Mangat Rai & Anr. v. Kidar Nath & Ors.

FAZAL ALI, J.-This appeal by special leave is directed against a judgment dated November 12, 1979 of the Punjab and Haryana High Court and raises a pure question of law. The facts of the case lie within a very narrow oompaiss. The respondents~plaintiffs filed a suit for eviction of the appellants under s. 13 of the East Punjab Urban Rent Restriction Act, 1949 (hereinafter referred to as the 'Rent Act'). The ejectment was sought for from the shop B-VI, 1400 old B-IX-1736, New Ground Floor, situated in Saban Bazar, Ludhiana. The main ground on which the suit for eviction was filed was that the appellant had committed default in the payment of rent. The suit was resisted by the appellant mainly on the ground that , he was not in arrears as he had deposited t!he entire rent due in the court of Senior Sub Judge, Ludhiana under s. 31 of the Punjab Relief H of Indebtedness Act, 1934 (hereinafter referred to as the 'Indebtedness Act'). It was also averred by the defendant-tenant that not only the rent due was deposittid but even future rent in advance had - MANGAT RAI v. KIDARNATH (Fazal, Ali, J.) 479 :also been deposited before the first date of hearilng. It was also alleged by the tenant that he had deposited the interest and cos~ of the suit amounting to Rs. 23 which was admittedly accepted by the landlord under protest. Thus, the tenant-appellant claimed complete protection under the proviso to s. 13(2) of the Rent Act. The defendant also pleaded that the notice given to the appellant by the landlord was legally defective. The trial court held that any deposit made by the appellant under s. 31 of the Indebtedness Act in the Court of the Senior Sub Judge was not a valid tender and therefore the appellant could not claim any protection under the proviso to s. 13(2) of the Rent Act. On the question of notice, the trial court held that the notice was valid and accordingly decreed the suit for ejectment. Other pleas were also taken by the defendant which were overruled by the trial court and have not been pressed before us. The appellant then filed an appeal before the District Judge, Ludhiana, being the' appellate authority, under the Rent Act against the judgment of the trial court. The appellate authority did not go at all into the quesion as to w1=J.ether or not the deposit of the rent due by the appellant was a valid tender but held that as the notice was 11ot in accordance with law, the suit was liable to fail. He accordingly allowed the appeal, set aside the order of the Controller and dismissed the suit for ejectment. Thereafter, the landlord-respondent went up in revision to the High Court against the order of the appellate authority and the only contention raised before the High Court was that in view of the decision of this Court in V. Dhanapal Chettiar v. Yesodai AmmaJ(l) as no,notice was necessary, therefore the Rent Controller was wrong in non-suiting the plaintiff on the ground of invalidity of the notice. The High Court accordingly decreed the suit without, however, going into the question of deposit of rent so as to protect the tenant from eviction. The appellant then filed an application for special leave which was granted and hence this appeal. The only point raised by the learned counsel for the appellant before us is that the appellant having deposited the rent before even the respondent filed the application for ejectment after which the appellant deposited the sum of Rs. 23 as cost and interest, he was entitled to the protection of the proviso to s·. 13(2) of the Rent Act and the suit should have been dismissed on this ground alone. , It was further argued that the deposit of the rent due under s. 31 of the Indebtedness Act was a valid tender as it would, in the eye of law, be treated as a deposit in the court of the Rent Controller because the court of the Senior Sub Judge was also functioning as a Rent (1) A.LR. 1979 SC 1745. -C 480 SUPREME COURT REPORTS [19811 1 S.C.R. Controller. The counsel for the respondent, however, submitted that the deposit made by the appellant cannot be held to be a valid tender as decided by a decision of this Court in Shri Vidya Prachar Trust v. Pandit Basant Ram(!). The learned counsel further submitted that · although this case was noticed by two later decisions of this Court in Shea Narain v. Sher Singh(2) and Duli Chand v. Maman Chand(!) yet the said case had be:en distinguished but not overruled. Before examining the contention of the learned counsel for the parties it may be necessary to mention the undisputed facts which emerge from the petition, affidavits, annexures and counter-affid!avits of the parties. It is not disputed that the rent of .the premises was Rs. 35.50 per month and that the suit for ejectment was brought by the respondent for