Supreme Court Upholds Eviction Based on Rent Default and Subletting: Anil Kumar Dhekale vs. Rukhiben (2017)

Can a tenant be evicted for not paying rent and subletting the property? The Supreme Court of India addressed this question in a case involving a landlord seeking to evict his tenants. The core issue revolved around whether the tenants had defaulted on rent payments and illegally sublet the property. This case, Anil Kumar Dadhurao Dhekale v. Rukhiben and Ors., highlights the importance of adhering to tenancy agreements and the legal consequences of violating them.

The judgment was delivered by a two-judge bench of the Supreme Court of India, comprising Justice Kurian Joseph and Justice R. Banumathi, with Justice R. Banumathi authoring the opinion.

Case Background

In 1958, Manilal Ishwarbhai Valand became the tenant of the ground floor of “Radha Bhuvan,” owned by Anil Kumar Dadhurao Dhekale, for a monthly rent of Rs. 30. Manilal ran a hair cutting salon there. The tenancy began on the 6th of each month and ended on the 5th of the following month. Manilal often defaulted on rent, accumulating arrears of Rs. 660 for the period between July 6, 1974, and May 5, 1976.

After Manilal failed to pay the arrears despite a notice, the landlord, Anil Kumar Dhekale, filed a suit for eviction in 1978. During the suit, Manilal died in 1979, and his legal heirs, including his wife and two sons, Dahyalal and Bhogilal, were brought on record. The landlord also alleged that after Manilal’s death, one Somabhai Dahiyabhai Valand was illegally sublet the premises.

Timeline

Course of Proceedings

The Small Causes Court initially ruled in favor of the landlord, ordering the tenants to vacate the premises due to rent default and illegal subletting. The court held that after the original tenant’s death, his legal heirs were not statutory tenants and had illegally sublet the property.

The tenants appealed to the District Judge, Vadodara. The First Appellate Court reversed the Small Causes Court’s decision, holding that the tenancy was not monthly but annual. The court also stated that the landlord failed to prove subletting. The High Court of Gujarat dismissed the landlord’s revision petition, affirming the First Appellate Court’s findings. The High Court held that there was no default in payment of rent as the tenants had deposited all the due amount on the first day of hearing of the suit.

The landlord then appealed to the Supreme Court of India.

Legal Framework

The case primarily revolves around the interpretation of Section 12 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (Bombay Rent Control Act). This section deals with the eviction of tenants. Section 12(1) states that a landlord cannot recover possession of a property as long as the tenant pays the standard rent and adheres to the tenancy conditions.

Section 12(3) outlines the circumstances under which a tenant can be evicted. Section 12(3)(a) applies to monthly tenancies, allowing eviction if rent is in arrears for six months or more. Section 12(3)(b) applies to other tenancies, allowing eviction if the tenant fails to pay the standard rent on the day of the hearing of the suit.

The relevant sections are:

“12. No ejectment ordinarily to be made if tenant pays or is ready and willing to pay standard rent and permitted increases.
(3)(a). Where the rent is payable by the month and there is no dispute regarding the amount of standard rent or permitted increases, if such a rent or increase are in arrears for a period of six months or more and the tenant neglects to make payment thereof until the expiration of the period of one month after notice referred to in sub-section (2), the Court may pass a decree for eviction in any such suit for recovery of possession.
(b). In any other case no decree for eviction shall be passed in any such suit if on the day of hearing of the suit or on or before such other date as the Court may fix, the tenant pays or tenders in Court the standard rent and permitted increases then due”

The Act also defines “tenant” in Section 5(11), including family members who carry on business with the tenant at the time of death. Specifically, Section 5(11)(c) states:

(11) “tenant” means any person by whom or on whose account rent is payable for any premises and includes – (c) (i) any member of the tenant’s family residing with him at the time of his death as may be decided in default of agreement by the Court; (ii) in relation to premises let for business, trade or storage, any member of the tenant’s family carrying on business, trade or storage with the tenant in the said premises at the time of the death of the tenant as may continue, after his death, to carry on the business, trade or storage, as the case may be, in the said premises and as may be decided in default of agreement by the Court.

Arguments

The landlord argued that the tenants were persistent defaulters in rent payment, and the case fell under Section 12(3)(a) of the Bombay Rent Control Act, as the rent was in arrears for more than six months. The landlord also contended that after the original tenant’s death, Somabhai Dahiyalal Valand was illegally sublet the premises, and the tenants were not entitled to continue the tenancy under Section 5(11)(c) of the Act.

The tenants argued that the case fell under Section 12(3)(b) of the Bombay Rent Control Act, as the tenancy was not monthly but annual. They also claimed that they had deposited all the due rent on the first day of the hearing and that the landlord failed to prove the subletting.

