{"id":10938,"date":"1994-03-02T00:00:00","date_gmt":"1994-03-01T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/chase-bright-steel-ltd-vs-shantaramshankar-sawant-on-2-march-1994"},"modified":"2019-02-25T13:36:36","modified_gmt":"2019-02-25T08:06:36","slug":"chase-bright-steel-ltd-vs-shantaramshankar-sawant-on-2-march-1994","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/chase-bright-steel-ltd-vs-shantaramshankar-sawant-on-2-march-1994","title":{"rendered":"Chase Bright Steel Ltd vs Shantaramshankar Sawant on 2 March, 1994"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">Chase Bright Steel Ltd vs Shantaramshankar Sawant on 2 March, 1994<\/div>\n<div class=\"doc_citations\">Equivalent citations: 1994 AIR 2114, \t\t  1994 SCC  (4)\t 89<\/div>\n<div class=\"doc_author\">Author: S Mohan<\/div>\n<div class=\"doc_bench\">Bench: Mohan, S. (J)<\/div>\n<pre>           PETITIONER:\nCHASE  BRIGHT STEEL LTD.\n\n\tVs.\n\nRESPONDENT:\nSHANTARAMSHANKAR SAWANT\n\nDATE OF JUDGMENT02\/03\/1994\n\nBENCH:\nMOHAN, S. (J)\nBENCH:\nMOHAN, S. (J)\nMUKHERJEE M.K. (J)\n\nCITATION:\n 1994 AIR 2114\t\t  1994 SCC  (4)\t 89\n JT 1994 (2)   192\t  1994 SCALE  (1)832\n\n\nACT:\n\n\n\nHEADNOTE:\n\n\n\nJUDGMENT:\n<\/pre>\n<p>The Judgment of the Court was delivered by<br \/>\nS.   MOHAN, J.- The short facts leading to this civil appeal<br \/>\nare as under.\n<\/p>\n<p>2.   The   original  owner  of\tsuit  property\tsituate\t  at<br \/>\nRamamaruti Road,<br \/>\nThane (Maharashtra) was one Omji Mulji.\t He leased out three<br \/>\nsmall flats having two rooms and a kitchen in favour of\t the<br \/>\nappellant  company  in 1963.  The rent was fixed at  Rs\t 300<br \/>\nplus Rs 20 municipal taxes and Rs 15 water charges.\n<\/p>\n<p>3.   In\t 1968,\tOmji  Mulji sold away the  property  to\t one<br \/>\nGavand.\t   Thereafter,\tthe  appellant\ttendered  the\trent<br \/>\nincluding  the taxes to the said Gavand from 1968.   In\t the<br \/>\nsame year of 1968, the municipal taxes were increased.\t The<br \/>\nappellant  paid\t a lump sum of Rs 338.58 as  rent.   Due  to<br \/>\nfurther\t increase  in the taxes, the appellant\ttendered  Rs<br \/>\n358.29 including taxes to the owner.\n<\/p>\n<p>4.   In the year 1975, the respondents came to purchase\t the<br \/>\nsuit  property.\t Since then, the appellant had\tbeen  paying<br \/>\nregularly rent and taxes at the rate of Rs 358.29 p.m.\n<\/p>\n<p>5.   The Advocate for the respondents issued a notice  dated<br \/>\nJuly 27, 1977 to the appellant terminating their tenancy and<br \/>\ncalled\tupon  the appellant to hand over  vacant  possession<br \/>\nsince the appellant was in arrears of permitted<br \/>\n<span class=\"hidden_text\"> 91<\/span><br \/>\nincreases  amounting  to Rs 5650 from  February\t 1976.\t The<br \/>\nnotice also stated two of the grounds for eviction, in\tthat<br \/>\nthe appellant had altered the premises and causing  nuisance<br \/>\nto the neighbours.\n<\/p>\n<p>6.   On receipt of the above notice, the appellant filed  an<br \/>\napplication  under Section 11(3) of the Bombay Rents,  Hotel<br \/>\nand  Lodging  House  Rates Control  Act,  1947\t(hereinafter<br \/>\nreferred to as &#8216;the Act&#8217;) for fixation of standard rent.  On<br \/>\nAugust 30, 1977, an interim order fixing the rent at Rs\t 358<br \/>\nwas passed.  It was directed to be deposited in the court on<br \/>\nor before 10th of every month.\tFor the months of August and<br \/>\nSeptember,  the\t appellant  paid the  interim  rent  to\t the<br \/>\nrespondents.   The same had been accepted.   However,  since<br \/>\nOctober\t 1977 the appellant was depositing the interim\trent<br \/>\nin the Court of Civil Judge, Junior Division, Thane.\n<\/p>\n<p>7.   On April 26, 1979, the respondents filed Civil Suit No.