Full Judgment Text
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PETITIONER:
M/S JAIN MOTOR CAR CO., DELHI
Vs.
RESPONDENT:
SMT. SWAYAM PRABHA JAIN & ANR.
DATE OF JUDGMENT: 15/02/1996
BENCH:
AHMAD SAGHIR S. (J)
BENCH:
AHMAD SAGHIR S. (J)
RAMASWAMY, K.
G.B. PATTANAIK (J)
CITATION:
1996 SCC (3) 55 JT 1996 (4) 479
1996 SCALE (2)197
ACT:
HEADNOTE:
JUDGMENT:
J U D G M E N T
S.Saghir Ahmad,J.
These are tenant’s appeals.
2. Prem Chand Jain, who is since dead and is now
represented by respondent No.1, had filed a petition before
the Rent Controller, Delhi, for the eviction of the
appellant from the premises no.XI/4239-A, Raj Kishan, Jain
Street, Municipal Ward No.XI, Darya Ganj, Delhi, on the
ground of default in payment of rent and sub-letting. This
petition came to be tried by the Additional Rent Controller,
Delhi, who passed an order on 24th March, 1971 under Section
15(1) of the Delhi Rent Control Act, 1958 (for short, the
’Act’, requiring the appellant to deposit all the arrears of
rent due for the period from 1.6.1970 within one month from
the date of the order and to deposit the future rent also at
the rate of Rs.200/- p.m., every month by the 15th of each
succeeding month after adjusting an amount of Rs 800/-
which, admittedly, was received by Prem Chand Jain as part
of the arrears of rent.
3. While the proceedings were pending before the
Additional Rent Controller, Delhi, Sh.Prem Chand Jain made
an application dated 22.3.1972 under Section 15(7) of the
Act for striking out the defence to the appellant on the
ground that the appellant had not deposited the rent for the
month of February, 1972, by 15th March, 1972 and had instead
deposited it on 30th March, 1972. This application was
rejected on 24th April, 1979 and the appeal which was
thereafter filed by Sh.Prem Chand Jain against this order
was dismissed by the Rent Control Tribunal by order dated
19.4.73. Sh. Prem Chand Jain then filed a second appeal in
the High Court which was registered as S.A.O.No.198 of 1973.
4. In the meantime, the Third Additional Rent Controller,
Delhi, by his order dated 27.10.75, allowed the main
petition of Sh. Prem Chand Jain for the eviction of the
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appellant from the premises in question on the ground that
the appellant had committed default in not depositing the
rent for the month of February, 1972, by 15th March, 1972
and thus the order dated 24.3.71 for regularly depositing
the future monthly rent by the 15th of each succeeding month
was not complied with the further finding that he, namely,
the Rent Controller had no power to condone the delay or to
extend the time for depositing the rent. Consequently, the
appellant was held not entitled to protection under Section
14(2) of the Act and he was directed to be evicted from the
premises in Question.
5. This order was challenged by the appellant before the
Rent Control Tribunal before whom Sh. Prem Chand Jain also
filed cross-objections on the question of sub-letting as the
Additional Rent Controller had held that the appellant had
not sublet any part of the premises and had thereby rejected
one of the grounds on which the appellant’s eviction was
sought. By order dated 20.3.78, the Tribunal dismissed the
appeal of the appellant as also the cross-objections filed
by the landlord. The Tribunal reiterated the finding
recorded by the Rent Controller that it had no power or
jurisdiction to condone the delay or to extend the time for
depositing the rent and the order passed under Section 15(1)
had to be strictly complied with. The appellant then filed a
second appeal in the High Court (S.A.O.No.125 of 1978) which
was taken up for hearing along with landlords S.A.O.No.198
of 1973. The High Court by its judgment and order dated 19th
August, 1982 dismissed the appellant’s second appeal while
landlord’s S.A.O.No.198 of 1973 was allowed with the finding
that the appellant had committed default in not depositing
the rent for month of February, 1972 by 15th March, 1972 and
was, therefore, liable to be premises in question. The High
Court was also of the opinion that the Rent Controller as
also the Tribunal were not justified in refusing to strike
off the defence of the appellant which was consequently
struck off by it.
