Gorakh Rambhau Chothve v. Vilas Eknath Kadam

15) The assumption and belief of Plaintiffs of likelihood of First Defendant being found at the house of Razak Gul Mohd is ultimately proved to be correct on the basis of evidence of the Postman. Plaintiff examined Vasant P. Salve, the Postman working in Igatpuri, who specifically deposed that when he approached the address mentioned in the notice, he could not find Defendant No.1 and learnt that he was in the market. Same is the position with regard to Defendant No.2, who was also not found at the suit property and was at the market. It is an admitted position that Defendants were conducting business in the vegetable market at Igatpuri. The Postman accordingly went to the market for service of the envelops on Defendants. However, both the Defendants refused to accept the same. Accordingly, endorsement was made by the Postman on the envelopes about refusal and the same were returned to the sender. The endorsement of the Postman is proved in his deposition. Thus, there is direct evidence available on record about Postman attempting to serve the notice on Defendants and they refusing to accept the same.

16) Mr. Joshi has relied upon judgment of the Gujarat High Court in Vadhere Devabhai Govindji (supra) in support of his ___Page No.12 of 22___ contention that the Postman cannot remember the events after long gap of four years and that he is not expected to have computerized memory. However, what needs to be appreciated is the fact that we are dealing with a situation of a small place like Igatpuri pertaining to the year 1983. At that time, Igatpuri being a very small establishment, it is unlikely that the Postman might personally know most of the residents of Igatpuri. There is nothing in evidence to indicate that the Postman worked at Igatpuri for a short duration or that at the time of his deposition, he was no longer working in Igatpuri. It was not uncommon in India during eighties that Postmen in rural and semi urban areas remained posted for long duration at one place and virtually knew all the residents in a particular locality. In the present case also, the Postman apparently personally knew the First Defendant, whom he identified in the Court during the course of cross-examination. It must also be borne in mind that a Postman is an independent witness, not concerned with the dispute between the parties. If he was interested witness, he could have simply made remark of refusal on the envelops. There was no necessity for him to depose about his visit to market to serve the notices on Defendants. He has personally deposed before the Court that the First Defendanttenant refused to accept service of notice. He has also identified the First Defendant in the Court. There is therefore no reason to disbelieve or discredit his evidence. Since direct evidence of Postman is available on record, the Appellate Court has rightly assumed that the notice was validly served. In my view, Plaintiffs have proved valid service of notice on the First Defendant-Tenant, who was in arrears ___Page No.13 of 22___ of rent. Therefore, reliance by Mr. Joshi on judgment of Single Judge of this Court in Ramavtar Ramasahaya Khatod (supra) does not cut any ice.

17) The next point for consideration is applicability of Clause (a) or Clause (b) of sub-section (3) of Section 12 to the present case. Section 12(3)(a) becomes applicable where the rent is payable by month and where there is no dispute about standard rent or permitted increases and where the arrears of rent are for a period of six months or more. Once these three conditions are fulfilled, the act of tenant in neglecting to pay rent within one month after receipt of demand notice mandates the Court to pass a decree for eviction. It appears that prior to 28 March 1963, the words used in Section 12(3)(a) were ‘the Court may pass a decree’ which are substituted by the words ‘the Court shall pass a decree’ by amending Act of 1963. Thus, once the conditions of Section 12(3)(a) are satisfied, no discretion is left to the Court but to pass a decree for eviction.

18) In cases other than the one covered by Section 12 (3)(a), decree for eviction cannot be passed if on the first date of hearing of the suit or before such date as the Court may fix, the tenant deposits the arrears of standard rent and permitted increases. Use of the words ‘in any other case’ would obviously mean a case where (i)the rent is not payable by a month, (ii)the dispute exists regarding standard rent or permitted increases, (iii)the arrears of rent are in respect of the period not exceeding period of six months. This is the ___Page No.14 of 22___ reason why Mr. Joshi has attempted to suggest that the rent was not payable by month in the present case. His contention is premised on demand made by Plaintiffs for education cess of 60 paise in the notice. He has relied upon judgment of the Apex Court in Raju Kakare Shetty (supra) in which it is held in para-13 as under:

