Supreme Court of India
DINA NATH (D) BY LRS & ANR.versusSUBHASH CHAND SAINI & ORS.
- Citation
- 2019 INSC 1074
- Decided
- 24 September 2019
- Disposal
- Appeal(s) allowed
- Bench
- ARUN MISHRA
Holding
Section 15(7) of the Delhi Rent Control Act, 1958 confers a discretionary power to strike out a tenant's defence, which must be exercised with care and circumspection; the Rent Controller’s order in this case was not so exercised and is set aside.
Summary
The appeal concerned a dispute under the Delhi Rent Control Act, 1958 where the landlord sought eviction of the tenants and the Rent Controller, invoking Section 15(7), struck out the tenants' defence in the pending eviction petition. The tenants argued that they had paid all arrears and even advanced rent, negating any contumacious default. The Supreme Court examined the statutory scheme, noting that Section 15(7) confers a discretionary, not mandatory, power to strike out a defence, to be exercised only in cases of wilful or deliberate non‑payment. It held that the Rent Controller’s order was not exercised with the required care and circumspection, as the tenants had complied with the rent‑deposit order. Consequently, the Court set aside the Rent Controller’s and the High Court’s orders and allowed the appeal. The decision reaffirmed that the power under Section 15(7) must be used sparingly and only where the tenant’s conduct amounts to a contumacious default.
Issues considered
- The nature of the power vested in the Rent Controller under Section 15(7) of the Delhi Rent Control Act, 1958 – whether it is discretionary or mandatory.
- Whether the Rent Controller exercised that power judiciously in striking out the tenants' defence in the present case.
- Whether the tenants were in contumacious or deliberate default in payment of rent.
Legislation cited
- Delhi and Ajmer Rent Control Act, 1952s. 13(5)
- Delhi Rent Control Act, 1958s. 15(1), s. 15(7)
Subjects
Delhi Rent Control ActSection 15(7)strike out defencetenant evictiondiscretionary powercontumacious defaultrent arrearslandlord-tenant law
Judgment
[2019] 12 S.C.R. 255 255
DINA NATH (D) BY LRS & ANR. A
v.
SUBHASH CHAND SAINI & ORS.
(Civil Appeal No. 4563 of 2014)
SEPTEMBER 24, 2019 B
[ARUN MISHRA, M. R. SHAH AND AJAY RASTOGI, JJ.]
Delhi Rent Control Act, 1958: s. 15(7) – Power of the Rent
Controller to strike out defence of the tenant, pending eviction
petition – Nature of – Held: Power vested u/s. 15(7) is discretionary
C
and not mandatory – It depends on contumacious or deliberate
default and must be construed harmoniously so as to balance the
rights and obligations of the tenant and the landlord – Power u/s.
15(7) being an exception, is to be exercised with due care and
circumspection – On facts, on the date of the order passed by the
Rent Controller itself, the entire arrears as directed to be deposited D
by the tenants stood paid and also on the date of the order passed
by the Rent Controller striking out his defence, rent for the entire
intervening period and even beyond had been paid – Thus, the
charge of contumacious failure and deliberate default in making
payment levelled against the tenants is ill founded – Decision of the
E
Rent Controller as upheld by the High Court, striking out defence
of the tenant has not been exercised judiciously and with
circumspection and thus, is unsustainable and set aside.
Allowing the appeal, the Court
HELD: 1.1 In Section 13(5) of Delhi and Ajmer Rent F
Control Act, 1952 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 Delhi Rent Control Act, 1958, Section 15(7) deals with the
matter in case of failure of the tenant to make the payment for
G
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.
The change of the words from “the Court shall order the defence
against ejectment to be struck out” to the words “the Controller
H
255
256 SUPREME COURT REPORTS [2019] 12 S.C.R.
A 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
B 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. The inevitable result on comparison
of Section 13(5) of the Act, 1952 and Section 15(7) of Act, 1958
C 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
D to be judicious in approach and with circumspection.
[Para 14, 15, 17][262-E-F; 263-E-F; 264-D-E]
1.2 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 non–performance
E 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
F
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. The power vested under Section 15(7) of the
Act, 1958 is discretionary and not mandatory and depends on
G contumacious or deliberate default and must be construed
harmoniously so as to balance the rights and obligations of the
tenant and the landlord and the power under Section 15(7) of
Act, 1958 being an exception to be exercised with due care and
circumspection. [Para 19, 24][265-F-G; 266-G; 267-A]
H
DINA NATH (D) BY LRS & ANR. v. SUBHASH CHAND SAINI 257
& ORS.