6. It is in these circumstances that the present appeals
have been filed and have now come up for hearing which are
being disposed of by this judgment.
7. Mr. Sachhar, learned Senior Counsel for the appellant
contended that the interpretation placed by the Delhi High
Court on the relevant statuary provisions contained in
Section 15(1) and 15(7) was erroneous and contrary to the
decisions of this Court and, therefore, the judgment was
liable to be set aside.
8. We may examine the submission in the light of the
relevant provisions of the Act providing protection against
sudden eviction of tenants.
9. Section 14(1) together with its proviso provides as
under :
"14. Protection of tenant against
eviction. (1) Notwithstanding
anything to the contrary contained
in any other law or contract, no
order or decree for the recovery of
possession of any premises shall be
made by any court or Controller in
favour of the landlord against a
tenant:
Provided that the Controller
may, on an application made to him
in the prescribed manner, make an
order for the recovery of
possession of the premises on one
or more of the following grounds
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only, namely
(a) that the tenant has
neither paid nor tendered the
whole of the arrears of the
rent legally recoverable from
him within two months of the
date on which a note of demand
for the arrears of rent has
been served on him by the
landlord in the manner
provided in Section 106 of the
Transfer of Property Act, 1882
(4 of 1882);
10. Section 14(2) provides as under
:
"14.(2) No order for the
recovery of possession of any
premises shall be made on the
ground specified in clause (a)
of the proviso to sub-section
(1), if the tenant makes
payment or deposit as required
by Section 15:
Provided that no tenant
shall be entitled to the
benefit under this subsection,
if, having obtained such
benefit once in respect of any
premises he again makes a
default in the payment of rent
of those premises for three
consecutive months."
11. Section 15(1) provides as under
:
"15. When a tenant can get the
benefit of protection against
eviction - (1) In every proceeding
for the recovery of possession of
any premises on the ground
specified in clause (a) of the
proviso to sub-section (1) of
Section 14, the Controller shall,
after giving the parties an
opportunity of being heard, make an
order directing the tenant to pay
to the landlord or deposit with the
Controller within one month of the
date of the order, an amount
calculated at the rate of rent at
which it was last paid for the
period for which the arrears of the
rent were legally recoverable from
the tenant including the period
subsequent thereto up to the end of
the month previous to that in which
payment or deposit is made and to
continue to pay or deposit, month
by month, by the fifteenth of each
succeeding month, a sum equivalent
to the rent at that rate."
12. Section 15(7) provides as under
:
"15(7). If a tenant fails to make
payment or deposit as required by
this section , the Controller may
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order the defence against eviction
to be struck out and proceed with
the hearing of the application."
13. A perusal of the above provisions will indicate that
the Act provides two opportunities to he tenant to avoid
eviction. The first is contemplated by the proviso to sub-
section (1) of Section 14 under which if the tenant pays to
the landlord the entire amount of arrears of rent demanded
from him by the landlord within two months from the date on
which a notice of demand is served upon him, it would not be
possible for the landlord to institute the proceedings for
his eviction on the ground under section 14 of the Act. The
second opportunity is provided to him after the institution
of the proceedings, by Sec. 14(2) which provides that no
order for the recovery of possession on the ground of
default in payment of rent shall be made is the tenant has
deposited or made payment of the rent in accordance with the
provisions of section 15 under which the Rent Controller can
call upon the tenant to pay to the landlord or to deposit in
his court, within, one month from the date of the order, the
arrears of rent calculated at the rate at which it was 1st
paid for the whole of the period for which the arrears were
legally recoverable from him including the period subsequent
thereto and further to pay or deposit continuously, month by
month, by the 15th of each succeeding month, a sum
equivalent to the rent at that rate.
14. The consequence of non-deposit or non-compliance of
the order made under section 15(1) is indicated in section
15(7) wherein it is provided that the Controller may order
the defence of the tenant to be struck out and proceed with
the hearing of the landlord’s petition for eviction.
