IMPORTANT POINT
In terms of Section 10(2)(i) of the Tamil Nadu Rent Control Act if there is default in payment of rent and a notice is sent by the landlord of such default, then the default would mature into a wilful default only if the default continues in other words the defaulted amount is not paid within a period of two months from the date of notice.

Headnote:Tamil Nadu Buildings (Lease and Rent Control) Act, 1960-Section 10(2)(i)-Wilful default in payment of rent-Eviction on ground of-Bona fide dispute over quantum of rent-Agent of landlord not coming to collect rent-Notice demanding rent-Before reply could be sent even before expiry of 60 days envisaged in Explanation to Proviso to Section 10(2) eviction petition filed-Tentative determination of rent by Court in Section 11 proceedings and deposit of arrears immediately thereafter-Rent Controller ordering eviction on ground of wilful default-Appellate authority and High Court upholding order-Held : Courts below committed error-Statute gives benefit to tenant, to whom notice is sent on ground of default, 60 days time to pay defaulted rent-Default would mature into wilful default only if default continues even after expiry of 60 days.
       Held : The statute has given a benefit to a tenant viz., if there is default in payment of rent and a notice is sent by the landlord of such default, then the default would mature into a wilful default only if the default continues in other words the defaulted amount is not paid within a period of two months from the date of notice. In the present case, notice was sent on 9.8.1989, thus the said two months would have expired only on the 9.10.1989. In other words, in case the tenant could have paid the said amount within this period, it would not be a case wilful default. We find in the present case after sending the said notice, the landlord did not wait for the expiry of the said period and before that filed the eviction petition R.C.O.P. No. 2963 of 1989 on 20.9.1989 alleging the wilful default and further if the suit itself was filed before the said period there could be no question of sending any reply to the said notice. Next, we find notice contained amount which fell into arrears is of two periods. The amount for the period 1.4.1989 to 31.7.1989 was admittedly in dispute. In fact for this reason during pendency, a proceeding to fix interim rent under Section 11 was initiated. The tenant reasonably thought to pay the same after its adjudication and in fact deposited the same the moment it was adjudicated. So far the earlier period, i.e. 1.1.1989 to 31.3.1989 for three months, the case of the appellant is that tenant s long dependency in the past, on the agent of the landlord to collect the rent and as he did not come, thus rent could not be tendered, thus this could not be a case of wilfully not paying the rent. It may be, as enhancement of rent came in dispute, the agent did not come to collect the rent. We have given our full consideration, and find submission for the appellant has force, which has not been adverted to by any of the three courts below. This coupled with Explanation to the proviso of Section 10 (2)(I) as two months did not expire from the date of notice when suit was filed it could not to be a case of wilful default. (Para 7)
       Wilful default means an act consciously or deliberately done with open defiance and intent not to pay the rent. In the present case the amount of rent defaulted firstly is on account of fact that the agent of the landlord did not come to collect the rent for some reason. Further, notice of default contained disputed rent. This fact coupled with the fact that eviction suit was filed before maturing a case of wilful default in terms of the Explanation to the proviso of Section 10(2). The dispute of rent admittedly was genuine. Further, we find conduct of the appellant throughout in the past being not of a defaulter or irregular payer of rent. Thus, all these circumstances cumulatively come to only one conclusion that the appellant cannot be held to be a wilful defaulter. (Para 8)
       Held consequently, all the three courts below committed error in law in holding tenant to be a wilful defaulter. So, we hold even if he was in default it is not a case of wilful default. We hold that the appellant committed no wilful default. Accordingly, the impugned orders and judgments of all the three courts are hereby set aside. (Para 10)

JUDGMENT

Misra, J.-This appeal is directed against the eviction of the appellant on account of default of payment of rent under Section 10(2)(i) of the Tamil Nadu Buildings (Lease and Rent Control) Act. 1960.

2. The appellant took the disputed shop situated at 71, Usman Road, T. Nagar, Madras on rent in the year 1972 from the erstwhile owner who sold this property to the present respondents in the year 1977. The rent then paid by the appellant was at the rate of Rs. 275/- p.m. Thereafter, it was raised to Rs. 343.75 p.m. after 1.4.1979. Next enhanced to Rs. 500/- p.m. w.e.f. 1.9.1985. In the year 1988 the appellant desired to change his business from spare parts of two-wheelers to sale of tyres, then the rent was again increased to Rs. 750/- p.m. The appellant desired that for selling of tyres he needs to install air-conditioner and compressor with water connection for checking of tubes and fitment of tyres. This also requires additional electricity load, a water tap and a separate lavatory. For doing these, the appellant offered and respondent agreed on condition that the rent be further enhanced from Rs. 750/- to Rs. 1,000/- p.m. On this oral agreement the appellant spent about Rs. 1,00,000/- on renovation. However, the respondent failed to discharge their obligations for providing the aforesaid additional facilities despite repeated requests. On respondents failure to do so, the appellant filed a suit against him that the landlord was not entitled to claim this enhanced rent of Rs. 1,000/- p.m. In support he stated that on the ground floor there are nine shops including the one with the appellant, similarly situated, but none of these shops have any rental of Rs. 1,000/- p.m.

3. Instead of complying with the said conditions, the appellant received respondent s notice dated 9.8.1989 through his advocate that the agreed rent of Rs. 1,000/- p.m. from 1.4.1989 has not been paid in spite of demands.

Before any reply could be sent the appellant was served with a copy of the eviction proceedings dated 27.9.1989 under Section 10(2)(i) of the aforesaid Act. The appellant contested this claim that enhancement agreed to pay Rs. 1,000/- was on a clear understanding that the respondent would provide separate toilet, water connection, additional electricity load etc. In fact, during the pendency of the said petition the counsel for the appellant wrote a letter dated 17.1.1990 to the counsel of the respondent for getting the three-phase electric connection for the shop in question.

4. Since there was a dispute in respect of rate of rent the Rent Controller passed an order under Section 11 on 30.7.1990 directing the appellant to deposit Rs. 17,250/- towards the rent for the period 1.1.1989 to 31.7.1990. The aforesaid amount was directed to be paid by 16.8.1990. The appellant deposited the said amount in the treasury of the court on 13.8.1990 and thereafter continued to pay/deposit the rent at the rate of Rs. 750/- p.m. initially in the court and then directly to the respondents who thereafter accepted the same. Thus, there has been no conceivable default. However, the Rent Controller decreed the petition of the respondent. The Rent Controller held that the respondent did not pay the arrears of rent even till filing of the counter in the said petition and it was paid only when Order under Section 11 was passed which constitutes to be wilful default. On appeal, the Appellate Authority confirmed the said order. The Appellate Authority records, in spite of receiving the aforesaid notice, Ex. P-2, the appellant did not sent any reply to contradict the contents of the said notice . Finally the revision was also dismissed by the High Court against which the present appeal has been preferred.

5. Learned counsel for the appellant submits that the Rent Controller without application of mind held, appellant to be wilful defaulter. The Appellate Authority also fell into the same error, while confirming the order. It records not sending any reply to the sa

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2000 Supreme(SC) 458

Cases Referred (1)