Supreme Court of India
K. SUBRAMANIAM (DIED) THROUGH LRS K.S. BALAKRISHNAN & ORS.versusM/S KRISHNA MILLS PVT. LTD.
- Citation
- 2025 INSC 1309
- Decided
- 11 November 2025
- Disposal
- Dismissed
- Bench
- DIPANKAR DATTA
Holding
The High Court correctly affirmed the appellate eviction order as the lessee and his heirs were in wilful default, and no error was found in its exercise of revisional jurisdiction.
Summary
M/s. Krishna Mills Pvt. Ltd., the landlord, leased a property to K. Subramaniam who paid only a fraction of the agreed rent, leading the Rent Controller to fix a higher fair rent. The lessee contested the fair rent but did not obtain a stay of the order, and continued to pay only a portion of the amount, resulting in an accumulation of arrears. After the lessee's death, the landlord filed an eviction petition against the heirs on the ground of wilful default, which was upheld by the appellate authority and affirmed by the High Court. The appellants argued that the lack of a two‑month notice and the pendency of appeals barred eviction, and that the principle of judicial finality protected them. The Supreme Court held that filing an appeal without a specific stay does not stay the operative order, and the landlord's right to evict for wilful default was not dependent on a prior notice. Consequently, the Court dismissed the appeal, upholding the eviction order.
Issues considered
- Whether the High Court was correct in refusing to reverse the appellate eviction order on the ground of wilful default.
- Whether the absence of a two‑month notice under the Explanation to Section 10(2)(i) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, precludes eviction.
- Whether filing an appeal without seeking a stay operates as a stay of the lower court's order.
- Whether the principle of finality of a judicial decision bars the landlord from proceeding with eviction despite pending appeals.
- How "wilful default" is to be interpreted under Section 10(2)(i) and its Explanation.
Legislation cited
- Code of Civil Procedure, 1908s. Order XLI Rule 5
- Tamil Nadu Buildings (Lease and Rent Control) Act, 1960s. 10(2)(i), s. 11(4), s. 23(2), s. 23(4), s. 25
- Tamil Nadu Regulation of Rights and Responsibilities of Landlords and Tenants Act, 2017s. 4
Headnote
Issue for Consideration Issue arose whether the High Court was right in declining to reverse the appellate order of eviction obtained by the respondent-owner against the appellants-lessee on the ground of wilful default in payment of rent. Headnotes Tamil Nadu Control) Act, 1960 – s.10(2)(i) – Eviction on the ground of wilful default – Respondent-owner leased out properties to lessee for a monthly rent of Rs. 48,000/-, however, the lessee paid Rs.33,000/- – Rent Controller fixed a fair rent which was upheld by the appellate
Subjects
Revisional jurisdictionEviction on the ground of wilful defaultLesseeFixation of fair rentEviction petitionWilful defaultAccumulation of arrearsPrinciple of finality of a judicial decisionJudicial finality
Judgment
[2025] 12 S.C.R. 167 : 2025 INSC 1309
K. Subramaniam (Died) Through LRs
K.S. Balakrishnan & Ors.
v.
M/s Krishna Mills Pvt. Ltd.
(Civil Appeal No. 2561 of 2025)
11 November 2025
[Dipankar Datta* and Manmohan, JJ.]
Issue for Consideration
Issue arose whether the High Court was right in declining to reverse
the appellate order of eviction obtained by the respondent-owner
against the appellants-lessee on the ground of wilful default in
payment of rent.
Headnotes
Tamil Nadu Buildings (Lease and Rent Control) Act,
1960 – s.10(2)(i) – Eviction on the ground of wilful default –
Respondent-owner leased out properties to lessee for
a monthly rent of Rs. 48,000/-, however, the lessee paid
Rs.33,000/- – Rent Controller fixed a fair rent which was upheld
by the appellate authority however, the High Court modified
the same – SLP thereagainst by lessee dismissed by this
Court – Lessee persisted in paying only a fraction thereof –
In an appeal against the order of Rent Controller fixing fair
rent, appellate authority did not grant stay of the order of Rent
Controller – Thereafter, eviction petition by the respondents
on the ground of wilful default – Rent Controller dismissed
the eviction petition, however appellate court passed order of
eviction against the appellants-legal heirs of deceased lessee,
on the ground of wilful default in payment of rent – High Court
affirmed the said order – Correctness:
Held: High Court in exercise of its revisional jurisdiction rightly
refrained from re-examining factual determinations and such an
approach being reasonable and unexceptionable, it committed no
error in affirming the appellate order of eviction passed against the
appellants on the ground of wilful default – Plea that pendency of
proceedings created uncertainty as to the quantum payable is of
* Author
168 [2025] 12 S.C.R.
Supreme Court Reports
no avail to the appellants – Lessee challenged the fixation of fair
rent but did not seek a stay of its operation before the appellate
or revisional fora – Mere filing of an appeal does not operate as
a stay of the decree/order under appeal – Payments were made
belatedly and only after protracted litigation – Such conduct cannot
be reconciled with bona fide doubt as to liability – Appellants
defaulted in payment of rent and such default is undoubtedly a
wilful default – Concurrent finding of the appellate authority, affirmed
by the High Court, that the lessee and thereafter the appellants
had been in wilful default, rests on sound appreciation of the legal
position and the appellants’ own admissions – It cannot be said
that the absence of a two months’ notice under the Explanation to
s.10(2)(i) would ipso facto disentitle the landlord from maintaining
the proceedings for eviction on the ground of wilful default – Statute,
when read as a whole, does not render such notice an indispensable
condition precedent to the assumption of jurisdiction by the Rent
Controller – Nature of default committed by the lessee satisfies
the attributes of a wilful default and leaves little room to hold that
no wilful default had been committed – Implication of “without
prejudice” used in the order of dismissal of the SLP filed by the
lessee would mean, that notwithstanding the liberty granted to the
lessee to make payment, as per liberty granted, such payments
were not to be seen as a waiver of respondent’s rights to realise
unpaid rent and even to proceed for the lessee’s ejectment owing
to wilful default committed by him – No advantage can be derived
by the appellants by contending that payments having been made
in terms of this Court’s order, the issue stood closed – Lessee,
and subsequently the appellants, taking shelter of the pending
appeal against the order fixing fair rent without, however, seeking
a stay thereof and also in light of the parting observation made
by this Court while disposing of SLP had no protective umbrella
over him/them so as to remain absolved from tendering payment
to the respondent. [Paras 31-34, 21-22, 24, 27-29]
Judgment/order – Principle of finality of a judicial decision –
Applicability, when appeal filed without seeking stay:
Held: Judicial proceedings attain finality upon a decision being
rendered by the apex court in the hierarchy of courts – Nonetheless,
proceedings do attain finality even at the level of the High Courts,
or the district courts or the trial courts if the immediate next superior
forum is not approached by the party suffering the decree/order of
the court seized of the lis – However, the principle of finality of a
[2025] 12 S.C.R. 169
K. Subramaniam (Died) Through LRs K.S. Balakrishnan & Ors. v.
M/s Krishna Mills Pvt. Ltd.
judicial decision would have no applicability in a situation where a
party, despite owing money (unpaid rent, here) to his adversary in
terms of a judicial determination, approaches the superior forum
but prefers not to seek a stay of such determination pending the
proceedings leaving the other party deprived of the benefits flowing
from the said judicial determination – Bogey of judicial finality
cannot, thus, be pressed into service to unfairly deny a party the
benefits of a judicial decision, operation of which does not suffer
from any interdiction by the superior court. [Para 30]
Case Law Cited
Chordia Automobiles v. S Moosa [2000] 2 SCR 13 : (2000) 3
SCC 282; PM Punnoose v. KM Munneruddin [2003] Supp. 1 SCR
698 : (2003) 10 SCC 610; N. Velmurugan v. K.N. Govindarajan
(2002) 2 SCC 500; Rupa Ashok Hurra v. Ashok Hurra [2002] 2
SCR 1006 : (2002) 4 SCC 388; Sundaram Pillai & Ors. v. V.R.
Pattabiraman [1985] 2 SCR 643 : (1985) 1 SCC 591; Trimurthi
Fragrances (P) Ltd. v. Government of N.C.T. of Delhi, 2022 SCC
OnLine SC 1247 – referred to.
Visalakshi Ammal v. T.B. Sathyanarayana (1997) 2 MLJ 453; J.
Vishalakshmi Ammal v. T.B. Sathyanarayana, 1996-2-L.W. 849;
Giridharilal Chandak & Bros. v. Mehdi Ispahani, 2011 (5) CTC
252 – referred to.
List of Acts
Tamil Nadu Buildings (Lease and Rent Control) Act, 1960; Tamil
Nadu Regulation of Rights and Responsibilities of Landlords and
Tenants Act, 2017; Code of Civil Procedure, 1908.
List of Keywords
Revisional jurisdiction; Eviction on the ground of wilful default;
Lessee; Fixation of fair rent; Eviction petition; Wilful default;
Accumulation of arrears; Principle of finality of a judicial decision;
Judicial finality.
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2561 of 2025
From the Judgment and Order dated 22.06.2021 of the High Court
of Judicature at Madras in CRP No. 2053 of 2020
170 [2025] 12 S.C.R.
Supreme Court Reports
Appearances for Parties
Advs. for the Appellants:
Jaideep Gupta, Senthil Jagadeesan, Sr. Adv., Sajal Jain, Punit
Manoj Agarwwal, Ms. Racheeta Chawla, Riddhi Bose, Ms. Rishi
Agarwal, Ms. Sampriti Baksi.
Advs. for the Respondent:
Mrs. V Mohana, Sr. Adv., Pr Ramakrishnan, B Ragunath, Mrs. Nc
Kavitha, Sriram P., Ms. Sreepriya K, S Padmanaban.
Judgment / Order of the Supreme Court
Judgment
Dipankar Datta, J.
The Appeal
1. This is an appeal by the heirs of a lessee seeking reversal of a
revisional judgment and order dated 22.06.20211 of the High Court
of Judicature at Madras2. The impugned order affirmed an appellate
order of eviction dated 25.02.2020 which, in turn, had reversed the
original order of dismissal of the eviction petition dated 06.02.2019.
Factual Matrix
2. The basic facts giving rise to the impugned order are not in dispute.
To the extent germane for disposal of the present appeal, the same
are adverted to in brief hereunder:
a. The sole respondent, M/s. Krishna Mills Pvt. Ltd.3, is the
owner of a godown bearing D. No. 1084, Avinashi Road,
Pappanaickenpalayam, Coimbatore, Tamil Nadu, and the
adjacent building4.
b. The three appellants are the sons and heirs of K. Subramanian
(since deceased), (proprietor of M/s. Royal Agencies).5 The
1 impugned order
2 High Court
3 M/s. Krishna, hereafter
4 petition property
5 Lessee, hereafter
[2025] 12 S.C.R. 171
K. Subramaniam (Died) Through LRs K.S. Balakrishnan & Ors. v.
M/s Krishna Mills Pvt. Ltd.
petition property consists of three portions of buildings measuring
5000 sq. ft. each, totalling to 15000. sq. ft., and a separate shed
on the western side measuring 500 sq. ft.
c. A lease agreement, dated 11.10.1999, was executed by and
between M/s. Krishna and the lessee, whereby a portion of the
petition property, measuring 5000 sq. ft. was leased out at a
monthly rent of Rs. 15,000/- for a period of 15 years. In October
2000, another 5000 sq. ft. of land and building was taken on
lease for a monthly rent of Rs. 15,000. From 01.05.2000, the
separate shed of 500 sq. ft. was taken on lease for a monthly
rent of Rs. 3000. Subsequently, in October 2001, another 5000
sq. ft. was taken on lease for a monthly rent of Rs. 15,000. Thus,
the total extent of 15,500 sq. ft. of land and building was leased
for an aggregate monthly rent of Rs. 48,000/-. However, the
lessee contended that the rent payable was Rs. 33,000/- p.m.
