Whether appellate court can stay eviction order with condition to deposit entire arrears of rent as claimed by landlord?

IN THE HIGH COURT OF KERALA AT ERNAKULAM

O.P. (RC) No. 169 of 2016

Decided On: 20.06.2017

Jose P.O.
Vs.
Xavier and Ors.

Hon’ble Judges/Coram:K. Harilal and P. Somarajan, JJ.

Citation: AIR 2017 (NOC) 898 kerala

1. Aggrieved by the conditions incorporated in the order of stay granted by the Rent Control Appellate Authority, Thrissur, the tenant came up under Article 227 of the Constitution of India challenging the legality and propriety of the said order. Originally, an application under Sections 11(2)(b), 11(3), 11(4)(i) and 11(4)(v) of the Kerala Buildings (Lease and Rent Control) Act, 1965 (for short ‘the Act’) was filed by the landlord for evicting the tenants, who are the respondents in the said application. They have suffered an order of eviction under Sections 11(2)(b), 11(3) and 11(4)(v) of the Act, before the Rent Control Court. The prayer for eviction under Section 11(4)(i) was rejected by the Rent Control Court. The order under Section 11(2)(b) was passed subject to the application of Section 11(2)(c) of the Act. Subsequently, the tenants filed an application under Section 11(2)(c) for vacating the order of eviction under Section 11(2)(b) and it is pending. As against the order of eviction under Sections 11(3) and 11(4)(i), an appeal was preferred before the Rent Control Appellate Authority, Thrissur, in R.C.A. No. 66/2016 and in that appeal, they moved an application for stay of the order passed under Sections 11(3) and 11(4)(i) of the Act. The First Appellate Court (Rent Control Appellate Authority) passed an order of stay under Exhibit P8, which is extracted below for reference.

“As on 31.5.2016 Rs. 4,12,413/- is the rent arrears. In spite of directions the amount not paid. So there shall be a stay as prayed for if the tenant pays the rent within 2 weeks. The tenant shall continue to pay the rent before 5th of every month. If the tenant makes any 2 default in paying monthly rents the stay shall stand vacated. The deposit of present arrears within 2 weeks and the prompt payment of future rent shall be conditions for stay.”

2. It is well within the jurisdiction of Rent Control Appellate Authority to impose any condition while granting stay of operation of the order of eviction. But, the condition should strike a balance in between the rights and liabilities of the parties under the Act in which the appeal was preferred. Going by the above order, it is clear that the directions issued for deposit of arrears of rent were not complied with. So, a stay was granted as prayed for with a condition that the tenant should pay rent within two weeks and continue to pay rent before fifth of every month and that in the event of making any two defaults, the stay will stand vacated. There is a further direction to deposit the arrears of rent within two weeks. We are at a lost to understand why the Rent Control Appellate Authority proceeded to grant stay instead of resorting to Section 12 of the Act. Section 12 of the Act is extracted below for reference:

“12. Payment of deposit of rent during the pendency of proceedings for eviction – (1) No tenant against whom an application for eviction has been made by a landlord under Section 11, shall be entitled to contest the application before the Rent Control Court under that section, or to prefer an appeal under section 18 against any order made by the Rent Control Court on the application unless he has paid or pays to the landlord, or deposits with the Rent Control Court or the appellate authority, as the case may be, all arrears of rent admitted by the tenant to be due in respect of the building up to the date of payment or deposit, and continues to pay or to deposit any rent which may subsequently become due in respect of the building, until the termination of the proceedings before the Rent Control Court or the appellate authority, as the case may be.

(2) The deposit under sub-section (1) shall be made within such time as the Court may fix and in such manner as may be prescribed and shall be accompanied by the fee prescribed for the service of notice referred to in sub-section (4):

Provided that the time fixed by the Court for the deposit of the arrears of rent shall not be less than four weeks from the date of the order and the time fixed for the deposit of rent which subsequently accrues due shall not be less than two weeks from the date on which the rent becomes due.
(3) If any tenant fails to pay or to deposit the rent as aforesaid, the Rent Control Court or the appellate authority, as the case may be, shall, unless the tenant shows sufficient cause to the contrary, stop all further proceedings and make an order directing the tenant to put landlord in possession of the building.

(4) When any deposit is made under sub-section (1), the Rent Control Court or the appellate authority, as the case may be, shall cause notice of the deposit to be served on the landlord in the prescribed manner and the amount deposited may, subject to such conditions as may be prescribed, be withdrawn by the landlord on application made by him to the Rent Control Court or the appellate authority in that behalf.”

