Full Judgment Text
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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(s). 4563 OF 2014
DINA NATH (D ) BY LRS & ANR. ….APPELLANT(S)
VERSUS
SUBHASH CHAND SAINI & ORS. ….RESPONDENT(S)
J U D G M E N T
Rastogi, J.
1. The instant appeal has been filed against the judgment and order
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dated 10 May, 2011 passed by the High Court of Delhi in Civil
Miscellaneous (M) No. 44 of 2011 at the instance of the appellants
(tenants) under Article 227 of the Constitution of India upholding
orders of the Rent Controller striking out defence of the appellants on
account of alleged failure to pay the rent.
Signature Not Verified
Digitally signed by
ASHWANI KUMAR
Date: 2019.09.24
16:35:44 IST
Reason:
2. The matter earlier was heard by a two Judge Bench of this Court
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and there was a unanimity on the principles of law that the power to
strike out the defence vested in the Rent Controller under Section
15(7) of the Delhi Rent Control Act, 1958 (hereinafter being referred to
as the “Act, 1958”) is discretionary and not mandatory and it is
imperative that every violation in implementation of the directions of
the Rent Controller under Section 15(1) of the Act, 1958 ipso facto
leave to the striking out of the defence of the tenant and it ought to be
exercised only when the tenant deliberately, contumaciously or
negligently fails to deposit the rent due from him but there was a
divergence of opinion on the facts of the instant case and for that
reason the matter has been placed before us.
3. The facts in brief which may be relevant for the present purpose
and culled out from the record are that the appellantstenants rented
a shop bearing no. 1445A, Dariba Kalan, Delhi on a monthly rent of
Rs. 66/. The respondentsplaintiffs jointly own the abovementioned
demised premises. The rent for the shop is to be paid to respondent
no. 1, who holds a power of attorney, to collect rent on behalf of the
respondents. In November, 2007, the respondents (landlord) filed an
eviction petition under Section 14(1)(a)(b)(c) and (j) of the Act, 1958
seeking decree for recovery of possession of the rented premises on the
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manifold reasons. We are not dilating on the grounds of eviction of
the demised premises at this stage since that is the subject matter to
be examined by the Rent Controller where the eviction petition is
pending adjudication.
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4. The appellants filed their written statement on 7 February, 2008
disputing the allegations made by the respondents in the eviction
petition. Since one of the ground on which eviction was prayed for by
the respondents was nonpayment of rent in which the order under
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Section 15(1) of the Act, 1958 came to be passed on 21 April, 2008.
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It will be appropriate to quote the order dated 21 April, 2008 ad
infra :
“RENT CONTROL TRIBUNAL DELHI
E931/07
21.04.08
Arguments heard u/s 15(1) of DRC Act. The rate of rent
and the relationship is not in dispute between the parties
though the petitioner claims the arrears w.e.f. 01.01.2007
and the respondent states that he has paid rent upto
October, 2007.
Since the orders u/s 15(1) of DRC Act are to be passed on
the admitted facts, the respondent is directed to pay or
deposit the arrears of rent w.e.f. 01.11.2007 till date @ Rs.
66/pm within 30 days from today and further continue to
pay or deposit the future rent at the said rate month by
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month before 15 of each succeeding English Calendar
month.
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SD/
ARC/DELHI/21.04.2008”
5. In terms of the order under Section 15(1) of Act, 1958, the
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appellantstenants have to pay or deposit the arrears of rent w.e.f. 1
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November, 2007 till date @ Rs. 66/ p.m. within 30 days from 1
November, 2007 and further continue to pay or deposit the future rent
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at the said rate month by month before 15 of each succeeding
English Calendar month.
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6. On account of noncompliance of the order dated 21 April, 2008
as alleged, the respondents filed an application under Section 15(7) of
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the Act, 1958 on 28 April, 2009 praying for striking out the defence
of the appellants.
7. The appellants filed their written response to the aforesaid
application and it was specifically stated in paragraphs 3 & 4 that
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along with the arrears due from 1 November, 2007, in addition the
advance rent of ten months was deposited and on adjustment of the
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advance rent deposited on 21 April, 2008, the monthly rent which
was deposited at a later point of time practically paid in advance and
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there was no default committed of the order dated 21 April, 2008.
