# [1976] Supp. 1 S.C.R. 645

- **Citation:** [1976] Supp. 1 S.C.R. 645
- **Court:** Supreme Court of India
- **Decided:** 1976-05-07
- **Bench:** Y. V. Chandrachud, R. S. Sarkaria, A. C. Gupta
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1976-supp-1-s-c-r-645-7208
- **Pages:** 12

## Headnote

B
Madhya Pradesh Accommodation Control Act, 1961-S. 12(1y(a) and (f)
-Scope of-Death of tenant-Heritable interest in the premises-Legal repre~
sentatives-lf could clai1n statutory tenancy-If concept applicable in lndiaStatutory tenant-If could sub-let the premises.
Rent-Payrnent-1/ could be n1ade by cheque.
.Procedure-Lower appellate court overlooked 1naterial evidence-Finding,
if bad in law-High Court-If could reverse.
Section 12(1) of the Madhya Pradesh Accommodation Contrnl Act, 1961,
enacts that notwithstanding anything to the contrary contained in any other
law or contract no suit shall be filed in any civil court against a tenant for his
eviction from any accommodation except on one or more of the grounds giVen
in the section. The ground given in cl. (a) is that the tenant has neither paid
nor tendered the whole of the arrears of the rent legally recoverable from him
within two months of the date on which the notice had been served on him
by the landlord and the ground in cl. (f) is that the accommodation let for
non.residential purpose is required bona fide by the landlord for the purpose of
continuing or starting his business.
The appellants brought a suit under s. 12(1 )(a) and (f) of the Act for
ejectment of their tenants. The suit was dismissed by the trial court on the
ground (i) that since the dispute as to the amount of rent payable by the
tenants had not been determined during the pendency of the suit Under s. 13(2)
no order for eviction could be made; (ii) that there was no bona fide require·
ment of the premises by the appellants for their own business and (iii) that
the refusal by the appellant to accept the arrears of rent by cheque was valid
because tendering by cheque was not valid tender in the absence of an agree·
ment to that effect.
The first appellate court decreed the suit. During the pendency of the
second appeal in the High Court the tenants died. The High Court allowed
substitution of their legal representatives over·ruling the appellants' objection
that the deceased tenants were mere statutory tenants and that the right to
resist eiectment on the basis of the Rent Control Act was merely a personal
right which was not heritable.
On merits, the High Court held that (i) offer
of rent by cheque amounted to valid tender by the Jenant and (ii) the appel·
lants had failed to prove their case of bona fide requirement of the premises
for their own use.
Dismissing the appeal,
HELD : There is no force in the contention that the defendants who v.'ere
statutory tenants had no heritable interest in the demised premises- and on
their death the right to prosecute the appeal in the High Court had not
survived to their heirs and legal representatives. The preQecessors·in-interest
of the respondents had a heritable interest in the premises and consequently
the resPondents had the right to prosecute the appeal in the High Court. [655AJ
(I) (a) The concept of statutory tenancy under the E~glish Rent Acts and
under the Indian statutes rests on different foundations.
The term statutory
tenancy which is used for referring to a tenant whose tenancy has been tenninated and who would be liable to be evicted but for the protecting statute, is
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borro\Ved from the English Rent Acts.
Courts in England have held that a
statutory tenant h~ no esta.te or property in the premises" he occupies becalliie
he retains possession by virtue of the Rent Acts and not as being entitled
to a tenancy.
But in this country it is not possible to proceed on the basis
that a tenant whose contractual tenancy has determined but who is protected
a~ainst evicti~n ~Y the sta~ute, ~as no right ~f. property b,ut only a person •. 'll
right to remain m occupation \VIthout ascerta1n1ng wha·t his rights are under
the statute.
[654H: 653A-C]
Anand /ilivas (Private) Litnited v. Anandji Kalyanji Ped/ii & Ors. [1964] 4
SCR 892; Jagdish Chander Chatter{ee and Ors. v. Sri Kishan & Anr., [1973] 1

## Text

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DA.t\1ADILAL AND OTHERS
PARASHRAM AND OTHERS
May 7, 1976
645
A
[Y. V. CHANDRACHUD, R. S. SARKARIA AND A. C. GUPTA, JJ.]
B
Madhya Pradesh Accommodation Control Act, 1961-S. 12(1y(a) and (f)
-Scope of-Death of tenant-Heritable interest in the premises-Legal repre~
sentatives-lf could clai1n statutory tenancy-If concept applicable in lndiaStatutory tenant-If could sub-let the premises.