15. Apparently, the terms of Section 15(1) appear to be
imperative. There was a controversy whether the Rent
Controller had any jurisdiction to extend the time
contemplated by Section 15(1) for the deposit of rent or its
payment to the landlord. A Full Bench of the Delhi High
Court in Delhi, Cloth & General Mills Co. Ltd. vs. Hem Chand
& Anr. AIR 1972 Delhi 975 (F.B.) held that the Rent
Controller had no jurisdiction to condone the delay in
deposit of the rent under Section 15 of the Act and it also
held that once a default is committed by a tenant, his
defence is liable to be struck out under Section 15(7) with
no alternative but to order his eviction. This decision to
the extent that the time for depositing the rent cannot be
extended or the delay cannot be condoned was upheld by this
Court in Hem Chand vs. Delhi Cloth & General Mills Co. Ltd.
& Anr. AIR 1977 SC 1986, but it did not agree with the Full
Bench on the second aspect of the matter that the default
must result in the striking out of defence and passing of an
order of eviction. This Court also held that to strike out
or not to strike out the defence was a matter within the
discretion of the Rent Controller and the decree for
eviction could not ipso facto be passed merely on the ground
of default in depositing the rent under Section 15(2) of the
Act. The relevant observations of this Court are thus :
"Now the question that remains is
whether the Rent Controller has any
discretion to extend the time
prescribed in Section 15(1). This
Section requires the Controller
after hearing the parties, to make
an order directing the tenant to
pay to the landlord or deposit with
the Controller within one month of
the date of the order the arrears
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of rent with a direction that they
continue to pay or deposit month by
month, a sum equivalent to the
rent. This is a second opportunity
given to the tenant to pay arrears
of rent. Without the protection
given under the Act the landlord
can on 15 days’ notice get the
tenant evicted. The Rent Control
Act protects the tenant from such
eviction and gives him an
opportunity to pay the arrears of
rent within two months from the
date of notice of demand as
provided in Section 14(1)(a). Even
if he fails to pay, a further
opportunity is given to the tenant
to pay or deposit the arrears
within one month under Section
15(1). Such payment of deposit in
compliance with the order under
Section 15(1) takes away the right
of the landlord to claim recovery
of possession on the ground of
default in payment of rent. The
legislature has given statutory
protection to the tenant by
affording him an opportunity to pay
the arrears of rent within one
month from the date of the order.
This statutory provision cannot be
modified as rights of parties
depend on the compliance with the
order under Section 15(1). In the
circumstances we agree with the
Full Bench that the Rent Controller
has no discretion to extend the
time prescribed under Section
15(1)."
16. A Three Judge Bench (Hon’ble V.R. Krishna Iyer, R.S.
Pathak and O. Chinnappa Reddy, JJ.) of this Court in
Shyamcharan Sharma vs. Dharamdas AIR 1980 SC 587 = 1980 (2)
SCC 151, on a consideration of the provisions of the U.P.
Accommodation Control Act (41 of 1961), which were similar
to Delhi Act, laid down that since Section 13(6) vests in
the court the discretion to order the striking out of the
defence, it does not clothe the landlord with an automatic
right to a decree for eviction nor does it visit the tenant
with the penalty of a decree for eviction being straightway
passed against him. It further observed as under :
"If S.13 were to be construed as
mandatory and not as vesting a
discretion in the Court, it might
result in the situation that a
tenant who has deposited the
arrears of rent within the time
stipulated by S.13(1) but who fails
to deposit thereafter the monthly
rent on a single occasion for a
cause beyond his control may have
his defence struck out and be
liable to summary eviction. We
think that S.13 quite clearly
confers a discretion, on the court,
to strike out or not to strike out
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the defence, if default is made in
deposit or payment of rent as
required by S.13(1 ). If the court
has the discretion not to strike
out the defence of a tenant
committing default in payment or
deposit as required by S.13(1), the
court surely has the further
discretion to condone the default
and extend the time for payment or
deposit. Such a discretion is a
necessary implication of the
discretion not to strike out the
defence. Another construction may
lead, in some cases, to a
perversion of the object of the
Act, namely, ’the adequate
protection of the tenant’. S.12 (3)
entitles a tenant to claim
protection against eviction on the
ground specified in S.12(1)(a) if
the tenant makes payment or deposit
as required by S.13. On our
consideration of S.13 that the
Court has the power to extend the
time for payment or deposit it must
follow that payment or deposit
within the extended time will
entitle the tenant to claim the
protection of S.12(3)."
