Law Web: Supreme court: It is not mandatory for tenancy court to strike off defence of tenant for non payment of arrears of rent

The inevitable result on comparison of Section 13(5) of the Act,

1952 and Section 15(7) of Act, 1958 be that the Court would not be

bound to strike out the defence against ejectment in case of default in

payment of rent in compliance to the order passed under Section 15(1)

of the Act, 1958 and it is always open to the Controller to examine the

facts of each case while exercising its discretion which obviously has

to be judicious in approach and with circumspection.

18. While interpreting Section 15(7) of Act 1958, V.R. Krishna Iyer, J.

in Miss. Santosh Mehta Vs. Om Prakash and Ors. 2 1980(3) SCC 610 held that the

power to strike out a party’s defence is an exceptional step and has

only to be exercised where a “mood of defiance” and “gross negligence”

on the part of the tenant is detected. This Court warned against the

landlord using Section 15(7) as a “booby trap” to get the tenant

evicted. It would be better to reproduce the passage which indicate

the approach which has to be adopted in such matters by the Court.

The relevant paras 3 & 4 are as under:“

3. We must adopt a socially informed perspective while

construing the provisions and then it will be plain that the

Controller is armed with a facultative power. He may, or may

not strike out the tenant's defence. A judicial discretion has

builtinselfrestraint,

has the scheme of the statute in mind,

cannot ignore the conspectus of circumstances which are

present in the case and has the brooding thought playing on

the power that, in a court, striking out a party's defence is

an exceptional step, not a routine visitation of a punitive

extreme following upon a mere failure to pay rent. First of all,

there must be a failure to pay rent which, in the context,

indicates wilful failure, deliberate default or volitional nonperformance.

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

matterofcourse

invocation of the power to strike out will

vanish. Farewell to the realities of a given case is playing

truant with the duty underlying the power.

4. …..The effect of striking out of the defence under Section

15(7) is that the tenant is deprived of the protection given by

Section 14 and, therefore, the powers under Section 15(7) of

the Act must be exercised with due circumspection.”

19. Subsequent decisions rendered on the subject also recognises

that mere failure to pay rent on the part of the tenant is not enough to

justify an order striking out the defence. It is only a wilful failure or

deliberate default or volitional of nonperformance

that can call for the

exercise of the extraordinary power vested in the Court. More

importantly, the plentitude of the discretionary power of the Court

under Section 15(7) of the Act, 1958 is with the Rent Controller

whether or not to strike out the defence, needless to say that the effect

of striking out the defence under Section 15(7) of Act, 1958 is that the

tenant be deprived of the protection available to him under Section 14

and it is imperative that such power vested with the Rent Controller

under Section 15(7) of the Act, 1958 must be exercised with due care

and circumspection.

20. In Smt. Kamla Devi Vs. Shri Vasudev 3, this Court reiterated

3 1995(1) SCC 356

that the power to strike out the defence simply vested the Rent

Controller with the discretion to do so. It was not mandatory for the

Rent Controller to strike out the defence simply because a default had

occurred. It is imperative that exercise of discretion vested with the

authority obviously depends upon the facts and circumstances of each

case and is not open to be exercised under the rule of thumb.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO(s). 4563 OF 2014

DINA NATH Vs SUBHASH CHAND SAINI

Rastogi, J.

Dated:SEPTEMBER 24, 2019

1. The instant appeal has been filed against the judgment and order

dated 10th May, 2011 passed by the High Court of Delhi in Civil

Miscellaneous (M) No. 44 of 2011 at the instance of the appellants

(tenants) under Article 227 of the Constitution of India upholding

orders of the Rent Controller striking out defence of the appellants on

account of alleged failure to pay the rent.

2. The matter earlier was heard by a two Judge Bench of this Court

and there was a unanimity on the principles of law that the power to

strike out the defence vested in the Rent Controller under Section

15(7) of the Delhi Rent Control Act, 1958 (hereinafter being referred to

as the “Act, 1958”) is discretionary and not mandatory and it is

imperative that every violation in implementation of the directions of

the Rent Controller under Section 15(1) of the Act, 1958 ipso facto

leave to the striking out of the defence of the tenant and it ought to be

exercised only when the tenant deliberately, contumaciously or

negligently fails to deposit the rent due from him but there was a

divergence of opinion on the facts of the instant case and for that

reason the matter has been placed before us.

3. The facts in brief which may be relevant for the present purpose

and culled out from the record are that the appellantstenants

rented

a shop bearing no. 1445A,

Dariba Kalan, Delhi on a monthly rent of

Rs. 66/.

