RAKAPALLI RAJA RAMA GOPALA RAOversusNARAGANI GOVINDA SEHARARAO & ANR.

                 RAKAPALLI RAJA RAMA GOPALA RAO
                                                                                     A
                                v.
                NARAGANI GOVINDA SEHARARAO & ANR.

                                SEPTEMBER 12, 1989

            [K. JAGANNATHA SHETTY AND A.M. AHMADI, JJ.]                              B

              A .P. Buildings (Lease, Rent & Eviction) Control Act, 1960: Sec-
        tion 10(2)-Tenant-Eviction-On ground of 'wilful default'-To be
        shown default was intentional, deliberate, calculated and conscious with
        full knowledge, of its consequences.

              Non-payment of rent by tenant under bona fide belief that he was
                                                                                     c
        entitled to purchase property under a prior oral agreement pursuant to
        which he paid earnest money-Whether 'wilful'.

              Words and Pharases: 'Wilful'-Me~ning of.
                                                                                     D
              The respondents purchased the demised premises by a registered
        sale-deed dated 7th December, 1977 for Rs. 70,000. The appellant was
        in actual possession of a part of the premises as a tenant of the vendors
        at the date of purchase. After the purchase the respondents served the
        appellant with a notice dated 13th December, 1977 calling upon him to
        pay the rent due, and deliver va~cant possession of the demised pre-         E
        mises. The appellant replied to the notice ~n 29th December, 1977
    \   alleging that the vendors had orally agreed on 14th October, 1977 to sell
        him the property for Rs. 70,000, and had received Rs.5,000 as earnest
        money, and that he was under no obligation to pay the rent and vacate
        the premises, since he was ready and willing to purchase the property.
        The respondents sent a reply denying the existence of any such oral          F
        agreement.

              A suit for eviction, was thereafter filed by the respondents claim-
        ing rent from December 1977 to May 1978 from the appellant, and
        since the same was not paid, the appellant it was contended had
        rendered himself liable to eviction on the ground of wilfu.I default.        G

             The courts below held that the appellant failed to pay the rent,
        and concluded that he was a wilful defaulter and passed a decree for
        ejectment against him .
•             In the appeal to this Court, on the question: whether it can be said   H
                                           115
                                                                                       1
                                                                                       1
    116         SUPREME COURT REPORTS                 [1989] Supp. 1 S.C.R.            J
                                                                                       '
    that the tenant's default to pay or tender rent from December 1977 to
A
    May 1978 was not wilful to avail of the benefit of the proviso to clause (i)
    of ,the sub-section (2) of Section 10 of the Andhra Pradesh Building
    (Lease, Rent and Eviction) Control Act, 1960. The Court, allowing
    the appeal.

B
         HELD: I. An act is said to be wilful if it is intentional, conscious
    and deliberate. [119A]

          S. Sundaram Pillai etc. v. V.R. Pattabiraman etc., [1985] 2 SCR
    643, refered to.

C         2. In order to secure eviction for non-payment of rent, it must be
    shown that the default was intentional deliberate, calculated and con-
    scious with full knowledge of its consequences. [119G]

          3. In cases where the tenant has defaulted to pay or tender the
D   rent, he is entitled to an opportunity to pay or tender the same if his
    default is not wilful. The proviso to sub-section (2) of Section 10 is
    couched in negative form to reduce the rigour of the substantive provi-
    sion in Section 10(2) of the Act. [118H; ll9A]

          4. The appellant-tenant in the instant case, did not pay or tender
E   the rent from December 1977 to May 1978, not because he had no desire
    to pay the rent to the respondents but because he bona fide believed that
    he was entitled to purchase the property under the oral agreement of
    October 14, 1977. He had also paid Rs.5,000 by way of earnest under


F
    the said oral agreement. He, therefore, bona fide believed that he was
    entitled to purchase the property under the said oral agreement and
    since he had already paid Rs.5,000 by way of earnest thereunder he
    genuinely believed he was under no obligation to pay the rent to the
                                                                                   •
                                                                                   /
                                                                                   '
    respondents. [119E-F]       -

