Civil Appeal No 4134 of 1991
From the Judgment and Order dated 3081991 of the Bombay High Court in Writ Petition No 3580 of 1991
JPPathak and PH Parekh for the Appellants
AM Khanwilkar and SK Parshankar for the Respondents
The Judgment of the Court was delivered by 229 KASLIWAL J
This appeal by grant of special leave is directed against the judgment of the Bombay High Court dated 30th August 1991 in a suit for possession under the Bombay Rents Hotel and Lodging House Rates Control Act 1947 hereinafter referred to as the Act
The suit was dismissed by the 7th Additional Small Causes Judge
On appeal the learned 10th Additional District Judge Pune by Judgment dated 2541991 set aside the order of the trial court and decreed the plaintiff s suit for possession
The tenants filed the writ petition in the High Court challenging the order of the Additional District Judge But the same was dismissed and the decree for possession passed by the Additional District Judge was affirmed
The trial court held that the service of notice dated 781980 on the defendant tenants was not held proved
The plaintiffs were unable to prove that the postal acknowledgement Exhibit 51 Contained the signatures of defendant no 2 or 3
It was held that on the point of service of notice the case of the plaintiff was rather confusing and not clear
It was held that even assuming that the notice had been served yet the case did not fall under Section 123 a of the Act
The trial court also held that the case did not fall under Section 123 b of the Act as the defendants had paid Rs 55800 on 1611984 and thereafter made regular payment of Rs 600 every month
According to the learned trial court the issues were framed on 2681985 and before that the defendants had made full payment as demanded in the notice and as such no decree can be passed under Section 123b of the Act
Learned Additional District Judge reversed the above finding of the trial court and held that the evidence of the plaintiff showed that the copy of the notice was sent to all the defendants by registered post
The postal receipts have been filed as exhibits 52 53 and 54
Learned Additional District Judge further held that when the notices are sent by registered post it is presumed to have been served and mere denial by the tenants had no value unless they proved some extraordinary happenings or events which prevented following of usual course of business
Learned Additional District Judge further held that the notice was sent on the address given in the plaint and it was admitted by the defendant in his statement that it contained the correct address
A presumption of service of notice was drawn under Section 27 of the General Clauses Act and Section 114 of the Evidence Act
Learned additional District Judge though affirmed the finding of the trial court that the case is not covered under section 123a of the Act but the plaintiffs were entitled to a decree under Section 123 B of the Act
In this regard learned Additional District Judge recorded the finding that the entire arrears of rent amounted to Rs 71088 but the defendant tenant only 230 deposited Rs 66000 till the first date of hearing and thus remained in arrears of Rs 5088
It was also held that the provisions of 123b of the Act are mandatory provisions and those are required to be strictly complied with by the tenants during the pendency of the suit and also appeal when the landlord claims possession of the suit premises on the ground of Section 123b of Act
The defendant tenant did not deposit the entire arrears on the first date of hearing and did not deposit the further rent during the pendency of the appeal
Thus the defendant persistently committed defaults during the pendency of the suit and also the appeal in paying the rent
We have heard learned counsel for the parties and have thoroughly gone through the record
It is important to note that Ms Kulkarni Patterns Pvt Ltd defendant No1 Was the tenant defendant No 2 Shri D G Kulkarni was the Chairman of the company and defendant No 3 Mrs MD Kulkarni was the wife of defendant No 2 and Director of defendant No 1
The plaintiffs sent a notice dated 781980 to all the defendants vide postal receipts Exhibit 5253 and 54
Exhibit 51 is only one acknowledgement receipt which has been produced on record
It has been contended on behalf of the appellants that the learned Additional District Judge was wrong in drawing presumption of service of service of notice in the facts of the present case
It was submitted that the plaintiff initially stated that the acknowledgement receipt Exhibit 51 contained the signatures of defendant NO3 but subsequently admitted that it contained the signature of defendant No 2
It was further argued that defendant No2
had appeared in the witness box and clearly denied his signatures on Exhibit 51
It was thus contended that the presumption of service of notice was rebutted and thereafter the burden lay on the plaintiffs to prove the service of notice by examining the postman or by other evidence and the plaintiffs having failed to do so the service of notice having not established the suit was liable to be dismissed
Reliance in support of the above contention was placed on a decision of this Court to which one of us was a party in Green view Radio Service vs Laxmibai Ramji And Another
