Summary
| Category | Data |
|---|---|
| Court | Supreme Court of India |
| Case Number | C.A. No.-002561-002561 – 2025 |
| Diary Number | 18897/2021 |
| Judge Name | HON’BLE MR. JUSTICE DIPANKAR DATTA |
| Bench | HON’BLE MR. JUSTICE DIPANKAR DATTA; HON’BLE MR. JUSTICE ARAVIND KUMAR |
| Precedent Value | Binding precedent (three-Judge Bench authority) |
| Overrules / Affirms | Affirms existing precedents (Sundaram Pillai v. Pattabiraman; Girdharilal Chandak & Bros.) |
| Type of Law | Landlord–Tenant Law (Tamil Nadu Buildings (Lease and Rent Control) Act, 1960) |
| Questions of Law | Whether failure to pay a court-fixed fair rent, without obtaining a stay of the fixation order during pendency of appeals, constitutes wilful default warranting eviction under Section 10(2)(i) of the Act. |
| Ratio Decidendi | The Court held that mere filing of an appeal challenging fair rent does not operate as a stay of the fixation order; non-payment of court-fixed fair rent over several years—despite opportunities to seek stay and multiple interim orders—amounts to wilful default. The proviso to Section 10(2)(i) vests discretion to determine wilful default even without a two-months’ notice under the Explanation. The Explanation only provides an additional, but not exclusive, instance of presumed wilful default. Appellants’ conduct—delaying payment until nearly six years after fixation and without staying the order—fell squarely within attributes of wilful default. |
| Judgments Relied Upon | Sundaram Pillai & Ors. v. V.R. Pattabiraman; Giridharilal Chandak & Bros. v. Mehdi Ispahani; Rupa Ashok Hurra v. Ashok Hurra; Trimurthi Fragrances (P) Ltd. v. Government of N.C.T. of Delhi |
| Logic / Jurisprudence / Authorities Relied Upon | Analysis of Section 10(2)(i) proviso and Explanation; Order XLI Rule 5, CPC (appeal does not automatically stay decree); attributes of wilful default (deliberate, intentional, calculated, conscious); “without prejudice” clause; hierarchy of court finality. |
| Facts as Summarised by the Court | Lessee leased 15,500 sq ft. at disputed rent (claimed ₹48,000 vs. ₹33,000 p.m.); fair rent fixed at ₹2,43,600 p.m. in 2007, modified to ₹2,37,500 p.m. in 2011; lessee never sought stay, paid only contractual rent for years; eviction proceedings on wilful default. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts |
| Persuasive For | High Courts |
| Follows | Sundaram Pillai v. V.R. Pattabiraman; Giridharilal Chandak & Bros. v. Mehdi Ispahani |
What’s New / What Lawyers Should Note
- Non-payment of court-fixed fair rent during pendency of challenges, without obtaining a stay, constitutes wilful default under Section 10(2)(i).
- Filing an appeal alone does not stay a fair-rent order; a specific stay must be sought.
- The Explanation to Section 10(2)(i) provides an additional instance of presumed wilful default but does not oust the proviso’s discretion to examine wilfulness without a two-months’ notice.
- Use of “without prejudice” when dismissing SLPs does not waive a landlord’s right to pursue eviction for wilful default.
- Appellate and revisional courts may affirm eviction where arrears remain unpaid despite multiple interim orders.
Summary of Legal Reasoning
- Appeal alone under Order XLI Rule 5, CPC, does not stay a decree/fixation order unless the appellate court so directs.
- In Girdharilal Chandak & Bros., failure to seek stay implies willingness to comply or no objection to execution; non-stay preserves operation of fair rent fixation.
- Section 10(2)(i) proviso empowers the Controller to adjudicate wilful default even without two-months’ notice; the Explanation adds, but does not limit, instances of default.
- Attributes of wilful default—deliberate, intentional, calculated, conscious—are satisfied by belated payments spanning years without lawful cause.
- “Without prejudice” in SLP dismissal preserves landlord’s rights; payments under such orders cannot be treated as waiver of eviction rights.
Arguments by the Parties
Appellants (Lessee Heirs):
- No stay sought on fair rent fixation; payments made per interim orders—cannot be branded wilful default.
- Liability crystallises only upon finality of fair-rent orders; pendency of appeals prevented final determination.
- Payments under “without prejudice” orders should discharge all arrears.
- Bona fide dispute on rent amount justified interim arrangements.
Respondent (Landlord):
- Fair rent fixed in 2007; lessee continued to pay lesser amounts until 2013—constitutes wilful default.
- Appeal does not operate as stay; no stay sought at any stage.
- Section 10(2)(i) includes fair rent; non-payment—even pending challenge—is wilful.
- No mandatory pre-notice required; discretion lies with Controller to proceed on default.
Factual Background
A private warehouse lease dispute arose over the proper monthly rent (contractual ₹48,000 vs. lessee’s ₹33,000). The Rent Controller fixed fair rent at ₹2,43,600 p.m. in January 2007, later modified to ₹2,37,500 p.m. The lessee paid only the earlier contractual rent and did not seek stays of fixation orders through appellate or revisional forums. After protracted litigation and intermittent interim payments, the landlord moved for eviction on the ground of wilful default, which was upheld by the Appellate Authority and the High Court and affirmed by the Supreme Court.
Statutory Analysis
- Section 10(2)(i), Tamil Nadu Buildings (Lease and Rent Control) Act, 1960: allows eviction if rent not paid within prescribed period; proviso permits Controller to grant up to 15 days’ time; Explanation adds two-months’ notice as conclusive proof of wilful default.
- Order XLI Rule 5, CPC: appeal does not stay execution absent specific direction.
- “Without prejudice” clause preserves landlord’s eviction rights despite interim payment orders.
Alert Indicators
- ✔ Precedent Followed