Rent-Payrnent-1/ could be n1ade by cheque.
.Procedure-Lower appellate court overlooked 1naterial evidence-Finding,
if bad in law-High Court-If could reverse.
Section 12(1) of the Madhya Pradesh Accommodation Contrnl Act, 1961,
enacts that notwithstanding anything to the contrary contained in any other
law or contract no suit shall be filed in any civil court against a tenant for his
eviction from any accommodation except on one or more of the grounds giVen
in the section. The ground given in cl. (a) is that the tenant has neither paid
nor tendered the whole of the arrears of the rent legally recoverable from him
within two months of the date on which the notice had been served on him
by the landlord and the ground in cl. (f) is that the accommodation let for
non.residential purpose is required bona fide by the landlord for the purpose of
continuing or starting his business.
The appellants brought a suit under s. 12(1 )(a) and (f) of the Act for
ejectment of their tenants. The suit was dismissed by the trial court on the
ground (i) that since the dispute as to the amount of rent payable by the
tenants had not been determined during the pendency of the suit Under s. 13(2)
no order for eviction could be made; (ii) that there was no bona fide require·
ment of the premises by the appellants for their own business and (iii) that
the refusal by the appellant to accept the arrears of rent by cheque was valid
because tendering by cheque was not valid tender in the absence of an agree·
ment to that effect.
The first appellate court decreed the suit. During the pendency of the
second appeal in the High Court the tenants died. The High Court allowed
substitution of their legal representatives over·ruling the appellants' objection
that the deceased tenants were mere statutory tenants and that the right to
resist eiectment on the basis of the Rent Control Act was merely a personal
right which was not heritable.
On merits, the High Court held that (i) offer
of rent by cheque amounted to valid tender by the Jenant and (ii) the appel·
lants had failed to prove their case of bona fide requirement of the premises
for their own use.
Dismissing the appeal,
HELD : There is no force in the contention that the defendants who v.'ere
statutory tenants had no heritable interest in the demised premises- and on
their death the right to prosecute the appeal in the High Court had not
survived to their heirs and legal representatives. The preQecessors·in-interest
of the respondents had a heritable interest in the premises and consequently
the resPondents had the right to prosecute the appeal in the High Court. [655AJ
(I) (a) The concept of statutory tenancy under the E~glish Rent Acts and
under the Indian statutes rests on different foundations.
The term statutory
tenancy which is used for referring to a tenant whose tenancy has been tenninated and who would be liable to be evicted but for the protecting statute, is
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borro\Ved from the English Rent Acts.
Courts in England have held that a
statutory tenant h~ no esta.te or property in the premises" he occupies becalliie
he retains possession by virtue of the Rent Acts and not as being entitled
to a tenancy.
But in this country it is not possible to proceed on the basis
that a tenant whose contractual tenancy has determined but who is protected
a~ainst evicti~n ~Y the sta~ute, ~as no right ~f. property b,ut only a person •. 'll
right to remain m occupation \VIthout ascerta1n1ng wha·t his rights are under
the statute.
[654H: 653A-C]
Anand /ilivas (Private) Litnited v. Anandji Kalyanji Ped/ii & Ors. [1964] 4
SCR 892; Jagdish Chander Chatter{ee and Ors. v. Sri Kishan & Anr., [1973] 1
S.C.R. 850; Roe v. Russel. f!928l 2 K.B. 117: Haskins v. Lewis [1931] 2 K.B_
1(9); Keeves v. Dean [1923] (93) L.J.K.B. 203 (207) and Boyer v. Warbe~·
[1953] 2 Q.B. 234, referred to.
(b) Tenancy has its origin in contract. A contractual tenant had an
estate or property in the subje_ct tnatter of the tenancy and heritability is an
incident of tenancy.
It cannot be assumed that with the determination of the
tenancy, the estate must necessarily disappear and the statute can only preserve
his status of irremovability and not the estate he had in the premises in his.
occupation.
[653D]
{c) The definition of a tenant contained in s. 2(i) makes a person continu·
ing in possession of a premises after the determination of his tenancy a tenant,
unless a decree or order for eviction had been made. against him, thus, putting
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him on par with a person whose contractual tenancy still subsists.
[653G]
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(d) Section 14 which deals v.ith restrictions on sub-letting read with the
~lefinition contained in s. 2(i) makes it clear that the so-called_ statutory tenant
has the right to sub-let in commo!ll with contractual tenant and this is because
he also has an interest in the prerrtises occupied by him.
