1. ' This appeal has been filed against the judgment of the Additional District Judge, Hyderabad upholding the order of the Controller whereby ejectment application of the respondent was granted. The brief facts are that under a registered sale deed dated 29th December, 1962 the respondent purchased the disputed premises/shop. Thereafter under an agreement dated 25th August, 1971 it was rented out to the appellant who in terms thereof deposited a sum of Rs, 25,000 with the respondent. This agreement was renewed from.Time to time and the last agreement available on record is dated llth August.
2. 1973. This agreement was for a period of 11 months commencing from 1st July 1973 to 31st May 1974.
3. This agreement provided that earlier the appellant had deposited with the respondent a sum of Rs, 25,000 by way of "A MANAT" (Trust) which shall be returned to the appellant when he hands over vacant possession to the respondent. The monthly rent was fixed at Rs, 500 per month to be paid in advance on the 1st day of every month. The learned counsel for the respondent has referred to a notice of the appellant dated 28th December, 1973 which has not been brought on record, and submitted that the appellant disputed the title of the respondent and demanded the refund of earnest money of Rs, 25,000 as according to him the property belonged to some one else. The appellants also alleged that the respondent had stopped accepting the rent. In reply Exh. 19 the respondent denied all these allegations. In these circumstances on 22nd January, 1974 the appellant filed an application before the Controller for the deposit of rent with a prayer that the order for deposit of rent may be passed after determining the issue relating to the relationship of landlady and tenant. The respondent filed objections and issues were flamed. However, on 15th July, 1974 the respondent filed an application before the Controller for ejectment of the appellant on the ground that he has committed default in payment of rent from 1st November, 1973 for 11 months. On 4th February, 1975 the Advocate for the appellant made statement that the appellant did not wish to challenge the title of the respondent and accepted her as the landlady. Upon this statement order for deposit of rent was made which was regularly complied with by the appellant.
4. The Controller however, held that default has been committed as according to him the appellant did not pay any rent from November, 1973 till January 1974 before application for deposit of rent was filed by him. The order passed by the Controller was upheld by the learned Additional District Judge.
5. ' Mrs. Salima Nasiruddin, the learned counsel for the appellant contended that the appellant had not disputed the title of the respondent but had asked for title documents which he required to produce in some income-tax proceedings which annoyed the respondent and she stopped accepting the rent whereupon an application for deposit of rent was made and in these circumstances no default has been committed by the appellant. This assertion of the learned counsel for the appellant does not seem to be correct as in the written statement filed by the appellant before the Controller a specific plea was taken challenging the relationship of landlady and tenant. This objection was finally given by the appellant on 4th February, 1975 when order for deposit of rent was made. The application for deposit of rent filed by the appellant also prayed for determination of the issue of this relationship. In these circumstances the appellant's contention is not tenable.
6. ' The next contention of the learned counsel for the appellant was that as the appellant had deposited a sum of Rs, 25,000 with the respondent as a security there could not be any default because if the rent had not been paid the respondent could have adjusted from it. It is an admitted position that the respondent had received a sum of Rs, 25,000 from the appellant which she had undertaken to return on receiving vacant possession from the appellant. Mr. S. A. Jamali the learned counsel for the respondent contended that Rs, 25,000 was a security for vacant possession which was to be refunded after the appellant hands over the vacant possession of the disputed shop to the respondent. In these circumstances it is contended that it was not possible to make any adjustment. The learned counsel for the appellant however relied upon a case of Muhammad Yousuf v. Abdullah (1). In that case the tenant had deposited a sum of Rs, 1,000 as a security deposit with the lessor, which was to be confiscated by the lessor if the tenant did not pay rent for consecutive three months or failed to deliver vacant possession to the landlord at the termination of the tenancy. The agreement was for a period of six months, which could he renewed but neither party exercised its option to terminate the lease, nor after its expiry any attempt was made to renew it. As default in payment of rent was committed, the lessor filed ejectment application which was granted by the Controller and upheld by both the appellate Courts. Dorab Patel, Actg. C. J.
7. Observed as follows :- "As in or opinion, the rights and liabilities of the appellant, in the instant case are governed exclusively by the said Ordinance, the question of the amount of rent due from him has to be determined in accordance with the provisions of clause (1) of subsection 2 of section 13 of the said Ordinance. Under this clause, a tenant has to pay the rent due from him 'within fifteen days of the expiry of the time fixed in the agreement of tenancy with his landlord or in the absence of any such agreement within sixty days from the period for which the rent is payable.' The words 'the agreement of tenany' means an agreement which is in force, and not an agreement which has expired and is dead. Therefore, in the instant case, when the respondent filed his eviction application on the 9th May, 1970 the appellant was in default in the payment of rent for the month of December, 1969 and for the months of January and February 1970. The rent thus due from him was Rs, 600. But as against this, the respondent had failed to return to the appellant the "security Deposit" of Rs, 1,000 despite the expiry of the lease agreement. The respondent was no doubt entitled to deduct the electricity charges before returning this amount, but even after deducting these charges, the amount lying with him far exceeded Rs, 600.
8. ' It is true that the appellant had not demanded the return of his deposit on the expiry of his lease, and further as the debtor, it was for him to find the creditor, therefore, he should "have informed- the respondent to adjust the arrears of rent against his deposit with the respondent. This he did pot do, but even on the footing that this resulted in a failure to pay rent within the meaning of section 13 of the said Ordinance, it was a very technical default and it would reduce the law to a farce, if the appellant was evicted for {{FOOT NOTE}}
(1) P L, D 1980 SC 298 {{FOOT NOTE}} being in debt to the respondent (on account of his failure to pay rent) when in fact the over all position was that the respondent was in debt to the appellant. Therefore, there could not be a more appropriate case for the exercise of the Court's discretion under section 13 of the said Ordinance in the tenant's favour. Accordingly, even on the footing that the appellant was in technical default in the payment of rent on the date of the eviction application filed against him, we have no hesitation in exercising or discretion in his favour. We, therefore, set aside the eviction order passed by the three Courts below and allow the appellant's appeal."
9. ' I am in respectful agreement with the above observations which is on all fours with the present case. The admitted position is that eviction application was filed on 15th July, 1974 whereas the tenancy agreement under which Rs, 25,000 had been deposited expired on 31st May, 1974. In the light of the observation of the Supreme Court as the agreement had expired the respondent was in debt to the appellant and the appellant was in technical default in payment of rent on the date of the eviction application filed against him and therefore it is a fit case for exercise of discretion in favour of the appellant. I therefore, set aside the eviction order passed by both the Courts below and allow the appellant's appeal with no order as to costs.