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: Civil Appeal No. 293 of 1963

Decision Date: 14 August 1964

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

In this matter, the Supreme Court of India heard a petition filed by Vasumatiben Gaurishankar Bhatt against Navairam Manchharam Vora and others. The judgment was delivered on 14 August 1964 and was authored by Justice P B Gajendragadkar, who sat on a bench with Justice K C Das Gupta. The case concerned a tenancy under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. The appellant occupied a single room in a building owned by the respondents and had accrued rent arrears for a period of two years and two months. Respondents served a notice on the appellant seeking recovery of the arrears. Shortly after the notice was served, the relevant Act was amended. The respondents then instituted a suit for eviction, alleging that they required the premises for bona fide personal use and that the appellant’s arrears exceeded six months. The appellant opposed the suit on several grounds, but before the hearing concluded and prior to the decree being passed, she deposited the full amount of rent that was due. The trial judge upheld the respondents’ contentions and decreed eviction. On appeal, the District Judge rejected the respondents’ claim of bona‑fide personal use yet found that the appellant remained in arrears and dismissed the appeal. A subsequent revision filed by the appellant was unsuccessful, and the appeal before this Court proceeded by way of special leave.

The appellant argued that the provisions of sections 12(1) and 12(2) of the Act were mandatory and that, in construing section 12(3)(a), the object of the statute—particularly the protective purpose of section 12—must be considered. She submitted that, before the amendment to section 12(3)(a) took effect, a tenant could settle the arrears at any time during the pendency of the suit or even during an appeal. To prevent hardship to the tenant, she contended that section 12(3)(a) should be read as requiring the landlord to issue a fresh notice after the amendment became operative. Further, she urged that the language of section 12(3)(a) indicated that the tenant’s failure to pay must occur after the amendment’s commencement, and that the right to deposit arrears had become a vested right which should not be withdrawn by an interpretation of section 12(3)(a). The Court was called upon to determine whether the amendment altered the obligations of the landlord and the tenant, and whether the tenant retained any vested right to pay arrears after the amendment.

In the course of argument, it was submitted that the tenant possessed a vested right to deposit arrears, and consequently the provision of section 12(3)(a) of the Bombay Rents, Hotel and Lodging House Rates Control Act should not be interpreted so as to deprive the tenant of that vested right. The Court held that the first clause of section 12(3)(a) refers to a notice issued by the landlord in accordance with the requirements of section 12(2). The legislature, when amending subsection (3), did not alter the language of section 12(2). The notice that had been served by the appellant in the present matter complied with the specifications laid down in section 12(2). The Court observed that once a notice satisfying section 12(2) has been served and the tenant is shown to have failed to comply with the notice for a period of one month thereafter, the conditions of section 12(2) are deemed fulfilled and the operation of section 12(3)(a) commences. The Court further ruled that section 12(3)(a) does not create any right, let alone a vested right, in favour of the tenant; and even if such a right were to be implied, it would not modify the clear meaning of the provision. The plain meaning, according to the Court, is that where a landlord has served the required notice and the tenant does not make the payment stipulated within the time frame prescribed by section 12(3)(a), the court is obligated to pass a decree of eviction against the tenant. Accordingly, the appeal was dismissed. The Court cited the authorities Dayaram Kashiram Shimpi v. Bansilal Ragkunath Marwari (1952) 55 Bom.L.R. 30, Laxminarayan Nandkishore Shravagi v. Keshardev Baijnath Narsaria (1956) 58 Bom.L.R. 1041, and Kurban Hussen Sajauddin v. Ratikant Nilkant (1959) A.I.R. 401. The judgment pertained to Civil Appeal No. 293 of 1963, filed by special leave from the Gujarat High Court’s order dated 17 December 1962 in Civil Revision Application No. 175 of 1960. The appellate bench, presided over by Justice Gajendragadkar, heard the matter on 14 August 1963. The appeal raised the narrow issue of the construction and effect of section 12(3)(a) of the Act. The appellant had been occupying a single room in the Lalbang residential building in Badekhan’s Chakla, Surat, since 18 October 1935, paying a monthly rent of Rs. 18. The respondents acquired the property on 12 October 1949. On 21 November 1950 they served a notice requiring the appellant to vacate on the ground of arrears dating from 1 July 1950. The appellant made a partial payment after receiving that notice but subsequently fell back into arrears, prompting a second notice on 7 February 1951 claiming arrears from 1 October 1950. The appellant did not