(654D]
(2)(a) The High Court rightly held that the cheques sent to the appellants
amounted to valid tender of rent. It is well-established that a cheque sent
in payment of a debt on the request of the creditor, unless dishonoured.
operates as a valid discharge of the debt a,nd if the cheque was sent by post
and \Vas met on presentaiion, the date of payment is the date when the cheque
was posted.
[655B-Dl
(b) Rent is payable in the sa1ne manner as any other debt and the debtor
has to pay his creditor in cash or other legal tender, but there can be no
dispute that the mode of payrrtent can be altered by agreement. In the
contemporary society it is reasonable to suppose payment by cheque as implied
unless the circumstances of a case indicate otherwise.
[655C]
( 3) The High Court was within its jurisdiction in setting flSide the finding
of the lower appellate court and restoring that of the trial court on the
question of bona fide requirement of the premises by the appeilants.
The
lower appellate cou_rt overlooked a very material part of the evide!).ce bearing
on the question. It is well-established that if a finding of fact is arrived at
ignoring important and relevant evidence the finding is bad in law.
[6518-C]
Radha Nath Seal v. Haripada Jana & Ors. AIR 1971 S.C. 1049, followed.
.Madan Lal Puri v. Sain Das Berry AIR 1973 S.C. 585; Mattulal v. Rad!iey
Lal AIR 1974 S.C. 1596; and Sarvate T. B. v. Nemi Chand 1966 M.P.L.J. 26,
referred to .
CIVIL APPELLATE JURISDICTION; Civil Appeal 88511968.
(From the judgment and order dated 6-11-1967 of the Madhya
Pradesh High Court in Second Appeal No. 913 of 1965).
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DAMADILAL v. PARASHRAM (Gupta, J.)
647
S. V. Gupte, R. P. Pandey and S. S. Khanduja, for the appellants.
F. S. Nariman, J. B. Dadachanji, P. C. Bhartari, K. L. John for
tile respondents.
The Judgment of the Court was delivered by
GUPTA, J. Damadi Lal, Sheo Prasad and Tirath Prasad who were
members of a Hindu Joint Family brought a suit for ejectment on July
31, 1962 against their tenants Begamal and Budharmal on the
grounds mentioned in clauses (a) and (f) of section 12(1) of the
Madhya Pradesh Accommodation Control Act, 1961. The relevant
.provisions are in these terms :
"Sec. 12. Restriction on eviction of tenants.-( 1) Notwithstanding anything to the contrary contained in any other
law or contract, no suit shall be tiled in any Civil Court
against a tenant for his eviction from any accommodation
except on one or more of the following grounds only,
namely-
( a) That the tenant has neither paid nor tendered the
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whole of the arrears of the rent legally recoverable from him
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within two months of the date on which a notice of demand
for the arrears of rent has been served on him by the landlord in the prescribed manner;
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(f) tl1at the accommodation Jet for non-residei1tial purposes is required bona fide by the landlord for the purpose
of continuing or starting his business or that of any of his
major sons or unmarried daughters if he is the owner thereof or for any person for whose benefit the accommodation is
held and that the landlord or such person has no other
reasonably suitable non-residential accommodation of his
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own in his occupation in the city or town concerned."
Plaintiffs' case under section 12 ( 1) (a) was that the defendant tenants
had defaulted in paying rent for ·the period October 1, 1961 to May
31, 1962 and did not also pay or tender the amount in arrears withi•
two months of the service of the notice of demand.
Clause (f) of
section 12(1) was invoked on the allegation that the accommodation
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let was required bona fide by the plaintiffs for the purpose of starting
their own business. Before the suit was instituted the plaintiffs had
determined the tenancy from May 31, 1962 by a notice dated May 7,
1962. The house in dispute which is in Bazar Chowk in District Satna
was Jet out to the defendants at a monthly rent of Rs. 2751- for the
purpose of their business.
The plaintiffs reside in village Nadan,
Tahsil Maihar, where they carry on their business.
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The trial court by its judgment and decree dakd November 11.
1964 dismissed the snit for eviction. There was some disoute hetween
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the parties as to the rate of rent; ultimately the plaintiffs admitted that
the rent was fixed at Rs. 1751- per month with effect from August 1,
1961 by the Rent Control Authority and a sum of Rs. 1200/-, which
was the amount in arrears, had been tendered to the plaintiffs by
cheque on May 26, 1962 which the plaintiffs refused to accept. The
trial court was of opinion that the refusal was valid because "tendering
by cheque is no valid tender" unless there was an agreement that payment by cheque would be acceptable and that the defendants were
therefore defaulters within the meaning of section 12(1)(a). However, in view of the dispute as to the amonnt of rent payable by the
tenants, which was not determined during the pendency of the suit as
required by section 13 ( 2), the trial court held that no order for eviction under section 12(1)(a) could be made in this case and passed'"a
decree for Rs. 1200 1-- in favour of the plaintiffs.
