1 Cra-124.07 ash IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION CIVIL REVISION APPLICATION NO. 124 OF 2007 Shri Harjeerao Anandrao Mahadik, since deceased through his Legal Representatives - 1A- Smt. Kamal Harjeerao Mahadik & Anr. .. Applicants (Org. Defendants ) Vs Shri Heeralal Ramjeevan Navadhar. .. Respondent -- Shri G.S. Godbole for the Applicants. Shri Rajesh S. Patil for the Respondent. -- CORAM : A.S.OKA, J. DATE ON WHICH THE SUBMISSIONS WERE HEARD : 26TH NOVEMBER 2010. DATE ON WHICH THE JUDGMENT IS PRONOUNCED : 14TH JANUARY, 2011. JUDGMENT : . The legal representatives of the Original Defendant/tenant have filed this Revision Application under Section 115 of the Code of Civil Procedure, 1908 for challenging the decree of eviction passed by the Trial Court which has been confirmed in an appeal. 2 Cra-124.07 2. The Respondent-Original Plaintiff filed a suit for eviction in respect of two stalls meant for canteen in a Cinema House. The stalls have been more particularly described in Paragraph 1 of the Plaint. The said stalls are hereinafter referred to as “the suit premises”. The case made out by the Respondent is that the suit premises was let out to the Original Defendant-tenant at monthly rent of Rs.500/-. In addition to the monthly rent, according to the Respondent, the tenant was liable to pay a sum of Rs. 250/- per month on account of water and electricity charges. It was alleged in the suit that the conduct of the predecessor of the Applicant is such that it is causing nuisance and annoyance to the other occupiers. It is alleged in the plaint that the predecessor of the Applicant was in arrears of rent from 1st October, 1997 onwards. It is alleged that he was in arrears of water and electricity charges. A claim is made in the suit in the sum of Rs.9,000/- towards the said water and electricity charges representing arrears for a period of three years prior to the date of institution of the suit. Reliance has been placed on a notice of demand dated 8th March, 1999 by which the aforesaid amount of Rs.9,000/- along with arrears of rent of Rs.8,500/- payable from 1st October, 1997 were demanded. As compliance was not made with the demand notice, the suit was filed. 3. The suit was contested by the Applicants by filing a Written Statement. It was contended that in September, 1973, the suit premises was let out to the predecessor of the Applicant at the monthly rent of Rs. 300/- inclusive of charges of water and electricity supply. It was stated 3 Cra-124.07 that from 25th September, 1973 to 28th February, 1994, the Respondent recovered the rent at the rate of Rs.350/- per month and thus, the Respondent recovered a sum of Rs.50/- per month in excess. It is stated that from 1st March, 1993, the predecessor of the Applicant started paying monthly rent of Rs.500/- which was inclusive of water and electricity charges and the amount at the said rate was accepted by the Respondent till 31st October, 1997. 4. It is alleged in the Written Statement that on 31st December, 1998, the predecessor of the Applicants attempted to tender arrears of rent of Rs.7,000/- for the period between 1st November, 1997 to 31st December, 1998 and he demanded rent receipt for the said amount. It is stated that the Respondent declined to accept the said amount. As far as the demand notice is concerned, in the Written Statement, the Applicants did not deny the service of demand notice. However, he contended that there was no liability to pay the demanded amount. It is stated further that to avoid any technical difficulty, without prejudice to the rights and contentions of the Applicants, the amount of rent has been deposited with the Trial Court. 5. The Trial Court held that the note book maintained by the Applicant placed on record shows that the monthly rent of the suit premises was fixed at Rs.500/- per month. However, the Trial Court held that there was no evidence on record to show that the predecessor of the Applicants was liable to pay separate water and electricity charges at the rate of Rs. 4 Cra-124.07 250/- per month on account of water and electricity consumption. The Trial Court held that the notice dated 8th March, 1999 was received by the Applicants’ predecessor on 10th March, 1999. It is held that within a period of one month from the date of the service of the notice, the predecessor of the Applicant did not apply for fixation of standard rent and even failed to pay or deposit the arrears of rent within the said period. As regards the case made out by the predecessor of the Applicants of tender of arrears to the Respondent, the learned Trial Judge observed that the Applicants relied upon a note book at Exhibit-70 maintained by their predecessor in which there is an entry made on 1st January, 1999 of the payment of amount, but there was no signature of the Plaintiff appearing on the said entry. Therefore, the Trial Court disbelieved the case made out by the Applicants in evidence that on 1st January, 1999 the rent was tendered by their predecessor to the Respondent. The Trial Court disbelieved the case of personal tender on the ground that the amount could have been easily sent by money order if the tender of the same was not really accepted by the Respondent. Thus, a finding of fact was recorded that the Applicants’ predecessor was in arrears of rent from 1st November, 1997 till 31st March, 1999. The Trial Court considered various amounts deposited by the Applicants in the Court and came to the conclusion that the Applicants had not deposited 9% interest as required by Sub-section (3) of Section 12 of the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947(hereinafter referred to as the said Act). The Trial Court held that there was no regular deposit of the rent during the pendency of the suit. 5 Cra-124.07 On account of non-compliance of Section 12(3) of the said Act, the Trial Court held that the Applicants were not entitled to any protection. The ground of nuisance was rejected by the Trial Court and accordingly, a decree was passed on the ground of arrears of rent. An appeal was preferred by the Applicants which has been dismissed by the learned District Judge. The Appellate Court confirmed the finding on the ground of default. 