          5. This is not a case of a tenant who has failed to pay the rent
    without any rhyme or reason. He was not averseto paying the rent bu(
O   he genuinely believed that he was nuder no obligation to do so as he had
    a prior right to purchase the property. [ll9H; 120A]

         6. This is a case where the Controller should have invoked the
   proviso to sub-section (2) of Section IO of the Act and called upon the
   appellant to pay the arrears from December 1977 to May 1978 within a
H ~rt_~in time. Failure to do so has resulted in miscarriage of justice. The
            RAKAPALLI v. N.G. SEHARARAO (AHMADI, J.]                 117

ejectment decree cannot therefore, be allowed to stand and is accord·
                                                                            A
ingly set aside. The·matter will go back to the Controller who will give
the benefit of the aforesaid proviso to the appellant. [I20A-B] --    -

      CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3812
of 1989.
                                                                            B
     From the Judgment and Order dated .1.2.89 of the Andhra
Pradesh High Court in Revision Petition No. 302 of 1989.

     K.N. Bhatt, M.J. Paul and Kailash Vasdev for the Appellant.

      A. Subba Rao for the Respondents.
                                                                            c
      The Judgment of the Court was delivered by

      AHMADI, J. Special leave granted.

      This tenant's appeal raises the question whether a tenant who         D
omits to pay or tender the rent in respect of the demised premises
under the belief that he had a right to purchase the property under a
prior agreement to sell and was, therefore, not obliged to pay the rent
can be said to be a wilful defaulter within the meaning of the proviso to
sub-section (2) of Section 10 of the A. P. Buildings (Lease, Rent &
Eviction) Control Act, 1960 (hereinafter called 'the Act'). Section         E
10(1) lays down that a tenant shall not be evicted except in accordance
with the provisions of this section or sections 12 and 13 of the Act,
Clause (i) of sub-section (2) of that section next provides that a land-
lord who seeks to evict his tenant may apply to the Controller for a
direction in that behalf and the Controller on being satisfied that the
tenant has not tendered the rent due by him within fifteen days after       F
the expiry of the time fixed in the agreement of tenancy or in the
absence of any such agreement by the last day of the month next
following that for which the rent is due, shall make an order directing
the tenant to put the landlord in possession. This is, however, subject
to the proviso which reads under:
                                                                            G
            "Provided that in any case falling under clause (i), if the
            Controller is satisfied that the tenant's default to pay or
            tender rent was not wilful, he may notwithstanding any-
            thing in section 11, give the tenant a reasonable time, not
            exceeding fifteen days, to pay or tender the rent due by him
            to the landlord lll'to the date of such payment or tender and   H
                                                                                 f
                                                                                 \



    118         SUPREME COURT REPORTS                [1989] Supp. 1 S.C.R.

A               on such payment or tender, the application shall be
                rejected."

    The proviso, therefore, makes it clear that if the Controller is satisfied
    that the tenant's default is not wilful he may give the tenant an
    opportunity to pay or tender the rent due by him to the lndlord and on
B   such payment or tender being made within the time allowed, the land-
    lord's application for eviction shall be rejected. The benefit of this
    proviso is available to only those tenant who are not guilty of wilful
    default. In the present case, the courts below have come to the conclu-
    sion that the tenant's default was wilful and hence the benefit of the
    proviso was not available to him. The question then is whether this
C   conclusion reached by the courts below can be sustained on he facts
    found proved.

         The facts lie in a narrow compass. The·respondents purchased
  the demised premises by a registered sale-deed dated 7th December,
   1977 for Rs.70,000. The appellant was in actual possession of a part of
D the premises as a tenant of the vendors at the date of purchase. After
  the purchase of the property the respondents served the appellant with
  a notice dated 13th December, 1977 caliing upon him to pay the rent
  due and deliver vacant possession of the demised premises. The appel-
  lant replied to the notice on 29th December, 1977 alleging that the
  vendors had orally agreed on 14th October, 1977 to sell the property to
E him for Rs.70,000 and had received Rs.5,000 as earnest. The appel-
  lant, therefore, contended that he was under no obligation to pay the
  rent and vacate the premises since he was ready and willing to pur-
  chase the property. The respondents sent a reply denying the existence         j