On the question of the plaintiffs' requirement of the premises for
their own business, the trial court found itself unable to accept the
evidence adduced on behalf of the plaintiffs. Of the _witnesses
examined by the plaintiffs on the point, the evidence of P.Ws. 1, 3 and
4 was not relied on because none of them was considered to be an
independent witness and, further, becansc it was apparent from their
evidence that what they said was what they were tutored to say by the
plaintiffs.
The other three witnesses were plaintiffs Damadi Lal and
Tirath Prasad (P.W. 2 and P.W. 6 respectively) and Radhcy Sham
(P.W. 5), a son of plaintiff She6 Prasad. They were also disbelieved
because of the following reasons. Damadi Lal tried to give the impression that plaintiffs had no business except the cloth business and the
grocery shop at Nadan. He tried to conceal that they had a moneylending business and also agricultural lands. Tirath Prasad stated that
the main source of income of the family was from the moneylending
business. Tirath Prasad also disclosed t!J.at the ,plaintiffs had already
a partnership business in cloth at Satna though Damadi Lal and P.W. 5
Radhcy Sham did not admit this. It also appears in evidence that the
;plaintiffs had yet another· cloth business at a place called Ramnagar
which was managed by Radhey Sham.
The plaintiffs claimed that
they would start a business at Satna, but Damadi Lal's evidence is that
they had no income or saving. Tirath Prasad also said that their income was not even sufficient for their maintenance.
Admittedly,
plaintiffs had in their possession one room in the house which was let
out to the defendants. The plaintiffs did not adduce any evidence to
show how the said accommodation was unsuitable or insufficient for
them to start their own business. It was also admitted that the plaintiffs had filed a suit for ejectment on an earlier occasion, but the defendants having agreed to pay increased rent the suit was not proceeded
with.
According to the defendants the present suit was instituted on
the defendants' refusal to increase the rent further to Rs. 500/- a
month.
For the above reasons the trial court did not accept the case of
bona fide requirement holdnig that P.W. 2, P.W. 5 and·P.W. 6 were in
the habit of suppressing the truth to snit their own purpose.
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DAMADILAL v. PARASHRAM (Gupta, J.)
649
On appeal by the plaintiffs, the first appellate court reversed the
decision of the trial court and decreed the suit. The appellate court
agreed with the trial court that sending a cheque did not amount t? a
valid tender of rent and, as the tenants did not apply under section
13(2), they were not entitled to protection against eviction on the
ground of default As regards the plaintiffs' case of requirement, the
court found, that the criticism of the plaintiffs' witnesses was net justified.
The appellate court thought that the fact that Tirath Prasad was
carrying on a cloth business at Satna which Damadi Lal had kept back
froin court was irrelevant in view of the plaintiffs' claim that some
members of the family wanted to start a new business at Satna.
According to the appellate court the further fact that P.W. 5 Radhcy
Sham was running a cloth business at Ramnagar was indicative of the
growing need of the plaintiffs' family.
The room
in the plaintiffs'
possession in the disputed house was not found suitable or sufficient
for a wholesale business that the plaintiffs intended to start.
Referring to the trial court's finding that the plaintiffs had no money to start
a new business at Satna, the court found that the
eviden~e did not
support this. The appellate court therefore held that the plaintiffs required the premises for their own business.
Dissatisfied with this decision, the defendants preferred a second
!appeal to t11e High Court. During the pendency of the second appeal
in High Court both the defendants died. Budharmal died on or about
January 27, 1966 and his legal representatives were brought on record
and substituted iu his place without objection.
Begamal died on
March 2, 1967 and his heirs applied for being brought on record in his
place as appellants. The plaintiffs made an application praying for an
order that the appeal had abated as a consequence of the death of both
the defendants. In this application the plaintiffs contended that
Budharmal and Begamal were "merely statutory tenants and their right
to resist ejeetment on the basis of Madhya Pradesh Accommodation
Control Act was merely a personal right" which was not heritable and
had "not devolved upon their heirs". By its order dated July 26, 1967
the High Court allowed the application for substitution made by
Begamal's heirs overruling the plaintiffs' objection.
