Dismissed

Dineshk. Shah, v. M/s. Thunga Jagannatha Rao, a Partnership firm rep. by its

Telangana HC23 Dec 2011CRP/2416/2007

Case brief

AI extract

What is this about?

In this civil revision petition, the High Court rejected the landlord's appeal against the appellate court's finding that tenants did not commit willful default in rent payment due to substantial evidence of payment shown in tax returns and ledgers.

What did the court decide?

Civil revision petition dismissed with no order as to costs and directions to carry out Supreme Court amendments after disposal.

Dineshk. Shah, Vs M/s. Thunga Jagannatha Rao, a… — Landlord and Tenant | Telangana HC (2011)

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HON’BLE MR JUSTICE R. KANTHA RAO

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C.R.P.NO.2416 OF 2007

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DATED: 23.12.2011

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BETWEEN: Dinesh K. Shah .. Petitioner And M/s Thunga Jagannatha Rao and others .. Respondents

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HON’BLE MR JUSTICE R. KANTHA RAO

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C.R.P.NO.2416 OF 2007

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ORDER:

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This civil revision petition is filed by the landlord against the judgment dated 20.04.2007 passed by the Additional Chief Judge, City Small Causes Court, Hyderabad in R.A.No.12 of 2005.

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2. I have heard Sri T.Sudhakar Reddy, learned counsel appearing for the revision petitioner and Sri P.Shiv Kumar, learned counsel appearing for the respondents.

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3. For the sake of convenience, the landlord will be referred as petitioner and the tenants will be referred as respondents.

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4 . The revision petitioner/landlord filed an eviction petition seeking eviction of the respondents/tenants from the petition schedule mentioned premises bearing municipal No.5-1-757, ground floor, Bank Street, Hyderabad. Subsequent to the filing of the said eviction petition i.e. R.C.No.510 of 1995 the petitioner sought to amend the number of the petition schedule mulgi as M.No.5-1-757/2. The said amendment petition was allowed.

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5. The brief facts necessary for considering the civil revision petition may be stated as follows:

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The petitioner is the absolute owner of the premises bearing

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Municipal No.5-1-757, Bank Street, Hyderabad. The respondents obtained two mulgies of the schedule property on monthly rent of Rs.280/- by executing a lease deed for 31 years from the father of the petitioner in the year 1962 exclusive of the electricity and municipal property tax and deposited a sum of Rs.19,000/-, which carries interest of Rs.6,125/- and the same was adjusted during the first 16 years and 9 months at the rate of Rs.125/- per month out of the agreed rent of Rs.280/- per month. The present monthly rent is Rs.600/-. The respondents committed willful default in payment of rent from March, 1995 to July, 1995 at the rate of Rs.600/- per month. Though the tenants agreed to pay municipal taxes for every half year, they failed to pay the same for the last one year, which amounts to willful default. Therefore, the respondents are liable for eviction. This is the version of the petitioner.

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The respondents contended that the petitioner is the co-owner of the schedule mulgies. The father of the petitioner let out the petition mulgies in favour of M/s Tunga Sathaiah Partnership (HUF) Firm constituted under the Indian Partnership Act, represented by two partners under a registered lease deed dated 06.10.1962 for a period of 16 years 9 months. The father of the petitioner had deposited a sum of Rs.19,000/- which carry interest of Rs.6125/- and Rs.125/would be adjusted in advance rent and that the petitioner’s father adjusted a sum of Rs.15,000/- from out of the total advance of Rs.25,125/-. Another lease deed dated 23.08.1972 was executed for the period from 06.07.1979 to 05.01.1999 and adjusted an amount of Rs.10,125/-. The father of the petitioner collected an amount of Rs.6,000/- as deposit agreeing to pay simple interest @ 1% which comes to Rs.11,100/- to be adjusted @ Rs.125/- per month, but the father of the petitioner did not adjust the same. The father of the

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petitioner withheld a sum of Rs.21,225/- and it is refundable at the time of vacating the premises. The present rent is Rs.600/- per month. The landlord has to pay the municipal taxes and in case of non payment of municipal taxes by the landlord, the tenant has to pay the same and recover from the rent payable to the landlord. The respondents paid municipal tax of Rs.8,878/-, but the petitioner failed to adjust the same in the monthly rent. The respondents paid the monthly rent of August, 1995 to the mother of the petitioner in the first week of August, 1995 when the petitioner had gone abroad. Therefore, there is no willful default in payment of rent.