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8. Taking note of the rival claims of the parties, the Rent Controller
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vide its Order dated 14 September, 2009 allowed the application filed
by the respondentslandlord under Section 15(7) of the Act, 1958 and
struck off the defence of the appellants in the pending evicting
petition. Dissatisfied with the order passed by the Rent Controller, the
appellants approached the Rent Control Tribunal. By an order dated
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24 May, 2010, the Rent Control Tribunal dismissed the appeal and
being dissatisfied, the appellants further approached the High Court
invoking Article 227 of the Constitution of India and that came to be
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dismissed vide judgment and order dated 10 May, 2011 which is
under challenge before us in the instant civil appeal.
9. The moot question arises for consideration is whether the power
vested with the Rent Controller under Section 15(7) of the Act, 1958 is
discretionary and has been judiciously exercised in the facts of the
instant case in striking out the defence of the appellants(tenants) in
the eviction proceedings.
10. Before adverting to the factual matrix relevant to the question of
striking out the tenant’s defence, it will be apposite for us to take note
of the scheme of the Act, 1958.
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11. The statement of objects and reasons of the Act, 1958 fell for
consideration before the Constitution Bench of this Court in Ashoka
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Marketing Ltd. and Anr. Vs. Punjab National Bank and Ors. ,
wherein this Court held that the purpose of the Act, inter alia, is to
give the tenants a larger measure of protection against eviction. This
Court observed:
“…The Statement of objects and reasons for the
enactment of the Rent Control Act, indicates that it has
been enacted with a view :
(a) to devise a suitable machinery for expeditious
adjudication of proceedings between landlords and tenants;
(b) to provide for the determination of the standard rent
payable by tenants of the various categories of premises
which should be fair to the tenants, and at the same time,
provide incentive for keeping the existing houses in good
repairs, and for further investment in house construction;
and
(c) to give tenants a larger measure of protection against
eviction.
This indicates that the object underlying the Rent
Control Act is to make a provision for expeditious
adjudication of disputes between landlords and tenants,
determination of standard rent payable by tenants and
giving protection against eviction to tenants. The premises
belonging to the Government are excluded from the ambit
of the Rent Control Act which means that the Act has been
enacted primarily to regulate the private relationship
between landlords and tenants with a view to confer certain
benefits on the tenants and at the same time to balance the
interest of the landlords by providing for expeditious
adjudication of proceedings between landlords and
tenant…”
1 1990 (4) SCC 406
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(emphasis
supplied)
12. Prior to the enactment of Act, 1958, the matter pertaining to rent
and eviction in the State of Delhi was governed by The Delhi and
Ajmer Rent Control Act, 1952(hereinafter being referred to as the “Act,
1952”). Apart from the ground of eviction provided under Section 13
of the Act, 1952 which is corresponding to the grounds for protection
of a tenant against eviction has been enumerated under Section 14 of
the Act, 1958. The corresponding provision of Section 13(5) of Act,
1952 has been provided under Section 15(7) with certain modifications
under Act, 1958.
13. One of the significant modification is that while under Section
13(5) of the Act, 1952, the application by the landlord had to be “for
an order on the tenantdefendant to deposit month by month rent at a
rate at which it was last paid” in all suits for ejectments. Section 15 of
the Act, 1958 makes a distinction between cases where the recovery of
possession is sought on, the grounds of arrears of rent having been
left unpaid within two months of the service of notice of demand and
other ejectment proceedings. In the first class of cases, the Controller
can make an order for payment of rent at the rate at which it was last
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paid while in the other class of cases the Controller may make an
order for payment at the rate at which it was legally recoverable.
14. The other notable difference is that under Section 13(5) of the
Act, 1952, failure of the tenant to deposit the arrears of rent within 15
days of the date of the order or to deposit the rent for any month by
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the 15 of the next following month made it incumbent on the Court
to strike out the defence against ejectment. The language was that on
the failure of the tenant to deposit the rent, in terms of the mandate of
law, “the Court shall order the defence against ejectment to be struck
off”. In the Act 1958, Section 15(7) deals with the matter in case of
failure of the tenant to make the payment for deposit as required by
the Act. The Rent Controller has a discretion to consider the facts and
circumstances of each case and exercise his discretion judiciously in
accordance with law. It will be appropriate to notice Section 13(5) of
Act, 1952 and Section 15(7) of Act, 1958, which are as under:
THE DELHI AND AJMER RENT CONTROL ACT, 1952
“13 Protection of a tenant against eviction
(5) If the tenant contests the suit as regards the claim for
ejectment, the plaintifflandlord may make an application at
any stage of the suit for an order on the tenantdefendant to
deposit month by month rent at a rate at which it was last
paid and also the arrears of rent, if any, and the court, after
giving an opportunity to the parties to be heard, may make
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an order for the deposit of rent at such rate month by month
as it thinks fit and the arrears of rent, if any, and on the
failure of the tenant to deposit the arrears of rent within
fifteen days of the date of the order or to deposit the rent at
such rate for any month by the 15th of the next following
month, the court shall order the defence against ejectment to
be struck out and the tenant to be placed in the same
position as if he had not defended the claim to ejectment;
and the landlord may withdraw the amount of money in
deposit without prejudice to his claim to any decree or order
for recovery of possession of the premises.”