6. The learned counsel appearing for the Applicants invited the attention of the Court to the findings recorded by the Courts below. He submitted that on the date of the notice of demand, the tenant was not in arrears. The learned counsel appearing for the Applicants pointed out that the Courts below have held that the Respondent was not entitled to recover water and electricity charges at the rate of Rs.250/- per month. He pointed out that in the notice of demand dated 8th March, 1999, there was a composite demand for the rent as well as electricity and water charges. He submitted that an excessive demand was made by the Respondent. The entire amount demanded was not payable by month. He submitted that even the demand made of the rent at the rate of Rs.500/- per month from 1st October 1997 was excessive as the respondent conceded before the trial Court that he was claiming rent with effect from 1st November 1997. He submitted that in view of the excessive and exorbitant demand made therein, the notice was illegal and in any case, the suit for eviction on the basis of such defective and invalid notice was not maintainable. He placed 6 Cra-124.07 reliance on a decision of this Court in the case of Ramvilas Shivlal Navandar and Others v. Biharilal @ C.R. Ray and Another, ( 2002(2) Mh. L.J. 467 ). He relied upon what is held by this Court in Paragraph 10 of the said decision and submitted that as it was not established that the water and electricity charges were payable by the Applicant, the notice of demand under Section 12(2) of the said Act was invalid and there was no cause of action to file a suit on the basis of such invalid notice. He submitted that in view of the excessive and illegal demand, the notice was not valid and, therefore, the suit itself was not maintainable on the ground of arrears of rent. 7. The learned counsel appearing for the Respondent supported the impugned judgments and decrees. He submitted that in the present case, the suit was filed after 1st October, 1987 and therefore, Section 12(3) of the said Act, as amended with effect from 1st October, 1987, will govern the suit. He submitted that after the service of notice of demand, a defendant/tenant can get relief against forfeiture provided he complies with the requirements of Section 12(3) of the said Act. He submitted that the decision of this Court in Ramvilas Shivlal Navandar (Supra) does not consider the Section 12(3) of the said Act as amended in the year 1987 and, therefore, the said decision will have no application. He placed reliance on a decision of the Division Bench of this Court in the case of Chaganlal Mulchand Jains v. Narayan Jagannath Bangh, (1983 BCI (0) 28 ) and submitted that the Court had no choice but to pass a decree. He 7 Cra-124.07 submitted that the demand will not become bad merely because excess amount was demanded by the landlord. He submitted that even assuming that the demand was untenable, it was the duty of the tenant to remit within the prescribed time the amount which according to him was due and payable. He also relied upon a decision of this Court in the case of Lalji Lachhamndas v. Amiruddin Amanulla & Another ( 1998(4)Bom.C.R. 335 ) and urged that the Court below had no choice but to pass a decree. 8. The learned counsel appearing for the Applicants pointed out that the decision in the case of Ramvilas Shivlal Navandar (Supra) considers a decision of the Division Bench in the case of Narhar Damodar Wani vs. Narmadabai T. Nove ( 1984 Mh.LJ 313 ) as well as the decision of the Apex Court in the case of Raju Kakara Shetty vs. Ramesh Prataprao Shirole and Another [ (1991)1 SCC 570 ]. He submitted that the case in hand is squarely governed by the said decision in the case of Ramvilas Shivlal Navandar (supra) and hence, the decree passed only on the ground of arrears of rent is required to be quashed and set aside. 9 I have given careful consideration to the submissions. As pointed out earlier, the demand was made by the Respondent by notice dated 8th March 1999 for arrears of rent from 1st October 1997 till 31st of March 1999 at the rate of Rs. 500/– per month and arrears of water and electricity charges for a period of 3 years at the rate of Rs. 250/– per month. The trial Court disbelieved the case of the respondent as regards 8 Cra-124.07 separate water and electricity charges payable by the applicants. On the basis of entries maintained by the predecessor of the applicants himself in a notebook which were signed by the respondent, the trial Court held that the monthly rent payable was Rs. 500/– and that there was no evidence to show that separate water and electricity charges were payable by the Applicants. Before the trial Court, the Respondent conceded that the arrears of rent payable were from 1st November 1997 and not from 1st October 1997. The Applicants relied upon entries in the notebook maintained by their predecessor and in particular the last entry dated 1st January 1999. It was found that there was no signature of the plaintiff against the said entry. Both