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Sec,15 (7)  of Delhi Rent Control Act – Power to strike out the defence – Apex court held that The appellants-tenants, despite  their  contumacious  disobedience,  of  the directions contained in the order of the Rent  Controller  dated  14.9.2009, have frustrated the process of law successfully, for about five years  (from 28.4.2009, i.e., the date on which the application under  Section  15(7)  of

the Rent Act was filed, till the disposal  of  the  present  Civil  Appeal). The tenants have achieved, what the legislation aimed to avoid. In the above view of the matter, I am of  the  considered  view,  that the order passed by the Rent Controller dated 14.9.2009,  which  was  upheld

by the Rent Control Tribunal (on 24.5.2010) and the High Court  (vide  order dated 10.5.2011) calls for no interference whatsoever. =

 

power to strike out the defence vested in  the  Court

under Section 15 (7) of the Delhi Rent  Control  Act  is  discretionary  and

ought to be exercised only when the tenant deliberately,  contumaciously  or

negligently fails to deposit the rent due from him,  I  have,  however,  not

been able to persuade myself  to  hold  that  such  deliberate,  neglect  or

contumacious failure has been established against the  petitioner-tenant  in

the instant case so  as  to  justify  the  exceptional  step  of  the  Court

striking out his defence at the threshold.=

Miss Santosh Mehta v. Om Prakash and Ors. (1980) 3  SCC  610  while

interpreting Section 15 (7) of the Delhi Rent Control Act  Krishna  Iyer  J.

held that the power to strike out the  party’s  defence  is  an  exceptional

step and is 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.  One can do no better  than  to  reproduce  the  passage  in

which this Court indicated the  correct  approach  to  be  adopted  in  such

matters. 

This Court said:

          “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  not

           strike out the tenant’s defence. A judicial discretion has built-

           in-self-restraint, 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 esteem following  upon  a

           mere failure to pay rent. First of all, there must be a  failure

           to pay rent which, in the context,  indicates  willful  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 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 matter of-

           course 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 s. 15(7)  is

           that the tenant is deprived of the protection  given  by  s.  14

           and, therefore, the powers under s. 15(7) of  the  Act  must  be

           exercised with due circumspection.”

The  instant  controversy  actually  demonstrates  how  a  tenant  has

effectively frustrated the legislative intent contemplated in Section  15(7)

of the Rent Act.   

The  legislative  purpose  was,  to  curb  tendencies  of tenants, from abusing the legal process.  

As  already  noticed  hereinabove,

the respondents-landlords filed an  eviction  petition  in  November,  2007.

Based on the non-compliance of the directions issued by the Rent  Controller

(on  21.4.2008),  the  respondents-landlords   moved   an   application   on

28.4.2009, praying for striking out the defence of  the  appellants-tenants.

After the appellants-tenants  filed  their  reply  on  17.8.2009,  the  Rent

Controller allowed the above application, and struck off the defence of  the

appellants-tenants, by an order dated 14.9.2009.   

The  order  of  the  Rent

Controller dated 14.9.2009 was assailed  by  the  appellants-tenants  before

the Rent Control Tribunal.  The prayer made by  the  appellants-tenants  was

rejected by the above Tribunal on 21.4.2010.   The  appellants-tenants  then

approached the High Court by filing a petition  under  Article  227  of  the

Constitution of India.  

The High Court dismissed the petition on  10.5.2011.

The said order was assailed by filing  a  Petition  for  Special  Leave  to

Appeal.  

The matter has been pending disposal  in  this  Court  ever  since.

The appellants-tenants, despite  their  contumacious  disobedience,  of  the

directions contained in the order of the Rent  Controller  dated  14.9.2009,

have frustrated the process of law successfully, for about five years  (from

28.4.2009, i.e., the date on which the application under  Section  15(7)  of

the Rent Act was filed, till the disposal  of  the  present  Civil  Appeal).

The tenants have achieved, what the legislation aimed to avoid.

In the above view of the matter, I am of  the  considered  view,  that

the order passed by the Rent Controller dated 14.9.2009,  which  was  upheld

by the Rent Control Tribunal (on 24.5.2010) and the High Court  (vide  order

dated 10.5.2011) calls for no interference whatsoever.

  For  the  reasons  recorded  hereinabove  the  appeal  fails  and  is

accordingly dismissed.

2014 ( April. Part ) http://judis.nic.in/supremecourt/filename=41418

T.S. THAKUR, JAGDISH SINGH KHEHAR

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 4563 OF 2014
(Arising out of S.L.P (C) No.26941 of 2011)
Dina Nath (D) by Lrs. & Anr. …Appellants

Versus

Subhash Chand Saini & Ors. …Respondents

 

J U D G M E N T

T.S. Thakur, J.

1. Leave granted.

2. I have had the privilege of going through the elaborate Order
proposed by my Esteemed Brother J.S. Khehar, J. While I entirely agree
with the view that the power to strike out the defence vested in the Court
under Section 15 (7) of the Delhi Rent Control Act is discretionary and
ought to be exercised only when the tenant deliberately, contumaciously or
negligently fails to deposit the rent due from him, I have, however, not
been able to persuade myself to hold that such deliberate, neglect or
contumacious failure has been established against the petitioner-tenant in
the instant case so as to justify the exceptional step of the Court
striking out his defence at the threshold.

3. The facts giving rise to the controversy have been set out at great
length in the judgment of my Erudite Brother. I, therefore, do not
consider it necessary to recapitulate the same over again except to the
extent it may be necessary in the course of this judgment to do so. Before
adverting to the factual matrix relevant to the question of striking out
the tenant’s defence, we need to remind ourselves of the spirit underlying
the Rent Control Legislations in general and Delhi Rent Control Act, 1958
in particular. The historical perspective in which these legislations came
about has been traced in several decisions of this Court. Nagindas Ramdas
v. Dalpatram Ichharam @ Brijram and Ors. (1974) 1 SCC 242 is one such
decision in which this Court traced the historical compulsions that led to
the enactment of the rent laws in this country. The broad policy underlying
these laws including the Delhi Rent Control Act, observed this Court, was
to protect the tenants against unreasonable demands of the landlords as to
rents, evictions and repairs. The following passage is an apposite reminder
of the times that saw the enactment of these laws and the purpose
underlying the same:

“…The strain of the last World War, Industrial Revolution, the
large-scale exodus of the working people to urban areas and the
social and political changes brought in their wake social
problems of considerable magnitude and complexity and their
concomitant evils. The country was faced with spiralling
inflation, soaring cost of living, increasing urban population
and scarcity of accommodation. Rack renting and large scale
eviction of tenants under the guise of the ordinary law,
exacerbated those conditions making the economic life of the
community unstable and insecure. To tackle these problems and
curb these evils, the Legislatures of the States in India
enacted Rent Control legislations…

…The language of the preambles of the Delhi Rent Act and
Madras Rent Act is strikingly similar. The broad policy and
purpose as indicated in their preambles is, substantially the
same viz., “to protect tenants against their landlords in
respect of the rents, evictions and repairs”. With the same
beneficent end in view, all the three Acts interfere with
contractual tenancies and make provisions for fixation of fair
and standard rents, or protection against eviction of tenants
not only during the continuance of their contractual tenure but
also after its determination. Indeed, the neologism “statutory
tenant” has come into existence because of this protective
policy which is common to all enactments of this kind…”

(emphasis supplied)

 
4. The above decision was followed in D.C. Bhatia and Ors. v. Union of
India and Anr. (1995) 1 SCC 104 in which this Court referred to the
challenge mounted against such rent laws and the restrictions placed by the
same upon the rights of the landlord to seek eviction of their tenants.
This Court while upholding the constitutional vires of The Delhi Rent
Control Act, 1958 restricted the eviction of tenants except on the special
grounds stated in the statute. Reference may also be made to Ashoka
Marketing Ltd. and Anr. v. Punjab National Bank and Ors. (1990) 4 SCC 406
where the Delhi Rent Act once again fell for consideration before a
Constitution Bench of this Court. Relying upon the Statement of Objects and
Reasons of the enactment, this Court held that the purpose of the Act,
inter alia, was 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 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…”