DELHI RENT CONTROL ACT, 1958
“Section 15 When a tenant can get the benefit of protection
against eviction
(7) If a tenant fails to make payment or deposit as required
by this section, the Controller order the defence against
may
eviction to be struck out and proceed with the hearing of the
application.”
(emphasis supplied)
15. The change of the words from “The Court order the defence
shall
against ejectment to be struck out” to the words “the Controller may
order the defence against eviction to be struck out” is a deliberate
modification in law in favour of the tenant. Under the Act 1952, the
Court had no option but to strike out the defence if the failure to pay
or deposit the rent is proved; under the Act, 1958, the Controller who
takes the place of the Court has a discretion in the matter, so that in
proper cases, even if there is a default in making the payment of rent,
but if he is satisfied on the basis of the material on record in exercise
of judicial discretion, may refuse to strike out the defence in the given
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facts & circumstances of the case.
16. Broadly speaking, the perusal of Act, 1952 with Act, 1958 shows
primarily the following changes:
(i) Section 13(5) of the Act, 1952 was meant to safeguard the
interest of the landlord only. Section 15(1) of the Act, 1958
is meant primarily by way of benefit to the tenant who gets
another opportunity to avoid his eviction by complying with
the order passed under Section 15(1). The tenant also by
complying with the order passed under Section 15(1) avoids
the consequence of his default of payment or tender before
filing of the petition.
(ii) Under Section 13(5) of the Act 1952, in case of default, the
Court was bound to strike out the defence whereas under
Section 15(7) of the Act 1958, in case of default in
compliance with the order passed under Section 15(1) or
Section 15(2), the Controller has a discretion to strike out
the defence and it is always open to be examined on the
facts and circumstances of each case.
(iii) Under the Act, 1958 by complying with the order under
Section 15(1), the tenant can defeat the eviction application,
whereas under the Act 1952, the tenant did not have this
advantage even if he complied with the order under Section
13(5) of the Act 1952.
17. The inevitable result on comparison of Section 13(5) of the Act,
1952 and Section 15(7) of Act, 1958 be that the Court would not be
bound to strike out the defence against ejectment in case of default in
payment of rent in compliance to the order passed under Section 15(1)
of the Act, 1958 and it is always open to the Controller to examine the
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facts of each case while exercising its discretion which obviously has
to be judicious in approach and with circumspection.
18. While interpreting Section 15(7) of Act 1958, V.R. Krishna Iyer, J.
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in Miss. Santosh Mehta Vs. Om Prakash and Ors. held that the
power to strike out a party’s defence is an exceptional step and has
only to be exercised where a “mood of defiance” and “gross negligence”
on the part of the tenant is detected. This Court warned against the
landlord using Section 15(7) as a “booby trap” to get the tenant
evicted. It would be better to reproduce the passage which indicate
the approach which has to be adopted in such matters by the Court.
The relevant paras 3 & 4 are as under:
“3. We must adopt a socially informed perspective while
construing the provisions and then it will be plain that the
Controller is armed with a facultative power. He may, or may
not strike out the tenant's defence. A judicial discretion has
builtinselfrestraint, has the scheme of the statute in mind,
cannot ignore the conspectus of circumstances which are
present in the case and has the brooding thought playing on
the power that, in a court, striking out a party's defence is
an exceptional step, not a routine visitation of a punitive
extreme following upon a mere failure to pay rent. First of all,
there must be a failure to pay rent which, in the context,
indicates wilful failure, deliberate default or volitional non
performance. Secondly, the section provides no automatic
weapon but prescribes a wise discretion, inscribes no
mechanical consequence but invests a power to overcome
intransigence. Thus, if a tenant fails or refuses to pay or
deposit rent and the court discerns a mood of defiance or
gross neglect, the tenant may forfeit his right to be heard in
defence. The last resort cannot be converted into the first
2 1980(3) SCC 610
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resort; a punitive direction of court cannot be used as a
booby trap to get the tenant out. Once this teleological
interpretation dawns, the mist of misconception about
matterofcourse invocation of the power to strike out will
vanish. Farewell to the realities of a given case is playing
truant with the duty underlying the power.