the Courts disbelieved the case of the Applicants that their predecessor approached the respondent on 1st January 1999 and tendered rent from 1st November 1997 till 31st of December 1998. Thus, the concurrent finding of fact is that the predecessor of the Applicants was in arrears of rent from 1st November 1997. It is pertinent to note that it was the case of the Applicants that from 1st March 1992 till 31st October 1997, their predecessor paid the rent at the rate of Rs. 500/– per month. The case of the Applicants is that the arrears of rent for the period from 1st November 1997 till 31st December 1998 were tendered on 1st January 1999 which case has been disbelieved by both the Courts below. The notice of demand was received by the predecessor of the Applicants on 10th March 1999. Admittedly, the Applicants’ predecessor did not tender the arrears of rent within a period of one month and did not apply for fixation of standard rent within the said period. There is no reason to find fault with the aforesaid findings recorded 9 Cra-124.07 concurrently by the Courts below in revisional jurisdiction. 10. The argument of the learned counsel appearing for the Applicants is that as the demand made by the notice of demand was excessive, the suit based on such notice was not maintainable. He relied upon what is held in Ramvilas Shivlal’s case (supra) and in particular in paragraph 10 thereof the material portion of which reads thus: “10. .....Once we reject this argument, it necessarily follows that amount towards permitted increases demanded in the suit notice4 was not payable on month to month basis. It is well settled that amount towards permitted increases is essentially payable on year to year basis. In the case of Raju Kakara Shetty vs. Ramesh Prataprao Shirole and another, [(1991) 1 SCC 570 ] the Apex Court has taken the view that amount towards education cess would be payable on year to year basis unless there is express agreement between the parties to the contrary. In absence of such an agreement, the amount towards permitted increases cannot be demanded in the notice under section 12(2) of the Act and no suit could be maintained on the ground of default if it is founded on notice which includes such a claim. Understood thus, no suit could have been instituted against the Respondents on the ground of default on the basis of invalid notice; and the court could not have examined any issue with regard to the ground of default, for there was no cause of action. Merely because a suit has been filed, that does not mean that the provisions of section 12(3)(b) of the Act can be invoked. If no suit could be maintained on the ground of default under section 12(3)(a), in such a case the court cannot proceed to decide the suit and decree the same under section 12(3)(b). This position is well settled in decision reported in 1984 Mh. LJ 313 in the matter of Narhar Damodar Wani vs. Narmadabai T. Nove. Moreover, the Appellate Court has found that since the Respondent-tenant had regularly paid the rent in Court no decree under section 12(3)(b) could 10 Cra-124.07 be made against the tenant.” (Emphasis added). The learned judge placed reliance on Narhar Damodar’s case. In Paragraph 7 of the said decision in Narhar Damodar’s case, the Division Bench held thus: “7. Section 12(2) of the Bombay Rent Act creates a positive bar in respect of a suit for recovery of possession and it expressly provides that no suit for recovery of possession shall be instituted by a landlord against a tenant on the ground of non-payment of standard rent or permitted increases due, until the expiration of one month next after notice in writing of the demand of the standard rent or permitted increases has been served upon the tenant in the manner provided in section 106 of the Transfer of Property Act, 1882. Sub-section (3)(a) undoubtedly provides that if the tenant is in arrears of rent for a period of six months or more and the tenant neglects to make payment thereof within a period of one month after the notice referred to in sub-section (2), the Court has to pass a decree for eviction in any such suit for recovery of possession. It is well established that clause (b) of sub-section (3) of section 12 applies to a case which does not fall under clause (a). Attention must also be invited to the provisions of sub- section (1) of section 12 which provides that a landlord shall not be entitled to the recovery of possession of any premises so long as the tenant pays, or is ready and willing to pay, the amount of the standard rent and permitted increases, if any, and observes and performs the other conditions of the tenancy, in so far as they are consistent with the provisions of the Bombay Rent Act. The scheme of sub-sections (1), (2) and (3) of section 12, therefore, is that if a tenant is ready and willing to pay the amount of standard rent and permitted increases, a landlord is not entitled to recovery of possession. The tenant has been given one month’s time during which he must pay the rent which is demanded by a notice under section 12(2) and if he does not pay that rent or the amount due, then the consequences specified in clauses (a) and (b) follow depending upon which 11 Cra-124.07 clause is attracted to the facts of a given case. One thing which is, however, clear on the face of section 12 and its provisions 12(2), then the landlord is not entitled to file a suit for possession on the ground of arrears in respect of which he has to give or has given a notice under section 12(2). In such a case, the provisions of sub-section (1) will also come into operation because if the tenant pays the amount