Vasumatiben Gaurishankar Bhatt vs Navairam Manchharam Vora And Ors.

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Not extracted

Decision Date: 14 August 1963

Coram: K.C. Das Gupta, P.B. Gajendragadkar

In this matter, the Supreme Court noted that the appeal was filed by special leave and centered on the interpretation and operation of section twelve three a of the Bombay Rents Hotel and Lodging House Rates Control Act, nineteen forty‑seven. The appellant, Vasumatiben Gaurishankar Bhatt, had occupied a single room in a residential building called Lalbang, located in Badekhan’s Chakla in the city of Surat, since the eighteenth of October, nineteen thirty‑five. The rental agreement required her to pay a monthly rent of eighteen rupees. On the twelfth of October, nineteen forty‑nine, the respondents, identified as the first and second defendants, purchased the property. Subsequently, on the twenty‑first of November, nineteen fifty, they served a notice on the appellant demanding that she vacate the premises on the basis that she was in arrears of rent from the first of July, nineteen fifty. The appellant responded to that notice by paying a portion of the rent, but she again fell behind in payment. Consequently, the respondents issued a second notice on the seventh of February, nineteen fifty‑one, alleging arrears dating from the first of October, nineteen fifty. The appellant neither vacated the premises nor settled the full amount claimed as arrears. A third notice was then served on the twenty‑seventh of March, nineteen fifty‑three, in which the respondents claimed that the appellant owed rent from the first of January, nineteen fifty‑one, amounting to arrears for two years and two months. A few days after this third notice, section twelve three of the Act was amended by the Bombay Amending Act number sixty‑one of nineteen fifty‑three, and the amendment became effective on the thirty‑first of March, nineteen fifty‑four. On the twelfth of April, nineteen fifty‑four, the respondents instituted the present suit against the appellant, seeking a decree of eviction on the grounds that they required the premises for their own bona‑fide personal use and that the appellant was in arrears for more than six months. The appellant opposed the suit on several grounds. While the suit was pending, the appellant paid a total of four hundred and seventy rupees in instalments, so that at the time the decree was pronounced, no arrears remained due. The trial judge affirmed both of the respondents’ pleas and granted a decree for eviction, holding that the respondents genuinely and reasonably needed the property for personal use and that the appellant’s rent arrears exceeded six months. The appellant appealed this decree to the District Court at Surat. The district judge found that the respondents had not sufficiently demonstrated that they required the premises in a reasonable and bona‑fide manner for personal use, but he accepted the contention that the appellant was in arrears for more than six months and that the suit fell within the ambit of section twelve three a of the Act, thereby confirming the trial court’s decree.

In this case, the appellant was found to be in arrears of rent for a period exceeding six months, and the suit was held to fall within the ambit of section twelve, sub‑section three, clause (a) of the Act. Consequently, the decree for eviction that the trial court had originally passed was affirmed on appeal. Dissatisfied with that outcome, the appellant filed a revisional petition before the Gujarat High Court challenging the correctness of the decree. The High Court dismissed the revisional petition, thereby confirming the decree that had been entered against the appellant. The appellant then approached this Court, seeking relief from the decision affirmed by the High Court. Counsel for the appellant, Mr Pai, argued that the High Court erred in concluding that the amended requirements of section twelve, sub‑section three, clause (a) justified the decree against the appellant.

The judgment noted that section twelve of the Act has undergone several amendments over time. Prior to the commencement of Amending Act number 61 of 1953, the provision read as follows: “Section twelve, sub‑section one – A landlord shall not be entitled to recover possession of any premises so long as the tenant pays or is ready to pay the amount of the standard rent and any permitted increases, if any, and observes and performs the other conditions of the tenancy, to the extent that they are consistent with the provisions of this Act. Sub‑section two – No suit for recovery of possession shall be instituted by a landlord against a tenant on the ground of non‑payment of the standard rent or permitted increases until the expiration of one month after a written notice demanding the standard rent or permitted increases has been served on the tenant in accordance with section 106 of the Transfer of Property Act, 1882. Sub‑section three – No decree for eviction shall be passed in any suit if, at the hearing of the suit, the tenant pays or tenders in Court the standard rent or permitted increases then due together with the costs of the suit.” The explanatory note to this section dealt with situations where a dispute existed between landlord and tenant regarding the amount of the standard rent; the present appeal does not concern that explanatory note. The Court further observed that the Bombay High Court had interpreted the phrase “at the hearing of the suit” in subsection three to include the hearing of an appeal arising from the suit. Accordingly, the Bombay High Court held that, under the original wording of subsection three, an appellate court could not confirm a decree for eviction if, before the appellate order was passed, the tenant paid or tendered in Court the standard rent or permitted increases then due together with the costs of the suit, as illustrated in Dayaram Kashiram Shimpi v. Bansilal Raghunath Marwari ([1952] 55 Bom. L.R. 30). After the amendment brought about by Amending Act 61 of 1953, the Bombay High Court construed the words “at the hearing of the suit” to mean that the tenant’s application to deposit the