(empahasis supplied)

 

5. The Delhi Rent Control Act though originally drafted with the highly
pro-tenant objective has been amended in the years 1960, 1963, 1976, 1984,
1988 and 1995. The Delhi Rent (Repeal) Bill, 2013 is currently pending
before the Parliament which aims at safeguarding the interests of
landlords. Significantly, the 1988 Amendment limited the application of
the Delhi Rent Control Act to only such premises as were let out for a rent
of less than Rs.3500/- per month. In D.C. Bhatia’s case (supra) this Court
observed that the object of the Amending Act was quite different from the
objects of the Parent Act and that the Amending Act was an attempt to
rationalize the Rent Control Act by restoring the balance between the
interests of the landlords and tenants. The Court said:

“…As a result of these legislations a host of problems have
cropped up. These problems have been stated in the various
Committee Reports set out earlier in the judgment.
Representations were also made by the landlords highlighting
these problems. In order to tackle the problems created by the
Rent Act, the Delhi Rent Control Act was amended in 1988 by
Delhi Rent Control Amending Act, 1988 (Act 57 of 1988).
…The objects of the Amending Act are quite different from the
objects of the parent Act. One of the objects of Amending Act
was to rationalise the Rent Control Law by bringing about a
balance between the interest of landlords and tenants. The
object was not merely to protect the weaker section of the
community. In fact, the representations made by the landlords’
association and the reports of various Committees indicated, the
laws were being very often abused by the rich tenants against
poor or middle class landlords. The Rent Act had brought to a
halt house-building activity for letting out. Many people with
accommodation to spare did not let out such accommodation for
the fear of losing the accommodation altogether. As a result of
all these, there was acute shortage of accommodation which
caused hardship to the rich and the poor alike. In the light of
this experience, the Amending Act of 1988 was passed.
…In order to strike a balance between the interests of the
landlords and also the tenants and for giving a boost to house
building activity, the Legislature in its wisdom has decided to
restrict the protection of the Rent Act only to those premises
for which rent is payable upto the sum of Rs. 3,500/- per month
and has decided not to extend this statutory protection to the
premises constructed on or after the date of coming into
operation of the Amending Act for a period of ten years. This is
a matter of legislative policy. The Legislature could have
repealed the Rent Act altogether. It can also repeal it step by
step. It has decided to confine the statutory protection to the
existing tenancies whose monthly rent did not exceed Rs. 3,500/-
.”
(emphasis supplied)

 
6. Having said that, we must refer to the decision of this Court in M/s
Rahabhar Productions Pvt. Ltd. v. Rajendra K. Tandon (1998) 4 SCC 49, where
this Court held that while the provisions of the rent law must be construed
harmoniously so as to balance the rights and obligations of the tenant and
the landlord, Courts cannot be unmindful of the fact that the legislative
object of the law continues to be to curb the tendency of the landlords to
evict the tenants on one pretext or the other so that the former can rent
out the premises at a higher rate of rent. This Court observed:

“…The Act which was brought on the Statute book in 1958 is a
composite legislation in the sense that while providing
protection to the tenants who, under common law, including
Transfer of Property Act, could be evicted from the premises let
out to them, at any time by the landlord on the termination of
their tenancy, it restricts the right of the landlords to evict
the tenants at their will. The Act is thus beneficial as also
restrictive in nature. The Courts are, therefore, under a legal
compulsion to harmoniously read the provisions of the Act so as
to balance the rights of the landlord and the obligations of the
tenant towards each other keeping in mind that one of the
objects of the legislature while enacting the Act was to curb
the tendency of the greedy landlords to throw out the tenants,
paying lower rent, in the name of personal occupation and rent
out the premises at the market rate…”

(emphasis supplied)

 

7. There is thus no gainsaying that while legislative intervention has
tried to moderate the law with a view to restoring the balance between the
rights and obligations of the landlords on the one hand and the tenants on
the other, the spirit and purpose underlying the rent legislation continues
to be to protect the tenants against arbitrary and unfair demands for
eviction or enhancement of rents. The pendulum has undoubtedly swung in
favour of the landlords not only by reason of these amendments to the rent
legislation which were perceived to be halting house-building activity and
leading to a visible reluctance among the owners to let out the available
accommodation for fear of losing the same altogether. Judicial
pronouncements have also liberalized the approach to be adopted qua the
landlord’s prayer for eviction when such eviction is sought on the ground
of bonafide personal need of the landlord. Decisions of this Court in Mst.
Bega Begum and Ors. v. Abdul Ahad Khan (Dead) by LRs. and Ors. (1979) 1 SCC
273, M/s Central Tobacoo Co. Bangalore v. Chandra Pakash 1969 (2) UJ 432
and Phiroze Bamanji Desai v. Chandrakant N. Patel and Ors. 1974 (1) SCC
661, interpreted the Rent Control legislation rather narrowly placing a
relatively heavier burden on the landlords in cases where vacation of the
tenants was sought on the ground of bona fide personal requirement of the
former. Recent decisions have made a significant departure from that
approach. In Mohd. Ayub and Anr. v. Mukesh Chand (2012) 2 SCC 155 this
Court observed that the landlord’s requirement need not be one of dire
necessity. So long as the need was bona fide, the mere affluence of the
landlord would not be a ground to reject his application for eviction. To
the same effect is the decision of this Court in Bhimanagouda Basanagouda
Patil v. Mohd. Gudusaheb (2003) 3 SCC 101.

8. The noticeable shift in the approach adopted towards eviction matters
based on personal bona fide requirement does not, however, necessarily
cascade into a similar approach towards grounds other than personal
requirement, especially where the default in the payment of rent is set up
as a ground for eviction. In such cases, the Courts will have to adopt a
relatively liberal approach towards the tenant. Just because there is a
default in payment of rent may not necessarily result in an order of
eviction unless the statute clearly or unequivocally so mandates.

9. In the case at hand, Section 15(7) of the Delhi Rent Control Act
leaves wide discretion with the Trial Court whether or not to strike out
the defence of the tenant even where a default is proved. Exercise of that
discretion in turn depends upon whether or not the default in payment of
rent is seen by the Courts to be deliberate or contumacious in nature. That
is because Section 15(7) of the Delhi Rent Control Act cannot be so
interpreted as to negate or frustrate the spirit of the legislation which
aims at granting protection to the tenants from eviction. The provision
must be so construed as to promote the object underlying the Act. To the
same effect are the pronouncements of this Court in which this Court has
considered striking off the defence of the tenant to be an “exceptional
step” warranted only when the tenant’s conduct is seen to be negligent,
deliberate or contumacious.