<br \/>\n384  of 1979 in the Court of Civil Judge,  Junior  Division,<br \/>\nThane  for  arrears  of permitted increases,  rent  and\t for<br \/>\npossession.  The ground urged was that the appellant was  in<br \/>\narrears\t of  permitted increases amounting to Rs  56.50\t per<br \/>\nmonth  since  October  1976.   This  was  on  the  basis  of<br \/>\ncalculation  at\t 7%  as education cess on  the\trent  of  Rs<br \/>\n358.29,\t Rs 30 water charges, 1\/4% as  unemployment  charges<br \/>\nand 1\/4% as tree cess.\tFurther grounds for eviction  namely<br \/>\nunauthorised  alteration  and creating\tnuisance  were\talso<br \/>\nurged.\t In September 1981 the application for\tfixation  of<br \/>\nstandard  rent was dismissed in default for  non-appearance.<br \/>\nThis dismissal came to be noted by the Advocate only in\t the<br \/>\nyear  1985.  However, the appellant had been depositing\t the<br \/>\ninterim standard rent all along.\n<\/p>\n<p>8.   In\t defence to the Regular Civil Suit No. 384 of  1979,<br \/>\nit was urged that the payment of standard rent had been made<br \/>\nwithout\t fail  throughout  and, therefore,  he\twas  not  in<br \/>\narrears.     The   other   grounds   namely,\tunauthorised<br \/>\nconstruction  and  causing nuisance were also  denied.\t The<br \/>\ntrial  court  decreed the suit for eviction  on\t account  of<br \/>\narrears of rent but not permitted increases.\n<\/p>\n<p>9.   Aggrieved\tby  the said order,  appellant\tfiled  Civil<br \/>\nAppeal\tNo.  452 of 1983 before the District  Judge,  Thane.<br \/>\nThe  said appeal was dismissed.\t Thereafter,  the  appellant<br \/>\npreferred  Writ\t Petition No. 5035 of 1985 before  the\tHigh<br \/>\nCourt.\t That  was  dismissed on February 19,  1987  on\t the<br \/>\nground\tthat the tenant was not in arrears of rent  but\t had<br \/>\ndefaulted  in  payment of permitted  increases.\t  Thus,\t the<br \/>\npresent civil appeal.\n<\/p>\n<p>10.  Mr\t Soli  J. Sorabjee, learned Senior Counsel  for\t the<br \/>\nappellant raised the following points for our consideration.\n<\/p>\n<p>\t      (i)   A valid notice of demand is a  condition<br \/>\n\t      precedent for the maintainability of suit\t for<br \/>\n\t      arrears of rent or permitted increase.  In the<br \/>\n\t      absence  of requisite demand, there can be  no<br \/>\n\t      question\tof noncompliance.  In such  a  case,<br \/>\n\t      the consequences mentioned under Section 12(3)<br \/>\n\t      sub-section   (3)(a)  or\t(b)  will   not\t  be<br \/>\n\t      attracted.   In  support of  this\t submission,<br \/>\n\t      reliance is placed on Chimanlal v. Mishrilall.<br \/>\n\t      1\t  (1985) 1 SCC 14: (1985) 2 SCR 39<br \/>\n<span class=\"hidden_text\">\t      92<\/span>\n<\/p>\n<p>\t      (ii)  In\tthe  present  case,  the  notice  of<br \/>\n\t      demand  dated July 27, 1977 does\tnot  mention<br \/>\n\t      the period of alleged arrears or the permitted<br \/>\n\t      increase.\t The demand is only for the  payment<br \/>\n\t      of  entire arrears of rent and  not  permitted<br \/>\n\t      increases.\n<\/p>\n<p>\t      (iii)Permitted increase, though part of  rent,<br \/>\n\t      is  not payable monthly.\tIt is  well  settled<br \/>\n\t      that education cess being payable on a year to<br \/>\n\t      year  basis,  the rent ceases  to\t be  payable<br \/>\n\t      every month within Section 12(3)(a) of the Act<br \/>\n\t      as  laid down in Raju Kakara Shetty v.  R.  P.<br \/>\n\t      Shirole2.\n<\/p>\n<p>\t      (iv)  The landlord can have no cause of action<br \/>\n\t      to  recover  permitted increase until  he\t had<br \/>\n\t      paid  the permitted increases.  Therefore,  he<br \/>\n\t      must  plead  and prove  payment  of  permitted<br \/>\n\t      increase.\t  There is no such pleading in\tthis<br \/>\n\t      case.   