Case: Harbanslal Jagmohandas &amp; Anr Vs. Prabhudas Shivlal

Civil Appeal No. 282 of 1971 referred to as the Gujarat Appeal is by special leave from the order dated 22 December, 1970 of the High Court of Gujarat rejecting a revision application against the judgment and decree passed by the Extra Assistant Judge on 17 September,Appeal No. 2068 of 1971 hereinafter referred to as the Bombay Appeal is by special leave from the judgment and order dated 21 March, 1971 of the High Court ofthe appeals raise a common question as to whether the provision contained in section 12(3) (a) ofthe Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 hereinafter referred to as the Act applies. The Gujarat High Court took the view that the provisions of section 12 (3) (a) of the Act apply to the suit. The Bombay High Court took the view that the provisions contained in section 12 (3) (a) of the Act do not apply to the suit, but that the suit is governed by the provisions contained in section 12 (3) (b) of theGujarat High Court has taken the view that the dispute as to standard rent is to be raised within one month from the service of the notice on the tenant. The Bombay High Court has taken a contrary view and held that the tenant can raise a dispute as to standard rent in his written statement in answer to the suit and in such a case the provisions of section 12 (3) (b) of the Act willthe Gujarat appeal the respondent filed a suit for recovery of possession of a portion of the ground floor of a building on the ground that the appellant was in arrears of rent from 1 September, 1964 and also on the ground that the respondent bonafide required possession of the premises in suit. The Third Joint Civil Judge in the trial court gave a decree in favour of the respondent for possession of the premises. The trial court held that the appellants were in arrears of rent from 1 September, 1964 and that they were not ready and willing to pay the rent. The trial Court further held that the contractual rent in respect of the premises was not unreasonable and excessive.The appellants in the Gujarat appeal filed an appeal in the court of District judge of Surat. The Appellate Court by judgment dated 17 September, 1970 confirmed the judgment and decreed the suit.The appellants thereafter filed a revision application before the Gujarat High Court on the ground that the court should have held that the case fell under section 12 (3) (b) of the Act. The High Court rejected the revision application atfacts found in the Gujarat appeal are as follows: The appellants paid rent to the respondent up to 31 August, 1964. The respondent landlord by notice dated 14 November, 1966 terminated the tenancy of the appellants, inter alia, on the ground that the appellants were in arrears of rent for more than six months. The appellants received the notice on 6 December, 1966. The respondent filed the suit on 2 February,the Gujarat appeal appellants contended that they raised the dispute about the standard rent by their letters dated 17 November, 1966; 19 December, 1966 and 11 February, 1967, and therefore, there was a dispute as to standard rent and the provisions contained in section 12 (3) (a) of the Act do not apply. The Appellate Court found that the letters dated 17 November, 1966 and 19 December, 1966 alleged to have been written by the appellants to the respondent were manufactured by the appellants and the certificates of posting were obtained by unscrupulous means. As to the alleged letter of the appellants dated 11 February, 1967 the Appellate Court found that in that letter the appellants referred to the letters dated 17 November, 1966 and 19 December, 1966. The respondent by his reply dated 16 February, 1967 denied that the respondent ever received any letter dated 17 November, 1966 or 19 December, 1966. On this evidence the Appellate Court found that there was no dispute as to rent within one month of the service of the notice terminating the tenancy.In the Bombay Appeal the notice terminating the tenancy was dated 5 April, 1963 to deliver possession on the expiration of 15 May, 1963. The suit was filed on 11 September, 1963. The appellants landlords alleged that the tenants were in arrears from 15 March, 1960 to 15 March, 1963, viz., for over six months. In the Bombay appeal the trial Court gave a decree for possession. The Appellate Court confirmed the judgment of the trial Court. In an application under Article 227 of the Constitution the Bombay High Court held that when the respondent paid all arrears and costs of the suit on 23 December, 1964 it could not be said that the respondent did not comply with the provisions of section 12 (3) (b) of the Act. The Bombay High Court took the view that the Full Bench of the Bombay High Court in Dattu Subhana Panhalkar v. Gajanan Vithoba Bobhate &Anr. held that a tenant could raise a dispute as to standard rent by raising an issue as to standard rent in the writtenprovisions contained in sections 12 (3) (a) and (b) of the Act are as(a) Where the rent is payable by the month and there is no dispute regarding the amount of standard rent of permitted increases, if such rent or increases are in arrears for a period of six months or more and the tenant neglects to make payment thereof until the expiration of the period of one month after notice referred to in sub-section (2), the Court shall pass a decree for eviction in any such suit for recovery of possession.