10. In Miss Santosh Mehta v. Om Prakash and Ors. (1980) 3 SCC 610 while
interpreting Section 15 (7) of the Delhi Rent Control Act Krishna Iyer J.
held that the power to strike out the party’s defence is an exceptional
step and is 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. One can do no better than to reproduce the passage in
which this Court indicated the correct approach to be adopted in such
matters. This Court said:
“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 not
strike out the tenant’s defence. A judicial discretion has built-
in-self-restraint, 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 esteem following upon a
mere failure to pay rent. First of all, there must be a failure
to pay rent which, in the context, indicates willful 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 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 matter of-
course 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 s. 15(7) is
that the tenant is deprived of the protection given by s. 14
and, therefore, the powers under s. 15(7) of the Act must be
exercised with due circumspection.”
(emphasis supplied)

 

 

11. Subsequent decisions rendered on the subject have not, in my opinion,
in the least bit diluted leave alone digressed from the above principles
that governs the exercise of power under Section 15(7). Even later decision
of this Court in Miss Santosh Mehta’s case (supra) also recognises
that mere failure to pay rent is not enough to justify an order striking
out the defence. It is only wilful failure, deliberate default or
volitional non-performance that can call for the exercise of that
extraordinary power vested in the Court. More importantly, the plenitude of
the discretionary power of the Court under Section 15 (7) was held to be
vesting a wise discretion and not an automatic weapon to be used against
the tenant. The power to strike out the defence is available only to
overcome intransigence, especially when the power is penal in nature, the
exercise whereof would deprive the tenant of the protection available to
him under Section 14. The same must, therefore, be exercised with due care
and circumspection.
12. Even in Smt. Kamla Devi v. Shri Vasudev (1995) 1 SCC 356 this Court
reiterated 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.
The exercise of that discretion obviously depends upon the facts and
circumstances of each case. The decision in M/s Jain Motor Car Co., Delhi
v. Smt. Swayam Prabha Jain & Anr. (1996) 3 SCC 55 does not disturb the
legal parameters regulating the exercise of the power but deals more with
the facts and circumstances of that case in which the power was found to
have been rightly exercised.
13. Coming then to the case at hand there are three distinct aspects from
which the question of default in payment of rent has to be viewed. The
first and foremost is whether the arrears which the Court determined and
directed the petitioner to pay were paid. The answer to that question is
in the affirmative. The Trial Court passed an order dated 21-04-2008 under
Section 15(1) of the Delhi Rent Control Act, 1958 directing the petitioner
to deposit arrears of rent from 1st November, 2007 to April, 2008 and to
continue to pay future rent @ Rs.66/- p.m. by the 15th of each succeeding
English calendar month. It is not in dispute that the petitioner complied
with the order regarding deposit of arrears in the right earnest inasmuch
as on 21st April, 2008, the date on which order under Section 15(1) was
passed. He paid to respondent No.1 the entire amount in cash representing
arrears of rent from 1st November, 2007 to April, 2008.
14. The second aspect is that over and above the amount directed to be
deposited, the petitioner paid an amount equivalent to ten months rent,
although there was neither any legal obligation cast upon him to do so nor
was any direction issued by the Trial Court for making any such payment.
It is also common ground that though the excess amount paid by the
petitioner did not represent any admitted liability, the excess amount
received was neither adjusted against future rent nor was it refunded to
him. It is significant to note that although the respondent-landlord had
claimed arrears even for the period beginning from 1st January, 2007 to
October, 2007, the Trial Court had excluded that period from its order as
the liability for that period was disputed on account of the specific case
set up by the petitioner that rent for the said period stood paid.
Adjustment of the excess amount paid to the respondent-landlord towards the
future rent for the period commencing from 1st May, 2008 was the only legal
option. Payment of the said excess amount having been acknowledged by the
landlord, the same must in the absence of a direction from the Court be
deemed to have been received and held by the landlord for the benefit of
the tenant. Adjustment of any such excess amount against future liability
was in that view the only possible and legally valid method of
appropriation of that amount. Viewed thus, the amount paid by the
petitioner on 21st April, 2008 covered the entire period upto February,
2009.
15. The third aspect is that between the date of the order dated 21st
April, 2008 under Section 15(1) of the Act till February, 2009 the
petitioner had made further payments of rent. One of these payments was
made on 27th June, 2008 while the second payment was made on 17th December,
2008. These payments represented rent for a period of six months. This
means that the petitioner had paid advance rent upto 31st August, 2009. Not
only that, the petitioner had made two further deposits, one on 1st May,
2009 and the second on 5th May, 2009. These payments when taken into
consideration cleared the entire rent liability of the petitioner for a
period of one year and nine months commencing from 1st September, 2009
onwards. If that be so the petitioner was not in default on the date of the
order passed by the Trial Court striking out his defence and for a
considerable period beyond that. The petitioner has in the special leave
petition referred to certain subsequent payments also but we consider it
unnecessary to go into those details. What is important is that as on the
date of the order passed by the Trial Court on 21st April, 2008 itself the
entire arrears directed to be deposited by the petitioner stood paid by him
and so also on the date of the order passed by the Trial Court striking out
his defence, rent for the entire intervening period and even beyond had
been paid. These payments may require reconciliation, calculations and
suitable adjustments against the months for which rent was payable but what
cannot be disputed is that the amount which the petitioner was called upon
to pay and which he has, pursuant to the direction of the Trial Court, paid
or deposited has been at all relevant points of time in excess of what was
payable to the landlord. The charge of contumacious failure and deliberate
default in making the payment levelled against the tenant is, therefore,
not well-founded. The petitioner on the contrary was at all points of time
keen to pay the amount of rent in excess of what was lawfully due. This may
have been partly because of the consequences that flow from non-payment and
partly because the amount of contractual rent is, by the current standard
of market rent, very meagre. The withholding of such a meagre amount was a
risk that no prudent tenant protected under the Rent Control law of the
land could take nor was it a case where by withholding the kind of amount
which was due towards rent would have in any manner benefitted the tenant,
just as the same would not have deprived the landlord of any major
financial income from the property let out by him. It is true that just
because the amount payable for the premises is low and payment or non-
payment thereof makes little difference to either the tenant or the
landlord, is no reason for the tenant not paying the rent as and when due.
The question, however, is not whether the denial of the amount would have
caused any major prejudice to the landlord or put the tenant under any
financial burden. The question is whether the tenant was guilty of
contumacious conduct in withholding such payment. While answering that
question, the amount of rent payable for the premises may be a factor which
cannot be totally brushed aside. Suffice it to say that the facts and
circumstances of the case at hand do not, in my opinion, suggest any
negligence, defiance or contumacious non-payment of the amount due to the
landlord to warrant the taking of that “exceptional step” which is bound to
render the tenant defenceless in his contest against the landlord.
16. It is noteworthy that in the course of hearing before us, learned
counsel for the petitioner-tenant had offered to raise rent by ten times of
the current amount and pay the same in advance for a period of five years
to show his bona fides. From the point of view of the landlords this may
be seen as a damage control desperate bid to avoid eviction by winning the
sympathy of the Court but from the point of view of the tenant it only
shows that the tenant does not grudge the landlord getting what is
legitimately due to him. The cumulative effect of all these circumstances,
in my view, entitles the tenant to an opportunity to contest the suit for
eviction. It is a different matter that the contest may eventually result
in his eviction but there is no need to prejudge the matter on merits nor
any valid reason to deprive the tenant-petitioner the bare minimum
opportunity to contest the eviction petition on merits.
17. In the result, I allow this appeal, set aside the order passed by the
Courts below and dismiss the petition filed by the respondent-landlords
under Section 15(7) of the Delhi Rent Control Act leaving it open to the
petitioner to make good his offer by enhancing the rent voluntarily by ten
times the current rent and depositing the future rent for a period of five
years, as offered by him, in advance. The parties are left to bear their
own costs.

………………….……….…..…J.
(T.S. Thakur)
New Delhi
April 16, 2014
“REPORTABLE”

 

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

 

CIVIL APPEAL NO. 4563 OF 2014

(ARISING OUT OF S.L.P. (C) No. 26941 OF 2011)

 

Dina Nath (D) By Lrs. & Anr. …. Appellants

Versus

Subhash Chand Saini & Ors. …. Respondents

 

 

J U D G M E N T

 

Jagdish Singh Khehar, J.