 Reliance was placed on the following observations made in the above case
In this connection we may also point out that the provisions of section 106 of the Transfer of Property Act require that notice to quit has to be sent either by post to the party or be tendered or delivered personally to such party or to one of his family members or servants at his residence or if such tender or delivery is not practicable affixed to a conspicuous part of the 231 property
The service is complete when the notice is sent by post
In the present case as pointed out earlier the notice was sent by the plaintiff s advocate by registered post acknowledgement due
The acknowledgement signed by the party was received by the advocate of the plaintiff
Thus in our view the presumption of service of a letter sent by registered post can be rebutted by the addressee by appearing as witness and stating that he never received such letter
If the acknowledgement due receipt contains the signatures of the addressee himself and the addressee as a witness states that he never received such letter and the acknowledgement due does not bear his signature and such statement of the addressee is believed then it would be a sufficient rebuttal of the presumption drawn against him
The burden would then shift on the plaintiff who wants to rely on such presumption to satisfy the court by leading oral or documentary evidence to prove the service of such letter on the addressee
This rebuttal by the defendant of the presumption drawn against him would of course depend on the veracity of his statement
The court in the facts and circumstances of a case may not consider such denial by the defendant as truthful and in that case such denial alone would not be sufficient
But if there is nothing to disbelieve the statement of the defendant then it would be sufficient rebuttal of the presumption of service of such letter or notice sent to him by registered post
 In the present case the plaintiffs had sent a copy of the notice to all the three defendants by registered post
Three postal receipts Exhibits 52 53 and 54 have been filed in the present case and Exhibit 51 one acknowledgement receipt
As regards Exhibit 51 the defendant No2 has appeared in the witness box and has denied his signatures
However it has not been shown that this acknowledgement receipt was related to which of the three notices sent vide postal receipts Exhibits 5253 and 54
The plaintiffs have clearly proved that three notices were sent by registered post and which is clearly born out from the three postal receipts
Admittedly the premises were taken on rent in the name of the defendant No1 namely Kulkarni Patterns
Pvt Ltd and it is proved that one of the notices by registered post was also sent to the company
It has been admitted by the defendant No2 in his statement that the notice was sent on the correct address
The defendant No2 in his statement has nowhere stated that no notice has bee received by the company
The only denial is in respect of the acknowledgment receipt Exhibit 51 and the only inference which could legitimately be drawn is that in respect of one notice it was not proved as 232 to who acknowledged the receipt of the notice
We do not approve the following statement of law made by the learned Additional District Judge that the evidence of the defendant did not show any extraordinary happenings or the events which prevented the following of usual course of business and thus his mere denial has no value
However in the present case three notices were sent by registered post and one of which was sent in the name of the defendant company who was the tenant a presumption can legitimately be drawn that the notice dated 781980 had been served on the company
There is no rebuttal on behalf of the defendant as regards the notice served on the company and in the facts and circumstances of the present case we hold that notice dated 781980 sent by registered post was served on the defendant company In Green View Radio Service supra it was held that the acknowledgement due receipt contained the signature of the addressee himself and the addressee as a witness stated that he never received such letter and the acknowledgement due did not bear his signature and such statement of the addressee if believed then it would be a sufficient rebuttal of the presumption drawn against him
The burden will then shift on the plaintiff who wants to rely on such presumption to satisfy the court by leading oral or documentary evidence to prove the service of such letter on the addressee
Even applying this statement of law in the facts of the present case the rebuttal if any made by defendant No2 can be related only with regard to Exhibit to Exhibit 51 for one notice but not with regard to all the three notices sent by registered post vide exhibits 52 to 54 Thus in the facts of the case in hand before us we are fully convinced that the service of notice shall have to be presumed so far as defendant company is concerned and there is no rebuttal to such presumption by the defendant appellants
The requirement of sending notice under Section 122 of the Act is to be done in the manner prescribed under paragraph two of Section 106 of the Transfer of Property Act which reads as under