13. The only submission which Dr. Chitale made for taking the case out of the purview of section 12(3)(a) was that the entire rent was not payable by the month which was the first condition to be satisfied for invoking the said provision. According to him, since the tenant was bound to pay education cess and other taxes in respect of the demised premises which were payable from year to year, a part of the rent was not payable by the month and therefore the first condition of section 12(3)(a) was not satisfied. Hence, submitted Dr. Chitale, the case fell within the phrase 'in any other case', by which clause (b) of section 12(3) opens. Before we answer the submission of Dr. Chitale it may be advantageous to refer to the relevant provisions of the Maharashtra Education (Cess) Act (Maharashta Act XXVII of 1962). Section 4(a) of the said Act provides for the levy and collection of tax (cess) on lands and buildings at the rates specified in Schedule A on the annual letting value of such lands or buildings. The primary responsibility to pay this tax is cast by section 8 on the owner of the land or building irrespective of whether or not he is in actual occupation thereof. Section 13 next provides that on payment of the amount of the tax in respect of such land or building the owner shall be entitled to receive that amount from the person in actual occupation of such land or building during the period for which the tax was paid. Under section 15 any person entitled to receive any sum under section 13 is conferred for the recovery thereof the same rights and remedies as if such sum were rent payable to him by the person from whom he is entitled to receive the same. It thus seems clear that education cess is a tax and the owner is primarily responsible to pay the same to the local authority ___Page No.15 of 22___ and on such payment a right is conferred on him to recover the same from the actual occupant in addition to the standard rent in respect of the demised premises. Sub-section (3) of section 13 in terms states that the recovery of any amount of tax from an occupier under this provision shall not be deemed to be an increase for the purposes of section 7 of the Act. It is, therefore, obvious that the landlord has a statutory right to recover the amount of education cess paid by him in respect of the demised premises from the tenantoccupant and such recovery shall not be an unlawful increase under of section 7 of the Act but would squarely fall within the expression 'permitted increases' as defined by section 5(7) of the Act. This statutory right to recover the amount of education cess in respect of the demised premises from the occupant-tenant can be quantified by agreement of parties so long as the amount quantified does not exceed the total amount actually paid by the owner by way of education cess. In the present case, it is nobody's contention that the amount of Rs. 120 per month payable by way of education cess and other taxes was in excess of the amount actually payable under the relevant statues to the local authority. The Gujarat High Court has taken a consistent view that where the tenant is obliged under the terms of the tenancy or by virtue of the statute to pay the tax dues to the landlord, since such taxes which form part of the rent are payable annually the case ceases to the governed by section 12(3)(a) and falls within the purview of section 12(3)(b) of the Act. In Maheshwari Mills Ltd., under the terms of the tenancy the tenant was obliged to pay the municipal taxes and property taxes in respect of the demised premises. The Court took the view that such payment was by way of rent and since the municipal taxes and property taxes were payable on year to year basis, a part of the rent was admittedly not payable by the month and, therefore, section 12(3)(a) was not attracted. In Prakash Surya the tenant had agreed to pay the municipal tax and education cess. The amount payable towards these taxes constituted rent and since the same was payable at the end of the year the Court held that the rent had ceased to be payable by the month and hence section 12(3)(a) had no application. The same view was reiterated in Vanlila's case where education cess was payable by the tenant by virtue of section 21 of the ___Page No.16 of 22___ Gujarat Education Cess Act, 1962. Since it constituted a part of the rent, to be precise permitted increase under section 5(7) of the Act, it was held that it took the case outside the scope of section 12(3)(a) of the Act. In the case of Vishwambhar Hemendas also since the rent was inclusive of taxes the Court held that the case was governed by section 12(3)(b) of the Rent Act. The Bombay High Court has expressed the same view in Muktabai's case. This Court in the Bombay Municipal Corporation's case held that while section 7 of the Act prohibits increase above the standard rent it does not prohibit the recovery of increase to which a landlord is entitled under the other provisions of the said statue, namely, increase by way of 'permitted increases'. Education cess is specifically recoverable as rent by virtue of section 13 and as sub- section (3) thereof provides that it shall not be treated as increase in rent under section 7 of the Act, there can be no doubt that such an increase falls with the definition of 'permitted increases under section 5(7) of the Act. It, therefore, seems to be well-settled that education cess is a part of 'rent' within the meaning of the Act and when the same is claimed in addition to the contractual or standard rent in respect of the demised premises it constitutes a permitted increase within the meaning of section 5(7) of the Act and being payable on a year to year basis, the rent ceases to be payable by the month within the meaning of section 12(3)(a) of the Act. But the question still survives whether the parties can be agreement quantity the said amount and make it payable on a month to month basis provided of course the said amount does not exceed the tax liability of the landlord; if it exceeds that liability it would infringe section 7 of the Act and the excess would not be allowed as permitted increase within the meaning of section 5(7) of the Act. A right to recover a certain tax amount from the tenant-occupant under the provisions of a statute can be waived by the owner or quantified by agreement at a figure not exceeding the total liability under the statue. If by agreement the amount is so quantified and is made payable by the month not withstanding the owner's liability to pay the same annually to the local authority, the question is whether is such circumstances the 'rent' can be said to be payable by the month within the meaning of section 12(3)(a) of the Act? We ___Page No.17 of 22___ see no reason why we should take the view that even where the parties mutually agree and quantify the tax amount payable by the tenant to the landlord on monthly basis, the rent should not be taken to be payable by the month within the meaning of section 12(3)(a) of the Act. A statutory right to recover the tax amount by way of reimbursement can be waived or limited by the holder of such right or the recovery can be regulated in the manner mutually arranged or agreed upon by the concerned parties so also as it is not in violation of statute. If for convenience and to facilitate payment, the parties by mutual consent work out an arrangement for the enforcement of the owner's statutory right to recover the tax amount and for discharging the tenant-occupant's statutory obligation to reimburse the owner, we see no reason for refusing to uphold such a contract and if thereunder the parties have agreed to the tenant-occupant discharging his liability by a fixed monthly payment not exceeding the tax liability. The said monthly payment would constitute 'rent' payable by the month within the meaning of section 12(3) (a) of the Act. The view expressed by the Gujarat High Court in Vishwambar Hemandas does not, with respect, state the law correctly if it holds that even in cases where the entire tax liability is on the landlord and the tenant had to pay a gross rent of Rs. 19.50 p.m. the mere recital in the lease that the rent is inclusive of taxes the case outside the purview of section 12(3)(a) of the Act. We are, therefore, in respectful agreement with the view taken by the Appellate Court and the High Court in that behalf. We, therefore, hold that as the tenant had failed to comply with the requirement of section 12(3)(a) to seek protection from eviction, the Courts below were justified in ordering his eviction. (emphasis added)