d. In 2004, M/s. Krishna filed an application for fixation of fair rent6
before the Rent Controller, Coimbatore, alleging that the original
rent was Rs. 48,000/- p.m. and not Rs. 33,000/- as claimed by
the lessee; and consequently, fixation of Rs. 3,76,800/- p.m. as
fair rent was sought. The Rent Controller allowed the application
in part on 10.01.2007, and fixed the fair rent at Rs. 2,43,600/-
p.m., payable from 01.02.2005.
e. M/s. Krishna then filed an application7 on 17.07.2007 seeking
eviction of the lessee on the ground of wilful default. While it
was alleged that an extent of 15,500 sq. ft. had been given on
lease at a monthly rent of Rs.48,000/- p.m., the lessee contended
that the rent was only Rs.33,000/- p.m. Earlier, as noted above,
on M/s. Krishna’s application, the Rent Controller by its order
dated 10.01.2007 had fixed the fair rent at Rs.2,43,600/- p.m.
and subsequently, a demand of Rs.68,87,400/- was claimed
towards arrears.
f. The lessee challenged the fixation of fair rent by carrying it in an
appeal8 before the Rent Control Appellate Authority, Coimbatore,
6 RCOP No. 44 of 2005
7 RCOP No.134 of 2007
8 RCA No.21 of 2007
172 [2025] 12 S.C.R.
Supreme Court Reports
which came to be dismissed on 20.02.2008, thereby confirming
the fair rent.
g. Against such dismissal, the lessee filed a revisional application9
before the High Court. By an interim order, the High Court
directed deposit of Rs.25,00,000/- before the Rent Controller
and further payment of Rs.75,000/- p.m. without prejudice to
the parties’ contentions. Complying with the said order, the
lessee deposited the sum, as directed, and commenced paying
Rs.75,000/- p.m.
h. On 09.09.2011, the High Court partly allowed the revisional
application and reduced the rent to Rs.2,37,500/- p.m.
i. A legal notice dated 01.10.2011 followed, whereby M/s. Krishna
demanded arrears of Rs.1,22,22,000/- after giving credit for
Rs.25,00,000/-. The lessee, under protest, remitted Rs.2,13,750/-
(after TDS) on 21.10.2011 towards rent for September, 2011
and thereafter preferred special leave petitions10 before this
Court. During the pendency of these petitions, M/s. Krishna
filed a revised memo of calculation on 23.12.2011.
j. By an order dated 23.03.2012, this Court dismissed the
special leave petitions but directed the lessee to pay arrears in
instalments of Rs.15,00,000/- by the 15th of each month, along
with regular rent of Rs.2,37,500/- p.m., clarifying that such
arrangement was without prejudice to the rights of the parties
in the pending proceedings.
k. In compliance therewith, the lessee remitted Rs.13,50,000/-
(after TDS) on 05.05.2012 and tendered two further cheques
of Rs. 2,13,750/- (after TDS) and Rs. 13,50,000/- (after TDS)
on 09.06.2012 towards arrears and rent.
l. The lessee sought a statement of accounts for audit purposes on
02.01.2013, and on 11.01.2013 sent a cheque of Rs.2,22,000/-
(after TDS) in full settlement of arrears, asserting that all dues
stood discharged. M/s. Krishna, by reply dated 05.02.2013,
confirmed receipt of the arrears but stated that the same was
9 CRP (NPD) No.2511 of 2008
10 SLP (C) Nos.6500-6501 of 2012
[2025] 12 S.C.R. 173
K. Subramaniam (Died) Through LRs K.S. Balakrishnan & Ors. v.
M/s Krishna Mills Pvt. Ltd.
received without prejudice to their rights in RCOP No. 134 of
2007.
m. On 06.02.2013, M/s. Krishna raised invoices claiming service
tax and interest from 01.06.2007 to 31.12.2012. By letter dated
17.04.2013, the lessee reiterated that all dues had been cleared
and denied wilful default, further contending that service tax
liability did not fall upon him under the lease.
n. Following the demise of the lessee, M/s. Krishna filed an
amended application on 23.10.2017 under Section 10(2)(i) of
the Tamil Nadu Buildings (Lease and Rent Control) Act, 196011,
impleading the appellants (i.e., the heirs of the deceased
lessee). Appellants filed their additional counter in February
2018, contending that no arrears were outstanding.
o. By an order dated 06.02.2019, the Rent Controller, Coimbatore,
dismissed RCOP No.134 of 2007, holding that M/s. Krishna had
failed to establish that original rent was Rs.48,000/- p.m. and
further that since the lessee had paid fair rent in terms of the
orders of this Court, no wilful default was made out.
p. Aggrieved thereby, M/s. Krishna preferred an appeal12. By a
judgment and order dated 25.02.2020, the Principal Subordinate
Judge, Coimbatore, reversed the Rent Controller’s finding,
observing that despite fair rent proceedings attaining finality, the
lessee had failed to tender arrears promptly and that clearance
in instalments, even after dismissal of the special leave petitions,
amounted to wilful default. The Principal Subordinate Judge
finally held that the appellants were liable to be evicted on the
ground of wilful default.
q. Appellants then mounted a challenge to the judgment and order
of reversal dated 25.02.2020 in a revisional application13. Upon
hearing the parties, vide the impugned order, the High Court on
22.06.2021 dismissed such application holding that the interim
direction to deposit Rs.25,00,000/- and to pay Rs.75,000/- p.m.
was only for the purpose of admission of the civil revision petition
and that the Court had not granted any stay of the order.
11 Rent Control Act, 1960
12 RCA No.32 of 2019
13 CRP No.2053 of 2020
174 [2025] 12 S.C.R.
Supreme Court Reports
r. Although the appellants commenced paying rent as fixed by the
High Court from 21.10.2011, belated payment of accumulated
arrears nonetheless constituted wilful default.
