TMI Blog1999 (8) TMI 974X X X X Extracts X X X X X X X X Extracts X X X X ..... n receiving the notice on January 18, 1988, he paid rent for the entire period to the Tax Recovery Officer. On the ground that the appellant had committed wilful default in payment of rent for the periods : (A) March 6, 1979 to February 24, 1988 and (B) February 24, 1988 to February 15, 1990 and on the ground that he required the premises for his own use and occupation, the said Shahul Hameed (landlord) filed R.C.O.P.No.2 of 1990 for eviction of the appellant (tenant) before the Rent Controller (District Munsiff Court) Valliyur under Sections 10(2)(i) and 10(3)(a)(iii) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 (for short 'the Act') on August 17, 1990. The appellant contested the petition denying the pleas of wilful default in payment of rent as well as of personal requirement of the landlord. The learned Rent Controller dismissed that petition on April 30, 1991. Aggrieved thereby, the respondents filed R.C.A.No.43 of 1991 before the Appellate Authority, Tirunelveli. In appeal, it was held that the ground of bona fide requirement of the respondents- landlords was not proved; however, the ground of wilful default in payment of rent was found against th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him of the consequences of the wilful default in payment of the rent. He has submitted that the High Court considered the application of the proviso and found that great prejudice would be caused to the landlord if their petition was dismissed. On the above contentions, the following points arise for determination : (i) What is the effect of the prohibitory order dated March 6, 1979 and notice dated January 18, 1988 issued under Section 226(3) of the Income Tax Act by the Tax Recovery Officer? (ii) Whether non-payment of rent by the appellant to the landlord after service of the said order/notice of Tax Recovery Officer on him, amounts to wilful default within the meaning of the proviso to Section 10(2)(i) of the Act? (iii) Whether the High Court is correct in law in allowing CMP No.13064 of 1996 filed by the respondents and in ordering the eviction of the appellant under Section 10(3)(c) of the Act? Points (i) and (ii) may be conveniently considered together. To appreciate the question of wilful default in payment of rent, Section 10(2)(i) and the proviso thereto may be noticed here : 10(2)(i). A landlord who seeks to evict his tenant shall apply to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;wilful default' and the tenant will be liable to be evicted on that ground. The wilful default in payment of rent, complained of against the appellant, comprises of the following periods : (A) from March 6, 1979 to February 24, 1988; (B) from February 25, 1988 to February 15, 1990; and (C) February 16, 1990 to February 28, 1991. The appellant, admittedly, did not pay the rent to the landlord after service of prohibitory order issued by the Tax Recovery Officer, Income Tax Department on March 6, 1979 (Ex.B-2). That order appears to have been issued under Section 222(1)(a) read with Rule 26(1)(a) of Second Schedule of the Income Tax Act. Those provisions may be quoted here for ready reference : 222(1)(a). Certificate to Tax Recovery Officer -- (1) When an assessee is in default or is deemed to be in default in making a payment of tax, the Tax Recovery Officer may draw up under his signature a statement in the prescribed form specifying the amount of arrears due from the assessee (such statement being hereafter in this Chapter and in the Second Schedule referred to as certificate ) and shall proceed to recover from such assessee the amount specified in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ire Cycle Shop, Eravadi. And that you the said T.M.Germans Fernandes, Hire Cycle Shop, Eravadi be and you are hereby prohibited and restrained, until the further orders of the undersigned, from making payment of the said debt or any part thereof, to any person whomsoever or otherwise than to the undersigned. There appears to be some obvious mistake in the penultimate para. Be that as it may, the purport of the prohibitory order is that the predecessor-in-interest of the respondents (landlord) was prohibited from receiving and the appellant (tenant) was prohibited and restrained from making payment of 'a certain debt alleged now to be due' or any part thereof to any person other than to the Tax Recovery Officer. Mr.B. Kumar has contended that the order is confined to a certain debt alleged now to be due from the appellant and that he was prohibited and restrained from making payment of the said debt or any part thereof to any person other than the Tax Recovery Officer; as on 6th March, 1979, if any rent was due by the appellant to the respondents the said order operated only in respect of that amount and that it did not cover future rent as and when it became ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may also be on account of supine indifference or callous or recalcitrant conduct. But if the default has occasioned on account of ignorance, accident or compulsion or circumstances beyond the control of the tenant, it cannot be termed as 'wilful default'. This has to be determined as a question of fact on the facts and in the circumstances of each case. In this case it is true that there is no direction in Ex.B-2 to the appellant not to pay future rent to the landlord from that date. But the tenant believed that, by virtue of the prohibitory order of the Tax Recovery Officer, he was directed not to pay the rent to the landlord who was also injuncted from receiving the rent until further orders of that authority. If there are reasonable grounds for his belief that he was prohibited and restrained from paying rent under Ex.B-2, and so the default has occurred due to statutory compulsion it cannot be said that he has committed wilful default in payment of rent. But if such an assumption is without any basis it would not relieve him of the consequences of wilful default. Now, we shall examine this facet. In his deposition as R.W.1 the appellant states : I received a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see