Case: Shah Dhansukhlal Chhaganlal Vs. Dalichand Virchand Shroff And Others

The appellant became a tenant of the respondent under a rent note executed on February 27, 1947 whereby rent was fixed at Rs. 40 per month and the tenancy was to be for period of one year from 22nd February, 1947. After the expiry of the said period, the appellant continued as a monthly tenant on the same terms and conditions as were to be found in the rent note. He fell into arrears of payment of rent and the respondent sued him for eviction some time in 195l. The suit was eventually compromised by a petition put in court bearing date September 16, l952. Under the terms of the compromise, the defendant continued as a tenant from September l, 1952 on the terms and conditions of the rent note dated February 27, 1947 :the original conditions in respect of rent also continued excepting that the rate was lowered from Rs. 40to quote the words of the.to "standard rent of27" and "in the matter of taxes and interest also the defendant was to act in accordance with the conditions of the aforesaid renth 2 of the compromise petition contained an account of payments made by the defendant the final result thereof being that it was agreed between the parties that the defendant had paid104-5-3 "which amount was to be reimbursed by the plaintiff to the defendant when accounting the future payment of" It should be noted here that according to the rent note of 1947 the tenant had agreed to pay the monthly rent of40 together with interest at0-12-0 per cent per annum in respect of any balance due forEven after the compromise the defendant fell in arrearsThe only payments made thereafter up to the institution of the second suit out of which the present proceedings have arisen were a sum of250 on July 19, 1954 and200 on March 17,The defendant did not make any payment to the plaintiff in respect of the permitted increases under the BombayHotel and Lodging House Rates Control Act, 1947 from the 1st of April 1954; neither did he pay the taxes agreedThe plaintiff gave a notice to the defendant on April 18, 1955 demanding the arrears of rent and permitted increases in terms of the said Act and also terminating the tenancy of the defendant with effect from May 31, 1955 in terms of Section 106 of the Transfer of PropertyThe notice was received by the defendant on April 21,No reply was sent thereto nor was any payment made to theThe suit for ejectment was filed on March 15, 1956 the ground thereof as laid in the plaint being that the defendant was in arrears of payment of rent and permitted increases and as such not entitled to the protection of theIn paragraph 6 of the plaint the dues under various heads were specified showing the arrears of rent, increases permitted the on, interest in terms of the rent note and taxes for threeIt was pleaded by the defendant in the written statement that rent at27 had been fixed by the court without going into the merits of the case and that standard rent or reasonable rent of the property in suit had to be fixed first and a preliminary issue in that respect should beThe defendant did not admit the claim to the arrears as laid in paragraph 6 of the plaintHe also pleaded that the notice of ejectment was not a valid one as the tenancy was to be reckoned in terms of the Gujarati calendar and not the Gregorian calendarThe date fixed for settlement of issues was September 3, 1956 which can be taken to be the date of the first hearing of the suit for the purposes of theOn that day the defendant deposited in court a sum ofThereafter the defendant made a deposit of a sum of150 on February 25,The suit was decreed by the trial Judge on March 25,The trial Judge after considering the evidence on record determined the standard rent of the premises at27, exclusive of the permitted increases and water-tax and sanitary-tax, payable by the defendant to theHolding that the defendant had not complied with section 12 (3) (b) of the Act he passed a decree forThe defendant went in appeal to the District Judge,He raised no contention even at the hearing of the appeal either in regard to the standard rent of the premises or in regard to interest on arrears of rent or municipal taxes or permittedThe finding of the trial Judge that the standard rent of the premises exclusive of permitted increases and water-tax and sanitary-tax was27 per month was not challenged by theNor was any question raised as to the finding that the defendant was liable to pay the plaintiff a sum of123-4-0 as and by way of interest on arrears of rent, a sum of81 as and by way of water-tax and sanitary-tax for a period of three years prior to the date of the suit a sum of2-1-9 per month as and by way of permitted increases from April 1,The point regarding the validity of the notice of ejectment was however raised in theAccording to the judgment of the High Court, "the only contention urged before the learned Assistant Judge was, whether the defendant had or had not complied with the requirements of Section 12 (3) (b) of the Rent" The Assistant Judge concluded that there had been no compliance with that section and upheld the decree for evictionIn revision three contentions were raised before the High Court, namely, (1) as to the validity of the notice of ejectment; (2) whether Section 12 (3) (a) or 12 (3) (b) of the Act applied; and (3) whether the defendant was entitled to protection