2.1 In the instant case, on the date of the order passed by A
the Rent Controller itself, the entire arrears as directed to be
deposited by the appellants stood paid and also on the date of the
order passed by the Rent Controller striking out his defence,
rent for the entire intervening period and even beyond had been
paid and what it appears is that suitable reconciliation and B
adjustments were required to be made against the months for
which rent was payable but what cannot be disputed is that the
amount which the appellants were called upon to pay and what
they have, pursuant to the directions of the Rent Controller was
paid/deposited at all relevant point of time in excess of what was C
payable to the landlord. In the given circumstances, the charge
of contumacious failure and deliberate default in making payment
levelled against the appellants–tenants is, thus, ill founded. [Para
29][268-E-G]
2.2 The amount of rent payable for the demised premises D
may be a factor which cannot be brushed aside, but the facts and
circumstances of the case on hand, do not suggest any negligence,
defiance or contumacious non–payment of the amount payable to
the landlord to warrant the taking of that “exceptional step” which
is bound to render the tenant defenceless in his contest against E
the landlord. [Para 30][268-H; 269-A]
2.3 The decision of the Rent Controller and confirmed by
the Single Judge of the High Court upholding the decision of
striking out of the defence of the appellants which certainly entails
adverse consequences in depriving of taking their defence and F
to contest the eviction application filed by the landlord has not
been exercised judiciously and with circumspection and thus, the
impugned judgment is unsustainable and is set aside. [Para
31][269-B-C]
Ashoka Marketing Ltd. and Anr. v. Punjab National G
Bank and Ors. (1990) 4 SCC 406 : [1990] 3 SCR 649;
Miss. Santosh Mehta v. Om Prakash and Ors. (1980)3
SCC 610 : [1980] 3 SCR 325; Smt. Kamla Devi v. Shri
Vasudev (1995)1 SCC 356 : [1994] 6 Suppl. SCR 603;
H
258 SUPREME COURT REPORTS [2019] 12 S.C.R.
A M/s. Jain Motor Car Co., Delhi Vs. Smt. Swayam Prabha
Jain & Anr. (1996) 3 SCC 55 : [1996] 2 SCR 663;
Aero Traders (P) Ltd. Vs. Ravinder Kumar Suri (2004)
8 SCC 307; Amrit Lal Vs. Shiv Narain Gupta (2010) 15
SCC 510 – referred to.
B Case Law Reference
[1990] 3 SCR 649 referred to Para 11
[1980] 3 SCR 325 referred to Para 18
[1994] 6 Suppl. SCR 603 referred to Para 20
C
[1996] 2 SCR 663 referred to Para 21
(2004) 8 SCC 307 referred to Para 22
(2010) 15 SCC 510 referred to Para 23
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4563
D of 2014.
From the Judgment and Order dated 10.05.2011 of the High Court
of Delhi at New Delhi in Civil Misc. (M) No. 44 of 2011.
Brahm S. Nagar and Ashok Mathur, Advs. for the Appellants.
E Amitabh Krishn, Pranesh, Rohit Kumar and S. S. Bandhopadhya,
Advs. for the Respondents.
The Judgment of the Court was delivered by
RASTOGI, J.
F 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.
G
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
H
DINA NATH (D) BY LRS & ANR. v. SUBHASH CHAND SAINI 259
& ORS. [RASTOGI, J.]
that every violation in implementation of the directions of the Rent A
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
B
us.
3. The facts in brief which may be relevant for the present purpose
and culled out from the record are that the appellants-tenants rented a
shop bearing no. 1445-A, Dariba Kalan, Delhi on a monthly rent of Rs.
66/-. The respondents-plaintiffs jointly own the above-mentioned demised
premises. The rent for the shop is to be paid to respondent no. 1, who C
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 D
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 E
the respondents was non-payment 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
E-931/07 F
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
G
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
H
260 SUPREME COURT REPORTS [2019] 12 S.C.R.
A rent at the said rate month by month before 15th of each succeeding
English Calendar month.
SD/-
ARC/DELHI/21.04.2008"
B 5. In terms of the order under Section 15(1) of Act, 1958, the
appellants-tenants 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.
C
6. On account of non-compliance 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
D 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
E 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 respondents-landlord 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
F
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
G 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.
H
DINA NATH (D) BY LRS & ANR. v. SUBHASH CHAND SAINI 261
& ORS. [RASTOGI, J.]
10. Before adverting to the factual matrix relevant to the question A
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, B
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 C
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 D
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.
