Full Judgment Text
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PETITIONER:
PARADISE INDUSTRIAL CORPN BOMBAY
Vs.
RESPONDENT:
KILN PLASTICS PRODUCTS
DATE OF JUDGMENT29/09/1975
BENCH:
ALAGIRISWAMI, A.
BENCH:
ALAGIRISWAMI, A.
GOSWAMI, P.K.
UNTWALIA, N.L.
CITATION:
1976 AIR 309 1976 SCR (2) 32
1976 SCC (1) 91
CITATOR INFO :
RF 1989 SC 162 (8,12)
ACT:
Bombay Rents, Hotel and Lodging House Rates Control
Act, 1947 Section 11(4) Failure of defendants to deposit
arrears of rent after fixation of fair rent-Court. if
competent to make order that defences of defendants be
struck on failure to deposit arrears of rent.
HEADNOTE:
The appellants plaintiffs filed a suit against the
defendants respondents for recovery of possession of the
property leased to them as also rent and mesne profits in
March, 1968. It was alleged that the defendants were in
arrears of rent from 1st March, 1966 and that the rent was
Rs. 385/- a month. On 30th January, 1968, a notice to quit
was given to the defendants and the notice was served on 1st
February, 1968. On 20th February, 1968 they filed an
application under s.11 of the Bombay Rents, Hotel and
Lodging House Rates Control Act 1947 for fixation of
standard rent. It was thereafter that the suit was filed in
March, 1968. On 23rd November. 1968, the suit came up before
a Judge of the Small Causes Court and after hearing the
parties he made an order requiring the defendants to deposit
Rs. 13,000/- as rent due up to the end of December 1968 and
interim standard rent of Rs. 308/- per month to be paid
beginning from, February 15, 1969. It was further ordered
that in default of the defendants depositing the amount the
plaintiffs were at liberty to follow the consequential
remedy under s.11 (4) of the Act. The defendants did not
deposit the amount ordered by the Court and on 24th February
1969 the plaintiffs applied to the Court praying for a
notice to be issued to the defendants to show cause why they
should not deposit the aggregate amount of’ rent and further
rent of Rs. 385/- per month from 1st August, 1969 till the
disposal of the suit. There was a further prayer that in
default of the deposit of the amount the defences of the
defendants may be ordered to be struck off. Upon this
application a notice was issued to the defendants and on 2nd
June, 1969, an order was made requiring the defendants to
deposit Rs. 14,007/- within one month and to continue to
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deposit Rs. 385/- per month in accordance with the earlier
order. It was further ordered that in default of the deposit
the defences of the defendants there to be struck of and
that the suit should be placed for ex parte orders on 15th
July 1969. The defendants were absent. On that day and the
suit was adjourned to 5th August, 1969. On the 5th August
the suit was again adjourned to 6th and on that day an ex-
parte decree for possession, recovery of arears of rent and
costs was passed. However, on the 5th August he defendants
had made an application stating that on proper calculation
the amount of arrears of rent would come to Rs. 7065/- and
praying for extension of time for deposit of this amount.
The defendants were allowed to deposit the amount without
prejudice to the rights and contentions of the partied and
notice was ordered to be issued to the plaintiffs. The
defendants deposited the amount but did not take out and
serve the notice on the plaintiffs and the notice was
ultimately discharged for want of prosecution on 19th
September, 1969. An appeal filed before the Appellate Bench
of the Small Causes Court against the exparte decree and it
was dismissed. The High Court on an application made by the
defendants under Art. 227 of the Constitution set aside the
decree passed by the Small Causes Court on 6th August, 1969
as also the decree passed by the Appellate Bench and also
dismissed the suit.
The High Court held that the order passed by the Small
Causes Court on June 2, 1969 was illegal and without
jurisdiction and every step that was taken by the Court
subsequently was without jurisdiction and, therefore, was
illegal. The High Court further held that as the defendants
had deposited
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all mounts as ordered by the Court previous to the order of
June 2, 1969 and also deposited the monthly rent at the rate
of Rs. 308/- per month the matter would fall under s.