The respondentsplaintiffs

jointly own the abovementioned

demised premises. The rent for the shop is to be paid to respondent

no. 1, who holds a power of attorney, to collect rent on behalf of the

respondents. In November, 2007, the respondents (landlord) filed an

eviction petition under Section 14(1)(a)(b)(c) and (j) of the Act, 1958

seeking decree for recovery of possession of the rented premises on the

manifold reasons. We are not dilating on the grounds of eviction of

the demised premises at this stage since that is the subject matter to

be examined by the Rent Controller where the eviction petition is

pending adjudication.

4. The appellants filed their written statement on 7th February, 2008

disputing the allegations made by the respondents in the eviction

petition. Since one of the ground on which eviction was prayed for by

the respondents was nonpayment

of rent in which the order under

Section 15(1) of the Act, 1958 came to be passed on 21st April, 2008.

It will be appropriate to quote the order dated 21st April, 2008 ad

infra:“

RENT CONTROL TRIBUNAL DELHI

E931/

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”

5. In terms of the order under Section 15(1) of Act, 1958, the

appellantstenants

have to pay or deposit the arrears of rent w.e.f. 1st

November, 2007 till date @ Rs. 66/p.

m. within 30 days from 1st

November, 2007 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.

6. On account of noncompliance

of the order dated 21st April, 2008

as alleged, the respondents filed an application under Section 15(7) of

the Act, 1958 on 28th April, 2009 praying for striking out the defence

of the appellants.

7. The appellants filed their written response to the aforesaid

application and it was specifically stated in paragraphs 3 & 4 that

along with the arrears due from 1st November, 2007, in addition the

advance rent of ten months was deposited and on adjustment of the

advance rent deposited on 21st April, 2008, the monthly rent which

was deposited at a later point of time practically paid in advance and

there was no default committed of the order dated 21st April, 2008.

8. Taking note of the rival claims of the parties, the Rent Controller

vide its Order dated 14th September, 2009 allowed the application filed

by the respondentslandlord

under Section 15(7) of the Act, 1958 and

struck off the defence of the appellants in the pending evicting

petition. Dissatisfied with the order passed by the Rent Controller, the

appellants approached the Rent Control Tribunal. By an order dated

24th May, 2010, the Rent Control Tribunal dismissed the appeal and

being dissatisfied, the appellants further approached the High Court

invoking Article 227 of the Constitution of India and that came to be

dismissed vide judgment and order dated 10th May, 2011 which is

under challenge before us in the instant civil appeal.

9. The moot question arises for consideration is whether the power

vested with the Rent Controller under Section 15(7) of the Act, 1958 is

discretionary and has been judiciously exercised in the facts of the

instant case in striking out the defence of the appellants(tenants) in

the eviction proceedings.

10. Before adverting to the factual matrix relevant to the question of

striking out the tenant’s defence, it will be apposite for us to take note

of the scheme of the Act, 1958.

11. The statement of objects and reasons of the Act, 1958 fell for

consideration before the Constitution Bench of this Court in Ashoka

Marketing Ltd. and Anr. Vs. Punjab National Bank and Ors. 1,

wherein this Court held that the purpose of the Act, inter alia, is to

give the tenants a larger measure of protection against eviction. This

Court observed:

“…The Statement of objects and reasons for the

enactment of the Rent Control Act, indicates that it has

been enacted with a view :

(a) to devise a suitable machinery for expeditious

adjudication of proceedings between landlords and tenants;

(b) to provide for the determination of the standard rent

payable by tenants of the various categories of premises

which should be fair to the tenants, and at the same time,

provide incentive for keeping the existing houses in good

repairs, and for further investment in house construction;

and

eviction.

This indicates that the object underlying the Rent

Control Act is to make a provision for expeditious

adjudication of disputes between landlords and tenants,

determination of standard rent payable by tenants and

giving protection against eviction to tenants. The premises

belonging to the Government are excluded from the ambit

of the Rent Control Act which means that the Act has been

enacted primarily to regulate the private relationship

between landlords and tenants with a view to confer certain

benefits on the tenants and at the same time to balance the

interest of the landlords by providing for expeditious

adjudication of proceedings between landlords and

tenant…”

1 1990 (4) SCC 406

(emphasis

supplied)

12. Prior to the enactment of Act, 1958, the matter pertaining to rent

and eviction in the State of Delhi was governed by The Delhi and

Ajmer Rent Control Act, 1952(hereinafter being referred to as the “Act,

1952”). Apart from the ground of eviction provided under Section 13

of the Act, 1952 which is corresponding to the grounds for protection

of a tenant against eviction has been enumerated under Section 14 of

the Act, 1958. The corresponding provision of Section 13(5) of Act,

1952 has been provided under Section 15(7) with certain modifications

under Act, 1958.