 

1. Leave granted.
2. It is not a matter of dispute that the appellants rented a shop
bearing no. 1445-A, Dariba Kalan, Delhi, wherein the monthly payable
rent is Rs. 66/-. The 25 respondents jointly own the abovementioned
tenanted premises. The rent for the shop is paid to respondent no.
1, who holds a power of attorney to collect rent (on behalf of the
respondents). In November 2007, the respondents filed an eviction
petition under Section 14 (1) (a) (b) (c) and (j) of the Delhi Rent
Control Act, 1958 (hereinafter referred to as “the Rent Act”) seeking
repossession of the rented premises, for a variety of reasons. It
was, inter alia, alleged, that the appellants had neither paid nor
tendered rent with effect from January, 2007, despite the service of
a demand notice, requiring the tenants to pay arrears of rent. It
was also asserted, that the appellants had sublet the tenanted
premises to his son. In this behalf, it was alleged that the
appellant’s son was using the shop for running a “halwai”
(traditional Indian sweetmeat maker) business. The shop was
originally let out for selling cold drinks, biscuits etc. On the
issue of usage, it was pointed out, that since the shop was now being
used for running “halwai” business, the appellants were using LPG
cylinders in the rented premises. This, according to the
respondents, had damaged the old construction. Additionally it was
alleged, that the appellants had also raised illegal constructions,
and had thereby altered the structure of the rented shop. In this
behalf it was asserted, that the appellants had lowered the floor of
the premises (by approximately 3 feet below the plinth level) by
excavating and dismantling the flooring. It was also alleged, that a
‘chabutra’ (a covered sitting platform) measuring about 4.5 feet and
a ‘chhajja’ (over hanging cover) measuring 7.8 feet, had also been
constructed unauthorizedly by the appellants. It was also asserted,
that the appellants had demolished the side pillars of the
constructed portion of the rented premises, and had also removed both
the side walls on which the entire roof, and upper storeys were
resting. It was also alleged, that the appellants had demolished the
front door wall, and had installed a loft in the shop. Likewise, the
appellants were alleged to have demolished the back wall of the shop
to increase the length of the tenanted premises.

3. The appellants entered appearance before the Rent Controller and
contested the eviction petition. For the said purpose, the
appellants filed a written statement on 7.2.2008, denying and
disputing all the allegations made by the respondents in the eviction
petition.

 

4. Since one of the grounds on which the eviction of the appellants was
sought, was on account of non-payment of rent with effect from
January, 2007; the Rent Controller passed an order dated 21.4.2008
under Section 15(1) of the Rent Act, requiring the appellants to
deposit the undisputed arrears of rent, and to pay future rent. The
aforesaid order of the Rent Controller is being extracted hereunder :-

 

“E-931/2007

 
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 month before 15th of each succeeding English Calendar
month.

 
SD/-

ARC/DELHI/21.04.2008”
A perusal of the order dated 21.4.2008 reveals, that the Rent Controller
having taken into consideration, the assertion made in the written
statement, that the appellants have already paid rent from 1.1.2007 up to
October 2007, directed the appellants to pay rent only with effect from
1.11.2007. The arrears were ordered to be paid within 30 days (of
21.4.2008). Future rent was ordered to be paid every month (i.e., “month by
month”) before the 15th day of each succeeding English calendar month.
5. On account of the non-compliance of the order dated 21.4.2008, the
respondents filed an application under Section 15(7) of the Rent Act
on 28.4.2009, praying for striking out the defence of the appellants.
The appellants filed a reply to the aforesaid application on
17.8.2009. Before filing the aforesaid reply, on 1.5.2009 i.e., on
the very day the appellants came to know of the filing of the
application under Section 15(7) of the Rent Act, the appellants
deposited rent before the Rent Controller, for the period from
November, 2009 to July, 2010. In making the aforesaid deposit, the
appellants had mistakenly mentioned that the rent was being deposited
from November, 2009, although they ought to have deposited rent from
November, 2008. Immediately on realizing the aforesaid mistake, the
appellants again deposited rent before the Rent Controller for the
period from November, 2008 to October 2009 on 5.5.2009.

 

6. For an effective determination of the controversy before us, it is
essential to extract herein the factual position indicated by the
appellants in their reply dated 17.8.2009 (to the application filed
by the respondents under Section 15(7) of the Rent Act). Accordingly,
paragraphs 3, 4 and 6 of the abovementioned reply, are being
reproduced hereunder :-

 
“3. Para 3 of the application in so far it states about contents of
the written statement is a matter of record. However, it is
specifically denied that the respondent has made any false statement
or furnished a false information before this Hon’ble Court. In fact
the rent was paid from January 2007 to October 2007 to the petitioner
No.1 but he deliberately did not issue any rent receipt and because
the respondent had no proof about the payment of rent in writing, to
avoid any kind of controversy, the rent for the period with effect
from January 2007 onwards was paid by respondent No.1 to petitioner
No.1 vide receipt dated 21.4.2008.

 
4. Para 4 of the application is admitted. It would not be out of
place to mention that the Petitioner No.1 used to collect rent from
the respondent No.1 not every month but after 3 months or 6 months or
years time. The respondent No.1, at the time when the order u/s.
15(1) of DRC Act was passed, was not present in the Court. However,
passing of the order was duly communicated through the clerk of the
counsel to the respondent No.1. In the evening of 21.4.2008 the
petitioner No.1 personally went to the respondent No.1 and collected
the rent from him with effect from 1.1.2007 to 30.4.2008. He did not
adjust the rent already paid and has already submitted the rate of
rent being too meager and the respondent No.1 was not interested to
enter into any controversy, the rent for the period with effect from
1.1.2007 to 30.4.2008 was paid by the respondent No.1 to the
petitioner No.1 against Receipt No. 21 dated 21.4.2008 which also
included the house tax for the years 2007-2008 and 2008-2009. The
petitioner No.1 also stated to the respondent No. 1 that he may not
deposit rent in the court as he will directly receive the rent from
him by issuing receipts. The respondent No.1 being an old and aged
person, not knowing the intricacies of law and also the repercussions
of non-deposit of rent every month believed the petitioner No.1 in
good faith. Though on 21.4.2008 the respondent No. 1 offered to pay
advance rent for a years time yet the petitioner No.1 refused to
accept the same. It was, however, a fault on the part of respondent
No.1 for not depositing the rent in the court. After 21.4.2008 the
petitioner No.1 again collected the rent for the month of May 2008 in
the end of May 2008 but issued the receipt subsequently which was
dated 27.6.2008. Thereafter despite request of the respondent No.1 the
petitioner No.1 procrastinated the acceptance of rent and finally in
the month of October 2008 he accepted the rent for the period with
effect from 1.6.2008 to 31.10.2008 and again he did not issue a rent
receipt. The rent receipt was later on issued in the month of December
2008 when the respondent No.1 asked for the same, number of times.
After October 2008 the petitioner No. 1 did not accept the rent from
the respondent No.2 because due to his illness the respondent No.1 was
not coming to the shop for some time. It was only because of serious
illness of respondent No.1, due to which the counsel could not be
contacted by him so as to deposit the rent in the court. On 28.4.2009
the petitioner No.1 taking advantage of the situation has filed the
present application.

 
xxx xxx xxx

 
6. Para 6 of the application is not admitted as such and hence
denied. As already submitted herein above the rent till the month of
March 2008 was paid in October 2008 itself but the petitioner No.1
deliberately issued receipt in the month of December 2008 and now for
his own deliberate attempt and the ignorance of respondent No.1 the
petitioner No.1 is trying to take advantage. There has never been a
deliberate attempt on the part of respondent No.1 of noncompliance of
the orders passed by this Hon’ble Court but it was only account of
misrepresentation of petitioner No.1, non-intentional violation
occurred.”

(emphasis is mine)

 

7. By an order dated 14.9.2009 the Rent Controller allowed the
application filed by the respondents under Section 15(7) of the Rent
Act, and thereby, struck off the defence of the appellants in the
pending eviction petition. Dissatisfied with the order passed by the
Rent Controller, the appellants approached the Rent Control Tribunal.
By an order dated 24.5.2010, the Rent Control Tribunal dismissed the
appeal preferred by the appellants. Dissatisfied, the appellants
approached the High Court of Delhi (hereinafter referred to as “the
High Court”) by filing a petition under Article 227 of the
Constitution of India, wherein, the appellants assailed the order
passed by the Rent Controller dated 14.9.2009, as well as, the order
of the Rent Control Tribunal dated 24.5.2010. The High Court
dismissed the petition filed under Article 227 on 10.5.2011. It is,
therefore, that the appellants approached this Court, by filing a
Petition for Special Leave to Appeal (C) no. 26941 of 2011, wherein
we have now granted leave.