4. …..The effect of striking out of the defence under Section
15(7) is that the tenant is deprived of the protection given by
Section 14 and, therefore, the powers under Section 15(7) of
the Act must be exercised with due circumspection.”
19. Subsequent decisions rendered on the subject also recognises
that mere failure to pay rent on the part of the tenant is not enough to
justify an order striking out the defence. It is only a wilful failure or
deliberate default or volitional of nonperformance that can call for the
exercise of the extraordinary power vested in the Court. More
importantly, the plentitude of the discretionary power of the Court
under Section 15(7) of the Act, 1958 is with the Rent Controller
whether or not to strike out the defence, needless to say that the effect
of striking out the defence under Section 15(7) of Act, 1958 is that the
tenant be deprived of the protection available to him under Section 14
and it is imperative that such power vested with the Rent Controller
under Section 15(7) of the Act, 1958 must be exercised with due care
and circumspection.
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20. In Smt. Kamla Devi Vs. Shri Vasudev , this Court reiterated
3 1995(1) SCC 356
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that the power to strike out the defence simply vested the Rent
Controller with the discretion to do so. It was not mandatory for the
Rent Controller to strike out the defence simply because a default had
occurred. It is imperative that exercise of discretion vested with the
authority obviously depends upon the facts and circumstances of each
case and is not open to be exercised under the rule of thumb.
21. The later decision in
M/s. Jain Motor Car Co., Delhi Vs. Smt.
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Swayam Prabha Jain & Anr. does not disturb the legal parameters
regulating the exercise of the power but deals more on the facts and
circumstances of that case in which the power was found to have been
rightly exercised.
22. The interpretation with reference to striking out the defence of a
tenant under Section 15(7) of the Act, 1958 later came up for
consideration before this Court in Aero Traders (P) Ltd. Vs. Ravinder
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.
Kumar Suri
23. Reference may be made to a later decision of this Court in
Amrit
4 1996(3) SCC 55
5 2004(8) SCC 307
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wherein it was held that subsection (7)
Lal Vs. Shiv Narain Gupta
of Section 15 of the Act, 1958 confers a discretion with the Rent
Controller who may order the defence against eviction to be struck off
and proceed with the hearing of the application if a tenant fails to
make payment or deposit, as required under Section 15 of Act, 1958.
It has been further held that every violation under Section 15(1) of the
Act, 1958 will not ipso facto lead to the striking out the defence of a
tenant. The discretion vested with the Controller under Section 15(7)
of Act, 1958 has to be exercised judiciously and if the noncompliance
of the order under Section 15(1) of the Act, 1958 depicts irrational
disregard to the order, or when the noncompliance is repeated, or
when no reasonable justification is tendered, or for such other similar
reasons, wilful, contumacious, or negligent and careless behaviour,
could lead to the striking out of a tenant’s defence.
24. It clearly emerges from the exposition of law that power vested
under Section 15(7) of the Act, 1958 is discretionary and not
mandatory and depends on contumacious or deliberate default and
must be construed harmoniously so as to balance the rights and
obligations of the tenant and the landlord and the power under
Section 15(7) of Act, 1958 being an exception to be exercised with due
6 2010(15) SCC 510
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care and circumspection.
25. Coming to the case on hand, there are distinct aspects from
which the question of default in payment of rent has to be viewed. In
the first instance, the question is whether the arrears which the Court
determined and directed the appellant to pay were paid. The answer
indeed is in the affirmative. The Rent Controller passed an order
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dated 21 April, 2008 directing the appellants to deposit arrears of
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rent from 1 November, 2007 to April, 2008 and to continue to pay
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future rent @ Rs. 66/ p.m. by the 15 of each succeeding month. It
is not in dispute that the appellants had complied with the order of
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deposit of arrears on 21 April, 2008. In fact, they paid ten months
advance rent in addition to arrears from November, 2007 to April,
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2008 in compliance of the order dated 21 April, 2008.
26. The second limb which in fact has been missed at all the three
stages is that in addition to the arrears of rent i.e. from November,
2007 to April, 2008, the appellants paid an amount equivalent to ten
months’ advance rent, although there was neither any legal obligation
to do so nor was any direction issued by the Rent Controller for
making such payment. It is not disputed that the additional rent paid
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by the appellants of ten months advance rent did not represent any
admitted liability, and the fact is that the additional rent of ten
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months which was paid by the appellants over the period from 1
November, 2007 to April, 2008 was neither adjusted against future
rent nor was it refunded to the appellants.