Arguments on Behalf of the Appellants
3. Mr. Jaideep Gupta, learned senior counsel appearing for the
appellants, contended that the eviction petition as originally filed
was untenable. According to him, no notice had been issued by
M/s. Krishna prior to the filing of RCOP No.44 of 2005, wherein
wilful default in payment of rent was alleged on the ground that the
monthly rent was Rs.48,000/- p.m., whereas the lessee consistently
asserted that the rent was Rs.33,000/- p.m. He further contended that
until disposal of CRP (NPD) No.2511 of 2008, no notice was ever
served calling upon the lessee to pay arrears based on fixation of
Rs.2,43,600/- p.m. as the fair rent by the Rent Controller with effect
from 01.02.2005, covering the period up to 30.06.2007. He invited
our attention to the letter dated 05.02.2013 of M/s. Krishna, wherein
it acknowledged that the arrears had been received at the rate of
Rs.2,37,500/- p.m., i.e., the fair rent as modified by the High Court
on 09.09.2011. In such circumstances, it was urged that the belated
amendment in RCOP No.134 of 2007, filed in the year 2017 after
the demise of the lessee, impleading the present appellants and
resurrecting the ground of wilful default for the very same arrears,
was nothing but an afterthought and liable to be rejected.
4. Mr. Gupta maintained that the conduct of the lessee or the appellants
was not that of a defaulter or an irregular payer of rent, since they
continued to pay the originally agreed rent in compliance with the
orders of various fora. Reliance was placed on the decision in
Chordia Automobiles v. S Moosa14 to contend that when the arrear
amount was in dispute and the proceedings were pending, it was
reasonable for the lessee to follow the interim arrangements, and
the same could not be held to be a case of wilful default.
5. It was next contended by Mr. Gupta that pursuant to the interim
order dated 30.07.2008 in CRP (NPD) No.2511 of 2008, the lessee
had, without delay, started remitting the rent in consonance with
the directions of the High Court. While arrears were not cleared
14 (2000) 3 SCC 282
[2025] 12 S.C.R. 175
K. Subramaniam (Died) Through LRs K.S. Balakrishnan & Ors. v.
M/s Krishna Mills Pvt. Ltd.
in a lump sum immediately, this was on account of the pendency
of SLP (C) Nos.6500-6501 of 2012 preferred against the order of
the High Court dated 09.09.2011. The matter attained finality only
upon the dismissal of the said special leave petitions by this Court
on 23.03.2012 and, thereafter, the appellants’ father scrupulously
adhered to the directions of this Court by paying instalments of
Rs.15,00,000/- towards arrears along with the monthly rent of
Rs.2,37,500/-. To address the issue of finality in the fixation of fair
rent, he placed reliance on the decision in Visalakshi Ammal v.
T.B. Sathyanarayana15, wherein it was held that the liability to pay
fair rent would arise only upon the passing of the fair rent order by
the Rent Controller, and that such liability would not attain finality so
long as the order remained under challenge in appeal or revision.
It was, therefore, submitted that the appellants cannot be branded
wilful defaulters when the arrears were paid strictly in terms of the
orders of this Court.
6. Mr. Gupta contended, by placing reliance on PM Punnoose v. KM
Munneruddin16, that whenever there is a bona fide dispute on the
quantum of arrears, the Controller should exercise his power under
the proviso to sub-section (2) of Section 10 of the Rent Control
Act, 1960 by passing an order thereunder and giving the tenant
a reasonable time, not exceeding 15 days, to pay or tender the
amount due to the landlord up to the date of such payment of rent.
He also contended that the tenant had cleared the entire arrears
and is willing to repay the outstanding arrears if any in two months,
arguing against the order of eviction.
7. Reliance was further placed on N. Velmurugan v. K.N.
Govindarajan17 to contend that once the execution petition was
filed and the High Court had, by an interim order, permitted deposit
and extended time for payment, there was no scope to allege wilful
default. The expression “without prejudice” occurring in the order
of this Court dated 23.03.2012 in SLP (C) Nos.6500-6501 of 2012,
it was argued, could not be interpreted to enable M/s. Krishna,
after having accepted arrears and rent pursuant to this Court’s
15 (1997) 2 MLJ 453
16 (2003) 10 SCC 610
17 (2002) 2 SCC 500
176 [2025] 12 S.C.R.
Supreme Court Reports
directions, to revive proceedings for wilful default in respect of the
very same arrears.
8. Mr. Gupta next placed reliance on the decision of this Court in Rupa
Ashok Hurra v. Ashok Hurra18 to urge that the principle of finality
attaches only to the judgment of the Court of last resort, namely,
this Court. It was argued that until the dismissal of SLP (C) Nos.
6500–6501 of 2012 on 23.03.2012, the issue of fixation of fair rent
remained sub judice and, consequently, any alleged default prior
thereto could not, in law, be characterised as “wilful”. According to
him, it was only after the dismissal of the said special leave petitions
that the determination of fair rent at Rs.2,37,500/- p.m. attained finality,
and from that stage onwards the lessee continued to make regular
payments without fail. He further contended that reliance placed on the
Tamil Nadu Regulation of Rights and Responsibilities of Landlords and
Tenants Act, 201719 was wholly misplaced, inasmuch as Section 4 of
the said enactment expressly exempts tenancies governed by written
agreements, which was the case here. It was also argued by him
that a unilateral termination letter issued by the landlord could not
by itself oust the jurisdiction of the civil court to entertain a tenant’s
defence under the governing rent control legislation.
9. Furthermore, on the issue of precedents concerning Order XLI Rule 5
of the Code of Civil Procedure, 1908, Mr. Gupta submitted that such
authorities were of no relevance in the present context. He contended
that those decisions merely recognise the appellate court’s discretion
to grant conditional stay of execution pending appeal, whereas the
question before the Court in the present case was whether the lessee
could be held guilty of “wilful default” within the meaning of Section
10(2)(i) of the Rent Control Act, 1960. According to him, the principle
governing determination of wilful default is distinct: liability of the
lessee is to be assessed with reference to whether he neglected
to pay rent from the date it became due despite the opportunity to
do so, and not with reference to interlocutory directions issued by
appellate courts while entertaining appeals.