12(3)(b) and the suit should be dismissed.
Allowing the appeal by special leave,
^
HELD:(1) The Judge of. the Small Causes used the words
"defences to be struck off" and did not use the words the
shall not be entitled to appear in or defend the suit except
with the leave of the Court, which leave may be granted
subject to such terms and conditions as the Court may
specify" The words "striking out the defence are very
commonly used by lawyers The use of the words defence struck
off does not in any way affect the substance of the order
and the High Court was wholly in error in holding that
because of the form of the order passed on June 2 1969 the
order was illegal and without jurisdiction. The order
squarely falls within s.11(4) What the law contemplates is
not adoption or use of a formula. it looks at the substance.
It is not possible to bring the case within the provisions
of s. 12(3)(b) of he Act. [35 EF. 36 BC, H].
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 411 of
1973.
Appeal by special leave from the Judgment and decree
dated the August 1972 of the High Court of Judicature at
Bombay in Special Civil Application No. 2778 of 1969.
F. S. Nariman and B. R. Agarwala for the Appellant.
Mrs. Urmila Kapoor and Miss Kamlesh, for Respondents 1
and
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The Judgment of the Court was delivered by
ALAGIRISWAMI, J. This is an appeal against the judgment
of the High Court of Bombay in an application under article
227 of the Constitution by which it not only set aside the
ex-parte decrees passed by the Court of Small Causes, Bombay
in a suit for eviction and rent but dismissed the suit
itself. The facts are as Follows:
The appellants-plaintiffs filed a suit against the
defendants-respondents for recovery of possession of the
property leased to them as also rent and mesne profits in
March 1968. It was alleged that the defendant were in
arrears of rent from 1st March 1966 and that the rent was
Rs. 385/- a month. On 30th January 1968 a notice to quit was
given to the defendants and the notice was served on 1st
February 1968. On 20th February 1968 they filed an
application under s.11 of the Bombay Rents, Hotel and
Lodging House Rates Control Act, 1947 for fixation of
standard rent. It was thereafter that the suit was filed in
March 1965. On 23rd November 1968 the suit came up before a
Judge of the Small Causes Court and after hearing the
parties he made an order requiring the defendants to deposit
Rs. 13,090/- as rent due up to the end of December 1968 and
interim standard rent of Rs. 308/per month to be paid
beginning from February 15, 1969. It was further ordered
that in default of the defendants depositing the amount the
plaintiffs were at liberty to follow the consequential
remedy under s.11(4) of the Act. The defendant did not
deposit the amount ordered by the Court and on 24th February
1969 the plaintiffs applied to the Court praying for a
notice to be issued to the defendants to show cause why they
should not deposit the aggregate amount of rent and further
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rent of Rs. 385/- per month from 1st August 1969 till the
disposal of the suit. There was a further prayer that in
default of the deposit of the amount the defences of the
defendants may be ordered to be struck off. Upon this
application a notice was issued to the defendants and on 2nd
June 1969 an order was made requiring the defendants to
deposit Rs. 14,607/- within one month and to continue to
deposit Rs. 308/- per month in accordance with the earlier
order. It was further ordered that in default of the deposit
the defences of the defendants were to be struck off and
that the suit should be placed for ex-parte orders on 15th
July, 1969. the defendants failed to deposit arrears of rent
and the suit came up for orders on 15th July 1969. The
defendants were absent on that day and the suit was
adjourned to 5th August 1969. On the 5th August the suit was
again adjourned to 6th and on that day an ex-parte decree
for possession, recovery of arrears of rent and costs was
passed. However, on the 4th August the defendants had made
an application stating that on proper calculation the amount
of arrears of rent would come to Rs. 7065/- and praying for
extension of time for deposit of this amount. The defendants
were allowed to deposit the amount without prejudice to the
rights and contentions of the parties and notice was ordered
to be issued to the plaintiffs The defendants deposited the
amount but did not take out and serve the notice on the
plaintiffs and the notice was ultimately discharged for want
of prosecution on 19th September, 1969. An appeal was filed
before the Appellate Bench of the Small Causes Court against
the ex-parte decree and it was dismissed. On an application
filed before the High Court a learned single Judge set aside
the decree passed by the Small Causes Court on 6th August
1969 as also . the decree passed by the Appellate Bench and
also dismissed the suit.