the rent which was due from 9-7-1967 to 10-11-1967, the date when the application for ejectment was filed. Secondly, it was also not disputed but rather tacitly admitted in the counter­ affidavit filed by the respbndent that a sum,_of Rs. 71 being the rent from 10-7-67 to 9~9-67 was deposited by the appellant on 8-8-67 under s. 31 of the Indebtedness Act before the Court of the Senior Sub Judge. It was also not disputed that a sum of Rs. 106.50 being the rent for the period from 10-9-67 to 9-12-67 was deposited on 7-11-67 vide challan Annexure R-7 and R-8 for Rs. 71 and Rs. 106.50 respectively, that is to say three days before the application for ejectment was filed. Finally, it was admitted by the respondent Kidar Nath that a sum of Rs. 23, being the cost. and interest, was accepted by the landlord under protest before the first date of hearing and he further admitted that he learnt about the challans Bxs. P-1 and P-2 containing the previous deposit of rent due also on the first date of hearing when they were produced. It is thus manifest that the entire arrears of rent, interest and cost were available for payment to the respondent on the first hearing. Thus, all the essential requirements of the provisions ·were complied with. The argument of the respondent, however, only centered round the question as to whether or not the deposit made by the appellant could be treated as a deposit under the Rent Control Act and, therefore, a valid tender to the landlord. That is really the crucial question which falls for determination iii the instant case. The counsel for the appellant has plitced strong reliance on two later decisions of this Court ill Shea Narain v. Sher Singh and Duli Chand v. Maman Chand (supra), whereas the co~el for the respondent has relied ?n Vidya H (1) [1970] 1 SCR 66. (2) [1980J 1 sec 12s. (3) [1980J 1 sec 246. -·A ,MANGAT RAI v. K!DARNATH (Fazal Ali, J.) 481 Prachar Trust's case (supra). Before, however, going to the decisions we would like to examine the provisions of the relevant Acts. It is true that there is absolutely no provision in the Rent Act under which a deposit could be made by a tenant before the Controller to the credit of the landlord. Under s. 31 of th1:1 Indebtedness Act there is undoubtedly a specific provision for a person who O)VeS money to another to depo~it the amount in the court and once this is done, the interest would cease to run. The serious question for consideration is as to whether or not a deposit by the tenant under s. 31 of the Indebtedness Act could be treated as a deposit in the court of Rent Controller so as to enure for his benefit. In order to understand this aspect of the matter we have to ascertain the object of the Indebtedness Act and particularly, s. 31 of the said Act. The "" main object of the Indebtedness Act appears to be to give relief to · debtors and protect them from paying excessive rates of interest. The Act thus contains provisions for setting up Debt Conciliation Boards. Section 7(1) defines 'Debt' and clause (2) of s. 7 defines 'Debtor' thus : "Debtor" means a person who owes a debt and- (i) who both earns his livelihood mainly by agriculture, and is either a land-owner, or tenant of agricultural land, or a servant of a land-owner, or of a tenant of agricultural land; or (ii) who earns his livelihood as a village menial paid in cash or kind for work connected with agricullure; or (iii) whose total assets do not exceed five thousand rupees;" In Vidya Prachar Trust case (supra), Hidayatullah, C. J., examined some of the provisions of the Indebtedness Act and held that the Act was not intended to operate between landlords and .tenants nor was the court of Senior Sub-Judge a clearing house for rent so as to convert it into a court of Rent Collector and speaking for the Court observed thus : - "The Act is not intended to operate betwettn landlords and tenants; nor is the Court of the Senior Sub-Judge created into a clearing house for rent.................. There is no provision in the Urban Rent Restriction Act for making a deposit except one, and that is on the first day of the hearing of the case. It could not have been intended that an . tenants who may be disinclined to pay rent to their landlords should be enabled to deposit it in the Court of a Senior Sub-Judge making the Senior Sub-Judge a kind of a Rent Collector for all landlords." 482 SUPREME COURT REPORTS r198ll 1 S.C.R. With due respect, in m~king these observations the attention of the learned Chief Justice does not appear to have been drawn to certain important aspects and facets of the true scope and purport of s. 31 of the Indebtedness Act 01' even to the fact that the same + Sub-Judge before whom deposit could be made under s. 31 of the Indebtedness Act was also functioning as Rent Controller under the Rent Act. Section 31 runs thus : "31. Deposit in court.