E
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 F
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…”
G
(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
1
1990 (4) SCC 406 H
262 SUPREME COURT REPORTS [2019] 12 S.C.R.
A 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
B
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 tenant-defendant to deposit month by month rent at a rate
at which it was last paid” in all suits for ejectments. Section 15 of the
C 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
D 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
E 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
F 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
G
“13 - Protection of a tenant against eviction
(5) If the tenant contests the suit as regards the claim for ejectment,
the plaintiff-landlord may make an application at any stage of the
suit for an order on the tenant-defendant to deposit month by
month rent at a rate at which it was last paid and also the arrears
H
DINA NATH (D) BY LRS & ANR. v. SUBHASH CHAND SAINI 263
& ORS. [RASTOGI, J.]
of rent, if any, and the court, after giving an opportunity to the A
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,
B
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.” C
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 D
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 E
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 F
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
G
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
H
264 SUPREME COURT REPORTS [2019] 12 S.C.R.
A 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
B 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.
C
(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.
D
17. The inevitable result on comparison of Section 13(5) of the
Act, 1952 and Section 15(7) of Act, 1958 be that the Court would not be
bound to strike out the defence against ejectment in case of default in
payment of rent in compliance to the order passed under Section 15(1)
of the Act, 1958 and it is always open to the Controller to examine the
E 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 held that
the power to strike out a party’s defence is an exceptional step and has
F 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
G 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
2
H 1980(3) SCC 610
DINA NATH (D) BY LRS & ANR. v. SUBHASH CHAND SAINI 265
& ORS. [RASTOGI, J.]
defence. A judicial discretion has built-in-self-restraint, has the A
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, B
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 C
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
D
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 Section E
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 F
justify an order striking out the defence. It is only a wilful failure or
deliberate default or volitional of non-performance 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 G
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.
H
266 SUPREME COURT REPORTS [2019] 12 S.C.R.
A 20. In Smt. Kamla Devi Vs. Shri Vasudev3, 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. 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
B
to be exercised under the rule of thumb.
21. The later decision in M/s. Jain Motor Car Co., Delhi Vs.
Smt. Swayam Prabha Jain & Anr.4 does not disturb the legal parameters
regulating the exercise of the power but deals more on the facts and
circumstances of that case in which the power was found to have been
C rightly exercised.
22. The interpretation with reference to striking out the defence
of a tenant under Section 15(7) of the Act, 1958 later came up for
consideration before this Court in Aero Traders (P) Ltd. Vs. Ravinder
Kumar Suri5.
D
23. Reference may be made to a later decision of this Court in
Amrit Lal Vs. Shiv Narain Gupta6 wherein it was held that sub-section
(7) of Section 15 of the Act, 1958 confers a discretion with the Rent
Controller who may order the defence against eviction to be struck off
and proceed with the hearing of the application if a tenant fails to make
E payment or deposit, as required under Section 15 of Act, 1958. It has
been further held that every violation under Section 15(1) of the Act,
1958 will not ipso facto lead to the striking out the defence of a tenant.
The discretion vested with the Controller under Section 15(7) of Act,
1958 has to be exercised judiciously and if the non-compliance of the
F order under Section 15(1) of the Act, 1958 depicts irrational disregard to
the order, or when the non-compliance is repeated, or when no reasonable
justification is tendered, or for such other similar reasons, wilful,
contumacious, or negligent and careless behaviour, could lead to the
striking out of a tenant’s defence.
G 24. It clearly emerges from the exposition of law that power
vested under Section 15(7) of the Act, 1958 is discretionary and not
mandatory and depends on contumacious or deliberate default and must
3
1995(1) SCC 356
4
1996(3) SCC 55
5
2004(8) SCC 307
6
H 2010(15) SCC 510
DINA NATH (D) BY LRS & ANR. v. SUBHASH CHAND SAINI 267
& ORS. [RASTOGI, J.]
be construed harmoniously so as to balance the rights and obligations of A
the tenant and the landlord and the power under Section 15(7) of Act,
1958 being an exception to be exercised with due care and circumspection.
25. Coming to the case on hand, there are distinct aspects from
which the question of default in payment of rent has to be viewed. In the
first instance, the question is whether the arrears which the Court B
determined and directed the appellant to pay were paid. The answer
indeed is in the affirmative. The Rent Controller passed an order dated
21st April, 2008 directing the appellants 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 month. It is not in dispute
that the appellants had complied with the order of deposit of arrears on C
21st April, 2008. In fact, they paid ten months advance rent in addition to
arrears from November, 2007 to April, 2008 in compliance of the order
dated 21st April, 2008.