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As far as we are able to see the only reason which
persuaded the learned Judge to come to this extraordinary
conclusion was that under s.11(4) of the Act the only order
that could be passed was an order directing, after fixing
the interim standard rent to be deposited within a
particular time, ’that if the tenant fails to comply with
any order made as aforesaid, within such time as may be
allowed by it, he shall not be entitled to appear in or
defend the suit except with leave of the Court, which leave
may be granted subject to such terms and conditions as the
Court may specify’, and the section did not authorise the
Court to strike of the Defences straightway. The learned
Judge found it difficult to understand how the Court could
pass an order on June 2, 1969 as follows:
"The defendant No. 2 to deposit the balance amount of
Rs. 14,607/- in Court within a month and continue to
deposit Rs.308 per month as per order passed by
scrutiny Court in default Notice absolute and defences
to be struck off and suit b fixed for ex parte hearing,
on 15th July 1969. Defendant No. 2 to pay Rs 30/- to
the plaintiffs."
He therefore thought the order passed by the Court on June
2, 1969 was illegal and without jurisdiction and every step
that was taken by the Court subsequently must be considered
to by without jurisdiction
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and illegal. However, considering the question as to what
was the proper order to be passed in the petition, the
learned Judge thought as the defendants had, admittedly
deposited by then all amounts as ordered by the Court
previous to the order of June 2, 1969 and also deposited the
monthly rent at the rate of Rs. 308/- per month the matter
would fall under s.12(3)(h) and the suit should be
dismissed.
We may in order to facilitate the discussion set out
the provisions of s. 11(4) of the Act:
"(4) Where at any stage or a suit for recovery of rent,
whether with or without a claim for possession of the
premises, the Court is satisfied that the tenant is
withholding the rent on the ground that the rent is
excessive and standard rent should be fixed, the Court
shall, and in any other case if it appears to the Court
that it is just and proper to make such an order the
Court may, make an order directing the tenant to
deposit in Court forthwith such amount of the rent as
the Court considers to be reasonably due to the land
lord, or at the option of the tenant an order directing
him to pay to the landlord such amount thereof as the
Court may specify. The Court may further make an order
directing the tenant to deposit in Court periodically,
such amount as it considers proper as interim standard
rent, or at the option of the tenant an order to pay to
the landlord such amount thereof as the Court may
specify, during the pendency of the suit. The Court may
also direct that if the tenant fails to comply with any
order made as aforesaid, within such time as may be
allowed by it, he shall not be entitled to appear in or
defend the suit except with leave of the Court, which
leave may be granted subject to such terms and
conditions as the Court may specify."
The learned Judge of the Small Causes Court used the words
"defences to be struck of and did not use the words "he
shall not be entitled to appear in or defend the suit except
with leave of the Court, which leave may be granted subject
to such terms and conditions as the Court may specify". We
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are afraid the learned Judge of the High Court has missed
the substance and chased the shadow. The words "sticking out
the defence" are very commonly used by lawyers. Indeed the
application made on 24th February 1969 by the plaintiffs was
for a direction. to order the defences of the defendants to
be struck off in default of the non-payment of the amount
ordered by the Court. The phrase "defence struck off" or
"defence struck but" is not unknown in the sphere of law
Indeed it finds a place in order XI, rule 21 of the Code of
Civil Procedure:
"21. Where any party fails to comply with any
order to answer interrogatories, or for discovery of
inspection of documents, he shall, if a plaintiff, be
liable to have his suit dismissed for want of
prosecution, and, if a defendant, to have his defence,
if any, struck out, and to be placed in the same
position as if he had not defended, and the party
interrogating or seeking discovery or inspection may
apply to the Court for an. Order to that effect, and an
order may be made accordingly."