Ultimately on November 6, 1967 the High Court allowed
the
appeal setting aside the decree of the lower appellate court and restoring that of the trial court dismissing the suit.-
The High Court found
that the defendants were not in arrears of rent. Differing from both
the courts below the High Court held that the cheque which the defen-
{lants had sent to the plaintiffs in payment of the amount in arrears
within a month of the service of the writ of summons on him amounted
to a valid tender of rent as required by section 13, and in view of section 12(3) no order for eviction could be made.
Section 12(3) provides that no order for eviction of a tenant shall be made on the
ground of default if the tenant makes payment or deposits rent as required by section 13. This. is what the High Court held on the validity
of tender of rent by cheque :
"The question is as to whether, instead of presenting the
cash, if a cheque is sent to the landlord, that is sufficient tender of the arrears of rent or not ...... In the highly deveA
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loped society, payment by cheque has bec_ome more convenient mode of discharging one's obligation. If a cheque
is an instrument which represents and produces cash and
is treated as such by businessmen, there is no reason .why
.the archaic principle of the common law should be followed
in deciding the question as to whether the handing . over of
the cheque is not a sufficient tender of the arrears of rent if
.the chequ~ is drawn for that amount. It is no doubt true
that the issuance of the cheque does not operate as a discharge of the obligation unless it is encashed,
and
it is
tre~ted as a conditional payment, yet, in my view, this
is
a sufficient tender of the arrears if the cheque is not dishonoured.
In the present day society, I am of the view.
an implied agreement should be inferred that if the payment
is made by a cheque, that mode of payment would be accepted."
On the ground of bona fide requirement, the High Court found that
there was no evidence to show that the plaintiffs had sufficient funds
to start the wholesale business for which they sought to get possession of the disputed premises.
This is a point which has· a bearing
on •he genuineness of the plaintiffs' claim.
The High rourt took
note of the fact that the plaintiffs made an attempt to keep
back
from the Court that they were carrying on business at two more
places. one at Satna, and another at Ramnagar.
In this connection
the High Court also referred to the defendants' case that the plaintiffs
sought to increase the rent from Rs. 275/- to Rs. 500/- a month and
that when the defendants had the rent reduced by the Rent Controller
to Rs. I 75/- per month, the present suit was filed.
The High Court
fouud that these circumstances which the trial court took into consideration were ignored by the lower appellate court.
The High
Court accordingly held that the plairitiffs had failed to prove their
case of bona fide requirement, set aside the decree of the appellate·
court, and restored that of the trial court dismissing the suit.
Before us, Mr. Gupte for the plaintiff-appellants raised three conttntio1JS : (I) Begamal and Budharmal both of whom were statutory
tenants had no
heritable interest in the demised premises and, on
their death, the right to prosecute the appeal in the High Court did
not survive to their heirs and legal representatives; (2) payment by
cheque was not a valid tender of rent and accordingly the suit should
have been decreed on the ground of default; and (3) the High Court
had no jurisdiction in second appeal to reverse the finding of
the
first appellate court on the question of reasonable requirement which
was a finding of fact.
In support of his first contention Mr. Gupte relied on two decisions
of this Court, Anand Nivas (Private) Ltd. v. Anandji Kalyanii Pedhi
& Ors.(') and Jagdish Chander Chatterjee and Ors: v. Sri Kishan &
A nr. (')
The statute considered in Anand Nivas' case was Bombay
(l) [l964]4S.C.R.892.
(2) [1973] IS. C.R. 850.
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DAMADILAL v . . PARASHRAM (Gupta, J.)
651
Rems, U
.. <otel and Lod·g. i11_g Rates Con. trol Ac.t,. 1947 as amended
in
195\i. The question there was, whether a tenant whose tena9cy had
been terminated had any right to mblet the premises.
Of the three
learned Judges composing the Bench that heard the appeal, Hidayatullah .and Shah JJ .. held that a statutory tenant, meaning a tenant
whose tenancy has determined but who continues in possession, has
no power of subletting.
Sarkar J .. delivered a dissenting opinion. Shah
J. who spoke for himself and Hidayatullah J. observed in the course
of their Judgment :
"A statutory tenant has no interest in the premises occupied· by him, and he has no estate to assign or transfer.
A statutory tenant is, as we have already observed, a person
who on determination of his contractual right, is permitted
to remain in occupation so long as he observes and performs
th.e conditions of the tenancy and pays the standard rent
and permitted increases.
His personal right of occupation
is incapable of being transferred or assigned, and he having
no interest in the property there is no estate on which subletting may operate."
It appears from the Judgment of Shah J. that "the Bombay Act merely grants conditional protection to a statutory tenant and dues not invest him with the right to enforce the benefit of any of the terms
and conditions the original tenancy".
