Case: Damadilal and Others Vs. Parashram and Others

Damadi Lal, Sheo Prasad and Tirath Prasad who were members of a Hindu Joint Family brought a suit for ejectment on July 31, 1962 against their tenants Begamal and Budharmal on the grounds mentioned in clauses (a) and (f) of section 12(1) of the Madhya Pradesh Accommodation Control Act, 1961. The relevant provisions are in these12. Restriction on eviction of tenants.-(1 ) Notwithstanding anything to the contrary contained in any other law or contract, no suit shall be filed in any Civil Court against a tenant for his eviction from any accommodation except on one or more of the following grounds only, namely-(a) That the tenant has neither paid nor tendered the whole of the arrears of the rent legally recoverable from him within two months of the date on which a notice of demand for the arrears of rent has been served on him by the landlord in the prescribed manner;x x x x xx x x x x(f) that the accommodation let for non-residential purposes is required bona fide by the landlord for the purpose of continuing or starting his business or that of any of his major sons or unmarried daughters if he is the owner there of or for any person for whose benefit t he accommodation is held and that the landlord or such person has no other reasonably suitable non- residential accommodation of his own in his occupation in the city or towncase under section 12(1)(a) was that the defendant tenants had defaulted in paying rent for the period October 1, 1961 to May 31, 1962 and did not also pay or tender the amount in arrears within two months of the service of the notice of demand. Clause (f) of section 12(1) w as invoked on the allegation that the accommodation let was required bona fide by the plaintiffs for the purpose of starting their own business. Before the suit was instituted the plaintiffs had determined the tenancy from May 31, 1962 by a notice dated May 7 1962. The house in dispute which is in Bazar Chowk in District Satna was let out to the defendants at a monthly rent of Rs. 275/- for the purpose of their business. The plaintiffs reside in village Nadan, Tahsil Maihar, where they carry on their business.The trial court by its judgment and decree dated November 11, 1964 dismissed the suit for eviction. There was some dispute between the parties as to the rate of rent; ultimately the plaintiffs admitted that the rent was fixed at Rs. 175/- per month with effect from August 1, 1961 by the Rent Control Authority and a sum of Rs. 1200/-, which was the amount in arrears, had been tendered to the plaintiffs by cheque on May 26, 1962 which the plaintiff s refused to accept. The trial court was of opinion that the refusal was valid because "tendering by cheque is no valid tender" unless there was an agreement that payment by cheque would be acceptable and that the defendants were therefore defaulters within the meaning of section 12(1)(a). However, in view of the dispute as to the amount of rent payable by the tenants, which was not determined during the pendency of the suit as required by section 13(2), the trial court held that no order for eviction under section 12(1)(a) could be made in this case and passed a decree for Rs. 1200/- in favour of thethe question of the plaintiffs requirement of the premises for their own business, the trial court found itself unable to accept the evidence adduced on behalf of the plaintiffs. Of the witnesses examined by the plaintiffs on the point, the evidence of P.Ws. 1, 3 and 4 was not relied on because none of them was considered to be an independent witness and, further, because it was apparent from their evidence that what they said was what they were tutored to say by the plaintiffs. The other three witnesses were plaintiffs Damadi Lal and Tirath Prasad (P.W.2 and P.W. 6 respectively) and Radhey Sham (P.W. 5), a son of plaintiff Sheo Prasad. They were also disbelieved because of the following reasons. Damadi Lal tried to give the impression that plaintiffs had no business except the cloth business and the grocery shop at Nadan . He tried to conceal that they had a money lending business and also agricultural lands. Tirath Prasad stated that the main source of income of the family was from the money lending business. Tirath Prasad also disclosed that the plaintiffs had al ready a partnership business in cloth at Satna though Damadi Lal and P.W. 5 Radhey Sham did not admit this. It also appears in evidence that the plaintiffs had yet another cloth business at a place called Ramnagar which was managed by Radhey Sham. The plaintiffs claimed that they would start a business at Satna, but Damadi Lals evidence is that they had no income or saving. Tirath Prasad also said that their income was not even sufficient for their maintenance. Admittedly, plaintiffs had in their possession one room in the house which was let out to the defendants. The plaintiffs did not adduce any evidence to show how the said accommodation was unsuitable or insufficient for them to start their own business. It was also admitted that the plaintiffs had filed a suit for ejectment on an earlier occasion, but the defendants having agreed to pay increased rent the suit was not proceeded with. According to the defendants the present suit was not instituted o n the defendants refusal to increase the rent further to Rs. 500/-a month.For the above reasons the trial court did not accept the case of bona fide