10. Mr. Gupta then referred to the own pleadings of M/s. Krishna in
RCOP No.134 of 2007, where the period of alleged default was stated
to be from 01.10.2000 to 31.01.2005, quantified at Rs.7,80,000/-,
18 (2002) 4 SCC 388
19 2017 Act
[2025] 12 S.C.R. 177
K. Subramaniam (Died) Through LRs K.S. Balakrishnan & Ors. v.
M/s Krishna Mills Pvt. Ltd.
computed at a monthly rent of Rs.15,000/-. He pointed out that such
a claim was never substantiated by M/s. Krishna at any stage of the
proceedings. In this regard, reliance was placed upon the findings
recorded in the order dated 06.02.2019 in RCOP No.134 of 2007,
wherein the Rent Controller itself noted the absence of evidence
establishing Rs.15,000/- p.m. as the rent for the relevant period.
11. Finally, as regards the quantum of arrears claimed in the eviction
petition, Mr. Gupta submitted that the figure of Rs.61,07,400/- as
averred by M/s. Krishna was untenable. His submission was twofold:
first, that the amount was computed on the basis of the fair rent
of Rs.2,43,600/- p.m. fixed by the Rent Controller on 10.01.2007,
whereas the revisional court, by its order dated 09.09.2011, had
reduced the fair rent to Rs.2,37,500/- p.m.; and secondly, that the
said fair rent determination reached finality only upon dismissal
of the special leave petitions by this Court on 23.03.2012. Thus,
it was contended that any claim predicated upon the figure of
Rs.2,43,600/- p.m. or upon a demand raised prior to the finality of
the proceedings was legally unsustainable.
12. Resting on the aforesaid arguments, Mr. Gupta prayed that the civil
appeal be allowed by setting aside the impugned order passed by
the High Court in CRP No. 2053 of 2020.
Arguments of the Respondent (M/s. Krishna)
13. Per contra, Ms. V. Mohana, learned senior counsel appearing for
M/s. Krishna, contended that the dispute was initially governed by
the Rent Control Act, 1960, but with the enactment of the 2017 Act
the jurisdiction of the civil courts stood excluded and landlord-tenant
disputes could thereafter be adjudicated only by Rent Courts and
Rent Tribunals. She urged that the appellants had wilfully defaulted in
payment of fair rent, a finding concurrently recorded by the Appellate
Authority and the High Court, since fair rent was determined on
10.01.2007, yet, the lessee cleared the arrears only on 11.01.2013.
Relying on J. Vishalakshmi Ammal v. T.B. Sathyanarayana20,
Ms. Mohana contended that the expression “rent” in Section 10(2)
(i) of the Rent Control Act, 1960 includes fair rent fixed by the court,
and non-payment thereof amounts to wilful default.
20 1996-2-L.W. 849
178 [2025] 12 S.C.R.
Supreme Court Reports
14. Ms. Mohana next heavily relied on the decision of a learned Judge
of the High Court in Giridharilal Chandak & Bros. v. Mehdi
Ispahani21. On the anvil thereof, she vehemently submitted that
mere filing of an appeal does not by itself operate as a stay, and
unless specifically prayed, the appellate court may in its discretion
either grant or refuse stay; hence, pendency of proceedings cannot
excuse non-payment of rent. She referred to the dismissal of the
special leave petitions by this Court on 23.03.2012, whereby the
lessee was directed to pay arrears at Rs.15,00,000/- p.m. along with
the regular rent of Rs.2,37,500/- p.m. by the 15th of each succeeding
month until the arrears were cleared, the said payment being directed
without prejudice to the rights of the parties in the pending eviction
proceedings. According to her, the appellants chose to pay only in
instalments and failed to comply fully.
15. It was urged that the pendency of eviction proceedings foreclosed
any plea of ignorance on the part of the appellants as to the
consequences of default, and that mere deposit of arrears pursuant
to interim orders could not absolve them of wilful default within the
meaning of Section 10(2)(i) of the Rent Control Act, 1960.
16. Ms. Mohana submitted the details of the wilful default committed by
the appellants, as follows:
a. The monthly rent agreed upon by and between the parties was
Rs. 48,000/- p.m.; however, the lessee paid only Rs. 33,000/-
p.m. from 01.07.2007.
b. The Rent Controller fixed the fair rent vide order dated
10.01.2007, whereas the full and final settlement of dues as
per the fair rent happened only on 11.01.2013. Appellants
wilfully withheld payment of rent during the pendency of the
eviction petition.
c. Even in an appeal filed by the appellants against the order of
the Rent Controller fixing fair rent, the Appellate Authority did
not grant a stay of the order of the Rent Controller, vide order
dated 20.02.2008. Even after this order refusing to stay the
Rent Controller’s order, the appellants did not settle the fair
rent until 11.01.2013.
21 2011 (5) CTC 252
[2025] 12 S.C.R. 179
K. Subramaniam (Died) Through LRs K.S. Balakrishnan & Ors. v.
M/s Krishna Mills Pvt. Ltd.
17. It was then brought to our notice by Ms. Mohana that M/s. Krishna
had filed I.A. No.100 of 2008 under Section 11(4) of the Rent Control
Act, 1960 before the Rent Controller, seeking a direction to the lessee
to deposit the arrears, failing which an order of eviction be passed.
Even after the High Court fixed fair rent at Rs.2,37,500/- p.m. by its
order dated 09.09.2011 passed in the revisional proceedings, and
despite subsequent notices issued by M/s. Krishna demanding the
arrears, the appellants continued to remain in default.
18. Ms. Mohana further argued that Section 10(2) of the Rent Control
Act, 1960 does not contemplate a prior notice by the landlord as a
pre-condition for seeking eviction. Reliance was placed on Sundaram
Pillai & Ors. v. V.R. Pattabiraman22 to submit that issuance of such
notice is discretionary, not mandatory. In any event, the appellants
neither raised the plea of want of notice in the eviction petition nor
objected to the proceedings on that ground at any earlier stage,
and are therefore estopped from so objecting at this belated stage.