27. It may be relevant to note that although the respondents
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landlord have claimed arrears for the period 1 January 2007 to
October 2007, but that was disputed by the appellants as it revealed
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from the order dated 21 April, 2008, but as we are examining the
question regarding striking of defence because of noncompliance of
the order passed by the Rent Controller in exercise of his power under
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Section 15(1) of Act, 1958, the arrear in terms of order dated 21
April, 2008 was to be paid from November, 2007 to April, 2008 and
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additional rent of ten months paid on 21 April, 2008 was indeed to be
adjusted by the respondents towards future rent for the period
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commencing from 1 May, 2008 and it was the only legal option and
having that excess amount being acknowledged by the respondents
landlord, the same must have been, in absence of a direction from the
Court, be deemed to have been received and held by the respondents
landlord for the benefit of the appellantstenants and adjustment of
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such excess amount against future liability in that view is the only
possible and legally valid method of appropriation of that amount.
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Viewed thus, the amount paid by the appellants on 21 April, 2008
covered the period of future rent commencing from May 2008 to
February, 2009(ten months).
28. The further limb of the factual matrix is also indisputed from the
record that after adjustment of the rent paid upto February, 2009, the
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monthly rent deposited on 27 June, 2008 of one month and 17
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December, 2008 for five months will cover the period till 31 August,
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2009. That means, the appellants have paid advance rent upto 31
August, 2009. Not only that, the further two deposits made by them,
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first on 1 May, 2009 and second on 5 May, 2009, if these payments
would have been taken into consideration, the appellants discharged
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the entire rent liability commencing from 1 September, 2009. The
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rent which was paid/deposited by the appellants on 21 April, 2008
th th st
followed with 27 June, 2008, 17 December, 2008, 1 May, 2009 and
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5 May, 2009 is not in dispute and that covers the rent for a period of
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one year and nine months commencing from 1 September, 2009.
29. It clearly manifests from record that on the date of the order
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passed by the Rent Controller dated 21 April, 2008 itself, the entire
arrears as directed to be deposited by the appellants stood paid and
also on the date of the order passed by the Rent Controller striking out
his defence, rent for the entire intervening period and even beyond
had been paid and what it appears is that suitable reconciliation and
adjustments were required to be made against the months for which
rent was payable but what cannot be disputed is that the amount
which the appellants were called upon to pay and what they have,
pursuant to the directions of the Rent Controller was paid/deposited
at all relevant point of time in excess of what was payable to the
landlord. In the given circumstances, the charge of contumacious
failure and deliberate default in making payment levelled against the
appellantstenants is, therefore, ill founded.
30. The question is whether the tenants were guilty of contumacious
conduct in withholding such payment. While answering that
question, the amount of rent payable for the demised premises may be
a factor which cannot be brushed aside, but the facts and
circumstances of the case on hand, do not suggest any negligence,
defiance or contumacious nonpayment of the amount payable to the
landlord to warrant the taking of that “exceptional step” which is
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bound to render the tenant defenceless in his contest against the
respondentslandlord.
31. In our opinion, the decision of the Rent Controller and confirmed
by the Single Judge of the High Court of Delhi under the impugned
judgment upholding the decision of striking out of the defence of the
appellants which certainly entails adverse consequences in depriving
of taking their defence and to contest the eviction application filed by
the respondentslandlord has not been exercised judiciously and with
circumspection and for the aforesaid reasons, the impugned judgment
is unsustainable and deserves to be set aside.
32. It appears that the eviction application was filed by the
respondents in the year 2007 and almost 12 years have rolled by and
the matter could not be proceeded because of the pendency of the
proceedings in this Court, we consider it appropriate to observe that
the Rent Controller/Competent Authority may proceed with the matter
and decide the pending eviction application expeditiously on merits
but in no case later than one year in accordance with law.
33. In the result, the appeal succeeds and the impugned judgment of
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the High Court of Delhi dated 10 May, 2011 confirming order of the
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Rent Controller/Tribunal are hereby set aside with the observations
supra. No costs.
34. Pending application(s), if any, stand disposed of.
………………………….J.
(ARUN MISHRA)
………………………….J.
(M.R. SHAH)
.…………………………J.
(AJAY RASTOGI)
NEW DELHI
SEPTEMBER 24, 2019