17. Both these decisions came to be considered by this
Court in Ram Murty vs. Bhola Nath & Anr. AIR 1984 SC 1392 =
1984 (3) SCC 111), which was a case under the Delhi Rent
Control Act, 1958, and it was laid down that so far as the
provisions relating to the striking out of defence contained
in Section 15(7) are concerned, they are in pari materia
with the provision contained in the M.P. Act and since a
Three Judge Bench in Shyamcharan’s case (supra) had already
held that it was within the discretion of the Rent
Controller to strike or not to strike out the defence, the
Two Judge decision in Hem Chand vs. Delhi Cloth & General
Mills AIR 1977 SC 1986 shall be treated as overruled. It was
laid down as under :
"15. We must confess that the two
decisions in Hem Chand and
Shyamcharan (AIR 1980 SC 587)
supra, are irreconcilable.
16. It would be incongruous to hold
that even if the defence of the
tenant is not to be struck out
under S.15(7), the tenant must
still be visited with the
punishment of being deprived of the
protection under S.14(2). In Hem
Chand’s case (AIR 1977 SC 1986) the
Court went to the extent of laying
down that even if the defence of
the tenant is struck out under
Section 15(7), the Rent Controller
could not straightway make an order
for eviction in favour of the
landlord under S.14(1)(a). The
Court held that the High Court was
wrong in its assumption that
failure to comply with the
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requirements of S.15(1) vests in
the landlord an ’indefeasible
right’ to secure an order for the
eviction of the tenant under
S.14(1)(a). The Court set aside the
judgment of the High Court taking
that view and remanded the matters
to the Rent Controller observing
that there was still an issue to be
tried. If that be so, the question
at once arises "What is the issue
to be tried?". If the landlord has
still to make out a case before the
Rent Controller that he was
entitled to an order for eviction
of the tenant under S.14(1), surely
the tenant has the right to
participate in the proceedings and
cross-examine the landlord. It must
logically follow as a necessary
corollary that if the defence is
not to be struck out under S.15(7)
it means that the tenant has still
the defences open to him under the
Act. In the premises, the
conclusion is irresistible that he
has the right to claim protection
under S.14(2). What is of essence
of S.14(2) and of S.15(6) is
whether there has been a
substantial compliance with the
order passed under S.15(1). The
words as required by S.15(1) in
these provisions must be construed
in a reasonable manner. If the Rent
Controller has the discretion under
S.15(7) not to strike out the
defence of the tenant, he
necessarily has the power to extend
the time for payment of future rent
under S.15(1) where the failure of
the tenant to make such payment or
deposit was due to circumstances
beyond his control. The previous
decision in Hem Chand’s case
interpreting S.15(7) and S.14(2) in
the context of S.15(1) of the Delhi
Rent Control Act, 1958, although
not expressly overruled, cannot
stand with the subsequent, decision
in Shyamcharan’s case, interpreting
the analogous provisions of the,
Madhya Pradesh Accommodation
Control Act, 1961 as it is of a
larger Bench.
(emphasis supplied)
18. Another Three Judge Bench of this Court in a recent
decision in Kamla Devi (Smt) vs. Vasdev (1995) 1 SCC 356,
which was also a case under the Delhi Act, has affirmed the
decisions rendered in Ram Murty’s case (supra) and
Shyamcharan’s case (supra). The learned Judges (Hon’ble J.S.