19) Thus, the ratio of the judgment in Rahul Kakare Shetty is that though education cess is payable by the landlord annually, the parties by agreement can quantify the amount of cess to be paid on month to month basis by the tenant. ___Page No.18 of 22___ 20) Mr. Joshi has also relied upon judgment of Single Judge of this Court in Madhavsingh Tulsidas (supra) in which it is held in paras-9 and 10 as under:

9. On behalf of the Petitioners, it has been submitted that the entire approach of the Appellate Bench is flawed inasmuch as the Appellate Bench proceeded on the basis that it was Section 12(3)(a) of the Act that would be the governing provision. There is merit in the submission that the judgment of the Appellate Bench of the Court of Small Causes is unsustainable on the issue of default. The Appellate Bench of the Court of Small Causes, it is to be noted, does not disturb the finding of the Trial Judge that the permitted increases in the present case included the education cess and that since the cess was not payable monthly, it could not be said that the rent was payable by the month. This finding of the Trial Court was borne out by the evidence on the record and is consistent with the law enunciated by the Supreme Court in Shetty's case. The judgment of the Supreme Court in Shetty's case recognises that it would be open to the landlord and the tenant by an agreement between them to quantify the liability of the tenant towards the education cess on a monthly basis in which case, the education cess together with the rent would continue to be payable monthly. In the event that there is such an agreement it has to be pleaded and proved. In the present case, the Appellate Bench does not find the existence of any such agreement in the evidence. On the contrary, the Appellate Court proceeds on the assumption that no such separate agreement was necessary, once it was established that the rent was to be paid on a six monthly basis by the Third Defendant. The entire approach of the Appellate Bench is to my mind completely flawed because in the absence of an agreement of the nature referred to in Shetty'scase, the inevitable conclusion is that the rent is not payable monthly since the education cess which is a part of the rent was not payable by the month. In the present case, it is of course to be noted that the suit has been instituted by the tenant against his sub-tenant, but that would not make ___Page No.19 of 22___ any difference because even in such a case, it is necessary for the Plaintiff to plead and prove the existence of an agreement by which the education cess was liable to be paid together with the rent on a monthly basis. That admittedly is not the case here. The landlord's evidence does not show any reference to an agreement by which the liability towards education cess was quantified on a monthly basis, to be payable with the rent. The distinction made by Counsel between what is payable and what is paid does not carry the case any further, the ingenuity of the submission notwithstanding. It was for the landlord to establish the existence of an agreement as held by the Supreme Court. That was not done.