(emphasis supplied)

3. Section 12 of the Act says that the tenant, against whom an application for eviction has been made, is not entitled to contest the application before the Rent Control Court under Section 11 of the Act or to prefer an appeal under Section 18 of the Act unless he has paid or pays to the landlord, or deposits with the Rent Control Court or the appellate authority, as the case may be, all arrears of rent admitted by him and continues to pay or to deposit any rent which may subsequently become due in respect of the building, until the termination of the proceedings. A mere reading of sub section (1) of Section 12 of the Act though gives an impression that payment or deposit of arrears of rent is a pre-requisite or condition precedent either to defend an application under Section 11 of the Act before the Rent Control Court or to prefer an appeal under Section 18 of the Act, sub section (2) with its proviso and sub section (3) makes the legal position clear that it is not an immediate pre-requisite or condition precedent, but it can be used only after the written statement (written objection) of the tenant to the original petition or an application submitted under Section 12 of the Act. The wording used “to prefer an appeal under Section 18 against any order” and the wording used “shall be entitled to contest the application” incorporated under Section 12(1) is to restrict the right of defence available to the tenant in an application under Section 11, if he fails to pay the rent or its arrears. Sub Section (2) says that the deposit under sub section (1) shall be made within such time as the Court may fix and in such manner as may be prescribed and shall be accompanied by the fee prescribed for the service of notice referred to in sub section (4). Proviso says that the time fixed by the Court for the deposit of the arrears of rent shall not be less than four weeks from the date of order and for subsequent deposit of monthly rent shall not be less than two weeks from the date on which the rent becomes due. Sub section (3) says that if the tenant fails to pay or to deposit the rent as aforesaid, the Rent Control Court or the appellate authority, as the case may be, shall, unless the tenant shows sufficient cause to the contrary, stop all further proceedings and make an order directing the tenant to put the landlord in possession of the building. Sub Section (4) deals with the manner in which the notice should be given to the landlord regarding the deposit. A conjoint reading of sub sections (1) to (4) of Section 12 of the Act would show that there should be an order passed by the Rent Control Court or the appellate authority, as the case may be, in compliance with the requirement under sub sections (1) and (2) with its proviso so as to have the application of sub section (3) of Section 12 of the Act. Unless there is an order in compliance with sub sections (1) and (2) with its proviso, no consequence would flow as envisaged under sub section (3) of Section 12 which states that the Rent Control Court or the appellate authority, as the case may be, shall, unless there is sufficient reason for the tenant, stop all further proceedings and make an order directing the tenant to put the landlord in possession of the building. Sub section (4) deals with the service of notice to the landlord when there is deposit made in compliance with the requirements under sub sections (1) and (2). Section 12 is really a supplement to the main Section 11 resting on the principle of equity rather than the beneficiary principle applied under Section 11 and that is why the legislature had not incorporated the same as a sub section to Section 11, as the principles applied thereunder are different. When there is an order passed by the Rent Control Appellate Authority directing the tenant to deposit arrears of rent and when there is failure to deposit the same within the time specified, the Rent Control Appellate Authority should pass an order of termination of proceedings as envisaged under sub section (3) of Section 12 and direct the tenant to put the landlord in possession of the building. It is not at all advisable in such a situation to grant stay of the order of eviction in favour of the tenant. If any condition is imposed while granting stay of order of Rent Control Court by the Rent Control Appellate Authority, it should not be for the payment of any amount other than the admitted arrears of rent and the rent which may subsequently become due in respect of the building. In other words, the jurisdiction of Rent Control Appellate Authority or the Rent Control Court to direct the tenant to deposit the rent arrears is confined only to admitted arrears of rent and Section 12 of the Act would come into play only on an admission made by the tenant regarding arrears of rent. It can be done only in two ways (1) by filing counter (written objection) to the application submitted under Section 11 of the Act or (2) by filing counter to an application under Section 12 of the Act filed by the landlord. So, the expression “shall be entitled to contest the application before the Rent Control Court” has to be understood in that context and hence the right to file a counter to the application, though a part of contest, is permissible before insisting compliance under Section 12 of the Act. Likewise, in the appellate stage also, unless there is admitted arrears of rent, there cannot be any application of Section 12 of the Act, except for the purpose of rent which may subsequently become due in respect of the building.

4. The order passed by the Rent Control Appellate Authority does not say whether the amount of Rs. 4,12,413/- is the admitted arrears of rent or not. It simply says that as on 31.05.2016 an amount of Rs. 4,12,413/- is due as rent arrears and in spite of directions the amount was not paid. Neither the Rent Control Court nor the appellate authority can impose such a condition to pay all the rent arrears as claimed by the landlord. Only the admitted arrears of rent alone can be directed to be deposited and non-compliance would visit with the consequences under sub section (3) of Section 12 of the Act.

5. The jurisdiction of Rent Control Appellate Authority in granting stay of the operation of the order of eviction granted by the Rent Control Court should be understood under this perspective. The Rent Control Appellate Authority is expected to exercise its jurisdiction in consonance with the Act and cannot exceed its jurisdiction while granting stay orders in Rent Control Appeals preferred against the orders of the Rent Control Court. A direction to deposit the entire arrears of rent, as claimed by the landlord, or a direction to deposit any amount exceeding the admitted arrears of rent would be outside the jurisdiction vested with the Rent Control Appellate Authority while dealing with an appeal under the Act. Hence, the direction issued by the Rent Control Appellate Authority without specifying whether it is an admitted arrears of rent or the arrears of rent as claimed by the landlord, does not reflect proper application of jurisdiction vested in it. Hence, the conditions embodied in the order of stay are hereby deleted and excluded. There will be an order of stay as prayed for by the revision petitioner/appellant. It is made clear that this order will not take away the right of the landlord to prefer an application under Section 12 of the Act or to take up the same against the tenant in consonance with Section 12 of the Act.

Original Petition is disposed of accordingly.

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