19. In the sequence of these submissions, Ms. Mohana urged that
the appellants had been persistent defaulters, and that no ground
for interference was made out with the concurrent findings of the
appellate court and the High Court. Accordingly, she prayed that the
appeal be dismissed.
Question
20. The sole question arising for decision is, whether the High Court
was right in the exercise of its revisional jurisdiction in declining
to reverse the appellate order of eviction obtained by M/s. Krishna
against the appellants on the ground of wilful default in payment of
rent initially by the lessee and then by the appellants?
Reasoning
21. We consider it appropriate to first address the question of wilful
default, which constitutes the principal ground on which the
decree of eviction rests. It is not in dispute that by its order dated
10.01.2007, the Rent Controller, Coimbatore fixed the fair rent at
Rs. 2,43,600/- p.m., payable with effect from 01.02.2005. Despite this
22 (1985) 1 SCC 591
180 [2025] 12 S.C.R.
Supreme Court Reports
order, the lessee continued to pay only the earlier contractual rent at
the rate of Rs. 48,000 p.m., leading to an accumulation of arrears from
01.02.2005 to 30.06.2007, amounting to Rs. 68,87,400/-, exclusive of
subsequent dues. The lessee, however, neither sought nor obtained a
stay of the said order before the appellate or revisional fora. Despite
the appellate authority having dismissed his appeal on 20.02.2008,
thereby confirming the fair rent, the lessee persisted in paying
only a fraction thereof. The situation continued even after the High
Court, by order dated 09.09.2011, modified the fair rent marginally
to Rs.2,37,500 p.m. A legal notice dated 01.10.2011 was thereafter
issued by the landlord demanding arrears of Rs.1,22,22,000/-, after
giving credit for the deposit of Rs.25,00,000/- earlier made under the
interim direction of the High Court. Instead of settling the arrears,
the tenant merely remitted Rs.2,13,750/- (after TDS) on 21.10.2011
towards rent for September 2011 and allowed the arrears to mount.
22. After the accumulation of arrears for over five years and the matter
had traversed through multiple fora, it was only after this Court, by
order dated 23.03.2012 dismissed SLP (C) Nos. 6500–6501 of 2012
that the lessee commenced remitting arrears in May and June 2012 by
issuing cheques of Rs.13,50,000/- and Rs.2,13,750/-, after deduction
of TDS. Even then, full and final settlement was effected belatedly
on 11.01.2013, nearly six years after the fixation of fair rent and
ten months after the dismissal of the special leave petitions. In our
opinion, the plea that pendency of proceedings created uncertainty
as to the quantum payable is of no avail to the appellants.
23. At this juncture, a profitable reference can be made to the decision
in Girdharilal Chandak and Bros. (HUF) (supra). While considering
the Rent Control Act, 1960, Justice V. Ramasubramanian (as His
Lordship then was) speaking for the High Court held as follows:
14. Irrespective of whether the order passed by this Court
on 28.10.2005 in CRP (NPD) Nos. 1657 & 1658 of 2005
was a conditional order or not, it is an admitted fact that
the Petitioner himself did not seek a stay of the orders
passed by the Rent Controller and the Appellate Authority,
while challenging the same by way of Revision. If a person
does not seek stay of an order passed by a Court below,
it would only indicate either of the two things viz., (i) that
he is willing to comply with the order, or (ii) that he has
[2025] 12 S.C.R. 181
K. Subramaniam (Died) Through LRs K.S. Balakrishnan & Ors. v.
M/s Krishna Mills Pvt. Ltd.
no objection to the orders of the Court below being put
into execution. The failure of a person to seek from an
Appellate forum, a stay of the order of a subordinate forum,
cannot mean anything else than the above two factors.
***
15. Order 41, Rule 5(1), C.P.C, makes it clear that an
Appeal shall not operate as a stay of the proceedings
under a decree or order appealed from, except so far as
the Appellate Court may order. It also makes it clear that
the execution of a decree need not be stayed merely by
reason of an Appeal having been preferred from the decree.
***
21. As a matter of fact, the Tamil Nadu Buildings (Lease
and Rent Control) Act, 1960, enables the Appellate
Authority under Section 23(2) to grant stay of further
proceedings pending decision on the Appeal. There is no
similar provision under Section 25. What is worse is the
fact that under Section 23(4), the decision of the Appellate
Authority is final and is not liable to be called in question
in any Court of Law, except as provided in Section 25.
Therefore, finality is reached in every proceeding under
the Act, the moment an order is passed by the Appellate
Authority. But it is made subject to the Revisional jurisdiction
of this Court. Therefore, in the absence of a stay, by this
Court in a Revision, the order of the Appellate Authority
becomes final until it is modified or set aside by this Court.
Moreover, Rule 12 of the Tamil Nadu Buildings (Lease and
Rent Control) Rules, 1974, prescribes the procedure for
the disposal of the Applications. The Third Proviso to sub-
rule (3) of Rule 12, states that whenever an Application
for setting aside an ex parte order is received for the first
time, all Execution proceedings would stand stayed till the
disposal of that Application. In other words, the Act contains
one provision for stay under Section 23(2), subject to the
discretion of the Appellate Authority. The Rules contain
one provision for automatic stay of execution, under the
Third Proviso to Rule 12(3). Therefore, the construction
that the admission of a Revision, without any order of stay,
182 [2025] 12 S.C.R.
Supreme Court Reports
would automatically take away the finality conferred under
Section 23(4) to an order of the Appellate Authority, would
do violence to the Act and the Rules. Hence, the second
contention is also unacceptable.