Every notice under this Section must be in writing signed by or on behalf of the person giving it and either be sent by post to the party who is intended to be bound by it or be tendered or delivered personally to such party or to one of his family or servants at his residence or if such tender or delivery is not practicable  affixed to a conspicuous part of the property The reading of the above provision clearly shows that the notice can be sent by post to the party who is intended to be bound by it
Thus the notice sent by registered post in the name of the defendant company who 233 is the tenant is fully in accordance with the requirement of section 106 of A the Transfer of Property Act
So far as the finding recorded by the learned Additional District Judge that the defendants were defaulter in the payment of rent and full amount of rent was not paid or deposited on the first date of hearing and no rent was paid month by month during the pendency of the appeal could not be assailed by the learned counsel for the appellants
Thus the learned Additional District Judge as well as High Court was right in passing a decree for possession under section 123b of the Act
As a result of the above discussion and findings recorded by us we find no force in this appeal and the same is dismissed with costs
YL Appeal dismissed


Summary:
While the appellant was working as Divisional Manager at Delhi the general insurance business was nationalised and its management was taken over by the Central Government under General Insurance Emergency Provisions Ordinance 1971 which was replaced by Act 57 of 1972 and vested in the Custodian of the New India Assurance Co Ltd the management of Orissa Insurance Co operative Society Ltd By operation of Section 7 of the Act the services of the appellant and others stood transferred and vested with the custodian
The appellant was kept under suspension from August 91973 pending investigation into charges of embezzlement
Explanation was called for on October 161973 and the appellant submitted his reply on December 7 1974 While dropping the proceeding the appellant was served with a termination order dated april 17 1975 issued by the respondent
The appellant challenged the aforesaid termination order in a writ petition in Delhi High Court which was dismissed by a Single Judge on November 111983 and this judgment was confirmed by the division Bench in a Letter Patent Appeal
In the appeal to this Court it was contended on behalf of the 221 appellant placing reliance on the majority view in DTC vs DTC Mazdoor Congress  Ors
judgment Today 19903 SC 725 that Rule 5 of the Orissa Insurance Co operative Ltd services Rules is ultra vires of Article 14 of the Constitution
On behalf of the respondent it was contended that unlike Rule 9 involved in DTC s case Rule 5 in the instant case provided guidelines and that the Board of Directors had to take a decision whether the need to continue the employee s service subsists which would be based on relevant material and thus there would be objective consideration before taking a decision not only regarding the need to continue the post but also the services of the Officer or the employee and if so construed the rule is not ultra vires of article 14
Allowing the appeal this Court HELD Rule 5 of the Orissa Insurance Co operative Society Ltd is capable of the interpretation that the Board of management may form an objective opinion on the basis of material that the post which the officer or the employee is occupying is no longer in need and that the post would be abolished
This would be a policy decision depending on the exigencies
Once the Board reaches such a decision to abolish the post in consequence the service of the officeremployee occupying the post could be terminated
Viewed in that light the said rule does not become arbitrary unreasonable or void offending Article 14 and therefore the rule is valid
225G 226 B There is a presumption in favour of constitutionality of a legislation or statutory rule unless ex facie it violates the fundamental rights guaranteed under Part III of the constitution
If the provisions of a law or the rule is construed in such a way as would make it consistent with the Constitution and another interpretation would render the provision or the rule unconstitutional the Court would lean in favour of the former construction
225 E It is clear in the instant case that the Board of Management did not abolish the post but put an end to the service of the appellant obviously due to loss of confidence as his honesty and integrity became suspicious and his continuance in service was felt inexpedient and not in the interest of the business of the respondents
But rule 8 was available for taking action for misconduct but was not availed
Therefore the order terminating the services of the appellant is illegal
226 C 222 Normally the appellant is entitled to reinstatement but the ends of justice would be met by directing the respondents to pay him Rs 100000 as compensation instead of reinstatement and further continuance in service
The compensation awarded would be staggered between the year 1973 till date for the purpose of income tax and given the appropriate relief
226D E March of service jurisprudence necessitates that the respondent recast Rule 5 in tune with the Constitution and the law
226 E