 

8. The question for this Court’s consideration is, whether it was just
and appropriate for the succeeding courts (the Rent Controller, Rent
Control Tribunal and the High Court) to have accepted the prayer made
by the respondents, for striking out the defence of the appellants,
in the eviction proceedings. For determining the issue in hand, it
is essential to extract herein Section 15 of the Rent Act. The same
is being reproduced hereunder :-

“15. When a tenant can get the benefit of protection against eviction.

 
1) In every proceeding of 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.

 
2) If, in any proceeding for the recovery of possession of any
premises on any ground other than that referred to in sub-section
(1), the tenant contests the claim for eviction, the landlord may,
at any stage of the proceeding, make an application to the
Controller for an order on the tenant to pay to the landlord the
amount of rent legally recoverable from the tenant and the
Controller may, after giving the parties an opportunity of being
heard, make an order in accordance with the provisions of the said
sub-section.

 
3) If, in any proceeding referred to in sub-section (1) or sub-
section (2), there is any dispute as to the amount of rent payable
by the tenant, the Controller shall, within fifteen days of the
date of the first hearing of the proceeding, fix an interim rent in
relation to the premises to be paid or deposited in accordance with
the provisions of sub-section (1) or sub-section (2), as the case
may be until the standard rent in relation thereto is fixed having
regard to the provisions of this Act, and the amount of arrears if
any, calculated on the basis of the standard rent shall be paid or
deposited by the tenant within one month of the date on which the
standard rent is fixed or such further time as the Controller may
allow in this behalf.

 
4) If, in any proceeding referred to in sub-section (1) or sub-
section (2), (there is any dispute as to the person or persons to
whom the rent is payable, the Controller may direct the tenant to
deposit with the Controller the amount payable by him under sub-
section (1) or sub-section (2) or sub-section (3), as the case may
be, and in such a case, no person shall be entitled to withdraw the
amount in deposit until the Controller decides the dispute and
makes an order for payment of the same.

 
5) If the Controller is satisfied that any dispute referred to in sub-
section (4) has been raised by a tenant for reasons which are false
or frivolous, the Controller may order the defence against eviction
to be struck out and proceed with the hearing of the application.

 
6) If a tenant makes payment or deposit as required by sub-section
(1) or subsection (3), no order shall be made for the recovery of
possession on the ground of default in the payment of rent by the
tenant, but the Controller may allow such costs as he may deem fit
to the landlord.

 
7) If a tenant fails to make payment or deposit as required by this
section, the Controller may order the defence against eviction to
be struck out and proceed with the hearing of the application.”

 

 

 

9. It is not a matter of dispute, that the Rent Controller had passed an
order dated 21.4.2008 under Section 15(1) of the Rent Act. By the above
order, the Rent Controller had required the appellants to pay arrears of
rent to the respondents from October 2007 upto date, within 30 days (i.e.,
by 21st of May, 2008). The appellants were required to pay future rent at
the rate of Rs. 66/- per month, “month by month”, by the 15th day of each
succeeding English calendar month. Even though I will deal with the actual
details of the delay in payment of future rent, “month by month”, it is
clear from the acknowledged factual position disclosed by the appellants in
their reply dated 17.8.2009, that there was delay in doing so. Despite
this acknowledged position, the issue that arises for consideration is,
whether the said delay would be sufficient by itself, in terms of the
mandate contained under Section 15(7) of the Rent Act, to strike out the
defence of the appellants. Insofar as the instant issue is concerned
reference may be made to the provision itself (Section 15(7) of the Rent
Act), which clearly uses the word “may” with reference to striking out the
defence of a tenant. The use of the word “may” postulates, that a
discretion is vested with the Rent Controller to strike out (or not to
strike out) the defence of a tenant, who has committed breach of an order
passed under Section 15(1) of the Rent Act. It is therefore apparent, that
despite non-compliance by a tenant, of directions issued under Section
15(1) of the Rent Act, there would be situations wherein the defence of a
tenant would not be struck off. The issue in hand is no longer res
integra. This Court has had various occasions to interpret Section 15(7)
of the Rent Act, wherein it has laid down the parameters to be taken into
consideration, while passing an order for striking out the defence of the
tenant (under Section 15(7) of the Rent Act). I have endeavoured to
examine a few of those judgments, in the following paragraph.
10.1. The power of the Rent Controller under Section 15(7) of the Rent Act
to strike out a tenant’s defence in an eviction petition on her failure to
deposit rent, came to be examined by this Court in Miss Santosh Mehta Vs.
Om Prakash and Others, (1980) 3 SCC 610. In the aforesaid judgment, this
Court held 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 built-in-self-restraint, 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 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 matter-of-course 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. There is no indication whatsoever in the Act to show that the
exercise of the power of striking out of the defence under
Section 15(7) was imperative whenever the tenant failed to deposit or
pay any amount as required by Section 15. The provisions contained in
Section 15(7) of the Act are directory and not mandatory. It cannot be
disputed that Section 15(7) is a penal provision and gives to the
Controller discretionary power in the matter of striking out of the
defence, and that in appropriate cases, the Controller may refuse to
visit upon the tenant the penalty of non-payment or non-deposit. 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.”
(emphasis is mine)
10.2. On the issue in hand, reference may also be made to the judgment of
this Court in Kamla Devi Vs. Vasdev, (1995) 1 SCC 356. In the instant
judgment, this Court opined that sub-section (7) of Section 15 of the Rent
Act allows a discretion to the Rent Controller, to strike out the tenant’s
defence, in case of non-compliance of direction to deposit rent. It was
clearly opined, that Section 15(7) of the Rent Act did not postulate a
mandatory provision for striking out the defence of the tenant, on account
of failure to make payment or deposit pursuant to an order passed by the
Rent Controller under Section 15(1) of the Rent Act. While so holding,
this Court observed as under:-

“17. We are unable to uphold this contention. In our view, it is not
obligatory for the Rent Controller to strike out the defence of the
tenant under Section 15(7) of the Delhi Act, if the tenant fails to
make payment or deposit as directed by an order passed under
Section 15(1). The language of Sub-section (7) of Section 15 is that
‘the Controller may order the defence against eviction to be struck
out’. That clearly means, the Controller, in a given case, may not
pass such an order. It must depend upon the facts of the case and the
discretion of the Controller whether such a drastic order should or
should not be passed.

 
xxx xxx xxx

22. The unreasonableness of the construction suggested by the
appellant, is well illustrated by the case of Santosh Mehta v. Om
Prakash and Anr: (1980) 3 SCR 325 . In that case, the tenant was a
working woman, who had engaged an advocate to represent her in a
dispute with the landlord. She duly paid all the arrears of rent by
cheque or in cash to her advocate, who failed to deposit the amount or
to pay to the landlord, as directed by the Rent Controller. On an
application made by the landlord, the Rent Controller struck out the
defence of the tenant under Section 15(7) of the Delhi Rent Control
Act. A Bench of two Judges of this Court held that the exercise of
power of striking out the defence under Section 15(7) was not
imperative whenever the tenant failed to deposit or pay any amount as
required by Section 15. The provisions contained in Section 15(7) of
the Act were directory and not mandatory. Section 15(7) was a penal
provision and gave the Rent Controller discretionary power in the
matter of striking out of the defence. It was ultimately held that the
order of the Rent Controller striking out the defence of the tenant in
the facts of that case was improper. The consequential order of
eviction was set aside.
23. We are unable to uphold the contention of the appellant that the
case of Ram Murti v. Bhola Nath and Anr.: (AIR (1984) SC 1392), was
wrongly decided and reliance was wrongly placed in that case on the
decision of a Bench of three Judges of this Court in the case of
Shyamcharan Sharma v. Dharamdas : (1980) 2 SCR 334. 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
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.”