Verma, S.R. Bharucha & Suhas C.Sen) were of the opinion that
the provisions of this Act were similar to the provisions of
the Madhya Pradesh Act. They observed as under :
"20. On behalf of the appellant it
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has been contended that the
principles laid down in this case
should not be extended to a case
governed by the provisions of Delhi
Rent Control Act. We do not find
any material distinction between
the provisions of Section 12(1),
(3) and Section 13(1) (5) and (6)
of the Madhya Pradesh Act and the
corresponding provisions of
Section 14(1), and Section 15(1) of
the Delhi Act. In fact this
argument was rejected in the case
of Ram Murti vs. Bhola Nath. In
that case, construing the
provisions of the Delhi Act, it was
held that Section 15(7) conferred a
discretionary power on the Rent
Controller to strike out the
defence of the tenant. That being
the position, the Rent Controller
had, by legal implication, power to
condone the default on the part of
the tenant in making payment or
deposit of future rent or to extend
time for such period or deposit."
(emphasis supplied)
At another place, they observed as
under :
"21. In coming to this conclusion
reliance was placed on the decision
in the case of Shyamcharan Sharma
case, it was argued on behalf of
the respondent that Shyamcharan
Sharma case was decided under the
Madhya Pradesh Accommodation
Control Act, 1961 which had a
different scheme altogether and had
no application to a case to be
decided under the provisions of the
Delhi Rent Control Act. This
argument was repelled by pointing
out in that judgment that the
scheme of the Madhya Pradesh
Accommodation Control Act, 1961 was
almost similar to that of the Delhi
Act with regard to the claim of the
landlord for eviction, of the
tenant on failure to pay, rent. The
only difference was that under the
Madhya Pradesh Act the landlord had
to bring a suit for eviction before
a Civil Court under Section
12(1)(a), whereas under the Delhi
Act an application had to be made
before the Rent Controller under
Section 14(1)(a)."
(emphasis supplied)
After noticing the similarities in the Delhi Act and the
Madhya Pradesh Act, the Court finally observed as under:
"In our view, sub-section (7) of
Section 15 of the Delhi Rent
Control Act, 1958 gives a
discretion to the Rent Controller
and does not contain a mandatory
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provision for striking out the
defence of the tenant against
eviction. The Rent Controller may
or may not pass an order striking
out the defence. The exercise of
this discretion will depend upon
the facts and circumstances of each
case. If the Rent Controller is of
the view that in the facts of a
particular case the time to make
payment or deposit pursuant to an
order passed under sub-section (1)
of Section 15 should be extended,
he may do so by passing a suitable
order. Similarly, if he is not
satisfied about the case made out
by the tenant, he may order the
defence against eviction to be
struck out. But, the power to
strike out the defence against
eviction is discretionary and must
not be mechanically exercised
without any application of mind to
the facts of the case."
19. Shyamcharan’s case (supra) was cited before the Delhi
High Court in the instant case, but it distinguished it on
the ground that it was a case under the M.P. Act and was not
applicable. It consequently proceeded to strike out the
defence of the appellant on the ground that it had committed
a default in depositing the rent for the month] of February,
1972 by the 15th of March, 1972. For doing this, it followed
the decision of this Court in Hem Chand vs. Delhi Cloth &
General Mills AIR 1977 SC 1986. It would be seen that even
in that case this Court had observed as under:
"While we agree with the view of
the Bench that the Controller has
no power to condone the failure of
the tenant to pay arrears of rent
as required under Section 15(1), we
are satisfied that the Full Bench
fell into an error in holding that
the right to obtain an order for
recovery of possession accrued to
the landlord. As we have set out
earlier in the event of the tenant
failing to comply with the order
under Section 15(1) the application
will have to be heard giving an
opportunity to the tenant if his
defence is not struck out under
Section 15(7) and without hearing
the tenant if his defence is struck
out. The Full Bench is therefore in
error in allowing the application
of the landlord on the basis of the
failure of the tenant to comply
with an order under Section 15(1)."