(b) In any other case no decree for eviction shall be passed in any such suit if, on the first day of hearing of the suit or on or before such date as the Court may fix the tenant pays or tenders in Court the standard rent and permitted increases then due and thereafter continues to pay or tender in Court regularly such rent and permitted increases till the suit is finally decided and also pays costs of the suit as directed by theI to section 12 of the Act is asany case where there is a dispute as to the amount of standard rent or permitted increases recoverable under this Act the tenant shall be deemed to be ready and willing to pay such amount if, before the expiry of the period of one month after notice referred to in sub-section (2) he makes an application to the Court under sub-section (3) of section 11 and thereafter pays or tenders the amount of rent or permitted increases specified in the order made by thefollowing provisions with regard to standard rent are found in section 11 of the Act. The Court may, upon an application made t o it for that purpose, or in any suit or proceedings, fix the standard rent, inter alia, where there is any dispute between the landlord and the tenant regarding the amount of standard rent. If any application for fixing the standard rent is made by a tenant who has received a notice from the landlord under sub-section (2) of section 12, the Court shall forthwith specify the amount of rent or permitted increases which are to be deposited in Court by the tenant and make an order directing the tenant to deposit such amount in Court or at the option of the tenant make an order to pay to the landlord such amount thereof as the Court may specify, pending the final decision of the application. Out of any amount deposited in Court, the Court may make an order for payment of such reasonable sum to the landlord towards payment of rent or increases due to him as it thinks fit. If the tenant fails to deposit such amount or, as the case may be, to pay such amount thereof to the landlord, his application shall besection 12 of the Act the 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 Act. Sub-section (2) of section 12 of the Act states that no suit for recovery of possession shall be instituted by a landlord against the tenant on the ground of non-payment of the 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. Clause (a) of sub-section (3) of section 12 of the Act provides for the passing of a decree for eviction first, where the rent is payable by the month; second, there is no dispute regarding the amount of standard rent or permitted increases; third, the rent or increases are in arrears for a period of six months; and fourth, the tenant neglects to make payment thereof until the expiration of the period of one month after notice referred to in sub-section (2) of section 12 of the Act. Clause (b) of sub-section (3) of section 12 of the Act, states that in any other case, no decree for eviction shall be passed in any such suit if, on the first day of hearing of the suit or on or before such other date as the Court may, fix, the tenant pays or tenders in Court the standard rent and permitted increases then due and thereafter continues to pay or tender in Court regularly such rent and permitted increases till the suit is finally decided and also pays costs of the suit as directed by the Court.Explanation I to section 12 of the Act provides that where there is a dispute as to the amount of standard rent or permitted increases recoverable under this Act the tenant shall be deemed to be ready and willing to pay such amount if, before the expiry of the period of one month after notice referred to in sub-section (2), he makes an application to the Court under sub-section (3) of section and thereafter pays or tenders the amount of rent or permitted increases specified in the order made by the Court.

Reasoning:
The view of the Bombay High Court overlooks the limitation of time within which a dispute is to be raised as to standard rent. The view of the Bombay High Court is that disputing within one month of the service of the notice terminating the tenancy is one mode of raising a dispute and the re is another mode of raising the dispute at any stage of the suit. The view of the Bombay High Court nullifies the provisions contained in section 12 and Explanation thereto and confers a right on the tenant where the legislation does not contemplate such a right.The provisions in section 11(3) of the Act deal with orders which may be passed by the Court during the pendency of the application disputing the rent. Provisions in section 11(4) of the Act deal with orders which may be pass ed consequent upon dispute as to rent. It is only when an application disputing rent is made within the time contemplated by Explanation I to section 12 of the Act that the provisions in sub-section (3) and (4) of section 11 are attracted.