It was recorded that the tenant neither vacated the premises nor settled all the rent arrears that were due from her. Consequently, the landlords served a third notice on her on 27 March 1953, asserting that they sought recovery of rent arrears dating back to 1 January 1951, which amounted to a total of two years and two months of unpaid rent. A few days after this third notice, section 12(3) of the Bombay Rents, Hotel and Lodging House Rates Control Act was amended by the Bombay Amending Act No 61 of 1953, and the amendment became effective on 31 March 1954. Following the coming into force of the amendment, the respondents instituted the present suit on 12 April 1954, praying for a decree of eviction against the tenant. Their petition rested on two grounds: first, that they required the premises that had been let to the tenant in good faith for their own personal use; and second, that the tenant was in arrears of rent for a period exceeding six months. The tenant contested the suit on several grounds. While the suit was pending, the tenant paid the outstanding sum of Rs 470 in installments before the date on which the decree was ultimately pronounced, thereby ensuring that at the moment the decree was passed no rent arrears remained payable. The trial judge, after hearing the matter, upheld both of the respondents’ pleas and issued a decree of eviction against the tenant. In arriving at that conclusion, the judge held that the respondents had a reasonable and bona‑fide claim to the property for their personal use and that the tenant had been in arrears of rent for more than six months.

The tenant appealed the trial judge’s decree before the District Court at Surat. The district judge found that the respondents had not produced sufficient proof that they needed the premises reasonably and in good faith for personal use, but he accepted the respondents’ contention that the tenant was indeed in arrears for a period exceeding six months and that the suit fell within the ambit of section 12(3)(a) of the Act. Accordingly, the decree passed by the trial court was affirmed on appeal. Unsettled by this outcome, the tenant subsequently filed a revisional petition before the Gujarat High Court, challenging the correctness of the decree. The High Court dismissed the revisional petition and confirmed the decree against the tenant. The tenant now approached this Court, contending that the High Court erred in holding that the requirements of section 12(3)(a) as amended justified the decree. It was noted that section 12 of the Act has undergone several amendments over time. Prior to the coming into force of the Amending Act No 61 of 1953, the provision read as follows: “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 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 this Act. (2) No suit”.

Section 12 of the Act, as it stood before the amendment brought by Amending Act No 61 of 1953, provided that a landlord could institute a suit for recovery of possession only on the ground of non‑payment of the standard rent or any permitted increase after a period of one month following a written notice of demand. The notice had to be served in the manner prescribed by section 106 of the Transfer of Property Act, 1882. Moreover, the provision stipulated that no decree for eviction could be passed in such a suit if, at the hearing of the suit, the tenant paid or tendered in court the rent and any permitted increase that were then due together with the costs of the suit. An explanatory note to this section dealt with disputes concerning the amount of the standard rent, but that explanatory note was not relevant to the present appeal. The Bombay High Court, interpreting the words “at the hearing of the suit” in subsection 12(3), held that the phrase included the hearing of an appeal arising from the original suit. Consequently, the High Court concluded that under subsection 12(3) an appellate court could not confirm an eviction decree if, before the appellate order was passed, the tenant paid or tendered in court the due rent, the permitted increase, and the costs of the suit and of the appeal, as reflected in the decision of Dayaram Kashiram Shimpi v. Bansilal Raghunath Marwari (1952) 55 Bom. L.R. 30. After subsection 12(3) was amended by the 1953 amendment, the Bombay High Court revisited the same expression and construed “at the hearing of the suit” to mean that any application by the tenant to deposit arrears had to be made before the court of first instance and could not be reserved for the appellate court, a view expressed in Laxminarayan Nandkishore Shravagi v. Keshardev Baijnath Narsaria (1956) 58 Bom. L.R. 1041.

Another decision of the Bombay High Court, Kurban Hussen Sajuddin v. Ratikant Nilkant and Anr. (1959) A.I.R. 401, addressed the wording “may” in subsection 12(3)(a) as amended and held that the term was to be read as “must.” The court explained that when the conditions of the provision were satisfied, the court was obliged to pass a decree for recovery of possession in favour of the landlord. In light of these authorities, the appellant contended that, under the amended subsection 12(3)(a), the court was not authorised to pass an eviction decree against her in the present proceedings. Counsel for the appellant emphasized that subsections 12(1) and 12(2) imposed mandatory restrictions on a landlord’s right to sue for eviction and that the legislature had enacted section 12 to protect the tenant’s interests. He further argued that, before the amendment, a tenant could pay the arrears at any stage during the pendency of the suit or even during an appeal, and that a tenant who failed to pay the arrears immediately after receiving the landlord’s demand could still avoid eviction by depositing the amount under section 12(3), either in the trial court or in the appellate court.