26. The second limb which in fact has been missed at all the three
stages is that in addition to the arrears of rent i.e. from November, 2007 D
to April, 2008, the appellants paid an amount equivalent to ten months’
advance rent, although there was neither any legal obligation to do so
nor was any direction issued by the Rent Controller for making such
payment. It is not disputed that the additional rent paid by the appellants
of ten months advance rent did not represent any admitted liability, and E
the fact is that the additional rent of ten months which was paid by the
appellants over the period from 1st November, 2007 to April, 2008 was
neither adjusted against future rent nor was it refunded to the appellants.
27. It may be relevant to note that although the respondents-landlord
have claimed arrears for the period 1st January 2007 to October 2007, F
but that was disputed by the appellants as it revealed from the order
dated 21st April, 2008, but as we are examining the question regarding
striking of defence because of non-compliance of the order passed by
the Rent Controller in exercise of his power under Section 15(1) of Act,
1958, the arrear in terms of order dated 21st April, 2008 was to be paid
from November, 2007 to April, 2008 and additional rent of ten months G
paid on 21st April, 2008 was indeed to be adjusted by the respondents
towards future rent for the period commencing from 1st May, 2008 and
it was the only legal option and having that excess amount being
acknowledged by the respondents-landlord, the same must have been,
in absence of a direction from the Court, be deemed to have been received H
268 SUPREME COURT REPORTS [2019] 12 S.C.R.
A and held by the respondents-landlord for the benefit of the appellants-
tenants and adjustment of such excess amount against future liability in
that view is the only possible and legally valid method of appropriation of
that amount. Viewed thus, the amount paid by the appellants on 21st
April, 2008 covered the period of future rent commencing from May
2008 to February, 2009(ten months).
B
28. The further limb of the factual matrix is also indisputed from
the record that after adjustment of the rent paid upto February, 2009, the
monthly rent deposited on 27th June, 2008 of one month and 17th
December, 2008 for five months will cover the period till 31st August,
2009. That means, the appellants have paid advance rent upto 31st August,
C 2009. Not only that, the further two deposits made by them, first on 1st
May, 2009 and second on 5th May, 2009, if these payments would have
been taken into consideration, the appellants discharged the entire rent
liability commencing from 1st September, 2009. The rent which was paid/
deposited by the appellants on 21st April, 2008 followed with 27th June,
D 2008, 17th December, 2008, 1st May, 2009 and 5th May, 2009 is not in
dispute and that covers the rent for a period of one year and nine months
commencing from 1st September, 2009.
29. It clearly manifests from record that on the date of the order
passed by the Rent Controller dated 21st April, 2008 itself, the entire
E arrears as directed to be deposited by the appellants stood paid and also
on the date of the order passed by the Rent Controller striking out his
defence, rent for the entire intervening period and even beyond had
been paid and what it appears is that suitable reconciliation and
adjustments were required to be made against the months for which
rent was payable but what cannot be disputed is that the amount which
F the appellants were called upon to pay and what they have, pursuant to
the directions of the Rent Controller was paid/deposited at all relevant
point of time in excess of what was payable to the landlord. In the given
circumstances, the charge of contumacious failure and deliberate default
in making payment levelled against the appellants-tenants is, therefore,
G ill founded.
30. The question is whether the tenants were guilty of
contumacious conduct in withholding such payment. While answering
that question, the amount of rent payable for the demised premises may
be a factor which cannot be brushed aside, but the facts and
H circumstances of the case on hand, do not suggest any negligence,
DINA NATH (D) BY LRS & ANR. v. SUBHASH CHAND SAINI 269
& ORS. [RASTOGI, J.]
defiance or contumacious non-payment of the amount payable to the A
landlord to warrant the taking of that “exceptional step” which is bound
to render the tenant defenceless in his contest against the respondents-
landlord.
31. In our opinion, the decision of the Rent Controller and confirmed
by the Single Judge of the High Court of Delhi under the impugned B
judgment upholding the decision of striking out of the defence of the
appellants which certainly entails adverse consequences in depriving of
taking their defence and to contest the eviction application filed by the
respondents-landlord has not been exercised judiciously and with
circumspection and for the aforesaid reasons, the impugned judgment is
unsustainable and deserves to be set aside. C
32. It appears that the eviction application was filed by the
respondents in the year 2007 and almost 12 years have rolled by and the
matter could not be proceeded because of the pendency of the
proceedings in this Court, we consider it appropriate to observe that the
Rent Controller/Competent Authority may proceed with the matter and D
decide the pending eviction application expeditiously on merits but in no
case later than one year in accordance with law.
33. In the result, the appeal succeeds and the impugned judgment
of the High Court of Delhi dated 10th May, 2011 confirming order of the
Rent Controller/Tribunal are hereby set aside with the observations supra. E
No costs.
34. Pending application(s), if any, stand disposed of.
Nidhi Jain Appeal allowed. F
G
H
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