In  spite of this\t point\thaving\tbeen<br \/>\n\t      urged before the lower appellate court as well<br \/>\n\t      as the High Court it has not been dealt  with.<br \/>\n\t      The  High Court has gone wrong  in  misreading<br \/>\n\t      the  provisions of Section 12 of the Act.\t  It<br \/>\n\t      has  read into it obligations  and  conditions<br \/>\n\t      which  are  not  statutorily  prescribed.\t  It<br \/>\n\t      should have taken note of the following  facts<br \/>\n\t      :\n<\/p>\n<p>\t      (a)   That  the application for standard\trent<br \/>\n\t      was made in time;\n<\/p>\n<p>\t      (b)   That  the interim rent as fixed  by\t the<br \/>\n\t      court  has been paid regularly throughout\t the<br \/>\n\t      pendency of the suit and the appeal;\n<\/p>\n<p>\t      (c)   That the interim rent fixed was the same<br \/>\n\t      as the contractual rent.\n<\/p>\n<p>11.  Mr A.M. Khanwilkar, learned counsel for the respondents<br \/>\nin  answering  these submissions would urge that it  is\t not<br \/>\ncorrect to state that there is no valid demand.\t The  notice<br \/>\nspecifically states as to what exactly the tenant was liable<br \/>\nto pay namely; the rent at Rs 358.29, 7% education cess,  Rs<br \/>\n30 for water charges, 1\/4% as unemployment charges, 1\/4%  as<br \/>\ntree  cess.   All these total up to Rs 56.50  per  month  as<br \/>\npermitted increases.  When the notice called upon the tenant<br \/>\nto pay the entire arrears of rent, all these which are\tpart<br \/>\nof rent were required to be paid.  As a matter of fact,\t the<br \/>\nplaint clearly discloses as to what exactly was the  demand.<br \/>\nTherefore,  on\tfacts the ruling of Chimanlal case&#8217;  has  no<br \/>\napplication.\n<\/p>\n<p>12.  There is no demur to the proposition that the permitted<br \/>\nincreases,  though  part of rent, are not  payable  monthly.<br \/>\nBut,  in  this\tcase, the plaint  clearly  states  that\t the<br \/>\npermitted increases were from February 1, 1976 till the date<br \/>\nof filing of suit in 1979.  Hence this proposition does\t not<br \/>\nin any way affect either the claim or the recovery thereof.\n<\/p>\n<p>13.  The  landlord  never disputed that the tenant  had\t not<br \/>\npaid  the  municipal  taxes.   As  a  matter  of  fact,\t the<br \/>\nmunicipal  demands had been produced in evidence.  The\tHigh<br \/>\nCourt  had  appropriately  appreciated\tthe  matter  and  it<br \/>\nwarrants no interference.\n<\/p>\n<p>2 (1991) 1 SCC 570<br \/>\n<span class=\"hidden_text\"> 93<\/span>\n<\/p>\n<p>14.  As\t a  proposition of law, it cannot be  disputed\tthat<br \/>\nthere must be a valid demand for maintainability of suit for<br \/>\narrears of rent or permitted increases.\t It has been so laid<br \/>\ndown in Chimanlal case&#8217; (at SCR pp. 43-44).\n<\/p>\n<p>15.  In\t this  case, the notice dated July 27,\t1977  is  as<br \/>\nfollows :\n<\/p>\n<blockquote><p>\t      &#8220;You  have been ]eased out the  entire  second<br \/>\n\t      floor.   You are in occupation of\t the  entire<br \/>\n\t      second   floor.\tThe  month  of\ttenancy\t  is<br \/>\n\t      according to British Calendar Month.  You have<br \/>\n\t      accommodated your three officers in the  three<br \/>\n\t      blocks  on the second floor.  The net rent  in<br \/>\n\t      respect of the said second floor is Rs 358.29.<br \/>\n\t      Over  and above the said rent you\t require  to<br \/>\n\t      pay  to my client 7% as education cess, Rs  30<br \/>\n\t      for  water  charges and 1\/4%  as\tunemployment<br \/>\n\t      charges  and 1\/4% as the tree cess.  Thus\t you<br \/>\n\t      are supposed to pay to my client Rs 56.50\t per<br \/>\n\t      month  as\t permitted increases.\tYou  are  at<br \/>\n\t      present in arrears of rent from February 1976.<br \/>\n\t      My  client has demanded the same but you\thave<br \/>\n\t      neglected and failed to pay the same.  