13. One of the significant modification is that while under Section

13(5) of the Act, 1952, the application by the landlord had to be “for

an order on the tenantdefendant

to deposit month by month rent at a

rate at which it was last paid” in all suits for ejectments. Section 15 of

the Act, 1958 makes a distinction between cases where the recovery of

possession is sought on, the grounds of arrears of rent having been

left unpaid within two months of the service of notice of demand and

other ejectment proceedings. In the first class of cases, the Controller

can make an order for payment of rent at the rate at which it was last

paid while in the other class of cases the Controller may make an

order for payment at the rate at which it was legally recoverable.

14. The other notable difference is that under Section 13(5) of the

Act, 1952, failure of the tenant to deposit the arrears of rent within 15

days of the date of the order or to deposit the rent for any month by

the 15th of the next following month made it incumbent on the Court

to strike out the defence against ejectment. The language was that on

the failure of the tenant to deposit the rent, in terms of the mandate of

law, “the Court shall order the defence against ejectment to be struck

off”. In the Act 1958, Section 15(7) deals with the matter in case of

failure of the tenant to make the payment for deposit as required by

the Act. The Rent Controller has a discretion to consider the facts and

circumstances of each case and exercise his discretion judiciously in

accordance with law. It will be appropriate to notice Section 13(5) of

Act, 1952 and Section 15(7) of Act, 1958, which are as under:THE

DELHI AND AJMER RENT CONTROL ACT, 1952

“13 Protection

of a tenant against eviction

(5) If the tenant contests the suit as regards the claim for

ejectment, the plaintifflandlord

may make an application at

any stage of the suit for an order on the tenantdefendant

deposit month by month rent at a rate at which it was last

paid and also the arrears of rent, if any, and the court, after

giving an opportunity to the parties to be heard, may make

an order for the deposit of rent at such rate month by month

as it thinks fit and the arrears of rent, if any, and on the

failure of the tenant to deposit the arrears of rent within

fifteen days of the date of the order or to deposit the rent at

such rate for any month by the 15th of the next following

month, the court shall order the defence against ejectment to

be struck out and the tenant to be placed in the same

position as if he had not defended the claim to ejectment;

and the landlord may withdraw the amount of money in

deposit without prejudice to his claim to any decree or order

for recovery of possession of the premises.”

DELHI RENT CONTROL ACT, 1958

“Section 15 When

a tenant can get the benefit of protection

against eviction

(7) If a tenant fails to make payment or deposit as required

by this section, the Controller may order the defence against

eviction to be struck out and proceed with the hearing of the

application.”

(emphasis supplied)

15. The change of the words from “The Court shall order the defence

against ejectment to be struck out” to the words “the Controller may

order the defence against eviction to be struck out” is a deliberate

modification in law in favour of the tenant. Under the Act 1952, the

Court had no option but to strike out the defence if the failure to pay

or deposit the rent is proved; under the Act, 1958, the Controller who

takes the place of the Court has a discretion in the matter, so that in

proper cases, even if there is a default in making the payment of rent,

but if he is satisfied on the basis of the material on record in exercise

of judicial discretion, may refuse to strike out the defence in the given

facts & circumstances of the case.

16. Broadly speaking, the perusal of Act, 1952 with Act, 1958 shows

primarily the following changes:(

i) Section 13(5) of the Act, 1952 was meant to safeguard the

interest of the landlord only. Section 15(1) of the Act, 1958

is meant primarily by way of benefit to the tenant who gets

another opportunity to avoid his eviction by complying with

the order passed under Section 15(1). The tenant also by

complying with the order passed under Section 15(1) avoids

the consequence of his default of payment or tender before

filing of the petition.

(ii) Under Section 13(5) of the Act 1952, in case of default, the

Court was bound to strike out the defence whereas under

Section 15(7) of the Act 1958, in case of default in

compliance with the order passed under Section 15(1) or

Section 15(2), the Controller has a discretion to strike out

the defence and it is always open to be examined on the

facts and circumstances of each case.

(iii) Under the Act, 1958 by complying with the order under

Section 15(1), the tenant can defeat the eviction application,

whereas under the Act 1952, the tenant did not have this

advantage even if he complied with the order under Section

13(5) of the Act 1952.

17. The inevitable result on comparison of Section 13(5) of the Act,