Source: https://www.lawweb.in/2018/02/whether-court-can-presume-that-tenant.html
Timestamp: 2019-04-22 10:17:20+00:00

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Law Web: Whether court can presume that tenant was not ready and willing to pay arrears of rent if rent is sent by cheque?
Whether court can presume that tenant was not ready and willing to pay arrears of rent if rent is sent by cheque?
It is true that under the ordinary law of contracts and commercial law a cheque is not legal tender (unless the creditor agrees to take it). The post-office may not be, without an agreement to the contrary, an agent of the landlord for purposes of receipt of rent paid by tenant by Postal Money Order. We must, however, consider whether the tenant was and is "ready and willing to pay" the rent to the landlord having regard to the real facts and circumstances of the case and not merely legalistic technical facts to be inferred from his conduct in sending it by Money Order, or by cheque, or in current coins of the realm. The Courts cannot assume that merely because the cheque was sent that the tenant was not ready and willing to pay the arrears of rent to the landlord. The cheque system is popular, especially with expansion in banking. Unless it is established that the person who issued the cheque had no cash in the bank account or would not be in a position to furnish cash when the cheque is presented to the Bank, it cannot necessarily be assumed that the tenant was not ready and willing to pay the arrears of rent to the landlord within the meaning of the Bombay Rent Act.
12. It may be that in general commercial law and under the old laissez-faire system of laws and administration of justice, the question of cheque being not legal tender was relevant. But when we are interpreting and applying a welfare legislation like the Bombay Rent Act, the object of the Act must be borne in mind. The object of the Act is not to help the landlord to raise technical points described by Bacon as "snares" founded on old laissez-faire notions of law and to deprive the tenant of the protection given to him by the Legislature. The tenant can pay rent to the landlord--and the landlord can ordinarily accept it by making payment either through Money Order or by cheque or by cash. The landlord must be, however, ready and willing to accept the payment. The two Courts below have completely ignored these aspects of the matter and erroneously assumed that 'ready and willing to pay' means only ready and willing to pay in cash in the coins of the realm.
13. Turning to the facts of the present case, there can be no doubt that when the tenant sent the cheque and letter, he had not neglected to pay as stated in the provisions of Section 12(3)(a). He made an effort to pay and avoid the application of that provision to the suit which may be instituted by the landlord. It can never be said, in the facts and circumstances of the present case, that notwithstanding the sending of the cheque which covered the entire dues and which was accompanied by a letter explaining why the cheque was being sent, that the tenant had neglected to make payment within the meaning of Section 12(3)(a). Negligence is the breach of a duty caused by the omission to do something which a reasonable man, guided by those considerations which ordinarily regulate the conduct of human affairs, would do, or doing something which a prudent and reasonable man would not do.
1. This is a tenant's petition under Article 227 of the Constitution of India, challenging the validity of a decree for possession passed in favour of the landlords-respondents Nos. 1 to 3. The petitioner was their tenant in respect of house No. 274, Ward No. 9 situate at Baramati. The suit was filed on the ground that the tenant had failed to pay arrears of rent for more than six months and the tenancy was terminated by a notice dated March 25, 1967.
2. The suit was resisted by the petitioner on the grounds that the plaintiffs were demanding more than the agreed rent of Rs. 47.25, that the agreed rent itself was excessive and the standard rent should be determined, that the notice terminating his tenancy was received by him on April 1, 1967, that on April 28, 1967 he sent a cheque for Its. 1,015 drawn on Poona Central Co-operative Bank Ltd., Branch Baramati, by registered post to plaintiff No. 1 along with the reply to the notice, that plaintiff No. 1 refused to accept the delivery of the registered post and hence the plaintiffs were not entitled to a decree for eviction.
3. It seems that, in the trial Court, no issue was framed with regard to the amount of standard rent as the issue was not pressed by the defendant. The trial Court found that the registered letter containing the cheque was refused by the plaintiffs on May 4, 1967, that when it was opened it contained a cheque dated April 29, 1967 and the reply dated April 28, 1967. In the written statement exh. 16, in para. 2, the petitioner had clearly averred that he was always ready and willing to pay all the rent due and that he was in the past and also in future prepared to pay the rent.
4. It is rather strange that notwithstanding all this, although the defendant was a lawyer, he did not insist on a specific issue being framed under Section 12(1) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. It-was, however, the duty of the Court to frame such an issue, as it is the main protection which is given by the Bombay Rent Act to the tenant in respect of termination of the tenancy on the ground of non-payment of rent notwithstanding the readiness and willingness to pay rent on the part of the tenant. It is also clear from the record that, even during the pendency of the suit in the trial Court, the tenant paid all the arrears of rent and costs.