24. In the present case, the lessee challenged the fixation of fair rent but
did not seek a stay of its operation before the appellate or revisional
fora. Mere filing of an appeal does not operate as a stay of the
decree/order under appeal is the statutory ordainment in sub-rule (1)
of Rule 5 of Order XLI, CPC. Payments were made belatedly and
only after protracted litigation. Such conduct cannot be reconciled
with bona fide doubt as to liability. Appellants, it is clear, defaulted in
payment of rent and such default, on facts and in the circumstances,
is undoubtedly a wilful default. The concurrent finding of the appellate
authority, affirmed by the High Court, that the lessee and thereafter
the appellants had been in wilful default, rests on sound appreciation
of the legal position and the appellants’ own admissions.
25. Furthermore, as regards the import and effect of Section 10(2)(i) of
the Rent Control Act, 1960, along with its proviso and explanation, we
need to refer to the decision in Sundaram Pillai (supra) relied upon
by Ms. Mohana. The said decision is by a three-Judge Bench of this
Court. The majority view was authored by Hon’ble A. Varadarajan, J.
(as His Lordship then was). The relevant paragraphs from it read
as follows:
56. We may, therefore, extract the Explanation again to
find out what it really means and to what extent does it
affect the provisions of the proviso:
“Explanation.—For the purpose of this sub-section default
to pay or tender rent shall be construed as wilful, if the
default by the tenant in the payment or tender of rent
continues after the issue of two months’ notice by the
landlord claiming the rent.”
57. If we analyse the various concomitants of the
Explanation, the position seems to be that—
(a) there should be a default to pay or tender rent,
(b) the default should continue even after the landlord has
issued two months’ notice claiming the arrears of rent,
[2025] 12 S.C.R. 183
K. Subramaniam (Died) Through LRs K.S. Balakrishnan & Ors. v.
M/s Krishna Mills Pvt. Ltd.
(c) if, despite notice, the arrears are not paid the tenant is
said to have committed a wilful default and consequently
liable to be evicted forthwith.
***
59. Another aspect that must be stressed at this stage is
that where a tenant has committed default after default
without any lawful or reasonable cause and the said
defaults contain all the qualities of a wilful default viz.
deliberate, intentional, calculated and conscious, should
he be given a further chance of locus poenitentiae? After
hearing counsel for the parties at great length, we feel
that although the question is a difficult one yet it is not
beyond solution. If we keep the objects of the proviso and
the Explanation separate, there would be no difficulty in
deciding these cases.
60. To begin with, Section 10(2)(i) of the Act lays down that
where the Controller is satisfied that the tenant has not
paid or tendered the rent within 15 days after the expiry
of the time fixed in the agreement of tenancy or in the
absence of any such agreement, by the last date of the
month next following that for which the rent is payable,
he (tenant) undoubtedly commits a default. Two factors
mentioned in Section 10(2)(i) seem to give a clear notice
to a tenant as to the mode of payment as also the last
date by which he is legally supposed to pay the rent. This,
however, does not put the matter beyond controversy
because before pacing (sic, passing) an order of eviction
under the proviso, it must also be proved that the default
was wilful and if the Controller is of the opinion that the
default in the circumstances and facts of the case was not
wilful, in the sense that it did not contain any of the qualities
or attributes of a wilful default as indicated by us above,
he may give the tenant a reasonable time, not exceeding
15 days, to pay the entire rent and if this is complied with,
the application for ejectment would stand rejected. The
difficulty, however, is created by the Explanation which
says that once a landlord gives a two months› notice to
his tenant for paying the arrears of rent but the tenant
184 [2025] 12 S.C.R.
Supreme Court Reports
continues in default even thereafter, then he is liable to
be evicted. There is a good deal of force in this argument
which has its own advantages. In the first place, it protects
the court from going into the intricate question as to what
is a wilful default and whether or not the conditions of
a wilful default have been satisfied which, if permitted
would differ from case to case and court to court. But the
difficulty is that if such a blanket ban is put on the court
for not examining the question of wilful default once the
conditions laid down in the Explanation are satisfied then
it would undoubtedly lead to serious injustice to the tenant.
A subsidiary consequence of such an interpretation would
be that even though the tenant, after receipt of the notice,
may be wanting to pay the arrears of rent but is unable to
do so because of unforeseen circumstances like, death,
accident, robbery, etc., which prevent him from paying the
arrears, yet under the Explanation he has to be evicted.
61. Another view which, in our opinion, is a more acceptable
one and flows from the actual words used by the proviso
is that where the Explanation does not apply in the sense
that the landlord has not issued two months’ notice, it will
be for the court to determine in each case whether the
default is wilful having regard to the tests laid down by
us and if the court finds that the default is wilful then a
decree for eviction can be passed without any difficulty.
62. ***
A correct interpretation, in our opinion, would be that
where—
(1) no notice, as required by the Explanation, is given to
the tenant, the Controller or the court can certainly examine
the question whether the default has been wilful and to
such a case the Explanation would have no application,
(2) the landlord chooses to issue two months’ notice
and the rent is not paid then that would be a conclusive
proof of the default being wilful unless the tenant proves
his incapability of paying the rent due to unavoidable
circumstances.
[2025] 12 S.C.R. 185
K. Subramaniam (Died) Through LRs K.S. Balakrishnan & Ors. v.
M/s Krishna Mills Pvt. Ltd.
63. The argument of the counsel for landlords was that
even if a notice under the Explanation is given that does
not take away the jurisdiction of the proviso to determine
whether or not the default has been wilful if it contains the
qualities and attributes referred to above because what
the Explanation does is merely to incorporate an instance
of a wilful default and is not conclusive on the point and
would have to be construed by the court in conjunction
with the conditions mentioned in the proviso. We are,
however, unable to go to this extreme extent because
that will actually thwart the object of the Explanation. As
we read the Explanation, it does not, at all take away the
mandatory duty cast on the Controller in the proviso to
decide if a default is wilful or not. Indeed, if the landlord
chooses to give two months› notice to his tenant and he
does not pay the rent, then, in the absence of substantial
and compelling reasons, the Controller or the court can
certainly presume that the default is wilful and order his
eviction straightaway. We are unable to accept the view
that whether two months› notice for payment of rent is
given or not, it will always be open to the Controller under
the proviso to determine the question of wilful default
because that would render the very object of Explanation
otiose and nugatory. We express our view in the matter
in the following terms:
“(1) Where no notice is given by the landlord in terms of
the Explanation, the Controller, having regard to the four
conditions spelt out by us has the undoubted discretion
to examine the question as to whether or not the default
committed by the tenant is wilful. If he feels that any of the
conditions mentioned by us is lacking or that the default
was due to some unforeseen circumstances, he may
give the tenant a chance of locus poenitentiae by giving
a reasonable time, which the statute puts at 15 days, and
if within that time the tenant pays the rent, the application
for ejectment would have to be rejected.
