Facts of the Case

The petitioner, Sheeba Rani, was the tenant and appellant in R.C.A. No. 4/2022 pending before the Rent Control Appellate Authority, Ernakulam. An order of eviction had been passed against her by the Rent Controller under Section 11(3) of the Kerala Building (Lease and Rent Control) Act, 1965.

Aggrieved by the eviction order, the tenant preferred an appeal before the Rent Control Appellate Authority. During the pendency of that appeal, the landlords filed an application under Section 12(1) of the Act seeking a direction to the tenant to deposit the entire arrears of rent.

The landlords claimed monthly rent at the rate of Rs. 41,300, comprising Rs. 35,000 plus GST. In the counter affidavit filed by the tenant, no dispute was raised regarding the rate of rent.

The Rent Control Appellate Authority directed the tenant to pay the arrears of rent up to July 2022 within four weeks. Aggrieved by this direction, the tenant approached the High Court under Article 227 of the Constitution of India.

Issues Involved

  1. Whether a tenant seeking to contest a rent control appeal is bound under Section 12(1) of the Kerala Building (Lease and Rent Control) Act, 1965 to deposit the entire admitted arrears of rent.
  2. Whether the tenant can claim adjustment or set-off of admitted rent arrears against an amount allegedly invested or deposited with the landlord.
  3. Whether the Rent Control Appellate Authority committed any error or irregularity in directing payment of arrears of rent up to July 2022 within four weeks.
  4. Whether supervisory interference under Article 227 of the Constitution of India was warranted against the order passed by the Rent Control Appellate Authority.

Petitioner’s Arguments

The petitioner-tenant contended that she had invested more than Rs. 15,00,000 as a deposit and, therefore, the landlords were liable to adjust the rent arrears against the amount invested by her.

On this basis, the petitioner challenged the direction requiring payment of the entire arrears of rent and sought interference with the order passed by the Rent Control Appellate Authority.

Respondents’ Arguments

The landlords had invoked Section 12(1) of the Kerala Building (Lease and Rent Control) Act, 1965 and sought a direction requiring the tenant to deposit the entire arrears of rent.

The landlords claimed rent at Rs. 41,300 per month, calculated as Rs. 35,000 plus GST. Significantly, the tenant had not disputed the rate of rent in her counter affidavit.

The respondents’ position, as reflected in the proceedings and accepted by the Court, was that the tenant was required to discharge the admitted arrears of rent in order to continue contesting the appeal.

Court’s Findings

The High Court held that a tenant, in order to contest the appeal, is bound to deposit the admitted arrears of rent.

The Court specifically observed that Section 12(1) of the Kerala Building (Lease and Rent Control) Act, 1965 mandates the tenant to discharge the entire admitted arrears in order to contest the appeal.

The Court further held that the tenant cannot claim any set-off against the liability to discharge the admitted arrears of rent.

Accordingly, the High Court found no error or irregularity in the order passed by the Rent Control Appellate Authority directing payment of the arrears.

Court Order

The High Court dismissed the original petition.

However, considering the facts and circumstances of the case, the Court granted the tenant four weeks from the date of the judgment to clear the entire arrears of rent.

The Court made no order as to costs.

Important Clarification

The judgment makes an important distinction between a tenant’s alleged monetary claim against the landlord and the statutory obligation to discharge admitted rent arrears under Section 12(1) of the Kerala Building (Lease and Rent Control) Act, 1965.

A tenant cannot avoid or postpone the statutory obligation to pay admitted arrears merely by asserting that a substantial amount was deposited, invested, or otherwise recoverable from the landlord. Where rent arrears are admitted, Section 12(1) requires their discharge for the tenant to contest the appeal, and a unilateral claim of set-off cannot substitute compliance with that statutory requirement.

The ruling is particularly significant because the tenant had not disputed the rate of rent in the counter affidavit. Therefore, the obligation concerning admitted arrears remained enforceable, notwithstanding the tenant’s assertion that more than Rs. 15,00,000 had been invested as a deposit.

Sections Involved

·         Section 11(3) of the Kerala Building (Lease and Rent Control) Act, 1965: The underlying eviction order against the tenant had been passed under this provision.

·         Section 12(1) of the Kerala Building (Lease and Rent Control) Act, 1965: This was the central provision considered by the High Court. The Court held that a tenant seeking to contest the appeal is bound to discharge the entire admitted arrears of rent and cannot claim set-off against that statutory liability.

·         Article 227 of the Constitution of India: The tenant invoked the supervisory jurisdiction of the High Court to challenge the order of the Rent Control Appellate Authority. The High Court found no error or irregularity warranting interference.

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