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6. The learned trial Court conducted detailed enquiry, during the course of which the petitioner was examined as PW.1 and got marked Exs.A1 to A16. The respondent No.3, who is the partner of the first respondent was examined as RW.1 and got marked Exs.B.1 to B.18.

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7. The period of default according to the petitioner is from March, 1995 to July, 1995 and also there is default in payment of Rs.1800/towards property taxes. The contention of the respondents is that they have paid the rents as well as municipal taxes for the alleged period of default to the petitioner and in so far as the rent in respect of the month of August, 1995 was paid to the mother of the petitioner in the first week of August, 1995 while the petitioner had gone abroad. Thus, according to the respondents there was no willful default in payment of rent.

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8. By his order dated 29.11.2004, the learned IV Additional Rent Controller, Hyderabad allowed R.C.No.510 of 1995 directing the eviction of the respondents from the schedule mentioned mulgi on the ground that they committed willful default in payment of rents.

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Whereas in the appeal i.e. R.A.No.12 of 2005 the Additional Chief Judge, City Small Causes Court, Hyderabad reversed the finding of the Rent Controller and held that there was no willful default committed by the respondents in payment of rents and accordingly set aside the order of eviction passed by the Rent Controller. Feeling aggrieved, the petitioner filed the present civil revision petition.

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9. The respondents filed certified copies of the lease agreement entered into in the year 1966 – 1972 respectively by the father of the petitioner in favour of the tenants and they were marked as Exs.B.1 and B.2. Ex.B.1 the lease agreement discloses that an amount of Rs.19,000/- with interest of Rs.6,125/- was kept as deposit with the father of the petitioner by the tenants and was agreed to be adjusted at the rate of Rs.125/- per month from out of the rent of Rs.280/- per month. But even before the expiry of the said lease period covered by Exs.B.1 i.e. within a period of ten years another lease agreementEx.B.2 was entered into between the parties. The contents of Ex.B.2 reveal that the respondents also deposited a further sum of Rs.19,000/- which was agreed to be adjusted at the rate of Rs.125/per month towards rent. In his evidence, the petitioner, who was examined as PW.1 stated that he did not remember as to which period his father made adjustment of rents which was agreed upon under Exs.B.1 and B.2. PW.1 put forwarded a plea that his father had returned the amount of Rs.10,125/- being the difference of amount, after adjustment was made towards rents out of the advance and also the interest under Exs.B.1. But no material has been placed on record by the petitioner showing that his father returned an amount of Rs.10,125/- towards balance amount from the advance. In any event,

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even according to PW.1, his father withheld a sum of Rs.11,000/- on the date of Ex.B.2. As could be seen from Ex.B.2, it is in respect of two mulgies and Ex.B.2 lease agreement expired by 1996. The petitioner filed the present eviction petition in the year 1995. Admittedly, during the subsistence of the lease period under Ex.B.2lease agreement, the firm of the respondents was dissolved and there was no provision in Ex.B.2 as to what steps have to be taken in the event of firm being dissolved or reconstituted.

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10. As rightly held by the appellate authority, Exs.B.1 and B.2 lease agreements would disclose that the petitioner has to pay the property tax and in the event of his failure to pay the same, the respondents have to pay the taxes and then recover the amounts paid towards taxes from the petitioner from out of the rent payable by them. This apart, there is also a recital in Ex.B.2 lease agreement that if the lease is extended beyond the expiry of Ex.B.2 then only the respondents have to pay the property taxes. The eviction petition was filed before the expiry of the original lease period. In any event, Exs.B.3 to B.7 reveal, that the respondents have been paying municipal taxes. Though it was the contention of the petitioner that the respondents failed to pay the property taxes the said contention does not seen to be true in view of the Exs.B.3 to B.7 and also from the admission made by the petitioner in his evidence as PW.1 that no property taxes were due till August, 1995. Considering all these facts, the learned appellate authority rightly held that the petitioner was holding a sum of Rs.10,125/- which was to be adjusted as per the contents mentioned in Ex.B.1, lease agreement and as could be seen from Ex.B.2, lease agreement the petitioner was further holding a sum of Rs.11,000/-. Thus, the learned appellate authority rightly

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concluded that the petitioner was holding an amount of Rs.21,225/from out of the advance paid by the respondents.

