Kerala High Court · 2024

O R D E R Aggrieved by the dismissal of R.C.A No.29 of 2023 on the files of the Rent Control Appellate Authority (Additional District Judge-IV), Thalassery, the appellants therein, who are the tenants and respondents in R.C.P No.242 of 2018 of Rent Control Court, Kannur, have preferred this revision before this Court.

2. The Rent Control Court, after evaluating the pleadings and evidence in the abovesaid R.C.P, ordered eviction of the revision petitioners from the petition scheduled building on the ground of arrears of rent, as envisaged under Section 11(2)(b) of the Kerala Buildings (Lease & Rent Control) Act, 1965 (for short ‘the Act’). The revision petitioners challenged the above order before the Rent Control Appellate Authority, (Additional District Judge-IV) Thalassery, by preferring R.C.A No.29 of 2023. The contention of the revision petitioners is that, upon the compulsion of the respondents- landlords, they had invested an amount of Rs.2 Crores for the commencement of a beauty parlour with five star facilities in the leasehold building, but thereafter, the respondents-landlords caused hindrance for the conduct of the above establishment, by refusing to issue consent letter for getting electricity connection, and also by cutting off the water supply, lift facility, etc. to the said building. The revision petitioners also contended that they had paid an amount of R.C.R.No.297 of 2023 4 Rs.75,00,000/- as security deposit to the respondents. Thus, the eviction of the revision petitioners, on the ground of arrears of rent, was resisted by them before the Rent Control Court as well as the Appellate Authority, by contending that no such order under Section 11(2)(b) of the Act could be passed since the landlords were indebted to pay back the amount of Rs.2 Crores invested by them, for the commencement of a five star beauty parlour at the insistence of the landlords, and the amount of Rs.75,00,000/- paid as security deposit. However, the Rent Control Court as well as the Appellate Authority refused to accept the contentions of the revision petitioners in the above regard, and directed the revision petitioners to hand over vacant possession of the petition scheduled building to the respondents-landlords. Challenging the above order of the Rent Control Court dated 29.09.2022 in R.C.P No.242 of 2018, which was upheld by the Appellate Authority in the judgment dated 22.05.2023 in R.C.A No.29 of 2023, the revision petitioners are now before this Court.

3. Notice of this revision petition was duly served to the respondents. The respondents appeared through their counsel.

4. Heard the learned Senior Counsel for the revision petitioners and the learned counsel for the respondents. R.C.R.No.297 of 2023 5

5. The point to be decided in this revision petition is whether the concurrent findings of the Rent Control Court, Kannur and the Rent Control Appellate Authority, Thalassery in the matter of eviction of the revision petitioners from the petition schedule building under Section 11(2)(b) of the Act, are liable to be interfered with.

6. As found by the Rent Control Court and the Appellate Authority, there is absolutely no dispute as to the landlord-tenant relationship between the respondents and revision petitioners. Nor had the revision petitioners raised any serious challenge as to the rate of rent liable to be paid to the respondents. It is also seen from the case records that the default committed by the revision petitioners in making payment of rent to the respondents, is more or less an admitted fact. The revision petitioners have not disputed the compliance of statutory requirements of the notice issued by the respondents demanding payment of the defaulted rent. The one and only challenge raised by the revision petitioners against the claim of eviction put forward by the respondents is that the amount of Rs.75,00,000/- which the revision petitioners claimed to have paid as security deposit, and the amount of Rs.2 Crores which they are said to have invested for the commencement of a beauty parlour with five star facilities, under the compulsion of the respondents, are liable to be paid back by the respondents, and hence the arrears of R.C.R.No.297 of 2023 6 rent due to be paid to the respondents are liable to be adjusted with the said amounts. According to the revision petitioners, it is not possible to say that rent is in arrears since the respondents are indebted to pay a higher amount back to the revision petitioners under the heads of accounts mentioned above.

7. The above challenge of the revision petitioners has been repelled by the Rent Control Court as well as the Appellate Authority for the reason that an adjudication as to the claims set forth by the revision petitioners for the refund of the amounts under the above heads of accounts, is beyond the scope of jurisdictional authority of the Rent Control Court and Appellate Authority while dealing with a petition under Section 11(2)(b) of the Act. It has been rightly observed by the Rent Control Court as well as the Appellate Authority that the revision petitioners have to work out their remedy in respect of the above grievance by approaching the competent Civil Court.