Sarkar J. dissenting heid that
word 'tenant' as defined in the Act included both a contractual tenant-,
a tenant whose lease is subsisting as also a statutory tenant, and the
latter has the same power to sublet as the former.
According
to
Sarkar J. even if a statutory tenant had no estate or property in the
demised premises, the Act had undoubtedly created a right in such a
tenant in respect of the property which he could transfer.
Jagdish
Chander Chatterjee's case dealt with the Rajasthan Premises (Control
of Rent and Eyiction) Act, 1950, and the question for decision was
whether on the death of a statutory tenant his heirs succeed to the
tenancy so as to claim protection of the Act.
In this case it was held
by Grover and Palekar JJ., relying on Anand Nivas' cas~, that after
the termination of contractual tenancy, a statutory tenant enjoys only
a personal right to continue in possession and on his death his heirs
do not 'inherit any estate or interest in the original tenancy.
Both these cases, Anand Nivas and Jagdish Chander Chatterjee,
procee<! on the basis that a tenant whose tenancy has been terminated,
described as statutory tenant, has no estate or interest in the premises
but only a personal right to remain in occupation. It would seem
as if there is a distinct category of tenants called statutory tenants
having separate and fixed incidents of tenancy.
The term 'statutory
tenancy' is borrowed from the English Rent Acts.
This may be a
convenient expression for referring to a tenant whose tenancy has been
terminated and who would be liable to be evicted but for the protecting statute, but courts in this country have sometimes borrowed along
with the expression certain notions regarding such tenancy from the
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decisions of the English courts. In our opinion it ha_s. to be ascertained how far these notions are reconcilable with the provisions of the
statute under consideration in any particular case.
The expression
'statutory tenancy' was used in England in several judgments under
the Increase of Rent and Mortgage Interest (War Restrictions) Act,
1915, to refer to a tenant protected under that Act, but the term. got
currency from the marginal note to section 15 of the Rent and Mortgage Interest (Restrictions) Act, 1920. That section which provided
inter alia that a tenant who by virtue of that Act retained possession
of any dwelling house to which the Act applied, so Jong as he retained
possession, must observe and would be entitled to the ~enefit of all
the terms and conditions of the original contract of tenancy which were
consistent with the provisions of the Act, carried the .description in the
margin "conditions of statutory tenancy".
Since then the term has
been used in England to describe a tenant protected under the subsequent statutes until section 49(1) of the Housing Repairs and Rent
Act, 1954 for the first time define 'statutory tenant' and 'statutory
tenancy'.
'Statutory tenant' was defined as a tenant "who retains possession by virtue of the Rent Acts and not as being entitled to a tenancy, and it was added. " 'statutory tenancy' shall be construed accordingly".
This definition of 'statutory tenancy' has been incorporated in the Rent Acts of 1957 and 1965. In England "statutory tenancy" does not appear to have had any clear and fixed incidents; the
concept was developed over the years from the provisions of the successive Rent Restrictions Acts which did not contain a clear indication
as to the character of sm;h tenancy.
That a statutory tenant is entitled to the benefit of the terms and conditions of the original contract
of tenancy so far as they were consistent with the provisions of the
statute did not, as Scrutton L. J. observed in Roe v. Ru«<ell,C) "help
very much when one came to the practical facts of life". according to
him "citizens are entitled to complain that their legislators did not
address their minds to the probable events that might happen in cases
of statutory tenancy, and consider how the legal interest they were
granting was affected by those probable events".
He added, " .... it
is pretty evident that the Legislature never coμsidered as a whole the
effect on the statutory tenancy of such ordinary incidents as death,
bankruptcy, voluntary assignment, either inter vivos or by will, a total
or partial subletting; but from time to time put into one of the series
of Acts a.provision as to one of the incidents without considering how
it fitted in with the general nature of the tenancy which those incidents
might affect". On the provisions which gave no clear and comprehensive idea of the nature of a statutory tenancy, the courts in England
had been slowly "trying to frame a consistent theory"".(') "making
bricks with very insufficient statutory straw".(3 )
Evershed M. R. in
Boyer v. Warbey(4) said : "The character of the statutory tenancy, I
(I) f]928]2K.B.117.
(2) Scrutton L. J. in Has!cinsv. Lewis[I93I] 2 K.B. I (9)
(3) Scrutton L.J. in Keeves v. Dean [1923] (93) L.J.K.B. 203 (207).
(4) [1953]2 Q.B. 234.
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DAMADILAL v. PARASHRAM (Gupta, !.)