(emphasis is mine)
10.3. On the issue in hand, reference was also made to the decision
rendered by this Court in Jain Motor Car Co., Delhi Vs. Swayam Prabha Jain,
(1996) 3 SCC 55. Therein, this Court examined a case where a single
default had been committed by the tenant. The tenant had not deposited
rent for the month of February 1972. On the issue of striking out the
defence of the tenant under Section 15(7) of the Rent Act, this Court held
as under:-
“21. Applying the above principles to the instant case, it cannot but
be held that the view expressed by the 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 corneous
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 the 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, the 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 Act on 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 the rent 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.’
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 the 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
filing 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.”
(emphasis is mine)
A perusal of the above conclusions, recorded in Jain Motor Co., Delhi’s
case (supra) reveals, that even a single willful default, could be
sufficient in striking out a tenant’s defence.
10.4. The interpretation with reference to striking out the defence of a
tenant under Section 15(7) of the Rent Act, also came up for consideration
before this Court in Aero Traders (P) Ltd. Vs. Ravinder Kumar Suri, (2004)
8 SCC 307, wherein, this Court opined as under:-
“6. The question which, therefore, requires consideration is whether
the appellant has made out any ground for exercising discretion in his
favour of not striking out his defence. According to Black’s Law
Dictionary “judicial discretion” means the exercise of judgment by a
judge or court based on what is fair under the circumstances and
guided by the rules and principles of law; a court’s power to act or
not act when a litigant is not entitled to demand the act as a matter
of right. The word “discretion” connotes necessarily an act of a
judicial character, and, as used with reference to discretion
exercised judicially, it implies the absence of a hard-and-fast rule,
and it requires an actual exercise of judgment and a consideration of
the facts and circumstances which are necessary to make a sound, fair
and just determination, and a knowledge of the facts upon which the
discretion may properly operate. (See 27 Corpus Juris Secundum page
289). When it is said that something is to be done within the
discretion of the authorities that something is to be done according
to the rules of reason and justice and not according to private
opinion; according to law and not humour. It only gives certain
latitude or liberty accorded by statute or rules, to a judge as
distinguished from a ministerial or administrative official, in
adjudicating on matters brought before him.
7. In the present case, the finding of the Rent Controller and also of
the Rent Control Tribunal is that the appellant set up a totally false
plea of his having sent the rent through cheques to the landlord.
Apart from pleading that he had sent the amount through cheques, he
pleaded no other fact which could be taken into consideration by the
Rent Controller for exercising discretion in his favour. It may be
noted that the premises are commercial and are situate in Karol Bagh,
which is a prime business area of Delhi and the rent is a paltry sum
of Rs. 30/- per month. But the appellant did not pay even this small
amount of rent, which is virtually a pittance, and has remained in
arrears for a long period of time. There is absolutely no ground on
which any discretion could be exercised in his favour. The High Court
was, therefore, perfectly justified in setting aside the order passed
by the Rent Control Tribunal and restoring that of the Rent
Controller.”
(emphasis is mine)
10.5. Last of all reference may be made to the recent decision of this
Court in Amrit Lal Vs. Shiv Narain Gupta, (2010) 15 SCC 510. In the
instant case the Rent Controller in exercise of the discretion vested in
him under Section 15(7) of the Rent Act, had struck off the defence of the
tenant. The Appellate Authority, however, reversed the judgment of the
Rent Controller. Thereupon, the matter came up for consideration before
the High Court under Article 227 of the Constitution of India. The High
Court set aside the order passed by the Appellate Authority. The tenant
thereupon approached this Court, assailing the order of striking off his
defence. While adjudicating upon the controversy, this Court held as
under:-
“11. So far as the order striking out the defence of the tenant is
concerned, it is clear that as far back as on 27.10.1983, the trial
court has passed a judicial order under Section 15(1) of the Act,
directing the tenant to deposit the rent month by month. Instead, the
tenant defaulted in making the deposits for a period of about three-
and-a-half years. The learned counsel for the appellant submitted
that striking out defence against eviction is an order which entails
serious consequences on the tenant and ordinarily the defence should
not be struck off unless the default is contumacious or deliberate.
Sub-section (7) of Section 15 confers a discretion on the Controller
who may order the defence against eviction to be struck out and
proceed with the hearing of the application if a tenant fails to make
payment or deposit, as required by Section 15. In the present case,
the tenant stopped making deposits from the month of October 1992.
For the period between October 1992 to March 1993, it can be
understood that the tenant believing that there was a compromise, did
not make the deposit but the factum of compromise was disowned by the
landlord on 23-3-1993. If the tenant believed bona fide that there
was a compromise, then, he should have acted accordingly and paid or
tendered the rent to the landlord @ Rs.500 per month which was agreed
upon between the parties on his own saying. If the landlord was
disputing compromise, then the tenant should have tendered or
deposited the rent before the Controller. There is a complete silence
on the part of the tenant in paying or tendering the rent for the
period for which he has defaulted. In such circumstances, the default
in payment of rent cannot be said to be bona fide. The proceedings
before the Controller have unfortunately remained pending for a long
time, almost 20 years by this time.

 
12. In the facts and circumstances of this case, it cannot be said
that the High Court did not have jurisdiction or exceeded in exercise
of jurisdiction in entertaining the petition under Article 227 of the
Constitution and setting aside the order of the Appellate Authority
and restoring that of the trial court.”

(emphasis is mine)

11. It is apparent, that this Court has clearly opined, that the power
vested under Section 15(7) of the Rent Act to strike off the defence of a
tenant, is discretionary and not mandatory. It is therefore imperative to
understand, that every violation in implementation of the direction(s)
issued by a Rent Controller under Section 15(1) of the Rent Act, will not
ipso facto lead to the striking out the defence of a tenant. A Rent
Controller must exercise his discretion, keeping in mind the nature of the
non-compliance. If the non-compliance is not serious, or is based on good
reason, a Rent Controller would not strike off the defence of the tenant.
Only when the non-compliance of the order passed by the Rent Controller
under Section 15(1) of the Rent Act, depicts irrational disregard to the
order, or when the non-compliance is repeated, or when no justification has
been expressed for the same, or for such other similar reason(s), the
discretion vested in Section 15(7) of the Rent Act, would entitle the Rent
Controller to strike off the defence of a tenant. In a given case even a
single default depicting willful, contumacious, or negligent and careless
behaviour, could lead to the striking out of a tenant’s defence. It is
therefore apparent, that judicial discretion exercised in such a matter
must be tempered with self-restraint, keeping in mind, that striking out a
tenant’s defence is an exceptionally harsh step, which ought not be taken
in a routine and casual manner. The Court must carefully evaluate the
facts of the given case, before exercising its discretion.
12. The question which arises for adjudication in the present controversy
is, whether the Rent Controller, the Rent Control Tribunal and the High
Court, were justified in the facts and circumstances of the instant case,
in ordering (or upholding) the striking out the defence of the appellants
herein. Herein, the order dated 21.4.2008 passed by the Rent Controller
under Section 15(1) of the Rent Act, required the payment of arrears of
rent claimed by the respondents (with effect from 1.11.2007 upto date, at
the rate of Rs.66/- per month), within 30 days (i.e., by 21.5.2008). The
above order also directed the appellants to pay future rent at the rate of
Rs.66/- per month, “month by month”, by the 15th day of each succeeding
English calendar month. It is not a matter of dispute, that arrears of
rent though directed to be paid from 1.11.2007 were actually paid with
effect from 1.1.2007, on 21.4.2008 itself. The appellants-tenants
therefore, voluntarily paid ten months rent in excess of the directions
contained in the order dated 21.4.2008. In making the aforesaid payment,
the appellants had exercised their discretion of caution, and had deposited
arrears of rent with effect from 1.1.2007, as claimed by the respondents.
The aforesaid discretion was exercised in the manner aforementioned (as is
disclosed in the reply filed by the appellants, dated 17.8.2009) keeping in
mind the fact, that the respondents had not issued receipts to the
appellants, despite their having been paid rent from 1.1.2007 upto
30.10.2007. And therefore, they would not be able to establish the above
position, through evidence. It was only as a matter of prudence, foresight
and precaution, that the appellants-tenants had tendered rent from 1.1.2007
even though the Rent Controller’s order required the appellants to pay
arrears from 1.11.2007.
13. Having therefore discharged the liability of paying of arrears of
rent, the next step in implementing the order dated 21.4.2008 was with
reference to the payment of future rent. By the order dated 21.4.2008, the
Rent Controller had directed the appellants to deposit future rent at the
rate of Rs.66/- per month, “month by month”, before the 15th day of each
succeeding English calendar month. The Rent Controller had definitely and
precisely, fixed the date by which rent for each succeeding month had to be
tendered by the appellants-tenants. It was on account of the alleged non-
payment of the future rent, in compliance with the directions contained in
the Rent Controller’s order dated 21.4.2008, that the respondents filed an
application under Section 15(7) of the Rent Act, on 28.4.2009. The
relevant period which falls for consideration, while determining the
default/failure/lapse relating to the non-payment of future rent, is from
1.5.2008 to 31.3.2009. From the pleadings before us, and the written reply
filed by the appellants dated 17.8.2009 (to the application filed by the
respondents under Section 15(7) of the Rent Act), the factual position, can
be summarized as follows:-