10. The Appellate Bench was clearly, therefore, in error in proceeding on the basis that it was Section 12(3)(a) that applies. The Trial Court was correct in coming to the conclusion that the case was governed by Section 12(3)(b). The Trial Court held that the tenant was entitled to the benefit of Section 12(3)(b). The finding of fact that was arrived at by the Trial Court was that the tenant had on or before the first date of hearing deposited the entire arrears of rent and that he had thereafter been regularly depositing the rent as and when it fell due. There is no finding in that regard in the impugned judgment of the Appellate Bench. This position was not disputed by Counsel. That is essentially a matter which must be considered by the Appellate Bench of the Court of Small Causes. The question of compliance with Section 12(3)(b) involves several factual determinations. The Appellate Bench of the Small Causes Court exercises an appellate jurisdiction on the judgments of Trial Judges in that Court. Since the issue relating to Section 12(3)(b) has not been considered by the Appellate Bench, it would be necessary to remand the case for a determination thereon. I am, therefore, of the considered view that it would be necessary to remit the matter back to the Appellate Bench for determining the question as to whether there was compliance of Section 12(3)(b).

21) Thus, if the Plaintiff pleads and proves existence of agreement under which education cess was liable to be paid ___Page No.20 of 22___ alongwith rent on monthly basis, provisions of Section 12(3)(a) become applicable. In the present case, Plaintiff pleaded in the plaint as under:

2. वर कलम १ यांत वर्णन क े लेल्या मिमळकत-घरांतील मागील बाजूची शेवटची एक खोली दरमहा १५ रु. भाडे व भाड्याचे रकमेवर दरमहा ५२ ‘ रुपयास ०४ पैसे प्रमार्णे सरकारी शिशक्षर्ण कराचे ' ६० पैसे असे मिमळून दरमहा १५ रु. ६० पैसे प्रमार्णे दरमहाचे दरमहा मिनयमिमतपर्णे भांडे देण्याचे कराराने वादींचा मासिसक भाडेकरी म्हर्णून प्रतितवादी नं.१ कडेस भाड्‌ याने आहे. भाड्याचा ममिहना इंग्रजी क ॅ लेंडर प्रमार्णे तारीख १ पासून सूरु होऊन त्या ममिहनाचे अखेरीस संपतो. प्रतितवादी नं.१ कडेंस सदरील जागेचे ता. १/१/११९३ पासूनच भाडे येर्णे बाकी आहे.

22) Far from disputing the above pleadings in the plaint, Defendants virtually admitted the same in para-3 of their Written Statement in which it was pleaded as under:

3. दावा कलम १ व २ मधील मजक ू र काही अशी बरोबर आहे. परंतू प्रतितवादी नं १ कडेस सदरील जागेचे ता. १/१/१९८३ पासूनचे भाडे येर्णे बाकी आहे व प्रतितवादी नं. १ सहा ममिहन्यापेक्षा जास्त ममिहन्याचे भाडे थकमिवले असल्याने तो थकभाडेकरी (तिडफॉलटर) झाला आहे. व घेर्णे मिनधन असलेल्या रकमेची वादीनी प्रतितवादी नं. १ कडे अनेक वेळ मागर्णी क े ली असता प्रतितवादी नं. १ ने टाळाटाळ क े ली व उडवाउडवीचे उत्तरे देत असे हे वादीचे म्हर्णर्णे बरोबर नसून ते प्रतितवादी नं. १ ला कबूल नाही.

23) Thus, Plaintiff specifically pleaded existence of agreement to pay Rs.15/- towards standard rent and 60 paise towards education cess on monthly basis. Defendant did not dispute this position. The Defendants thus agreed that the education cess was agreed to be paid on monthly basis. Therefore, the judgments of the ___Page No.21 of 22___ Apex Court in Ashok Shetty (supra) and of this Court in Madhavsingh Tulsidas (supra), far from assisting the case of the Petitioners, actually militates against them. In my view, agreement for payment of rent as well as education cess on monthly basis is pleaded and proved in the present case. The Appellate Court has rightly applied provisions of Section 12(3)(a). Since the Defendants admittedly did not pay rent to the landlords within a period of one month after the refusal of notice, the Court was left with no other discretion but to decree the suit on account of language employed in Section 12(3)(a) of the Bombay Rent Act.

24) Considering the overall conspectus of the case, I do not find any valid ground to interfere in the decree passed by the Appellate Bench, which, to my mind, appears to be indefensible. The Writ Petition must fail and is accordingly dismissed. Rule is discharged. There shall be no order as to costs.

25) After the order is pronounced, the learned counsel appearing for the Petitioner seeks continuation of stay for a period of 12 weeks. Instead of continuing the order of stay, Petitioners are granted time of three months for vacating the suit premises subject to filing their usual Undertaking in this Court within a period of 2 weeks from today. [SANDEEP V. MARNE, J.] ___Page No.22 of 22___