653
have already said, is a very special one.
It has earn~ many epithets,
including •·monstrum horrendum", and perhaps it has never been
fully thought out by Parliament". Courts in England have held that a
statutory tenant has no estate or property in the premises he occupies
because he retains possession by virtue of the Rent Acts and not as
being entitled to a tenancy; it has been said that he has only a personal
right to remain in occupation, the statutory right of "irremovability",
and nothing more.
We find it difficult to appreciate how in this country we can proceed on the basis that a tenant whose contractual tenancy has determined but who is protected against eviction by the statute, has no right
of property but only a personal right to remain in occupation, without
ascertaining what his rights are under the statute.
The concept of a
statutory tenanr having no estate or property in the premises which he
occupies is derived from the provisions of the English Rent Acts. But
it is not clear how it can be assumed that the position is the same in
this country without any reference to the provisions of the relevant
statute.
Tenancy has its origin in contract. There is no dispute that
a contractual tenant has an estate or property in the subject matter
of the tenancy, and heritability is an incident of the tenancy.
It cannot be assnmed, however, that with the determination of the tenancy
the estate must necessarily disappear and the statute can only preserve
his status of irremovability and not the estate he had in the premises in
his occupation.
It is not possible to claim that the "sanctity"
of
contract cannot be touched by legislation.
It is therefore necessary
to examine the provisions of the Madhya Pradesh Accommodation
Control Act, 1961 to find out whether the respondents' predecessorsin-interest retained a heritable interest in the disputed premises even
after the termination of their tenancy.
Section 2(i) of the Madhya Pradesh Accommodation Control Act,
l961 defines 'tenant' to mean, unless the context otherwise requires :
"a person by whom or on whose account or behalf the
rent of any accommodation is, or, but for a contract express
or implied, would be payable for any accommodation and
includes any person occupying the accommodation as a subtenant and also any person continuing in possession· after the
termination of his tenancy whether before or after the commencement of this Act; bnt shall not include any person
against whom any order or decree for eviction has been
made".
The definition makes a person continuing in possession after
the
determination of his tenancy a tenant unless a decree or order for
eviction has been made against him, thus putting him on par with a
person whose contractual tenancy still subsists.
The incidents of such
tenancy and a contractual tenancy must therefore be the same unless
any provision of the Act conveyed a contrary intention. That nuder
this Act such a tenant retains an interest in the premises, and not
merely a personal right of occupation, will also appear from section
14 which contains provisions restricting the tenant's power of subletting.
Section 14 is in these terms :
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"Sec. 14 Restrictions on sub-letting.-(!) No tenant shall;
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without the previous consent in writing of the landlord-
( a) sublet the whole or any part of the accommodation
held \JY him as a tenant; or
{b) transfer or assign his rights in the tenancy or in any
part thereof.
(2) No landlord shall claim or receive the payment ot
any sum as premium or pugree or claim or receive any con··
sideration whatsoever in cash or in kind for giving hjs con·
sent to the sub-letting of the whole or any part of th·e 2:com·
modation held by the tenant.'"
There is nothing to suggest that this section does not apply to all tenants as defined in section 2(i). A contractual tenant has an estate
01 interest in premises from which he carves out what he gives to the
sub-tenant.
Section 14 read with section 2(i) makes it clear that
the so-called statutory tenant has the right to sub-let in common with a
contractual tenant and this is because he also has an interest in the
premises occupied by him.
Considering the position of the sub-tenant
of a statutory tenant in England, Lord De_nning said in Solomon v.
Orwell.(')
"When a statutory tenant sub-lets a part of the premises
he does not thereby confer any estate or interest in the sub-tenant.
A
statutory tenant has no estate or interest in himself and he cannot
carve something out of nothing.
The sub-tenant, like the statutory
tenant, has only a personal right or privilege." In Englanc!
the
statutory tenant's right to sub-let is derived from specific provisions
of the Acts conceding this right to him; in the Act we are concerned
with in this appeal, the right flows from his status as a tenant. This
is the basic difference between the English Rent Restrictions Acts and
the Act under consideration and similar other Indian statutes.
In a
Special Bench decision of the Calcutta High Court, Krishna Prasad
Bose v. Sm. Saraiubala Dasi,( 2 ) Bachawat J. considering the question
whether a statutory tenant continuing in occupation by virtue of the
West Bengal Premises Rent Control (Temporary Provisions)' Act,
1950 could sub-let the premises let to him, said :
"The Rent Control and Tenancy Acts create a special
world of their own.
They speak of life after death.
