any rent receipts after December 1963. He also alleged that the rent of Rs. 28/- per month was exorbitant and that he would get standard rent determined.
Finding of the Court:

The court held that Section 12(3)(a) of the Rent Act, which makes it mandatory for the court to pass a decree for eviction if certain conditions are fulfilled, did not apply in this case because there was a dispute regarding the standard rent. The court found that the tenant had raised a dispute in his written statement in response to the suit for recovery of rent, and that this dispute was sufficient to take the case out of the ambit of Section 12(3)(a). The court also held that Section 12(3)(b), which gives the court discretion to allow time for payment of rent if certain conditions are met, applied in this case. The court found that the tenant had paid or tendered the standard rent and permitted increases as required by Section 12(3)(b), and that he had also paid the costs of the suit as directed by the court.
Issues: 1. Whether in a proceeding to which Section 12(3)(a) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, would otherwise apply, the tenant-defendant can prove that a dispute about standard rent exists without following the procedure laid down in Explanation I to Section 12? 2. Can he then also take the defence that Section 12(3)(a) does not apply and Section 12(3)(b) applies?
Ratio Decidendi: The court interpreted the provisions of Section 12(3)(a) and 12(3)(b) of the Bombay Rents Hotel and Lodging House Rates Control Act, 1947, and held that a tenant can raise a dispute regarding standard rent even after the suit is filed by his written statement and that such a dispute would be sufficient to take the case out of the ambit of Section 12(3)(a). The court also held that Section 12(3)(b) gives the court discretion to allow time for payment of rent if certain conditions are met, and that the tenant in this case had fulfilled those conditions.
Final Decision: The court answered both questions in the affirmative, holding that the tenant could prove a dispute about standard rent without following the procedure laid down in Explanation I to Section 12, and that he could also take the defence that Section 12(3)(a) did not apply and Section 12(3)(b) applied.

judgment-

Kotval, C.J.

1. This reference raises important questions as to the construction of Section 12 of the Bombay Rents Hotel and Lodging House Rates Control Act, 1947 (Act 57 of 1947). The Special Civil Application was originally heard by a single Judge. He referred it to a Division Bench and the Division Bench has referred it for decision to a Full Bench upon two Questions which are as follows:--

""1. Whether in a proceeding to which Section 12 (3) (a) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, would otherwise apply, the tenant-defendant can prove that a dispute about standard rent exists without following the procedure laid down in Explanation I to Section 12?

2. Can he then also take the defence that Section 12 (3) (a) does not apply and Section 12 (3) (b) applies?"" Since two specific questions have thus been referred but not the whole petition it is really unnecessary to consider the case upon the facts but it will tend to an understanding of the questions that have been referred if we briefly set out the circumstances under which the reference arose.

2. The petitioner is the landlord of a house in Kolhapur. On 1st October 1961 he let it out to Gajanan the respondent No. 1. The agreed rent was Rs. 28/- per month, comprised of Rs. 25/-as rent plus Rs. 3/- as taxes of the Kolhapur Municipality. The 1st respondent failed to pay the rent from December 1963 to 31st May 1965. On that date the landlord gave notice under Section 12 (2) of the Rent Act calling upon him to pay the rent or to deliver possession on termination of the tenancy by the end of June 1965. The 1st respondent replied to the notice on 8th June 1965. Though the reply had been referred to in the judgments of the Courts below and throughout the proceedings a copy of it was not before us and with the consent of counsel we have taken a copy of the translation of that reply on record. The 1st"" respondent asserted that the entire amount had been paid to the petitioner but that the petitioner had not issued any rent receipts after December 1963. He also alleged that the rent of Rs. 28/-per month was exorbitant and that he would get standard rent determined. He alleged that the premises should not be worth more than Rs. 8/- per month in rent. He also asked what was the standard rent under Section 21 (Sic : Section 11) of the Rent Act. There were other grounds upon which the petitioner had also moved for the eviction of the 1st respondent on the grounds of waste in respect of the Premises let and of being a nuisance to the neighbourhood under Section 108 (c) of the Transfer of Property Act, but with these grounds we are not concerned in this reference. Suffice it to say that they have been concurrently negatived by all the courts with the result that only the ground of nonpayment of rent remains to be considered.

3. As regards standard rent the trial Court fixed the standard rent at Rs. 26/- per month, and rejected the stand of the tenant that he had paid all the rent till the end of January 1965. It however considered the fact that the tenant had paid in Court the interim standard rent fixed by the Court and also the fact that Rs. 100/- of the tenant were in deposit with the landlord and therefore the trial Court did not grant the petitioners claim for eject-ment but merely passed a decree for Rs. 546/- as arrears of rent and directed the petitioner to withdraw the amount in deposit towards the arrears decreed.

4. In an appeal to the District Court, Kolhapur, all the findings of the trial Judge were upheld and the cross-objection filed on behalf of the tenant seeking to reduce the standard rent to Rs. 16/- per month was rejected. The petition is filed against this decision of the District Court at Kolhapur.

5. When the petition came up before Mr. Justice Bal the question raised before the learned Judge was whether the petitioner landlord was not entitled to a decree for ejectment having regard to the provisions of Section 12 (3) (a) of the Re

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