|S. No. |Month for which |Last date of |Actual date of|Whether rent paid|
| |rent payable |payment as |payment of |on time or in |
| | |per order |rent for the |default of order |
| | |dated |relevant month|dated 21.4.2008 |
| | |21.4.2008 | | |
|1. |May 2008 |15.06.2008 |27.06.2008 |Payment in |
| | | | |default of order |
|2. |June 2008 |15.07.2008 |17.12.2008 |Payment in |
| | | | |default of order |
|3. |July 2008 |15.08.2008 |17.12.2008 |Payment in |
| | | | |default of order |
|4. |August 2008 |15.09.2008 |17.12.2008 |Payment in |
| | | | |default of order |
|5. |September 2008 |15.10.2008 |17.12.2008 |Payment in |
| | | | |default of order |
|6. |October 2008 |15.11.2008 |17.12.2008 |Payment in |
| | | | |default of order |
|7. |November 2008 |15.12.2008 |05.05.2009 |Payment in |
| | | | |default of order |
|8. |December 2008 |15.01.2008 |05.05.2009 |Payment in |
| | | | |default of order |
|9. |January 2009 |15.02.2009 |05.05.2009 |Payment in |
| | | | |default of order |
|10. |February 2009 |15.03.2009 |05.05.2009 |Payment in |
| | | | |default of order |
|11. |March 2009 |15.04.2009 |05.05.2009 |Payment in |
| | | | |default of order |
Based on the factual position extracted hereinabove, I shall endeavour to
examine whether the discretion exercised by the courts below in striking
out the defence of the appellants is sustainable in law.
14. First and foremost, it is essential to deal with the plea canvassed
at the hands of the appellants, namely, that on some occasions whilst the
rent was tendered on an earlier date, the receipt for the same was issued
by the respondents on a later date. The submission advanced was, that it
was imperative while adjudicating the present controversy, to take into
consideration the actual date of tender of rent, mentioned by the
appellants-tenants in their written reply, and not the date indicated in
the receipts acknowledging the payment of rent. The courts below had
rejected the instant plea canvassed at the hands of the appellant. I am
satisfied, that the rejection of the plea by the courts below, was fully
justified. In this behalf it may be noted, that the respondents had sought
eviction of the appellants on account of non-payment of rent, with effect
from 1.1.2007. The reply of the appellants to the aforesaid assertion was,
that they had actually paid rent upto 31.10.2007, and were in arrears only
with effect from 1.11.2007. Despite the aforesaid assertion, the
appellants in the exercise of prudence, foresight and precaution, and as a
matter of abundant caution, had tendered arrears of rent (in furtherance of
the order dated 21.4.2008 passed under Section 15(1) of the Rent Act by the
Rent Controller), from 1.1.2007 to 30.4.2008, even though the appellants-
tenants had been directed to deposit arrears only from 1.11.2007. The
appellants have clearly expressed, that the respondents had claimed rent
even for the period (1.1.2007 to 31.10.2007) for which it had already been
paid. Therefore, the appellants-tenants tendered ten months rent twice
over, because of the fact that the respondents had not issued receipts
despite the payment of rent. In the above view of the matter, it is
impossible to assume, that the appellants would continue to repose faith
and trust in the respondents, and unmindful of the consequences, continue
to tender rent, without obtaining a receipt at the time of tendering rent.
Therefore the contention, that the appellants had tendered rent for the
period from June 2008 to October 2008, for which a receipt was issued only
on 17.12.2008, cannot be accepted. For all intents and purposes it has to
be assumed, that rent receipts were issued to the appellants simultaneously
with the payment thereof. It is in the above view of the matter, that the
chart depicting the payment of rent, in terms of the order passed by the
Rent Controller on 21.4.2008, is based on the date of issue of receipts by
the respondents.
15. Before venturing to examine the controversy on its merit, it is
necessary to formulate four essential components of consideration, in
respect of the controversy in hand. These, in my view, have necessarily
and mandatorily to be kept in mind while dealing with, striking out the
defence of a tenant, contemplated under Section 15(7) of the Rent Act. The
mandatory components are expressed hereunder:-
(i) Undoubtedly, the provisions of the Rent Act are aimed at protecting
tenants, against unreasonable demands of landlords as to rents, evictions
and repairs. The spirit and purpose underlying the Rent Act, is aimed at
protecting tenants against arbitrary and unfair demands of eviction.
Whilst protecting tenants, the legislature has also incorporated certain
provisions, including Section 15(7) of the Rent Act, for curbing abuse of
the legal process, by tenants. Section 15(7) of the Rent Act is aimed at
enforcing tenants to make deposits or payments of rent (both arrears and
future) in compliance with directions issued by Rent Controllers. Section
15(7) of the Rent Act, vests a discretion with Rent Controllers, to strike
out the defence of tenants, who fail to make payments or deposits
contemplated under Sections 15 (1) and/or (3) of the Rent Act. The
landlord has no role in the matter. It is the inaction of the tenant
itself, which would prompt a Rent Controller, to strike out the tenants’
defence. Such action is permissible, if it is found that the non-deposit
(in compliance with a Rent Controller’s directions) was conscious or
willful, and without any reasonable justification. There is no question of
any liberal approach towards a tenant, who fails to comply with directions
issued by the Rent Controller under Sections 15(1) and/or (3) of the Rent
Act. For, it is out of the tenant’s own actions, that the consequences
arise.
(ii) The relevant date for determining the disobedience of the tenant is
singularly, exclusively and solely referable, to the mandate of the
schedule of payment, contained in the order passed by the Rent Controller.
This is clearly apparent from the use of the words “if a tenant fails to
make payment or deposit as required …”. Neither the date of moving an
application under Section 15(7) is of relevance, nor the date on which the
Rent Controller passes an order striking out the defence of a tenant is
germane/apposite for the instant consideration. For that matter, any other
date, besides the schedule of payment contemplated in the Rent Controller’s
order, would be totally irrelevant, for the purpose of a determination
under Section 15(7) of the Rent Act. (iii) The
deposits and payments, required to be made by a tenant under Sections 15(1)
and/or (3) of the Rent Act, are attributable exclusively for the purpose
expressed by the tenant. Therefore, if a payment is made by a tenant
towards arrears of rent, the same cannot be assigned, or attributed, or
credited, towards future rent. Likewise, the vice versa. Therefore,
payment or deposit made by a tenant would have reference only to such
purpose, as is ascribed by the tenant, in exercise of his independent
discretion, at the time of making the deposit. (iv)
Acts of the tenant to make up deficiencies by making deposits, beyond the
date/time contemplated by the Rent Controller, could be treated as an
acceptable payment/deposit, if there is adequate and acceptable explanation
for the delayed deposit. And not otherwise. For the above reason,
subsequent acts of magnanimity shown by a tenant, to pay more than what was
required by the Rent Controller (for that matter, many folds more, as in
the present case), would likewise be irrelevant.
16. Whether or not, the courts below exercised their discretion
justifiably, in striking out the defence of the appellants under Section
15(7) of the Rent Act, is being examined hereinafter, keeping in mind the
above parameters. Future rent was payable in terms of the order dated