The
statutory tenancy arises phoenix-like out of the ashes of the
contractual tenancy.
The contractl\lll tenant may die hut
the statutory tenant may live lone thereafter.
The statutorv
tenant is an ex-tenant and yet h~ is a tenant."
·
The concept of statutory tenancy under the English Rent Acts and
under the Indian statutes like the one we arc concerned with in this
appeal rests on different foundations. It n;ust therefore be held that
(1) [1954] l All l".R. 874.
(2) 65 Cal. W.N. 293 (297-298).
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DAMADILAL v. PARASHRAM (Gupta, J.)
655
the predecessors-in-interest of the present respondents had a heritable
A
interest in the premises and consequently the respondents had the
right to prosecute the appeal in the High Court.
Mr. Gupte's first
submission thus fails.
On the grouod of default, it is not disputed that the defendants
tendered the amount in arrears by cheque within the prescribed time.
The question is whether this was a lawful tender. It is well-established
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that a cheque sent in payment of a debt on the request of th" creditor,
unless dishonoured, operates as valid discharge of the debt and, if the
cheque was sent by post and was met on presentation, the date of payment is the date when the cheque was posted.
The question however still remains whether in the absence of an agreement between the
parties, the tender of rent by cheque amounts to a valid discharge of
the obligation.
Earlier, we have extracted a passage from the High
C
Court's Judgment on this aspect of the case.
We agree with the view
taken by tha High Court on the point.
Rent is payable iii the same
manner as any other debt and the debtor has to pay his creditor in
cash or other legal tender, but there can be no dispute that the mode
of payment can be altered by agreement.
In the contemporary society
it is reasonable to suppose such agreement as implied unless
the
circumstances of a case indicate otherwise.
In the circumstance of this
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case, the High Court, in our opinion, rightly held that the cheque sent
to the plaintiffs amounted to valid tender of rent.
The second contention urged on behalf of the appellants must also be rejected.
Mr. Gupte's last contention relates to the plaintiffs' bona tldc requirement of the premises.
The trial court found
on the evidence
that the plaintiffs' claim was unjustifi.ed.
The first court of appeal
reversed that finding and held that the plaintiffs' requirement was bona
fide.
The High Court in second appeal agreed wi\IJ.. the trial court
in holding that the landlord had no bona fide requirement.
Mr. Gupte
contended that the High Court had no jurisdiction in second appeal
to upset the finding of the lower appellate court on this issue which,
according to him, was a finding of fact.
Mr. Nariman for the respondent relied on the decision of this Court in Madan Lal Puri v.
Sain Das Berry(') to argue that the question was a mixed question
of law and fact and that it was within the jurisdiction of the High
Court in second appeal to examine the correctness of the finding. In
answer Mr. Gupte referred to another decision of this Court Mattu/al
v. Radhey Lal(') which, relying on an earlier decision of this Court
in Sarvate T. B. v. Nemi Chand, (3) held that such a finding was one
of fact and not a finding on a mixed question of law and fact.
We
do not think that for the purpose of this case we need express any
opinion on the apparent conflict between these two decisions.
Plaintiffs' case was that they had cloth and grocery business at village Nadan
and that they desired to start a wholesale cloth and grocery business
at Satna. The trial court's finding was based inter alia on the evidenoe
(I) AIR !973S.C.R.585.
(2) A.LR. 1974 S.C.1596.
(3) 19661\1.P.L.l. 26.
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that the plaintiffs had not adequate funds to start a new wholesale
business.
The lower appellate court reversed the finding of the trial
court on the ground that there was no evidence that the plaintiff had
no money to start a new business; the lower appellate court's finding
rests maillly on this consideration.
The High Court pointed out that
plaintiff Damadidas alias Damadi Lal (P. W. 2) stated in his evidence
that their income from the business at Nadan was sufficient "only
for meeting the expenses of livelihood";
plaintiff
Tirath
Prasad
(P.W. 6) also admitted that "our present income is not sufficient even
for our maintenance because there are many members in the family".
It thus appears that the lower appellate court overlooked a very material part of the evidence bearing on the question. It is well established that if a finding of fact is arrived at ignoring important and relevant evidence, the finding is bad in law.
(see Radha Nath Seal v.
Haripada Jana & Ors.(1).
We therefore think that the High Court
was within its jurisdiction in setting aside the finding of the lower
appellate court and restoring that of the trial court on this poinL
In the result the appeal fails and is dismissed but in the circumstances of the case we make no order as to costs.
P.B.R.
Appeal dismissed.
(1) A.LR. 1971 S.C. 1049.
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