You are<br \/>\n\t      thus  a  defaulter.   You are  not  ready\t and<br \/>\n\t      willing to pay the rent as and when it becomes<br \/>\n\t      due.\n<\/p><\/blockquote>\n<blockquote><p>\t      You  are\talso called upon to pay\t the  entire<br \/>\n\t      arrears  of rent on receipt  hereof.   Failing<br \/>\n\t      compliance  of  which,  my  clients  will\t  be<br \/>\n\t      compelled\t to  go\t to the\t court\tof  law\t for<br \/>\n\t      getting their grievances redressed entirely at<br \/>\n\t      your  risk  as to the costs  and\tconsequences<br \/>\n\t      which please note.\n<\/p><\/blockquote>\n<p>16.  No\t doubt, the word &#8216;supposed&#8217; in paragraph 3 has\tbeen<br \/>\nincorrectly  used.  But that does not in any way affect\t the<br \/>\nvalidity  of  the  notice.  Besides, merely  because  it  is<br \/>\nstated &#8216;arrears of rent&#8217;, it does not mean that there is  no<br \/>\ndemand\t for  permitted\t increases  since  those   permitted<br \/>\nincreases  are\tpart of rent.  The plaint in  no  mistakable<br \/>\nterms says as follows :\n<\/p>\n<blockquote><p>\t      &#8220;The month of the tenancy of the defendant was<br \/>\n\t      according to British Calendar Month.  The\t net<br \/>\n\t      rent  in respect of the said second floor\t was<br \/>\n\t      Rs  358.29  over and above the said  rent\t the<br \/>\n\t      defendant\t  was  required\t to  pay  to   these<br \/>\n\t      defendant\t 7%  as education cess,\t Rs  30\t for<br \/>\n\t      water  charges, 1\/4% as  unemployment  charges<br \/>\n\t      and  1\/4%\t as  tree  cess.   These  plaintiffs<br \/>\n\t      submit that thus the defendant was required to<br \/>\n\t      pay   the\t  permitted  increases\t per   month<br \/>\n\t      amounting\t to Rs 56.90. The defendant  was  in<br \/>\n\t      arrears of permitted increases since  February<br \/>\n\t      1976.  These plaintiffs demanded the same time<br \/>\n\t      and again but the defendant has failed to\t pay<br \/>\n\t      the   same.   The\t defendant  is,\t thereby   a<br \/>\n\t      defaulter.&#8221;\n<\/p><\/blockquote>\n<p>17.  Therefore,\t this\tcontention of Mr  Soli\tJ.  Sorabjee<br \/>\ncannot\tbe  accepted.\tFactually,  the\t ruling\t stated\t  as<br \/>\nChimanlal    case&#8217; is distinguishable.\tIn R.K. Shetty\tcase2<br \/>\nit is stated at p. 581 as under : (SCC para 13)<br \/>\n\t      &#8220;In Maheshwari Mills Ltd.3 under the terms  of<br \/>\n\t      the tenancy the tenant was obliged to pay\t the<br \/>\n\t      municipal taxes and property taxes in  respect<br \/>\n\t      of  the demised premises.\t The court took\t the<br \/>\n\t      view that such payment was by way of rent\t and<br \/>\n\t      since  the municipal taxes and property  taxes<br \/>\n\t      were payable on year to year basis, a part  of<br \/>\n\t      the rent was admittedly not<br \/>\n\t      3\t Panchal  Mohanlal lshwardas  v.  Maheshwari<br \/>\n\t      Mills Ltd.,(1962) 3 Guj LR574<br \/>\n<span class=\"hidden_text\">\t      94<\/span><br \/>\n\t      payable  by the month and, therefore,  Section<br \/>\n\t      12(3)(a) was not attracted. In Prakash Surya 4<br \/>\n\t      the tenant had agreed to pay the municipal tax<br \/>\n\t      and   education  cess.   The  amount   payable<br \/>\n\t      towards these taxes constituted rent and since<br \/>\n\t      the  same was payable at the end of  the\tyear<br \/>\n\t      the court held that the rent had ceased to  be<br \/>\n\t      payable\tby  the\t month\tand  hence   Section<br \/>\n\t      12(3)(a) had no application.&#8221;\n<\/p>\n<p>18.  As rightly urged by Mr Khanwilkar, learned counsel\t for<br \/>\nthe  respondent\t the permitted increase may not\t be  payable<br \/>\nmonthly; but in the instant case, the period, for which\t the<br \/>\npermitted increases are claimed, is between February 1, 1976<br \/>\ntill  April 27, 1979.  