required to be paid by the notice under section 12(2), then the tenant is a person who is ready and willing to pay the standard rent and the permitted increases, as the case may be, and the landlord is disabled from filing a suit for recovery of possession. In a case where the tenant has paid or must in law be deemed to have paid the amount demanded by the notice under section 12(2), not only are the provisions of section 12(3)(a) not attracted, but there is no occasion to call in aid the provisions of section 12(3)(b), because even the provisions of section 12(3)(b) will be attracted only if there is a claim for recovery of possession. If by the compliance with the requirements of the notice under section 12(2) the landlord is disabled from filing a suit for recovery of possession, there is no question of the provisions of section 12(3)(b) being attracted at all.” (emphasis added) The Division Bench was considering the question of effect of the payment or the deemed payment of the amount of arrears as per the demand made by the notice under section 12 (2) of the said Act. Thus the Division Bench dealt with the effect of compliance or deemed compliance with the notice of demand within the stipulated time and held that in case of such compliance, there is no cause of action to file a suit for eviction on the ground of arrears of rent and in such a suit, there is no question of evicting the tenant for non-compliance with the requirement of deposit of the rent during the pendency of the suit. The observations made by the division 12 Cra-124.07 bench are not at all in the context of excessive demand made by a notice of demand and the effect thereof. As far as the effect of excessive demand is concerned, in an unreported decision of the Division Bench in Purushottam Bhanudas Palse v. Shakuntalabai Vishwanath Ayyaswami (Writ Petition No. 3658 of 1981 along with Writ Petition Nos.3828 and 3895 of 1981 delivered on 13th December, 1995), it was held thus:- “Everything would depend on this aspect of the matter which would be a factual aspect of the matter. The Court shall have to make an attempt to find out whether the inaccuracy in the demand of arrears of rent and permitted increases in the notice under section 12(2) of the Rent Act is traceable to any mala fide or dishonesty on the part of the landlord. If a positive finding of mala fide or dishonesty is recorded, then, in our opinion, the notice could be faulted as bad on that ground alone. Otherwise on the mere inaccuracy, the notice could not be faulted. Even if the inaccuracy is of large measure, that also would be no ground to fault the notice unless of course the magnitude of inaccuracy coupled with other facts and circumstances appearing on record is capable of leading to a finding of mala fide or dishonesty on the part of the landlord.” (Emphasis added) Thus, the law laid down by the Division Bench is that only when it is found that the demand made is dishonest or malafide, the notice of demand will become bad in law and even if inaccuracy of large magnitude is found the notice, it is not bad unless the demand made in shown to have been vitiated by malafides or dishonesty. Another learned Single Judge of this Court in the Case of Lalji Lachhamndas Vs Amiruddin Amanulla (1998(4) Bombay 13 Cra-124.07 Cases Reporter 335) in paragraph 15 of the judgment after relying upon another decision of the Division Bench of this Court held thus: “15. .....No dispute about standard rent is permissible to be raised in a suit if the tenant has not made any application under section 11 of the Act. The finding of fixation of standard rent was thus uncalled for and was without jurisdiction. Even assuming that the standard rent is Rs.12/- the notice making demand at the rate of Rs.13.50 ps. cannot be said to be bad in law. The respondent had an option to pay the undisputed amount of rent i.e. At the rate of Rs.12/- per month and raise dispute as regards the rest of the claim as made by the landlord, which he has not done so, and instead he has raised the dispute in the reply to the notice. As held by the Division Bench in Chhaganlal v. Narayan Jagannath, any mistake in making demand for short amount would not render the notice invalid. Same view is reiterated by another Division Bench in (Purushottam Bhanudas Palse v. Shakuntalabai Vishwanath Ayyaswami ) 10, Writ Petition No. 3650 of 1981. Therefore, the contention about validity of notice must be rejected.” Therefore, the law laid down by the Division Bench of this Court is that the notice of demand under section 12 (2) is not invalid only on the ground of excessive demand unless it is found that the demand was malafide or dishonest. There is no such finding recorded by the Courts below in the present case. There is no such case made out in the written statement. 11. While going back to the case of Ramvilas (supra) it must be stated that apart from the fact that there is a binding precedent of the Division Bench of this Court, the learned judge has recorded a finding in 14 Cra-124.07 the facts of the case before him. Moreover, The Learned Judge has also not considered the effect of sub-section (3) of section 12 the said Act which was brought on the statute book on 1st October 1987 . To the case before him, the said provision was not applicable. In the decision in the case of Shashikant Kulkarni vs Mahalaxmi Co-operative Bank ([2001] 1 Mh.L.J 131), the same learned Judge reiterated the legal position as under: “5. .....It is well settled position that even if the demand is excessive it is the duty of the tenant to offer at least the agreed rent within a period of one month from