20. In view of the above discussion, the High Court was not
justified in relying upon the decision of this Court in Hem
Chand’s case as it shall be deemed to have been overruled
or, in any case, lost its efficacy as a binding decision in
view of the Three Judge Bench decisions in Shyamcharan
Sharma vs. Dharamdas AIR 1980 SC 587 and Kamla Devi (Smt)
vs. Vasdev (1995) 1 SCC 356. The two Judge Bench in Ram
Murty vs. Bhola Nath & Anr. AIR 1984 SC 1392 has already
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critically examined the decision of this Court in Hem
Chand’s case (supra) and has held it to be contrary to the
three Judge Bench decision in Shyamcharan Sharma’s case.
21. Applying the above principles to the instant case, it
cannot but be held that the view expressed] by Rent
Controller, the Rent Control Tribunal as also the High Court
that the time under Section 15(1) for depositing the rent
could not be extended nor could the delay be condoned was
wholly erroneous. The whole approach, therefore from the
beginning, was based on wrong premises. The High Court went
a step further. While the Rent Controller and the Rent
Control Tribunal had not struck out the defence of the
appellant on the ground that 15 days’ default in depositing
the rent for February, 1972 was not wilful or contumacious,
the High Court, on an erroneous view, struck out the
defence. We have already noticed above that striking out of
defence under Section 15(7) of the Act is in the discretion
of the Rent Controller. Since the discretion appears to have
been properly exercised by the Rent Controller as also by
the Rent Control Tribunal, the High Court, in the particular
circumstances of the case, was not justified in interfering
with that discretion and striking out the defence of the
appellant. The High Court, while considering this question,
has observed as under :
"In other appeal S.A.O. no. 193 of
1973 of the landlord challenging
the Judgment and order of the
Tribunal dismissing his application
under Section 15(7) of the Act,
defence of the appellant tenant was
not struck off by the Controller.
In other words the tenant was
allowed to defend the eviction
case. He was allowed to lead
evidence and take part during the
trial of the eviction proceedings.
The appellant had claimed
condonation for the purpose of
Section 15(7) of the Action the
ground that the attorney of the
appellant had fallen ill and the
partner of the firm Ajit Prasad had
forgotten the date of deposit on
account of being busy in connection
with the election in which his
brother was also a candidate. These
facts are not sufficient to condone
the delay in deposit of rent. These
acts amount to negligence on the
part of the appellant which is a
partnership firm. The attorney had
fallen ill and one partner had
forgotten the date of deposit,
there were other partners and other
officials of the firm who ought to
have taken steps to deposit within
time. I am, therefore, of the view
that it was not a fit case for
refusing to strike off the defence
of the appellant tenant under
Section 15(7) of the Act. I,
therefore, set aside the Judgment
and order of the Tribunal and the
Controller and strike off the
defence of the appellant."
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22. The High Court thus struck out the defence by
substituting its own discretion in place of the Rent
Controller and the Tribunal both of whom had held that the
default by the appellant was not wilful. The main question
was whether appellant was entitled to extension of time in
depositing the rent or should he be evicted for not
depositing the rent for only one month in time particularly
when the default was not wilful or contumacious. At one
time, we were inclined to remand the case to the Rent
Controller so that the appellant’s plea regarding extension
of time in depositing the rent for the month of February,
1972 may be considered but having regard to the fact that
the appellant had already pleaded those facts which have
already been considered by the High Court, we feel that it
would not be in the interest of justice now to remand the
case as the High Court appears to be justified in coming to
the conclusion that the appellant was negligent and careless
as the rent could still be deposited by any other partner,
if the attorney had fallen ill or one partner had forgotten
the date of deposit. Any other explanation offered by the
appellant would be obviously an after thought and,
therefore, as pointed out earlier, it will not serve any
purpose to remand the case to the Rent Controller. The
result is that the appeal has to be dismissed and is hereby
dismissed but without any order as to costs allowing-three
months time to the appellant to vacate the premises on
failing the usual undertaking to this effect in this Court
failing which the respondent-landlady will be entitled to
recover possession from the appellant through police force.