SOHRAB N. TAVARIA Vs. JAFFERALI G. PADAMSEE

JUDGEMENT

(1.) THESE two revisional applications raise a point of limitation under Section 8 Sub -section (2), of the Bombay Rent Control Act, VII of 1944. This question arises in this way. Three suits had been originally filed by the plaintiff against his tenants for ejectment and for arrears of rent and compensation from May 1, 1952, to January 31, 1954, and for mesne profits for the period subsequent thereto until possession was given to him. The property let out to the defendants is known as 'Candy Castle' and it is situated opposite the Strand Cinema at Colaba. The claim for rent and compensation was resisted by the defendants on the ground that they had paid an amount of Rs. 10,000 each in two suits and Rs. 11,000 in one suit as premia to the plaintiff and' that they were entitled to deduct the said amounts out of the rent payable by them to the plaintiff. By consent the three suits were tried together since they raised common questions of fact and law. The learned trial Judge of the Court of Small Causes rejected the defence raised by the tenants and passed a decree for ejectment and for different sums of money as claimed by the plaintiff in respect of arrears of rent, compensation and damages. The decrees thus passed by the trial Court were challenged by the defendants before the appellate Court in the Court of Small Causes. The appeals, however, failed and the decrees passed by the trial Court were confirmed. Two of the tenants have now preferred the present revisional applications and on their behalf it has been urged that the Courts below erred in law in holding that the tenants were not entitled to claim deduction under Section 8(2) of the Act. The conclusion reached by the Courts below on this point was the result of their finding that the claim for deduction was barred by limitation. That is how the only question which has been urged before us in the present revision present revisional application is one of limitation under Section 8(2) of the Act.

(2.) IT is unnecessary to set out the legislative history of the rent legislation. Act VII of 1944 was preceded by two earlier Acts II of 1918 and XVI of 1939. The relevant provision contained in Section 8 of the Act with which we are concerned was substantially the same in the earlier Acts. The Rent Acts have made separate provisions for giving relief to the tenant where the tenant had paid to the land -ford any amount by way of fine or premium on the one hand, and on the other, where excess payment had beenmade by the tenant to the land lord by way of rent. In the present case, we are concerned with the payment made by the tenants to the landlord by way of premium. Section 8 deals with this question. Sub -section (1) of Section 8 prohibits the landlord from accepting from the tenant any fine, premium or any other like sum in addition to the rent in consideration of the grant, renewal or continuance of a tenancy of any premises. This prohibition is made inapplicable under Sub -section (3) to any payment under any agreement entered into before September 1, 1940. The acceptance of the prohibited consideration is penalised under Sub -section (4) of Section 8. Sub -section (2) of Section 8 confers on the tenant the right to recover the amount paid by him by way of premium and also gives him the right to claim deduction of the amount paid by way of premium from any rent payable by him to the landlord. It is necessary to set out the terms of this Sub -section. Where any such payment has been made. says this Sub -section, the amount shall be recoverable by the tenant by whom it was made from the landlord, and may, without prejudice to any other method of recovery, be deducted from any rent payable by him to the landlord. Mr. M.V. Desai for the petitioners contends that two rights are given to the tenant under this provision. The tenant may recover the amount in question by instituting a suit in that behalf and Mr. Desai concedes that a suit of this kind would be governed by an appropriate provision of the Limitation Act. Mr. Desai does not concede that the period of limitation would be three years under Article 62 of the Limitation Act and he suggests that the period should be six years under Article 120 of the Limitation Act. But whether the period of limitation is three years or six years, it is not disputed that a claim to recover the amount by a suit would be governed by the Limitation Act. In regard to the other right of the tenant to claim deduction of the premium paid from any rent payable by him, however, Mr. Desai argues that this right is not governed by any consideration of limitation and its exercise is subject to only one restriction which is mentioned in the section : the claim for deduction can be made only so long as tenant continues to be a tenant of the premises and as such is liable to pay rent to the landlord. If and when the tenancy is determined and the tenant ceases to be a tenant, he cannot make any claim for deduction of the premium paid by him. It is only from rent payable by him that deduction can be claimed, and if and when rent ceases to be payable by him, a claim for deduction automatically lapses. If the claim for deduction can be made without reference to the law of limitation, then the view taken by the Courts below would clearly be erroneous. If, on the other hand, the Limitation Act is applicable even to the claim for deduction, then it would be necessary to consider which article applies to such a claim. If Article 62 applies, and not Article 120, then the view taken by the Courts below would be right.

(3.) IN our opinion, this distinction would not be of any assistance to Mr. Desai in the matter of construing Section 8, Sub -section (2). As I have already mentioned, Mr. Desai himself has conceded that the recovery of the premium by filing a suit is subject to the law of limitation, so that it really does not make a substantial difference that the period of limitation has not been prescribed by Section 8(2) itself. It is true that Section 12(1) itself prescribed a period of six months; but that does not mean that the period of limitation is not prescribed by Limitation Act for the recovery of premium under Section 8(2). It was necessary to prescribe the period of limitation under Section 12 (1) because Legislature wanted to prescribe a much shorter period for claims falling under Section 12 (1), whereas Legislature wanted to leave the recovery of rent under Section 8(2) to be governed by the general law of limitation. Therefore, the absence of any provision prescribing limitation in Section 8(2) itself is not a matter of any decisive importance. While construing Section 8(2), it is, therefore, necessary to bear in mind that the first right given to the tenant to recover the premium paid by him is governed by the period of limitation prescribed under the Limitation Act. Section 8(2) really provides for two remedies or methods of recovery to the tenant. The first method of recovery is to institute a suit for recovering the amount in question; and the second method of recovery is to claim deduction from the rent payable by him. There can be no doubt on this point because in referring to the claim for deduction the section in terms says that the claim for deduction can be made by the tenant 'without prejudice to any other method of recovery.' In other words, the claim for deduction is obviously one method of recovery and this method has been provided without prejudice to any other method of recovery under the law. It may be useful at this stage to refer to the decision in Diment v. Roberts [1925] 1 K.B. 9 where Atkin L.J., in dealing with substantially similar provisions of Section 14 of the Increase ofRent and Mortgage Interest (Restrictions) Act, XC of 1920, observes that the said section 'gives one method of recovery, by deducting from the next rent payable.''