In this matter, the Court observed that the legislature had enacted the present statute and, in particular, the provisions of section 12 with the purpose of protecting the tenant’s interests. Counsel for the appellant argued that before the amendment of section 12(3)(a) the tenant could pay arrears at any time while the suit or its appeal was pending, and therefore a tenant who failed to pay immediately after receiving a demand notice would understand that such failure would not automatically lead to eviction, because the tenant could still satisfy the amount as required by section 12(3) either before the trial Court or before the Court of Appeal. On that basis, counsel suggested that, to avoid hardship to the tenant, section 12(3)(a) should be interpreted as requiring the landlord to issue a fresh notice after the amendment came into force, since the notice served before the amendment did not inform the tenant that non‑compliance would necessarily result in ejectment. Counsel therefore urged that the beneficial provisions of the statute be read liberally. The Court was unable to accept this argument. The Court explained that section 12(3)(a) mandated that where the landlord and tenant did not dispute the amount of standard rent or any permitted increase, and where the landlord could demonstrate that the tenant was in arrears for six months or more, and that those arrears persisted despite a notice being served before the suit was instituted and no payment being made within a month thereafter, the landlord was entitled to obtain a decree of ejectment. The Court noted that although section 12(3)(a) referred to a notice, the notice must be the one required by section 12(2), and the amendment of subsection (3) did not alter the language of subsection (2). Upon examination of section 12(2), the Court found that the notice given by the respondents to the appellant satisfied the statutory requirements of that subsection. The respondents’ notice informed the appellant of the arrears due, and the appellant did not make payment within the one‑month period following the service of that written notice. Consequently, the Court held that the conditions of section 12(2) were fulfilled, and that the case must be adjudicated under section 12(3)(a).

Section 12(2) did not oblige the landlord to inform the tenant of the consequences that would follow if the tenant failed to pay the arrears specified in the notice. Consequently, when the notice that the respondents served on the appellant before the commencement of the present suit satisfied the requirements of Section 12(2) and it was demonstrated that the appellant did not remit the arrears within the period mandated by that notice, the conditions of Section 12(2) were fulfilled. On that basis, the dispute between the parties had to be adjudicated under the provisions of Section 12(3)(a). Counsel for the appellant then argued that the language of Section 12(3)(a) seemed to imply that the tenant’s failure to pay the arrears must have occurred after the date on which the Amending Act became operative. He relied on the phrasing of the section, which refers to the tenant “neglects to make payment” of the rent, and pointed out that the provision does not use the past‑tense expression “has neglected to make payment.” In the Court’s view, this line of argument lacked merit. The term “neglect” appearing in the present tense must be interpreted in the context that the clause addresses the tenant’s neglect to make payment of the rent until the expiry of one month after receipt of the notice; using the past tense in that context would be inappropriate. Accordingly, the correct position is that, once a notice has been served in accordance with Section 12(2) and the tenant is shown to have failed to comply with that notice through the lapse of one month thereafter, the requirements of Section 12(2) are satisfied and Section 12(3)(a) becomes operative. Counsel for the appellant also maintained that the tenant possessed a vested right to pay the arrears at the hearing of the suit, and therefore any construction of Section 12(3)(a) that would defeat that vested right should be avoided. It is difficult to accept the proposition that Section 12(3)(a) confers any vested right on the tenant. What the provision actually states is that a decree in favor of the landlord shall not be issued if the tenant pays or tenders the standard rent in Court at the hearing of the suit. On its face, this clause does not create a right, let alone a vested right, in favor of the tenant. Even assuming, for argument’s sake, that the tenant held a vested right to make payment in Court at the hearing, such a consideration does not alter the plain meaning of the words employed in Section 12(3)(a). The suit was instituted after the amended section had come into force, and it is clear that the amended provision governs the adjudication of the dispute between the parties. Under the plain meaning of Section 12(3)(a), once a notice is served on the tenant and the tenant has not made the required payment within the time specified, the landlord is entitled to a decree for eviction.

The Court observed that where a notice had been served on a tenant under section 12(3)(a) of the relevant Act and the tenant had failed to make the required payment within the period prescribed by that same provision, the court was bound by law to pass a decree for eviction against the tenant. The Court noted that this interpretation had been adopted by the Gujarat High Court in the proceedings before it. The Supreme Court affirmed that the view expressed by the Gujarat High Court accurately gave effect to the language of section 12(3)(a) as it had been amended in the year 1953. Having examined the arguments raised in the appeal, the Court found that the appeal did not raise any substantive question that could alter the application of the statutory provision. Consequently, the Court held that there was no merit in the appeal. On that basis, the Court concluded that the appeal must fail. Accordingly, the appeal was dismissed and the parties were ordered to bear the costs of the proceedings. The order of dismissal of the appeal was thus formally recorded.