5. In spite of this, however, the trial Court passed a decree for eviction holding that Section 13(3)(a) applied to the suit, as the petitioner did not pay the arrears of rent for more than six months within one month after the notice. It cannot be disputed--and it is not disputed--that the amount of cheque for Rs. 1,015 sent by the tenant by registered post covered the entire arrears of rent. Nevertheless the trial Court held that the cheque was not legal tender, that the amount was sent more than a month after the notice and that therefore the plaintiffs were entitled to a decree under Section 12(3)(a). That decree was confirmed by the Assistant Judge in appeal. The said decisions are challenged in the above petition.
6. Mr. Gole, learned Counsel for the petitioner, submits that the petitioner had paid all the arrears of rent and costs of both the Courts below in Court. Mr. Lalit says that this is not stated on affidavit and, therefore, he cannot say anything about the matter. I think that the landlords' advocate cannot take advantage of the absence of proper instructions from the landlords in this way and try to dispute the fact which is a matter of record. The petitioner was given stay in this Court only until further orders. If at all the petitioner had not paid the amount in the lower Court, as stated by Mr. Gole, the respondents-landlords could have moved this Court for vacating the stay. The landlords have not cared to move this Court for vacating the stay. There is no reason for not accepting the statement made by Mr. Gole that the petitioner has deposited the arrears of rent and costs in the lower Court.
7. Mr. Gole submitted that the decrees passed by the two Courts below and the findings recorded by them on the basis of Section 12(3)(a) are contrary to law inasmuch as the tenant had not 'neglected' to make payment of the arrears of rent until the expiration of the period of one month after the notice within the meaning of Section 12(3)(a) because he had sent the registered letter and the cheque for all the arrears within one month from the date of the receipt of the notice by registered post on April 28, 1967. He did all that he could to make payment to the landlords, as an ordinary, reasonable and prudent man with a bank account would do in the 20th Century in the context of the provisions of the Bombay Rent Act.
8. On the other hand, Mr. Lalit, the learned Counsel for the landlords, submitted that the findings recorded by the two Courts below are findings of fact viz. that the petitioner did not pay the arrears of rent within one month from the receipt of the notice and in view of that finding, the decision of the Supreme Court in Manorama v. Dhanlaxmi (1966) 69 Bom. L.R. 138, S.C., was attracted and the two Courts below were right in holding that Section 12(3)(a) applied to the suit. He further submitted that sending of the amount by cheque and not in current coins of the realm would not be payment within the meaning of Section 12(3)(a) and in support of his argument he relied on a decision of a single Judge of the Calcutta High Court in Brojendra Coomar v. Sirish Chandra MANU/WB/0155/1954 : AIR1954Cal459 the judgment of the Division Bench of the Allahabad High Court in Mohanlal v. itanwnr Sen MANU/UP/0198/1954 : AIR1954All480 and the decision of another Division Bench of the Allahabad High Court in Salik Bam v. Jai Gopal Singh MANU/UP/0098/1955 : AIR1955All350 .
9. In view of the above contentions, the question which arises in this petition is as to whether, in the facts and circumstances found by the lower Courts, the two Courts erred in law in applying the provisions of Section 12(3)(a) and in not applying the provisions of Section 12(1) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. In my judgment, the attention of the two Courts below was not drawn to the important protection given to the tenant ready and willing to make the payment of rent under Section 12(1) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, particularly in the context of the plea of the defendant in the written statement that he was and continues to be always ready and willing to pay rent and he was not able to pay the same because the landlords were demanding more rent and they were not ready to adjust the amount towards the repairs made by him.
10. The Court must consider in all such cases carefully the scheme of Section 12. Section 12(3)(a) is attracted only where a tenant is not ready find willing to pay rent and is in arrears of rent for more than six months. If he is ready and willing to pay rent as required under Section 12(1), the landlord shall not be entitled to recover possession. The question, therefore, is whether Section 12(1) applies to the facts of the suit. Both the Courts below failed to apply their mind to the provisions of Section 12(1) in this case, in spite of the specific plea of the defendant that he was ready and willing to pay rent and the conduct of the tenant in depositing all arrears and costs. The plea was supported by his sending of a cheque in a cover with the registered reply on April 28, within one month. The letter was wrongly refused by the plaintiffs.