  of any such oral agreement and filed a suit for eviction. lt may here be       •
  mentioned that on the date of the purchase of the property the rent            1
F was paid to the vendors up to the end of November 1977. The respon-
  dents, therefore, claimed the rent from December 1977 to May 1978
  from the appellant. Since the appellant failed to pay the rent for the
  said period the courts below came to the conclusion that he was a
  wilful defaulter and passed a decree in ejectment against him. The
  tenant has, therefore, come in appeal to this Court.
G
        The short question then is whether it can be said that the tenant's
  default to pay or tender rent from December 1977 to May 1978 was not
  wilful to avail of the benefit of the proviso extracted above. It may be
  noticed that in cases where the tenant has defaulted to pay or tender
  the rent he is entitled to an opportunity to pay or tender the same if his
H default is not wilful. The proviso is couched in negative form to reduce
             RAKAPALLI v. N.G. SEHARARAO [AHMADI. J.]                    119

the rigour of the substantive provision in Section 10(2) of the Act~ An        A
Act is said to be wilful if it is intentional, conscious and deliberate. The
expressions 'wilful' and 'wilful default' came up for consideration
before this Court in S. Sundaram Pillai etc. v. V. R. Pattabiraman
etc., [1985] 2 SCR 643. After extracting the meaning of these expres-
sions from different dictionaries (See: pp. 659 & 660) this Court con-
cluded at p. 661 as under.                                                     B

            "Thus a consensus of the meaning of the words 'wilful
            default' appears to indicate that default in order to be _wil-
            ful must be intentional, deliberate, calculated and conscious,
            with full knowledge of legal consequences flowing there-
            from''.
                                                                               c
Since the proviso with which we are concerned is couc~ed in negative
form the tenant can prevent the decree by satisfying the Controller
that his omission to pay or tender the rent was not wilful. If the Con-
troller is so satisfied he must give an opportunity to the tenant to make
good the arrears within a reasonable time and if the tenant does so            D
within the time prescribed, he must reject the landlords application for
eviction. In the present case, it is not in dispute that the tenant did not
pay the rent from December 1977 to May 1978 before the institution of
the suit. Under the eviction notice served on him in December 1977 he
was called upon to pay the rent from December, 1977 only. The
appellant-tenant did not pay or tender the rent from December 1977 to          E
May 1978 not because-he had no desire to pay the rent to the respon-
dents but because he bona fide believed that he was entitled to pur-
chase the property under the oral agreement of 14th October, 1977.
He had also paid Rs.5,000 by way of earnest under the said oral agree-
ment. True it is, his suit for specific performance of the said oral
agreement has since been dismissed but he has filed an appeal which is         F
pending. He, therefore, bona_ fide believed that he was entitled to
purchase the property under the said oral agreement and since he had
already paid Rs.5,000 by way of earnest thereunder he was under no
obligation to pay the rent to the respondents. In order to secure evic-
tion for non-payment of rent, it must be shown that the default was
intentional, deliberate, calculated and conscious with full knowledge          G
of its consequences. Here is a tenant who felt that even though he had
invested Rs.5,000 as earnest the vendor has sold the property to the
respondents in total disregard of his right to purchase the same. This is
not a case of a tenant who has failed to pay the rent without any rhyme
or reason. He was not averse to paying the rent but he genuinely
believed that he was under no obligation to do so as he had a prio~            H·
     120         SUPREME COURT REPORTS                [ 1989] Supp. 1 S.C.R.

A    right to purchase the property. We are, therefore, of the opinion that
     this is a case in which the Controller should have invoked the proviso
     and called upon the appellant to pay the arrears from december 1977
     to· May 1978 within a certain time. Failure to do so has resulted in
     miscarriage of jus.tice. We are, therefore, of the opinion that the eject-
     ment decree cannot be allowed to stand.
B
           In the result we allow this appeal and set aside the eviction
     decree. The matter will go back to the Controller with a direction that
     he will give the benefit of the proviso extracted above to the appellant
     in accordance with law. Parties will bear their own costs.

·C   N.V.K.                                                  Appeal allowed.