-(1) Any person who owes money may at any time deposit in court a sum of money in full or part -A payment to his creditor. · (2) The court on receipt of such deposit shall give notice 1 thereof to the creditor and shall, on his application, pay the sum to him. (3) From the date of such deposit interest shall cease to run on the sum so deposited." · The learned Chief Justice held. that although the general words 'any person who owes money' may appear to cover the case of a tenant yet as a whole .the Act was not meant to cover cases of a landlord and tenant but only such! debtoJrs and creditors between whom there was an agreement for payment of interest. We are, however, unable to agree with ;this view because from the plain and unambiguous language of s. 31 it cannot be spelt out that the Act applies only to a particular type of debtors and creditors as hinted by ~he learned Chief Justice.· We have highlighted this aspect of the matter to show that s. 31 has been couched in the widest possible terms and the legislature has advisedly not used the wol.'d 'debtor' in s. 31 so as to confine the provisions of ,the section only to the 'debtor' defined in the said Act and to no other, but the legislature intended to embrance within its fold all persons owing money including tenants who are in arrears. Thus, under s. 31 any person who owes money is entitled to deposit in court the money owed either in full or in part in the name of his creditor. · It is manifest. therefore, that this provision would apply even to a tenant who owes money to his landlord by way of rent due and he can also enjoy the facility provided by s. 31 of the Indebtedness Act. It appears that by virtue of a notification (No. 1562-Cr.-47 /9224 published in the Punjab Gazette Extraordinary, dated 14th April 1947) all subordinate Judges of First Class were appointed as. H Controllers. The notification may be extracted thus : "In pursuance of the provisions of clause (b) of Section 2 of the Punjab Urban Rent Restriction Act, 1947, the Governor MANGAT RAI v. KIDARNATII (Fazal Ali, J.) 483 of Punjab is pleased to appoint all first class Subordina:te Judges A in the Punjab to perform the functions. of Controllers under the said Act, in the Urban area within the limits of their existing civil jurisdiction". In the instant case, it is not disputed that the Senior Sub-Judge was a Sub-Judge First Class and was also functioning as a Rent Controller in Ludhiana which was an urban area, hence any deposit made in his court by a tenant to the credit of a landlord to get the protection of the Rent Act, would have to be treated as a deposit before the Rent Controiler. Afterall. if the Sub-Judge was a Rent Controller, the amount would have to be deposited by a challan in the same treasury which was to be operated by the Sub-Judge who was also a Controller. By a notification made under the Punjab Courts Act, 1913, a Sub-Judge is conferred with first class, second class and third class powers according to the nature of the jurisdiction of the cases which they are competent to try~ A Sub-Judge, first Class exercises jurisdiction without any limit as to the value of the case. A Sub-Judge, Second Class exercises jurisdiction in cases of which the value does not exceed Rs. 10.000 and a Subordinate Judge, III Class exercises jurisdiction in cases of which the value does not exceed Rs. 5,000. This appears to be the hierarchy of the Sub-Judges under the Punjab Courts Act, 1918. This aspect of the matter was noticed by this Court in Ku/dip Singh v. The State of Punjab & Anr.(1) where referring to the nature of the Senior Sub-Judge, the following observations were made : "The Rules and Orders of the Punjab High Cour.t reproduce a Notification of the High Court dated 16th May 1935 as amended on 23rd February 1940, at page 3 of Chapter 20-B of Volume I, where it is said in paragraph 2- 'It is further directed the Court of .such Senior Subordinate Judge of the first class shall be deemed to be a District Court. etc.' This appears to regard each Senior Subordinate fodge as a Court in himself and not merely as the presiding officer of G the Court of the Subordinate Judge." Thus, the combined effect of the provisions of s. 31 of the Indebtedness Act and the notification 1:/Y which a Senior Sub-Judge was to function as a Controller under the Rent Act is that s. 31 is constituted a statutory agency or machinery for receiving all debts H and paying the same to the creditors. This appears to us to be the (!) [1956] SCR 125. 484 SUPREME COURT REPORTS l198 ll 1 S.C.R. dominant purpose and the avowed object of s. 31. It thus follows as a logical consequence that any deposit made by a tenant under s. 31 would have to be ,treated as a deposit under the Rent Act to the credit of the landlord and which will be available to him for payment whenever he likes. That this is the position has been clearly held by two Division Bench decisions of the Punjab High Court. In Mam Chand v. Chhatu Ram & Ors.