The sale agreement can extinguish the landlord-tenant relationship, as evidenced by substantial payment and conduct of the parties.

JUDGMENT

(Common Prayer: Civil Revision Petitions are filed under Section 25 of the Tamil Nadu Buildings Lease and Rent Control Act, praying to set aside the Judgement and Decree dated 11.09.2018 passed by the (Rent Control Appellate Authority) VIII Judge, Court of Small Causes at Chennai, in R.C.A.Nos.800 and 801 of 2017 reversing the Judgement and Decree dated 10.10.2017 in RCOP No.865 of 2013 and RCOP No.600 of 2008 on the file of XVI Judge, Small Causes Court, Chennai.)

Common Order:

1. These Civil Revision Petitions are arising out of rent control proceedings. The tenant is the revision petitioner. The respondent/landlady filed a petition for eviction on the ground of wilful default and also petition for fixation of fair rent. Both the petitions filed by the respondent were dismissed by the Rent Controller on the ground there was no jural relationship of landlord and tenant. Aggrieved by the same, the respondent preferred two rent control appeals. The appeal against the dismissal of eviction petition was partly allowed by setting aside the finding of Rent Controller with regard to jural relationship. The appellate authority held that the jural relationship of landlord and tenant was established and amount deposited by the petitioner and withdrawn by the respondent shall be treated as rent payable by the petitioner. However, the dismissal of eviction petition was confirmed. The appeal filed against dismissal of fair rent petition was allowed by fixing fair rent at the rate of Rs.61,850/- per month. Aggrieved by the same, the petitioner has come by way of these two revisions.

2. According to the respondent/landlady, the petitioner is a tenant under her in respect of the non-residential/commercial building. The rental agreement was entered into on 01.10.2003 and the agreed monthly rent was Rs.9,000/- per month. Since there was agreement to increase the rent at the rate of 5% per every 11 months period, on the date of filing eviction petition the agreed monthly rent was Rs.9,450/-. It was claimed by the respondent that petitioner had committed default in payment of rent from February- 2005. Therefore, the respondent issued a lawyer notice on 26.12.2007 calling upon the petitioner to pay the arrears of rent from February-2005 to November-2007. The petitioner came up with a reply notice dated 07.01.2008 with false allegations. Inspite of rejoinder by the respondent, petitioner failed to pay the rent. It was further averred by the respondent that she had borrowed a sum of Rs.17,42,065/- from the petitioner for interest to discharge mortgage loan obtained by her from Tamil Nadu Industrial Investment Corporation. The petitioner insisted the respondent to execute sale agreement in his favour as a security for loan transaction. It was claimed by the respondent that she had no intention to sell the demised premises to petitioner and no sale agreement was executed by her in favour of petitioner. It was also claimed that there was no clause in the agreement to the effect that tenant need not pay rent to the demised premises. The suit for specific performance field by the petitioner was resisted by the respondent by contending that agreement was a security for a loan transaction. Thus, on the specific allegation that petitioner committed default in payment of rent from February-2005 to November-2007, for a period of 34 months, the respondent laid the petition for eviction. While the said petition was pending, the respondent also filed a petition seeking fixation of fair rent at the rate of Rs.1,99,560.74/- per month.

3. The petitioner herein filed counter affidavit and resisted both the petitions on the ground that petitioner and respondent entered into sale agreement in respect of the demised premises on 07.03.2005 and as per the terms of said agreement, the respondent agreed to sell the demised premises to the petitioner for a total sale consideration of Rs.24,24,000/-. It was claimed by the petitioner that he paid a sum of Rs.17,42,065/-