requirement holding that P.W. 2, P.W. 5 and P.W. 6 were in the habit of suppressing the truth to suit their ownappeal by the plaintiffs, the first appellate court reversed the decision of the trial court and decreed the suit. The appellate court agreed with the trial court that sending a cheque did not amount to a valid tender of rent and, as the tenants did not apply under section 13(2), they were not entitled to protection against eviction on the ground of default. As regards the plaintiffs case of requirement, the court found, that the criticism of the plaintiffs witnesses was not justified. The appellate court thought that the fact that Tirath Prasad was carrying on a cloth business at Satna which Damadi Lal had kept back from court was irrelevant in view of the plaintiffs claim that some members of the family wanted to start a new business at Satna. According to the appellate court the further fact that P.W. 5 Radhey Sham was running a cloth business at Ramnagar was indicative of the growing need of the plaintiffs family. The room in the plaintiffs possession in the disputed house was not found suitable or sufficient for a wholesale business that the plaintiffs intended to start. Referring to the trial courts finding that the plaintiffs had no money to startnew business at Satna, the court found that the evidence did not support this. The appellate court therefore held that the plaintiffs required the premises for their ownwith this decision, the defendants preferred a second appeal to the High Court. During the pendency of the second appeal in High Court both the defendants died. Budharmal died on or about January 27, 1966 and his legal representatives were brought on record and substituted in his place without objection. Begamal died on March 2, 1967 and his heirs applied for being brought on record in his place as appellants. The plaintiffs made an application praying for an order that the appeal had abated as a consequence of th e death of both the defendants. In this application the plaintiffs contended that Budharmal and Begamal were "merely statutory tenants and their right to resist ejectment on the basis of Madhya Pradesh Accommodation Control Act was merely a personal right" which was not heritable and had "not devolved upon their heirs". By its order dated July 26, 1967 the High Court allowed the application for substitution made by Begamals heirs overruling the plaintiffs objection.Ultimately on November 6, 1967 the High Court allowed the appeal setting aside the decree of the lower appellate court and restoring that of the trial court dismissing the suit. The High Court found that the defendants were not in arrears of rent. Differing from both the courts below the High Court held that the cheque which the defendants had sent to the plaintiffs in payment of the amount in arrears within a month of the service of the writ of summons on him amounted to a valid tender of rent as required by section 13, and in view of section 12(3) no order for eviction could be made. Section 12(3) provides that no order for eviction of a tenant shall be made on the ground of default if the tenant makes payment or deposits rent as required by section 13. This is what the High Court held on the validity of tender of rent byquestion is as to whether, instead of presenting the cash, if a cheque is sent to the landlord, that is sufficient tender of the arrears of rent or not........In the highly developed society, payment by cheque has become more convenient mode of discharging ones obligation. If a cheque is an instrument which represents and produces cash and is treated as such by businessmen, there is no reason why the archaic principle of the common law should be followed in deciding the question as to whether the handing over of the cheque is not a sufficient tender of the arrears of rent if the cheque is drawn for that amount. It is no doubt true that the issuance of the cheque does not operate as a discharge of the obligation unless it is encased, and it is treated as a conditional payment, yet, in my view, this is a sufficient tender of the arrears if the cheque is not dishonoured. In the present day society, I am of the view, an implied agreement should be inferred that if the payment is made by a cheque, that mode of payment would bethe ground of bona fide requirement, the High Court found that there was no evidence to show that the plaintiffs had sufficient funds to start the wholesale business for which they sought to get possession of the disputed premises. This is a point which has a bearing on the guanines of the plaintiffs claim. The High Court took note of the fact that the plaintiffs made an attempt to keep back from the Court that they were carrying on business at two more places, one at Satna, and another at Ramnagar. In this connection the High Court also referred to the defendants case that the plaintiffs sought to increase the rent from Rs. 275/- to Rs. 500/- a month and that when the defendants had the rent reduced by the Rent Controller to Rs. 175/- per month, the present suit was filed. The High Court found that these circumstances which the trial court took into consideration were ignored by the lower appellate court. T he High Court accordingly held that the plaintiffs had failed to prove their case of bona fide requirement, set aside the decree of the appellate court, and restored that of the trial court dismissing the suit.