This is evident from paragraph  6  of<br \/>\nthe plaint as under :\n<\/p>\n<blockquote><p>\t      &#8220;The cause of action for the purpose of filing<br \/>\n\t      of this suit first arose on or about March  1,<br \/>\n\t      1976,  for arrears of permitted increases\t and<br \/>\n\t      for  possession  on September 1, 1977  and  is<br \/>\n\t      being continued respectively from time to time<br \/>\n\t      till the filing of this suit.&#8221;\n<\/p><\/blockquote>\n<blockquote><p>\t      Therefore,  R.K.\tShetty case   2\t  cannot  be<br \/>\n\t      pressed into service.\n<\/p><\/blockquote>\n<blockquote><p>\t      19.At  no point of time, the  tenant  disputed<br \/>\n\t      the   payment  of\t municipal  taxes   by\t the<br \/>\n\t      landlord.\t  In  fact, the evidence is  to\t the<br \/>\n\t      following effect<br \/>\n\t      &#8220;Permittedincrease  was amounting to Rs  56.50<br \/>\n\t      since February<br \/>\n\t      1976.   I have produced the xerox copy of\t the<br \/>\n\t      notices issued by Municipality at Ex. 13.\t  We<br \/>\n\t      demanded\t the  permitted\t increase   to\t the<br \/>\n\t      defendant.  But they failed to pay the same.&#8221;\n<\/p><\/blockquote>\n<p>20.  On\t September 14, 1983, the standard rent was fixed  at<br \/>\nRs  358 per month and the permitted increases were fixed  at<br \/>\nRs 56 per month.  The appellant continued to pay Rs 358\t per<br \/>\nmonth being the standard rent.\tHe did not pay the permitted<br \/>\nincreases.   The fact that he was depositing  throughout  Rs<br \/>\n358  and even during the stage of writ petition, can  hardly<br \/>\nrelieve him from such an obligation.  Under Section 12(3)(b)<br \/>\nof the Act, there is an obligation to deposit the  permitted<br \/>\nincreases not only during the pendency of the standard\trent<br \/>\napplication which in this case has come to be dismissed\t for<br \/>\ndefault\t but even during the pendency of suit for  eviction.<br \/>\nAs  rightly held by the High Court, if this were not  to  be<br \/>\nso, the tenant could claim protection on its showing that he<br \/>\nhad within a period of one month from the date of service of<br \/>\nnotice\tof demand under Section 12(2) filed  an\t application<br \/>\nfor standard rent and that he had obeyed that order; in this<br \/>\ncase the interim standard rent.\n<\/p>\n<p>21.  Accordingly,  we hold that there are no merits in\tthis<br \/>\ncivil appeal which stands dismissed.  The tenant shall\thand<br \/>\nover  vacant  possession  of the said  premises\t within\t six<br \/>\nmonths\ton  condition that he files  the  usual\t undertaking<br \/>\nwithin four weeks from the date of this order.<br \/>\n4   Prakash Surya v. Rasiklal Ishverlal Mehta, (1978) 1\t RCR<br \/>\n<span class=\"hidden_text\">10<\/span><br \/>\n<span class=\"hidden_text\">95<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India Chase Bright Steel Ltd vs Shantaramshankar Sawant on 2 March, 1994 Equivalent citations: 1994 AIR 2114, 1994 SCC (4) 89 Author: S Mohan Bench: Mohan, S. (J) PETITIONER: CHASE BRIGHT STEEL LTD. Vs. RESPONDENT: SHANTARAMSHANKAR SAWANT DATE OF JUDGMENT02\/03\/1994 BENCH: MOHAN, S. (J) BENCH: MOHAN, S. (J) MUKHERJEE M.K. (J) CITATION: [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-10938","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Chase Bright Steel Ltd vs Shantaramshankar Sawant on 2 March, 1994 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/chase-bright-steel-ltd-vs-shantaramshankar-sawant-on-2-march-1994\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Chase Bright Steel Ltd vs Shantaramshankar Sawant on 2 March, 1994 - Free Judgements of Supreme Court &amp; 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