The landlord submitted that the tenancy was a monthly tenancy, with rent due on the 6th of each month, and produced receipts as evidence. The landlord further argued that the tenant’s sons were not involved in the business, and therefore, were not statutory tenants. The landlord also produced evidence to show that one of the sons was employed elsewhere, and the other had his own separate business.

The tenants argued that the notice issued by the landlord demanded rent and other local taxes, which made the tenancy annual, not monthly. They also claimed that Somabhai Dahiyabhai Valand was their worker, not a sub-lessee.

The innovativeness of the argument by the landlord is that he produced evidence to show that the tenancy was a monthly tenancy and that the sons of the original tenant were not involved in the business and therefore, not entitled to continue the tenancy. The landlord also produced evidence to show that the tenant had sublet the premises.

Issues Framed by the Supreme Court

The Supreme Court considered the following issues:

1. Whether the tenants were in default of rent payment.
2. Whether the tenancy was monthly or annual.
3. Whether the tenants were entitled to continue the tenancy after the death of the original tenant.
4. Whether the tenants had illegally sublet the premises.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following legal provisions:

• Section 12 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947: This section deals with the eviction of tenants. Section 12(1) states that a landlord cannot recover possession of a property as long as the tenant pays the standard rent and adheres to the tenancy conditions. Section 12(3)(a) applies to monthly tenancies, allowing eviction if rent is in arrears for six months or more. Section 12(3)(b) applies to other tenancies, allowing eviction if the tenant fails to pay the standard rent on the day of the hearing of the suit.
• Section 5(11)(c) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947: This section defines “tenant” and includes family members who carry on business with the tenant at the time of death.

Judgment

The Supreme Court relied on Section 12 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947* to determine that the tenants were liable to be evicted as they were in default of rent for more than six months. The Court held that the case fell under Section 12(3)(a) as the tenancy was monthly. The Court also relied on Section 5(11)(c) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947* to determine that the tenant’s sons were not entitled to continue the tenancy as they were not involved in the business with their father.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the evidence presented by the landlord. The Court emphasized the fact that the tenants were in default of rent for more than six months, the tenancy was a monthly tenancy, the tenant’s sons were not involved in the business, and the premises were illegally sublet. The Court’s reasoning was based on the interpretation of the relevant provisions of the Bombay Rent Control Act and the evidence presented by the landlord.

The Supreme Court’s reasoning for each issue is as follows:

The Court rejected the tenants’ argument that the tenancy was annual, stating, “In our view, the First Appellate Court as well as the High Court did not properly appreciate the evidence of appellant-plaintiff and other evidence adduced by the parties.” The Court also noted, “By producing Ex.27 receipt and other receipts, the appellant-landlord has established that the tenancy was a ‘monthly tenancy’.”

Regarding the tenant’s sons, the Court observed, “The findings of the trial court that the defendant Nos.1/2 and 1/3 are not entitled to the benefit of Section 5(11)(c), is well reasoned and based on evidence and the same is to be restored.”

The Supreme Court overturned the High Court’s decision and restored the trial court’s order of eviction. The court found that the tenants were liable to be evicted on three grounds: default in rent payment, the tenant’s sons not being entitled to the benefit of Section 5(11)(c), and subletting.

Key Takeaways

✓ Tenants must pay rent on time to avoid eviction.

✓ Subletting without the landlord’s permission can lead to eviction.

✓ Only family members who are actively involved in the business with the tenant at the time of death can continue the tenancy.

✓ Landlords should maintain proper records of rent payments and tenancy agreements.

This judgment reinforces the importance of adhering to tenancy agreements and the legal consequences of violating them. It also clarifies the rights and obligations of both landlords and tenants under the Bombay Rent Control Act.

Directions

The Supreme Court directed the tenants to hand over vacant possession of the premises within two months from the date of the judgment. Failure to do so would result in contempt of court proceedings, in addition to other available legal remedies.

Development of Law

The ratio decidendi of this case is that a tenant can be evicted for default in rent payment, subletting without the landlord’s permission, and if the tenant’s legal heirs are not entitled to continue the tenancy under the relevant rent control act. This judgment reinforces the existing legal position and provides clarity on the interpretation of Section 12 and Section 5(11)(c) of the Bombay Rent Control Act.

Conclusion

In Anil Kumar Dadhurao Dhekale v. Rukhiben and Ors., the Supreme Court of India upheld the eviction order against the tenants, ruling in favor of the landlord. The court found that the tenants had defaulted on rent payments, illegally sublet the property, and that the tenant’s sons were not entitled to continue the tenancy. This case serves as a reminder of the importance of adhering to tenancy agreements and the legal consequences of violating them.