under Section 12 (1) of theThe High Court held that it was not open to the tenant to raise the question of the validity of the notice in a revisionMoreover there was no substance in it as the compromise petition expressly recorded that the tenancy in terms of it should commence on September 1,With regard to the second question the High Court held that "it was common ground between the parties before the Assistant Judge that the case of the defendant fell within Section 12 (3) (b) of the Rent" The learned Judge of the High Court noted :(a) The trial Judge turned down the applicability of Section 12 (3) (a) of the Act holding that the defendant had disputed the municipal taxes and permitted increases(b) The conditions under12 (3) (b) of the Act were not fulfilled;      (c) No contention about the applicability of Section 12 (3) (a) was raised before the Assistant Judge in appeal and he therefore did not go into the question at all; and      (d) The conditions necessary for the applicability of Section 12 (3) (a) were not present, as besides the amount of27 mentioned in the compromise petition, the tenant had to pay other sums not due from him every monthThe High Court further found that after the first date of hearing of the suit on September 3, 1956 rent of the premises which fell due on 1st October 1956, 1st November 1956, 1st December l956, 1st January 1957, 1st February 1957 and 1st March 1957 remained unpaid on March 25, 1957 when the suit was disposed of As the defendant did not pay or deposit in court regularly the amount of standard rent which became due on the aforesaid dates barring the 1st of March 1957 (taking into account the deposit of0 on February 25,1957) there was default on the part of the defendant attracting the operation of Section 12 (3) (b) of the ActThe High Court turned down the contention based on Section 12 (1) of the ActAt the hearing of the appeal before us, learned counsel for the appellant raised two points, namely:(1) The provisions of Section 12 (l) of the Ace were applicable throughout the hearing of the suit and down to the date of the finalIf at that stage it was found that the defendant had paid up all arrears due from him he could not be ejected(2) Even applying Section 12 (3) (b) there was no default on the part of the defendant which would render him liable to

Court's reasoning:
It appears to us that there is no substance in the contention put forward on behalf of theSection 12 (1) must be read with the Explanation and so read it means that a tenant can only be considered "to be ready and willing to pay" 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 by theWe have already noted that the tenant made no payment within the period of one month of the notice of ejectment and although in his written statement he raised a dispute about the standard rent he made no application in terms of Section 11 (3) of theThe readiness and willingness to pay has therefore to be judged in the light of the facts of thee as here a suit is filed on the ground that the tenant was in arrears for a period of more than 6 months and although raising a dispute as to the standard rent or permitted increases recoverable under the Act, the tenant makes no application in terms of Section 11 (3) he cannot claim the protection of Section 12 (1) by merely offering to pay or even paying all arrears due from him when the court is about to pass a decree against himAs already noted, if(3) (a) is not attracted, the tenant, if he is in arrears, cannot sit quiet and offer to pay all the amount due from him at the time of the hearing of the suit so as to get the protection of Section 12To be within the protection of sub-section (1) where he raises a dispute about the standard rent payable he must make an application to the court under sub-section (3) of Section 11 and thereafter pay or tender the amount of rent and permitted increases, if any, specified in the order made by theIf he does not approach the court under Section 1l (3), it is not open to him thereafter to claim the protection of Section 12 (1)The case clearly does not come within Section 12 (3)To be within the protection of that provision, the tenant must not only pay all the arrears due from him on the first day of hearing of the suit, but he must thereafter continue to pay or tender in court regularly the rent and the permitted increases till the suit is finallye the date of the suit, the appellant was entitled to a credit of104-5-3; the total payments up to the date of the first hearing including the sum of1,000 come toThe amounts due from him up to that date were:(a) rent at the rate of27 per month for 48(b) permitted increases from 1st April, 1954 to 1st September, 195661-3-9(d) Interest on arrears at 9 per centmaking a totalMoreover, there was failure on the part of the appellant to pay or tender in court the amounts which fell due from the 1st of October 1956 to the 1st of March,Thus, leaving out of consideration the question of costs awarded against him under the decree, the appellant cannot get the protection under Section 12 (3) (b) of theA faint attempt was made to raise the point about the invalidity of the notice of ejectment on the plea that the same had to comply with Section 12 (2) of theThis is clearly fallacious as the said section merely lays down the manner in which a notice of demand of standard rent and permitted increases has to be