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11. The crucial documents in this case are the income tax returns filed by the petitioner. PW.1 admitted in his evidence that he filed income tax returns for the period from 01.04.1995 to 31.03.1996. It is evident from these returns that PW.1 has shown therein the rents collected by him from the tenants. It is also mentioned in the said returns that he received rent from the respondents for the period from 01.04.1995 to 31.03.1996. It was sought to be contended on behalf of the petitioner that even though the rents were not paid as they were outstanding, he mentioned them in the income tax returns. Except his oral explanation offered, the petitioner did not examine the auditor or any other witness to prove the said fact that they were mentioned in the income tax returns on the mere ground that there were dues. Therefore, in view of the fact that the income tax returns filed by the petitioner disclose the rents paid by the tenants, the explanation offered by the petitioner cannot be accepted more particularly when the petitioner did not issue any notice to the respondents calling upon them to pay the rents except under Ex.A.6 which is subsequent to the filing of the eviction petition. This apart, Ex.B.12 is the ledger book entry maintained by the respondents during regular course of their business. There are entries in them with regard to the payment of rents to the petitioner for the alleged period of default. It is pertinent to note that during the period when the entries were made in the ledger book no litigation between the parties was contemplated and therefore, the learned appellate authority rightly held that Ex.A.8 ledger book reflects the factum of payment of rents made by the respondents during the relevant period.

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12. I n DAKAYA ALIAS DAKAIAH v ANJANI^[1] the Hon’be Supreme Court held that when the tenant immediately on receipt of demand notice sending the entire amount under the default before filing the suit, it cannot be said that he committed any willful default and that the eviction order causing serious prejudice to the tenant carrying on business in the disputed premises is liable to be set aside.

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13. In the instant case, however, the petitioner failed to establish that the respondents committed any willful default in payment of rent or municipal taxes in view of the evidence forthcoming in the present case. The learned appellate authority upon carefully analyzing the evidence on record rightly arrived at the conclusion that there was no willful default committed by the respondents in payment of rents. The judgment passed by the learned appellate Court is based on evidence and reasoning, this Court in exercise of powers of revision under Section 22 of the A.P. Buildings (Lease, Rent and Eviction) Control Act, 1960 will not interfere with such findings recorded by the appellate authority.

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14. The petitioner/landlord filed C.M.P.No.3450 of 2010 to receive the orders of the Hon’ble Supreme Court in Civil Appeal No.4538 and 4539 of 2006 dated 4.08.2010 as additional documents and the said documents are received and marked as Exs.A.17 and A.18. In the said order, the Hon’ble Supreme Court clearly observed that the amendments are only with regard to the description of property and no prejudice will be caused to the defendants/respondents by allowing the amendment applications and that both the amendment

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applications should have been allowed by the High Court. Holding as such the Supreme Court allowed the appeals. In view of the order passed by the Hon’ble Supreme Court, the amendment stood allowed. It is directed that they be carried out after disposal of this civil revision petition.

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15. For the foregoing reasons, the civil revision petition is dismissed. There shall be no order as to costs.

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_________________ Date: 23.12.2011 R. KANTHA RAO, J kvrm

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HON’BLE MR JUSTICE R. KANTHA RAO

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C.R.P.NO.2416 OF 2007

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DATE: 23.12.2011

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[1] AIR 1996 SC 383

Dineshk. Shah, v. M/s. Thunga Jagannatha Rao, a Partnership firm rep. by its

Case brief

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Dineshk. Shah, v. M/s. Thunga Jagannatha Rao, a Partnership firm rep. by its

Case brief

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