Court's reasoning:
The concept of statutory tenancy under the English Rent Acts and under the Indian statutes like the one we are concerned with in this appeal rests on different foundations. It must therefore be held that the predecessors-in-interest of the present respondents had a heritable interest in the premises and consequently the respondents had the right to prosecute the appeal in the High Court. Mr. Guptes first submission thusthe ground of default, it is not disputed that the defendants tendered the amount in arrears by cheque within the prescribed time. The question is whether this was a lawful tender. It is well established that a cheque sent in payment of a debt on the request of the creditor, unless dishonoured, operates as valid discharge of the debt and, if the cheque was sent by post and was met on presentation, the date or payment is the date when the cheque was posted. The question however still remains whether in the absence of an agreement between the parties, the tender of rent by cheque amounts to a valid discharge of the obligation. Earlier, we have extracted a passage from the High Courts Judgment on this aspect of the case. We agree with the view taken by the High Court on the point. Rent is payable in the same manner as any other de bt and the debtor has to pay his creditor in cash or other legal tender, but there can be no dispute that the mode of payment can be altered by agreement. In the contemporary society it is reasonable to suppose such agreement as implied unless the circumstances of a case indicate otherwise. In the circumstance of this case, the High Court, in our opinion, rightly held that the cheque sent to the plaintiffs amounted to valid tender of rent. The second contention urged on behalf of the appellants must also be rejected.Mr. Guptes last contention relates to the plaintiffs bona requirement of the premises. The trial court found on the evidence that the plaintiffs claim was unjustified. The first court of appeal reversed t hat finding and held that the plaintiffs requirement was bona fide. The High Court in second appeal agreed with. the trial court in holding that the landlord had no bona fide requirement. Mr. Gupte contended that the High Court had no jurisdiction in second appeal to upset the finding of the lower appellate court on this issue which, according to him, was a finding of fact. Mr. Nariman for the respondent relied on the decision of this Court in Madan Lal Puri v. Sain Das Berry to argue that the question was a mixed question of law and fact and that it was within the jurisdiction of the Court in second appeal to examine the correctness of the finding. In answer Mr. Gupte referred to another decision of this Court Mattulal v. Radhey Lal which, relying on an earlier decision of this Court in Sarvate T. B. v. Nemi Chand, held that such a finding was one of fact and not a finding on a mixed question of law and fact. We do not think that for the purpose of this case we need express any opinion on the apparent conflict between these two decisions. Plaintiffs case was that they had cloth and grocery business at village Nadan and that they desired to start a wholesale cloth and grocery business at Satna. The trial courts finding was based inter alia on the evidence that the plaintiffs had not adequate funds to start a new wholesale business. The lower appellate court reversed the finding of the trial court on the ground that there was no evidence that the plaintiff had no money to start a new business; the lower appellate courts finding rests mainly on this consideration. The High Court pointed out that plaintiff Damadidas alias Damadi Lal (P. W. 2) stated in his evidence that their income from the business at Nadan was sufficient " only for meeting the expenses of livelihood"; plaintiff Tirath Prasad (P.W. 6) also admitted that "our present income is not sufficient even for our maintenance because there are many members in the family" It thus appears that the lower appellate court overlooked a very material part of the evidence bearing on the question. It is well establish ed that if a finding of fact is arrived at ignoring important and relevant evidence, the finding is bad in law. (see Radha Nath Seal v. Haripada Jana & Ors.We therefore think that the High Court was within its jurisdiction in setting aside the finding of the lower appellate court and restoring that of the trial court on this point.