8. The learned Senior Counsel for the revision petitioners has adverted to the decision of the Apex Court in G.Reghunathan v. K.V.Varghese [(2005)7 SCC 317] in support of the point that the amount received as advance by the landlord is liable to be refunded to the tenant, and thus the arrears of rent, if any, are liable to be adjusted with such advance amount held by the landlord. R.C.R.No.297 of 2023 7

9. In Abdul Gafoor M.C. v. K. Abdurahiman and another [2015 (3) KHC 775] the Division Bench of this Court was dealing with a case in which the learned counsel for the tenant raised an alternative contention that the tenant has already paid an advance of Rs.7,50,000/- and that, in the light of the principles laid down by the Apex Court in Modern Hotel, Gudur v. K. Radhakrishnaiah [(1989) 2 SCC 686] and Reghunathan v. Varghese [(2005) 7 SCC 317] the landlord cannot retain such huge amount and that this amount being repayable to the tenant is liable to be adjusted towards rent arrears, if any.

10. In Abdul Gafoor M.C. [2015 (3) KHC 775] the Division Bench noticed that, Modern Hotel [(1989) 2 SCC 686] was a case arising under the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960. Section 7(2) of the said Act provided that where the fair rent of a building has not been fixed, the landlord shall not, after the commencement of the Act, claim, receive or stipulate for the payment of any premium or other like sum in addition to the agreed rent. However, as per the proviso to this section, the landlord could receive or stipulate for the payment of an amount not exceeding one month's rent by way of advance. It was taking note of this statutory provision that the Apex Court took the view that money received as advance by the landlord from the R.C.R.No.297 of 2023 8 tenant, in excess of what was provided under Section 7(2), becomes payable to the tenant immediately and that amount of arrears of rent being smaller than the advance amount held by the landlord on account of the tenant, there was no default in payment of rent and eviction order is not justified. It is this judgment which is followed in Reghunathan [(2005) 7 SCC 317].

11. In Abdul Gafoor M.C. [2015 (3) KHC 775] the Division Bench held that, insofar as Kerala Buildings (Lease and Rent Control) Act is concerned, a similar provision is contained in Section 8 of the Act and in the light of the judgment of this Court in Isac Ninan v. State of Kerala [1995 (2) KLT 848] that section no longer survives in the Statute. This, therefore, means that the Kerala Act does not contain any provision similar to Section 7 of the Andhra Pradesh Act, in the context of which judgment in Modern Hotel [(1989) 2 SCC 686] was rendered by the Apex Court. That being so, the argument advanced by the learned Senior Counsel for the revision petitioners as regards the applicability of the dictum in Reghunathan supra, cannot be accepted.

12. The proposition of law in the above regard has been reiterated in the decision of a Division Bench of this Court in Abdul Razak P. M. v. K. C. Thomas and Others [2022 (4) KHC 260] in which one among us, (Anil K. Narendran, J.) was a party, wherein R.C.R.No.297 of 2023 9 it has been held that when Section 8(1) of the Act is not in Statute book, as it was declared ultra vires by the Division Bench of this Court in Issac Ninan v. State of Kerala [1995 (2) KLT 848], a tenant is not entitled to contend that the landlord is not entitled to retain the advance in excess of one month's rent. Therefore, the contention of the tenant that, the security deposit made by him, in terms of the lease deed dated 01.11.2017, which is still with the landlord, has to be adjusted against the admitted arrears of rent, before the Rent Control Court passing an order under Section 12(3) of the Act, can only be rejected as untenable.

13. Thus the only conclusion which could be drawn from the discussions aforesaid is that the contention put forward by the revision petitioners that they are not liable to be evicted under Section 11(2)(b) of the Act in view of the amount allegedly held by the respondents as security deposit, is totally unsustainable. It is also pertinent to note, in this context, that there is absolutely no evidence adduced by the revision petitioners, other than the interested testimony of RW1, before the Rent Control Court to substantiate their claim of remittance of an amount of Rs.75,00,000/- as security deposit and an investment of Rs.2 Crores at the request of the landlord for the commencement of a beauty parlour with five star facilities. Thus the resistance offered by the R.C.R.No.297 of 2023 10 revision petitioners against their eviction on the ground of arrears of rent is liable to fail for that reason also.

14. As a conclusion to the discussions aforesaid, we hold that the impugned judgment of the Rent Control Appellate Authority is neither perverse nor patently illegal warranting interference in this revision proceedings. Therefore, revision petitioners (respondents-tenants in the R.C.P) are liable to be evicted from the petition schedule building on the ground of arrears of rent as envisaged under Section 11(2)(b) of the Act.

15. In the result, this Rent Control Revision is dismissed declining interference on the impugned judgment of the Rent Control Appellate Authority and also the order of the Rent Control Court. (sd/-) ANIL K. NARENDRAN, JUDGE (sd/-) G. GIRISH, JUDGE jsr/vgd