SULOCHANA GANPAT REGE Vs. MADAN DATTATRAY WADKE

JUDGEMENT

(1.) THE question involved in this petition is whether an agreement under which a landlord has obtained a loan from an intending tenant for the construction of a residential building cannot be taken cognizance of by the Court and cannot be enforced on the ground that it does not comply with all the requirements of Section 18(3) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (hereinafter referred to as the 'Rent Act' or 'the Act') including the requirement of registration.

(2.) THE facts of the case about which there is no dispute are these : Opponents Nos. 1 to 5 (hereinafter referred to as 'the opponents') are joint owners of a house known as Wadke house situate at Mahim in the City of Bombay. That house was built by their deceased father Dattatraya in the year 1959, While the house was under construction, Dattatraya obtained a loan of Rs. 5,000 from the petitioner for financing the construction and agreed to let out one double room on the first floor including the rear verandah and front gallery, to her. Out of this amount Rs. 2,000 were paid by the petitioner on April 2, 1959, and the balance of Rs. 3,000 was paid by her on April 6, 1959. For both these amounts Dattatraya passed receipts to the petitioner. In the second receipt it is stated that the amount was to carry interest at 4% per annum and was to be repaid by deducting 50% from the rent, each month. In the receipts the amount is described as 'deposit' but there is no dispute between the parties that it was a 'construction loan' as popularly called. The construction was complete before July 1959 and the petitioner was put in possession of a tenement designated as Flat No. 2. The rent fixed was Rs. 55 per month exclusive of water charges. It appears, Rs. 1.41 became subsequently payable as permitted increases on account of the State Education Cess and the local education cess. From the commencement of the tenancy Dattatraya started adjusting half of the monthly rent towards the repayment of the loan according to the agreement. He died some time in 1960 and after him his widow i.e. the mother of the opponents, went on making similar adjustment. After her death in 1964 the present opponents also accepted half of the monthly rent as before, till December, 1965 but refused to accept thereafter and the petitioner, therefore, started sending the rent by Postal Money Orders. Opponents accepted the Money Orders till April 1966 but in the meantime on March 4, 1966, they gave notice to the petitioner alleging inter alia that she was not ready and willing to pay the rent and purporting to terminate her tenancy from the end of April 1966. They did not accept the rent for the month of May and for the subsequent months. On December 16, 1966, they gave another notice to the petitioner purporting to be under Section 12(2) of the Rent Act, demanding alleged arrears of rent from May 1966 and water charges.

(3.) THE suit came up for what is known in the Small Causes Court as 'scrutiny' on November 80, 1967, and on that day the Court passed an order directing the petitioner to deposit Rs. 1,215.28 within 8 weeks towards rent or compensation without prejudice and thereafter to continue to deposit in Court Rs, 56.41 per month as rent or compensation by 19th day of each succeeding month commencing from February, 1968 till the disposal of the suit. The Court also directed that the amounts, if and when deposited, be paid to the opponents towards rent or compensation on account and subject to adjustment on the basis of standard rent. The order was made without taking into account the agreement to adjust half the monthly rent towards the repayment of the loan and hence on December 13, 1967, the petitioner made an application to the Court pointing this out and praying that the order be modified by taking the agreement into account. According to her, on the basis of that agreement she would be required to deposit only Rs. 414.30 and not Rs. 1,215.28.