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In effect, both mean the same thing. Nobody could have
misunderstood what was meant. Indeed, one may even say that
the phrase ‘’the defence to be struck off" or "struck out"
is more advantageous from the point of view of the
defendents. Even when a defence is struck off the defendant
is entitled to appear, cross-examine the plaintiff’s
witnesses and submit that even on the basis of the evidence
on behalf of the plaintiff a decree cannot be passed against
him, whereas if it is ordered in accordance with s. 11 (4)
that he shall not be entitled to appear in or defend the
suit except with the leave of the Court he is placed at a
greater disadvantage. The use of the words ’defence struck
off’ does not in any way affect the substance of the order
and the learned Judge of the High Court was wholly in error
in holding that because of the form of the order passed on
June 2, 1960 the order was illegal and without jurisdiction.
The order squarely falls within s. 11(4). What the law
contemplates is not adoption or use of a formula it looks at
the substance. The order is not therefore one without
jurisdiction. It is one which the Judge was competent to
make. Be it noted that the learned Judge does not hold that
the amount ordered to deposited by the defendants by the
order dated June 2, 1969 was wrong or that it could not have
been ordered at all. That order also fired the interim
standard rent as contemplated by that section. That section
itself con templates that the Court may order the deposit of
such amount of the rent as the Court considers to be
reasonably due to the landlord. Therefore, the order dated
June 2, 1969 could not be held to be invalid on any ground
whatsoever; nor has it been held to be illegal any ground
other than that the words used were not the proper ones. It
is to be further noted that the order itself did not order
the defenes be struck off, it only fixed the 15th July 1969
as the date for striking out the defences and to fix the
suit for ex-part hearing. So, till the expiry of a month
given by that order for the deposit of money the question of
striking out the defence did not arise nor was it in fact
struck out. On the date fixed for striking out defences and
fixing the date, for ex-parte hearing the defendants did not
appear nor did they appear on the 5th and 6th of August when
the suit was fixed for hearing. ’Though they were permitted
to deposit Rs. 7,000/- on their application dated 4th August
1969 they did not take any further steps and so the notice
was dismissed. The deposit of Rs. 7,000/- does not make any
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difference to the decision in this case because it was
allowed to be deposited without prejudice to the rights and
contentions of the parties. The defendants did not even
apply for setting aside the ex-parte decree giving proper
reasons for their non-appearance on the 5th and 6th August.
They went on appeal against the ex-parte decree. The
Appellate Bench of the Small Causes Court could have
decided the appeal only on the basis of the material before
it and the learned Judge of the High Court did not rely upon
any material whatsoever except the form of the order made on
the 2nd June 1969 for not merely setting aside the decree
but even dismissing the suit itself. The deposit of the
money after the ex-parte decree was passed was wholly
irrelevant in considering whether the ex-parte decree passed
was a proper one and much more so whether the suit itself
could be dismissed.
We are unable to understand how the learned Judge found
it possible to bring the case within the provisions of s.
12(3) of the
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Act. The tenants did not pay either on the 1st day of the
hearing of the suit or on or before the date the Court
fixed. Indeed on proper construction of law it is s. 11(4)
that will apply. Section 12(3)(b) does not deal with a case
like the present.
The appeal is, therefore, allowed. The judgment of the
High Court is set aside and the decree of the Court of Small
Causes dated August 6, 1969 as well as the appellate decree
passed by the Court of small Causes are restored. The
respondents will pay the appellants’ costs.
V.M.K Appeal allowed.
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