11. It is true that under the ordinary law of contracts and commercial law a cheque is not legal tender (unless the creditor agrees to take it). The post-office may not be, without an agreement to the contrary, an agent of the landlord for purposes of receipt of rent paid by tenant by Postal Money Order. We must, however, consider whether the tenant was and is "ready and willing to pay" the rent to the landlord having regard to the real facts and circumstances of the case and not merely legalistic technical facts to be inferred from his conduct in sending it by Money Order, or by cheque, or in current coins of the realm. The Courts cannot assume that merely because the cheque was sent that the tenant was not ready and willing to pay the arrears of rent to the landlord. The cheque system is popular, especially with expansion in banking. Unless it is established that the person who issued the cheque had no cash in the bank account or would not be in a position to furnish cash when the cheque is presented to the Bank, it cannot necessarily be assumed that the tenant was not ready and willing to pay the arrears of rent to the landlord within the meaning of the Bombay Rent Act.
14. In the present case, the tenant cannot be said to have neglected to pay the arrears of rent to the landlord, when, within one month, he sent by registered post a cover containing the cheque to the landlord. He did what a reasonable and prudent man with a Bank account in these days would do. The landlord could have accepted the cheque and after he had accepted the same he could have cashed it by presenting to the bank. There is nothing to show that he could not have cashed the cheque by presenting it to the bank. Just because the landlord did not do what an ordinary reasonable and prudent landlord who wanted to recover rent would do, it cannot be said that the tenant neglected to make the payment of arrears of rent within the meaning of Section 12(3)(a). The only inference that can be really drawn is that the landlord refused it only with a view to contend that Section 12(3)(a) applied though the tenant was ready and willing to pay rent. If the landlord was not ready and willing to accept rent, it cannot be inferred that the tenant was not ready and willing to pay rent or neglected to pay arrears of rent. The two Courts below, therefore, were patently in error in applying the provisions of Section 12(1)(a) to the present suit, even though Section 12(1) applied to the suit.
15. In fact, the landlords had no cause of action at all to file a suit, as the tenant had always offered all the arrears of standard rent and permitted increases even before the period of expiration of one month of the service of notice of terminating the tenancy. He had also expressed his readiness and willingness to pay future rent. Under Section 12(1), 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 Act. The two Courts below have passed the decree for eviction against the petitioner, ignoring the provisions of Section 12(1). They also ignored the importance of the word 'neglects' under Section 12(3)(a) and exercised a jurisdiction not vested in them by law by illegally decreeing the suit.
16. Mr. Lalit argued that it cannot be said, just because a postman received from the post office the registered letter on May 1, 1967, even assuming that the cheque is legal tender or the tenant could make the payment by cheque, that the letter was posted or that the payment was made within one month of the notice. The very fact that the postman was given by the post office a registered packet on May 1, 1967 for delivery to plaintiff No. 1, must lead necessarily to the inference, having regard to common human knowledge and experience that the registered letter must have been delivered to the post-office before that. In these circumstances, the fact should be considered not to defeat the protection given to tenants under the Bombay Rent Act or from a technical, subtle and legalistic view but from a broad, practical, realistic and liberal point of view consistent with the object of the Bombay Rent Act. The point for decision as already stated is whether the tenant was ready and willing to pay rent or neglected to make the payment of arrears of rent and not whether cheque was legal tender. Having regard to the fact that the registered letter was sent with the cheque to the landlord and was refused by the landlord, it will be unreasonable to say that the tenant was not ready and willing to pay the rent within the meaning of Section 12(1).
17. The decision of the Supreme Court in Manorama's case cited by Mr. Lalit, cannot be applied to the facts of the present case. That was a case where the tenant had 'neglected' to pay the arrears of rent before expiration of one month after the notice. It is not the case here.
18. So far as decision in Brojendra Coomar v. Sirish Chandra and Mohanlal v. Kunwar Sen are concerned, they are entirely irrelevant for construing words of Section 12(3)(a) and Section 12(1), The decision in Salik Ram v. Jai Gopal Singh is also similarly distinguishable, as it was not a case under the rent legislation.
19. In the result, the petition succeeds. The judgment and decree passed by the Assistant Judge on April 22, 1969 and the judgment and decree passed by the Civil Judge, Junior Division, Baramati, on August 17, 1968, in so far as the decrees directed possession of the suit premises to be restored to the landlords, must be quashed. The decree, in so far as the payment of rent and costs1 are concerned, must be confirmed as it is clear that before the landlords' notice of termination of tenancy, the tenant was in arrears of rent, although it may be that it was due to quarrels with the landlords. The plaintiffs are at liberty to withdraw all the amounts deposited by the tenant in the lower Courts. Rule made absolute. In the circumstances of the case, there will be no order as to costs.

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