in default in respect of the amount specified on the notice and further proceedings may be taken against you for the realisation of the amount as if it were an arrears of tax due from you in the manner provided in Sections 222 to 225 of the Income-tax Act, 1961, and this notice shall have the same effect as an attachment of a debt by the Tax Recovery Officer in exercise of his powers under Section 222 of the said Act. The necessary challans for depositing the money to the credit of the Central Government may be obtained from me. A copy is this notice is being sent to Sri. S.A. Shahul Hameed, 87, 7th street, Eravadi (tax payer). Sd/- Ist Income-tax officer, Tirunelveli. From a perusal of Ex.B-3, it is evident that the appellant was required to pay to the Tax Recovery Officer the amount due (rent) to the landlord and, accordingly, he paid the rent due for the period (A) commencing from Ex.B-2 to B-3 - 107 months. Section 226(3) of the Income Tax Act is identical to Order 21 Rule 46, C.P.C. This Court in V.N.Vasudeva vs. Kiroi Mal Luhariwala [AIR 1965 SC 440], while considering effect of notice under Section 46(5A) of the Income-tax Act, 1922 which is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondents (the assessee in default) the respondents' right to claim or receive the rents from the appellant stood suspended till the arrears of income tax specified therein was paid by them. As on the date of filing eviction petition also they did not satisfy the demand of the Tax Recovery Officer. So, they cannot proceed against the appellant for irregular payment/non-payment of rent to the Tax Recovery Officer for his eviction from the suit premises albeit by his conduct he has made himself liable under the provisions of the Income Tax Act. Mr.B. Kumar next contended that the provisions of the Income-tax Act had no overriding effect over the provisions of the Rent Control Act and payment of rent to the Income-tax Officer pursuant to Ex.B-2 and Ex.B-3 would not relieve the appellant of his obligation to pay the rent to the landlord. He relied upon a judgment of Calcutta high Court in Dhunseri Tea Industries Ltd. Vs. The Hanuman Estates Private Ltd. [AIR 1976 Calcutta 328]. We are unable to accept the contention of the learned counsel; first, because the provisions of Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, are not identical with the provisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to deposit or pay month by month if he intends to get the benefit of protection against eviction under sub-section (4) of Section 17 of that Act. It is a beneficial provision enacted to provide relief to the tenant in proceeding taken against him for eviction on the ground of default in payment of rent to the landlord. After service of summons on the tenant an application under Section 17(3) of the West Bengal Act was filed by the landlord to strike out the defence. The tenant contested the petition taking the plea that pursuant to the notice under Section 226(3) of the Income Tax Act, he paid the rent to the concerned authority so he would be deemed to have discharged his obligation under Section 17(1) of that Act. It was a common ground that had the tenant deposited the rent in the Court or paid it to the landlord within the period specified in Section 17(1), it would have operated a complete discharge of his liability under that Act. The Trial Court did not accept the plea of the tenant and struck out his defence. On revision to the High Court of Calcutta, a Division Bench held that the notice under Section 226(3) of the Income Tax Act could not have the effect of overriding sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of eviction against the appellant under Section 10(3)(c). It may be noted here that there is a fundamental difference between a case of raising additional ground based on the pleadings and the material available on record and a case of taking a new plea not borne out by the pleadings. In the former case no amendment of pleadings is required whereas in the latter it is necessary to amend the pleadings. The Court/Rent Controller in its discretion, with a view to do complete justice between the parties, may allow a party either to raise additional ground or take a new plea, as the case may be, if the circumstances so justify like a plea based on subsequent events. Whereas in the former situation, the case can be disposed on the material on record but in the latter case the pleadings will have to be amended and for that reason the parties have to be given reasonable opportunity to file further pleadings and adduce necessary evidence. No exception can be taken to the order of the High Court allowing CMP to raise additional grounds in the C.R.P. But it would be of no consequence as there has been no application for amendment of the pleadings. The respondents cannot be permit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... landlord in possession of that portion or part of the building of which eviction is ordered and to extend the same from time to time but not exceeding three months. It may be noticed that under Section (3)(a) it is incumbent on the landlord to show that he or any member of his family is not occupying any building (residential or non-residential, as the case may be) for his own occupation or for the purpose of keeping a vehicle or for purposes of a business (as the case may be) which he or any member of his family is carrying on, in the city, town or village concerned which is his own. But for the purpose of clause (c) the landlord will indeed be occupying a part of a building of which the remaining part is in occupation of the tenant. Further whereas recovery of possession of a non-residential building under Section (3)(a) bars a second application under that clause, no such bar exists in case of clause (c). For granting relief to the tenant under clause (a) the aspect of hardship to the tenant is alien but under clause (c) the Controller is enjoined to reject the application of the landlord for eviction if he is satisfied that the hardship which may be caused to the tenan ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