(1) a Division Bench consisting of Falshaw, C. J. and Grover, J. went into this very question in great detail and observed as follows : - "It is equally clear that a depo•sit made under section 31 would save the running of interest and that the tenants would be entitled to take the benefit of the provisions contained in section 31 regarding cesser of interest from the date of payment into Court for the purposes of calculating the amount which have to be deposited under the proviso in question to claim protection against eviction. If ,the money deposited in Court under section 31 is a good. payment for the purpose of ·stopping the running of interest it looks highly problematical that it would cease to be a valid payment to the landlord of rent . . . . . . . . . .in a case of the present type where it has not been shown that there was any other account between the landlord and the tenant and the amount was deposited clearly towards payment of rent because the landlord would not accept the money orders which had been previously sent, it is not possible to accept the view that the payment is not being made to the landlord on account of rent. It may well be that the landlord is not inclined to accept that payment but it is for that very purpose that the provision, namely, section 31 o~ the Punjab Relief of Indebtedness Act, has been enacted. The language of section 31 itself is clear that the person t .who owe~ money can deposit the same in Court in full or part t.'payment to his creditor. This means that deposit in Court is ~antamount to payment having been made to the creditor. Even if no such implied agency can be inferred, the Court is constituted as a statutory agent because the payment made to it is by fiction of law considered to be payment made to the creditor by the debtor and which, in addition, is effective enough to stop the running of interest." (1) I.LR. 1964 Punjab 626. MANGAT RAJ v. KIDARNATH (Fazal Ali, J.) 485 To the same effect is another decision of the same High Court in K~ushi Ram v. Shanti Rani & Ors.(1). Where Dulat,. J., speaking for the Court observed as follows :- "It is clear that if such deposit is not to be equivalent to actual payment to the creditor, it is certainly good and valid tender of the money, for it has been paid into Court and the creditor has been told through Court that .the money has been deposited and can be received. by the creditor at any time. In my opinion, therefore, there is no occasion for further consideration of the decision of the Division Bench in Mam· Chand' s case, which, if I may say so, adopts a perfectly reasonable and matter-of-fact .view of the situation. I would therefore hold that a deposit made under section 31 of the Punjab Relief of Indebtedness Act in respect of any arrears of rent must be taken in law to be at least a valid tender of such arrears. In both these cases, therefore, it is impossible to ignore the fact of the deposit." We find ourselves in complete agreement with the observations ;made by the Punjab High Court in the two cases referred to• above 1 which lay down the correct law on the subject. In view of these circumstances we are unable to agree with 'the view taken by the learned Chief Justice ill Vidya Prachar Trust's case (supra) that the Court of Senior Sub-Judge was not converted .into a court of Rent Controller by the tenaint because the Sub-Judge ·was actually functioning as a Rent Controller by virtue of the .notification, as indicated above. It may also be emphasised at this stage that the present suit was also filed before the Senior Sub Judge, Ludhiana where the deposit was made by the appellant, tho'ugh after the suit was filed it was transferred to some other Sub-Judge who was also ··empowered to function as a Rent Controller. Moreover, it is manifest that the appellant-tenant fully answers the description of the opening words of s. 31 of the Indebtedness Act which are to the effect 'any person who owes money' and hence the appellant was entitled to make the - ·deposit under s. 31 which would enure for the benefit of the creditor. In -our opinion, therefore, to give a narrow meaning to the words "person who owes money" used in s. 31 of the Indebtedness Act would be to unduly restrict the scope of s. 31 which appears to be contrary to · the intention of the legislature. Furthermore, under the proviso to · s. 13(2) of the Rent Act, the tenant was required to deposit interest 'also in order to get protection of the proviso. Hence, the tenant ·was a debtor with a sort of a statutory agreement to pay interest (1) 1964 P.L.R. 755. 