The Court observed that, according to the decision in Laxminarayan Nandkishore Shravagi v. Keshardev Baijnath Narsaria ([1956] 58 Bom. L.R. 1041), any arrears payable by the tenant must be deposited before the Court of first instance and cannot be postponed for payment in the Court of appeal. The Court then turned to another decision of the Bombay High Court that required reference before addressing the issues raised in the present appeal. In the case of Kurban Hussen Sajuddin v. Ratikant Nilkant and Anr., the High Court held that the term “may” used in section 12(3)(a), as amended, should be interpreted as “must”. Accordingly, when the conditions prescribed in that provision are satisfied, the Court is obligated to pass a decree for recovery of possession in favour of the landlord. These precedents frame the Court’s consideration of the appellant’s contention that, under the amended section 12(3)(a), the Court was not empowered to pass a decree for ejectment against her in the present proceedings. On behalf of the appellant, counsel emphasized that sections 12(1) and 12(2) are mandatory provisions that impose stringent restrictions on a landlord’s right to sue a tenant for eviction. He argued that, in construing the effect of section 12(3)(a), the legislature’s intention to protect tenant interests must be borne in mind, noting that the statute was enacted specifically to safeguard tenants. He further pointed out that, before the amendment of section 12(3)(a), a tenant could pay the arrears at any stage during the pendency of the suit or even during the pendency of the appeal. Consequently, when the tenant failed to pay the arrears immediately after receiving the landlord’s demand notice, it could be inferred that she understood that such failure would not automatically result in eviction and that she retained the option to deposit the amount either in the trial Court or in the appellate Court as required by section 12(3). In order to prevent undue hardship to the tenant, counsel suggested that section 12(3)(a) should be read as obligating the landlord to issue a fresh notice after the amendment came into force, because the notice issued prior to the amendment did not sufficiently inform the tenant that non‑compliance would inevitably lead to her ejectment. He therefore urged that the provisions of this benevolent statute be interpreted liberally. This argument, articulated by counsel, represents the first contention raised before the Court. The Court, however, stated that it could not accept this line of reasoning. It explained that section 12(3)(a) requires, in cases where there is no dispute between the landlord and the tenant regarding

Section 12(3)(a) provides that when there is no dispute as to the amount of standard rent or any permitted increase, a landlord who can demonstrate that a tenant has been in arrears for six months or more, and that those arrears persisted despite a notice served before the commencement of suit, may obtain a decree for ejectment if the tenant fails to make payment within one month after receipt of that notice. Although the provision refers to “a notice,” the notice contemplated is the one required by section 12(2). The amendment that introduced subsection (3) did not alter the wording of subsection (2). Accordingly, the notice issued by the respondents to the appellant in the present matter must be examined against the requirements of section 12(2). The notice sent by the respondents informed the appellant that rent arrears were due, and the appellant did not discharge those arrears within the one‑month period prescribed after the notice was served. Section 12(2) does not obligate the landlord to explain the consequences of non‑payment in the notice; it merely requires that the notice be served. Consequently, the notice issued by the respondents satisfied the conditions of section 12(2), and because the appellant failed to pay the arrears as required, the statutory test of subsection (3)(a) was met, permitting the suit to proceed under that provision.

Counsel for the petitioner argued that the language “neglects to make payment” in section 12(3)(a) suggests that the tenant’s failure must occur only after the amendment became effective, relying on the present‑tense wording rather than a past‑tense formulation. The Court found that argument unavailing. The word “neglect” is to be read in context with the clause that requires the tenant to neglect payment until the expiration of one month after receipt of the notice; using the past tense would be inappropriate in that context. Accordingly, once a valid notice under section 12(2) is served and the tenant is shown to have failed to comply with that notice within the stipulated one‑month period, the conditions of section 12(2) are satisfied and section 12(3)(a) consequently comes into operation. Thus, the statutory scheme operates without regard to the timing of the amendment relative to the tenant’s neglect, and the Court affirmed that the provision applies as written.

In interpreting section 12(3)(a), the Court said that a construction which would defeat the alleged vested right of the tenant should not be adopted. The Court observed that it was difficult to accept the argument that the provisions of section 12(3)(a) actually created any vested right for the tenant. According to the wording of section 12(3)(a), a decree in favour of the landlord could not be passed only in the circumstance where the tenant paid or tendered the standard rent in Court at the hearing of the suit. The Court noted that, on its face, this provision did not appear to confer any right, let alone a vested right, on the tenant. Even assuming, for the sake of argument, that the tenant possessed a vested right to make such a payment in Court at the hearing, the Court found that this consideration did not change the plain meaning of the words used in section 12(3)(a). The suit under consideration had been filed after the amended section had come into force, and the Court held that the amended provision therefore applied to the suit and governed the resolution of the dispute between the parties. Consequently, the Court interpreted the plain meaning of section 12(3)(a) to be that, once a notice was served on the tenant and the tenant failed to make the required payment within the time specified in that provision, the Court was bound to pass an eviction decree against the tenant. The Court agreed with the view taken by the Gujarat High Court, finding that this view gave effect to the amended provisions of section 12(3)(a) as they stood in 1953. Accordingly, the Court concluded that the appeal lacked any substantive merit, dismissed the appeal, and ordered the appellant to pay costs.