(2) If the landlord chooses to give two months’ notice to
the tenant to clear up the dues and the tenant does not
pay the dues within the stipulated time of the notice then
186 [2025] 12 S.C.R.
Supreme Court Reports
the Controller would have no discretion to decide the
question of wilful default because such a conduct of the
tenant would itself be presumed to be wilful default unless
he shows that he was prevented by sufficient cause or
circumstances beyond his control in honouring the notice
sent by the landlord.”
26. Hon’ble Sabyasachi Mukharji, J. (as the Chief Justice then was)
dissented. Although we find His Lordship’s opinion expressed in
paragraphs 79, 81, 83, 84, 86, 87 and 90 of the report to be logical,
the same pales into insignificance in view of the same being the
minority view. Having regard to the Constitution Bench decision
of this Court in Trimurthi Fragrances (P) Ltd. v. Government of
N.C.T. of Delhi23, the decision in Sundaram Pillai (supra) has to
be regarded as a judgment of a three-Judge Bench which binds us
sitting in a combination of two.
27. Thus, on consideration of the proposition of law laid down by the
majority in Sundaram Pillai (supra), this Court is not persuaded
to accept the contention of the appellants that the absence of a
two months’ notice under the Explanation to Section 10(2)(i) of the
Rent Control Act, 1960 would ipso facto disentitle the landlord from
maintaining the proceedings for eviction on the ground of wilful
default. The statute, when read as a whole, does not render such
notice an indispensable condition precedent to the assumption of
jurisdiction by the Rent Controller. The Explanation merely provides
an additional instance where, upon service of notice and continued
non-payment, the default may be presumed to be wilful; it does
not, by necessary implication, obliterate the discretion vested in
the Controller under the proviso to determine wilfulness even in the
absence of such notice.
28. That apart, the nature of default committed by the lessee satisfies
the attributes of a wilful default as explained in Sundaram Pillai
(supra) and leaves little room for us to hold that no wilful default
had been committed.
29. Further, we have perused the brief order dated 23.03.2012 dismissing
the special leave petitions of the lessee. This Court was careful in using
23 2022 SCC OnLine SC 1247
[2025] 12 S.C.R. 187
K. Subramaniam (Died) Through LRs K.S. Balakrishnan & Ors. v.
M/s Krishna Mills Pvt. Ltd.
the words “without prejudice”. The implication of “without prejudice”
used in the order of dismissal would mean, in the circumstances, that
notwithstanding the liberty granted to the lessee to make payment,
as per liberty granted, such payments were not to be seen as a
waiver of M/s. Krishna’s rights to realise unpaid rent and even to
proceed for the lessee’s ejectment owing to wilful default committed
by him. The position seems to be absolutely clear on this front and
no advantage can be derived by the appellants by contending that
payments having been made in terms of this Court’s order, the issue
stood closed.
30. We are also not impressed by the argument of Mr. Gupta based on
the principle of law laid down in Rupa Ashok Hurra (supra). Judicial
proceedings attain finality upon a decision being rendered by the
apex court in the hierarchy of courts. There is, as such, no quarrel
with the said proposition of law. Nonetheless, proceedings do attain
finality even at the level of the high courts, or the district courts or the
trial courts if the immediate next superior forum is not approached
by the party suffering the decree/order of the court seized of the lis.
However, the principle of finality of a judicial decision would have
no applicability in a situation where a party, despite owing money
(unpaid rent, here) to his adversary in terms of a judicial determination,
approaches the superior forum but prefers not to seek a stay of
such determination pending the proceedings leaving the other party
deprived of the benefits flowing from the said judicial determination.
The bogey of judicial finality cannot, thus, be pressed into service
to unfairly deny a party the benefits of a judicial decision, operation
of which does not suffer from any interdiction by the superior court.
31. Having bestowed anxious consideration to the rival submissions and
on perusal of the materials placed on record, we find ourselves in
agreement with Ms. Mohana that the lessee, and subsequently the
appellants, taking shelter of the pending appeal against the order
fixing fair rent without, however, seeking a stay thereof and also in
light of the parting observation made by this Court while disposing
of SLP (C) Nos. 6500–6501 of 2012, had no protective umbrella
over him/them so as to remain absolved from tendering payment
to M/s. Krishna.
32. Having regard to the afore-canvassed factual and legal position and
on acceptance of the instances of default referred to by Ms. Mohana,
188 [2025] 12 S.C.R.
Supreme Court Reports
we answer the question arising for decision in the affirmative. We
conclude that the High Court, in exercise of its revisional jurisdiction,
rightly refrained from re-examining factual determinations and such
an approach being reasonable and unexceptionable, it committed
no error in affirming the appellate order of eviction passed against
the appellants on the ground of wilful default.
33. The appeal, in our view, is unmeritorious. It is liable to be and is,
accordingly, dismissed.
34. The appellants are, however, granted time of six months from the
date of this order to vacate and hand over vacant possession of the
decretal property to M/s. Krishna, subject to the usual undertakings
being filed within a fortnight from date positively. In default, grant of
time of six months shall stand vacated and M/s. Krishna would be
at liberty to institute execution proceedings in accordance with law
to recover possession.
35. Parties shall, however, bear their own costs.
Result of the case: Appeal dismissed.
†
Headnotes prepared by: Nidhi Jain
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