486 SUPREME COURT REPORTS £198ll 1 S.C.R.: and would therefore squarely fall within the definition of s. 31 of the Indebtedness Act even if the interpretation placed by the learned Chief Justice on s. 31 in Vidya Prachar Trust'-s case (supra) is accepted· at. its face value. Another ground taken by the learned Chief Justice to hold that the deposit of money before the Sub-Judge could not be a valid tender was that under s. 19 read with s. 6 of the Rent Act, acceptance of future rent was punishable as an offence and hence it would be impossible to contend that a landlord would be required to accept rent at the peril of going to jail. In this connection, the Chief Justice observed as follows :- "Further the deposit of money i.ti the present case _was not only of the rent due but also of futurn rent. Under s. 19 read with s. 6 of the' Urban Rent Restriction Act a landlord is liable to be sent to jail if he recovers advance rent beyond one month."' With great respect to the Hon'ble Chief Justice, it seems to us tliat there is absolutely no bar either under s. 19 or s. 6 of the Rent Act to receive future rent. Section 6 of the Rent Act may be extracted thus : "6. Landlord not to claim anytbing in excess of fair rent.­ (1) Save as provided in section 5, when the Controller has fixed· the fair rent of a building or rented land under section 4- (a) the landlord shall not claim or receive any premium or other like sum in addition to fair rent or any rent in -. excess of such fair rent, but the landlord may stipulate for ~ and receive in advance an amount not exceeding one month's rent; _ (b) any agreement for the payment of any sum in addition to rent or of rent in excess of such fair rent shall be nul! and void." Section 6. thus merely provides that where a fair rent is fixed by the· Controller it would not be open to the landlord to receive any amount in advance in excess of the fair rent. Section 6(a) further permits the fandJord to stipulate and receive in advance an amount not exceeding one month's rent. Clause (b) makes any agreement for .- payment of any sum in excess of such fair rent null and void. This section therefore clearly deals with a situation where a fair rent under s. 6 is fixed by the Controller on the application of the 'parties. Neither in the present: case nor in Vidya Prachar Trust's case (supra)· was ihe·re ·any allegation that a fai1.1 rent had been fixed by the· Controller. Section 19 is the penal section which makes a person .. MANGAT RAI v. KIDA.RNATII (Fazal Ali, J.) 487 punishable with imprisonment for a maximum period of two years if he violates the provisions of s. 6. So long as fair rent is not fixed by the Controller the parties aire free to agree to payment of any rent and neither s. 6 nor s. 19 would be attracted to such a case. Moreover, even if the tenant were to deposit future l'ent it is always open to the landlord not to withdlraw tlie future rent but confine himself to taking out cinly the rent that is in arrears which will not at al! violate any provision of the Rent Act. For these reasons, therefore, with great respect to the Hon'ble Judges who decided the Vidya Praohar Trust's case (supra), w~ are unable to agree with the view taken by them that a deposit by the tenant under s. 3 I of the Indebtedness Act was not a valid tender and we are of the opinion that that case was not correctly decided and we, therefore, overrule the same. Learned counsel for the respondent submitted that the proviso to ~- 13(2) of the Rent Act contemplates that the rent with cost and interest must be deposited on the first hearing of the application for ejectment either by paying or tendering the same to the landlord on that date and neither before nor after that date. We are unable tD place such a restricted or unreasonable interpretation on the language of the proviso which runs thus : "Provided that if the tenant on the first hearing of the application for ejectment after due service pays or tenders the arrears of rent and interest at six per cent per annum on such arrears together with the. cost of application assessed by the ControI!er, the tenant shall be deemed to have duly paid or tendered the rent within the time aforesaid." Like all other Rent Control Acts in the· other States in the country, the Rent Act is a piece of social legislation which seeks to strike a just balance between the rights of the landlords and the requirements of the tenants. The Act p!'events the landlord from taking the extreme step of evicting the tenant merely on the ground of default in payment of rent if the landlord is guaranteed entire payment of the entire arrears of re.nt, cost and interest. Thus, the proviso affords a real and sanctified protection to the tenant which should not be nullified by giving a hypertechnical or . literal construction to the language of the proviso which instead of advancing the object of the Act may result in its frustration. The statutory provisions of the proviso which is meant to give · a special protection to the tenant, if properly and meaningfully H construed, lead to the inescapable conclusion that the rent togethea- with cost and interest, etc., should be paid on or before ·the date E· 488 SUPREME COURT REPORTS ll98ll 1 S.C.R. of the first hearing and once this is done, there would be a sufficient compliance "".ith the conditions mentioned in the proviso. It is not disputed in the instant case that the entire rent including even the future rent has been deposited with the Rent Controller before the date of the first hearing, that is to say on 8-8-67 and 7-11-67, whereas the first date of hearing was 8-12-67. The landlord-respondent himself admitted that he had received the interest and cost of Rs. 23 on the first date of hearing. Thus, all the necessairy conditions of the proviso to s. 13(2) of the Rent Act were fully complied with in the instant case and in that view of the matter there was no legal obstacle in dismissing the suit for ejectment. In a recent case Shea Narain v. Sher Singh (supra) this Court observed. as follows : "It is therefore, manifest that in the instant case a deposit of the' rent and th1~ arrears along with interest had actually been made before the first date of hearing to the knowledge of the Court and the Cou111; had acknowledged the fact of the deposit of the amount. Again, on the first date of hearing, i.e., May 11, 1967 the Rent Controlle[ informed counsel for the applicartt­ respondent that a sum of Rs. 179.48 had been deposited. It is, therefore, clear that the applicant-respondent was apprised clearly -of the fact that the amount in question had actually been deposit~d and was at his disposal and he could withdraw the·. same from the Court of the Rent Controller wheneve[ he liked. There is no magical formula or any prescribed manner in. which rent can be deposited by the tenant with the landlord. The rent can be deposited by placing the money in the hands of the landlord which would amount to actual tender; second mode of payment is to deposit the amount in the court where a case is pending in such a manner so as to make the amount available to the landlord without any hitch or hindrance whenever he wants it. Even the Act does not prescribe any particular mode of deposit. In fact, the use: of the words "tender or deposit" in the proviso clearly postulates that the rent can be given to the landlord in either of the two modes. It may be tendered to the landlord personally or to his authorised agent or it may be deposited in court which is dealing with the case of the landlord to his knowledge so that the landlmd may withdraw the deposit whenever he likes ......... In fact, if the tenant deposits the rent even before the first date of hearing it is a solid proof of his bona tides. in the matter and the legal position would be that if the rent is deposited before the -first date of hearing, it MANGAT RAI v. KIDARNATH (Fazal Ali, J.) 489 will be deemed to have been deposited on the date of the hearing A also because the deposit continues to remain in the court on that date and the position would be as if the tenant has deposited th.e rent in court fo11 payment to the landlord." · It was, however, urged by the respondent that in the case cited above, the rent was deposited after the suit fo11 ejectment was filed and not before the suit. hence the deposit was held to be valid. In our opinion, this argument is not tenable because once it is held that a deposit under s. 31 of the Indebtedness Act is a valid: tender having been deposited on or before the first date of hearing, the exact point of time when the deposit is made is wholly irrelevant and will not amount to non-compliance of the conditions of the proviso to s. 13(2) of the Rent Act. In the instant case, we have also found that the deposit of the arrears of rent had been made prior to the filing of the ejectment petition and the interest and cost were paid on the first date of hearing as admitted by the respondent. For these reasons, therefore, we hold that the . appellant-tenant having complied with the conditions of the proviso to s. 13(2) of the Rent Act, the High Court committed an error of law. in decreeing the plaintiff's suit for ejectment. The result is that the appeal is allowed, the order of the High Court is set aside and the suit of the plaintiffs for ejectment is dismissed. In the peculiar crrcumstances of this case and particulady having regard to the. fact that Vidya Prachar Trust's case (supra) held the field before this judgment Tendered by us, we would leave the parties to bear their own costs. Appeal allowed. S. R. 'E