21.4.2008, from the month of May, 2008. The same was payable, “month by
month”, before the 15th day of each succeeding English Calendar month.
Only twelve intervening months had lapsed in terms of the order dated
21.4.2008, when the application under Section 15(7) was filed by the
respondents-landlords, on 28.4.2009. It is apparent from the above chart
(see paragraph 13 above), that the appellants did not comply with the order
dated 21.4.2008, for making payments towards future rent, even for a single
month, before the application under Section 15(7) of the Rent Act was
filed, by the respondents-landlords on 28.4.2009. The facts expressed in
the pleadings reveal, firstly, that the appellants-tenants did not deposit
any rent before the Rent Controller. Secondly, that they did not even
voluntarily tender rent by themselves to the respondents. Thirdly, that
respondent no.1-Subhash Chand Saini, representing the respondents-landlords
had himself approached the appellants, during the period under reference,
for collecting rent. Therefore deposit/payment of rent was never
unilaterally made by the appellants-tenants. Payments towards future rent
were made, only on the asking of the respondents-landlords. These facts,
certainly demonstrate a foolhardy attitude, on the part of the appellants,
in the matter of payment of future rent. In view of the parameters
expressed in paragraph 15 above, the relevant date for determining the
delinquency of the tenant (while passing an order under Section 15(7) of
the Rent Act), is referable only to the schedule of payment mandated in the
Rent Controller’s order dated 21.4.2008. For the month of May, 2008, the
direction was to pay rent by 15.6.2008; for the month of June, 2008, the
payment had to be made by 15.7.2008; for July, 2008, payment had to be made
by 15.8.2008 ….., so on and so forth, and finally, for the month of March,
2009, the payment had to be made by 15.4.2009. Payments made for a
particular month on a date later than the one contemplated in the order of
the Rent Controller dated 21.4.2008, is liable to be treated as a payment
in violation of Rent Controller’s order. Not once, was rent paid by the
stipulated date. The appellants were to pay only Rs.66 per month, for a
shop located in a commercial area of Delhi, and, there was a continued
default in making even this meager payment, “month by month”. Fourthly, no
acceptable excuse has been tendered, for the delayed payment, pertaining to
any of the twelve months under reference. There is therefore no doubt
about the fact, that the appellants treated the directions of the Rent
Controller dated 21.4.2008, with absolute casualness. There is an
unequivocal inference of a clear disregard to the directions issued by the
Rent Controller. The facts of this case depict a recalcitrant, as well as,
a negligent and careless behaviour, at the hands of the appellants. This
is not a case of a single lapse, but of persistent repeated and unrelenting
default in the payment of future rent, for all the months intervening the
date when the order under Section 15(1) of the Rent Act was passed, and the
date when the application under Section 15(7) was filed by the respondents-
landlords. It is not possible to condone such indifference, insensitivity,
disinterest and apathy to judicial directions. Judicial discretion in such
a matter, taking into consideration the defaults committed by the
appellants-tenants, in my view, was legitimately exercised by the Courts
below, by striking out the defence of the appellants-tenants.
17. Furthermore, in my view, payment voluntarily made by the tenant on
21.4.2008 towards arrears of rent, cannot be attributable or assignable or
creditable, towards future rent. The said payment was made, in exercise of
free discretion, towards arrears of rent. It shall be deemed to be a
deposit by the tenant for that purpose, and for no other purpose. The
respondents-landlords filed an application under Section 15(7) of the Rent
Act on 28.4.2009 praying for striking out the defence of the appellants-
tenants for non-compliance of the order of the Rent Controller dated
21.4.2008. Payments made by the appellants-tenants, for future rent
payable upto 15.4.2009 (for the month of March, 2009), after the date of
filing of the application (on 29.4.2009), in my considered view, are not
relevant, for determining the issue in hand. The date on which the Rent
Controller passed the order striking out the defence of the appellants-
tenants, i.e. 14.9.2009, has absolutely no nexus to the consideration
contemplated in Section 15(7) of the Rent Act. The offer made by the
appellants-tenants to raise the rent by ten times of the current amount,
and to pay the same in advance for a period of five years, is nothing but
an act of frustration, and is only aimed to prejudice the Court’s mind.
Section 15(7) of the Rent Act does not contemplate condonation of payments
made in violation of the directions issued by the Rent Controller, by
subsequent payments, even where the tenant accepts to make a voluntary
payment, many folds more than what is due to the landlord. The only
exception is when there is a reasonable explanation for delayed payment.
Unfortunately, there is no such explanation on behalf of the tenant, in
this case. In my considered view, therefore, the action of the appellants-
tenants in not complying with the schedule of payment expressed in Rent
Controller’s order dated 21.4.2008 (for paying future rent), consecutively
and repeatedly for 12 months, is nothing but a contumacious failure to
comply with the directions of the Rent Controller.
18. The instant controversy actually demonstrates how a tenant has
effectively frustrated the legislative intent contemplated in Section 15(7)
of the Rent Act. The legislative purpose was, to curb tendencies of
tenants, from abusing the legal process. As already noticed hereinabove,
the respondents-landlords filed an eviction petition in November, 2007.
Based on the non-compliance of the directions issued by the Rent Controller
(on 21.4.2008), the respondents-landlords moved an application on
28.4.2009, praying for striking out the defence of the appellants-tenants.
After the appellants-tenants filed their reply on 17.8.2009, the Rent
Controller allowed the above application, and struck off the defence of the
appellants-tenants, by an order dated 14.9.2009. The order of the Rent
Controller dated 14.9.2009 was assailed by the appellants-tenants before
the Rent Control Tribunal. The prayer made by the appellants-tenants was
rejected by the above Tribunal on 21.4.2010. The appellants-tenants then
approached the High Court by filing a petition under Article 227 of the
Constitution of India. The High Court dismissed the petition on 10.5.2011.
The said order was assailed by filing a Petition for Special Leave to
Appeal. The matter has been pending disposal in this Court ever since.
The appellants-tenants, despite their contumacious disobedience, of the
directions contained in the order of the Rent Controller dated 14.9.2009,
have frustrated the process of law successfully, for about five years (from
28.4.2009, i.e., the date on which the application under Section 15(7) of
the Rent Act was filed, till the disposal of the present Civil Appeal).
The tenants have achieved, what the legislation aimed to avoid.
19. In the above view of the matter, I am of the considered view, that
the order passed by the Rent Controller dated 14.9.2009, which was upheld
by the Rent Control Tribunal (on 24.5.2010) and the High Court (vide order
dated 10.5.2011) calls for no interference whatsoever.
20. For the reasons recorded hereinabove the appeal fails and is
accordingly dismissed.

…………………………..J.

(Jagdish Singh Khehar)

New Delhi;

April 16, 2014.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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