Case: DINA NATH (D) BY LRS Vs. SUBHASH CHAND SAINI

Rent Controller passed an order dated 21 st 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 15 th of each succeeding month. It is not in dispute that the appellants had complied with the order of deposit of arrears on 21 st 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 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 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 1 st January 2007 to October 2007, 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 paid on 21st April, 2008 was indeed to be adjusted by the respondents towards future rent for the period commencing from 1 st May, 2008 and it was the only legal option and having that excess amount being acknowledged by the respondents- landlord, the same must have been, in absence of a direction from the Court, be deemed to have been received and held by the respondents- landlord for the benefit of the 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).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 27 th 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 31 st August, 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, 2008, 17th December, 2008, 1 st 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 arrears as directed to be deposited by the appellants stood paid and also on the date of the order passed by the Rent Controller striking out his defence, rent for the entire intervening period and even beyond had been paid and what it appears is that suitable reconciliation and adjustments were required to be made against the months for which rent was payable but what cannot be disputed is that the amount which the appellants were called upon to pay and what they have, pursuant to the directions of the Rent Controller was paid/deposited at all relevant point of time in excess of what was payable to the landlord. In the given circumstances, the charge of contumacious failure and deliberate default in making payment levelled against the appellants-tenants is, therefore, ill founded.30. The question is whether the tenants were guilty of contumacious conduct in withholding such payment. While answering that question, the amount of rent payable for the demised premises may be a factor which cannot be brushed aside, but the facts and circumstances of the case on hand, do not suggest any negligence, defiance or contumacious 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 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 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.32. It appears that the eviction application was filed by the respondents in the year 2007 and almost 12 years have rolled by and the matter could not be proceeded because of the pendency of the proceedings in this Court, we consider it appropriate to observe that the Rent Controller/Competent Authority may proceed with the matter and decide the pending eviction application expeditiously on merits but in no case later than one year in accordance with law.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]16. Broadly speaking, the perusal of Act, 1952 with Act, 1958 shows primarily the followingSection 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.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.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 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 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. Coming to the case on hand, there are distinct aspects from which the question of default in payment of rent has to be viewed. In the first instance, the question is whether the arrears which the Court determined and directed the appellant to pay were paid. The answer indeed is in the affirmative. The Rent Controller passed an order dated 21 st 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 15 th of each succeeding month. It is not in dispute that the appellants had complied with the order of deposit of arrears on 21 st 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 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 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 1 st January 2007 to October 2007, 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 paid on 21st April, 2008 was indeed to be adjusted by the respondents towards future rent for the period commencing from 1 st May, 2008 and it was the only legal option and having that excess amount being acknowledged by the respondents- landlord, the same must have been, in absence of a direction from the Court, be deemed to have been received and held by the respondents- landlord for the benefit of the 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).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 27 th 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 31 st August, 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, 2008, 17th December, 2008, 1 st 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 arrears as directed to be deposited by the appellants stood paid and also on the date of the order passed by the Rent Controller striking out his defence, rent for the entire intervening period and even beyond had been paid and what it appears is that suitable reconciliation and adjustments were required to be made against the months for which rent was payable but what cannot be disputed is that the amount which the appellants were called upon to pay and what they have, pursuant to the directions of the Rent Controller was paid/deposited at all relevant point of time in excess of what was payable to the landlord. In the given circumstances, the charge of contumacious failure and deliberate default in making payment levelled against the appellants-tenants is, therefore, ill founded.30. The question is whether the tenants were guilty of contumacious conduct in withholding such payment. While answering that question, the amount of rent payable for the demised premises may be a factor which cannot be brushed aside, but the facts and circumstances of the case on hand, do not suggest any negligence, defiance or contumacious 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 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 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.32. It appears that the eviction application was filed by the respondents in the year 2007 and almost 12 years have rolled by and the matter could not be proceeded because of the pendency of the proceedings in this Court, we consider it appropriate to observe that the Rent Controller/Competent Authority may proceed with the matter and decide the pending eviction application expeditiously on merits but in no case later than one year in accordance with law.It clearly emerges from the exposition of law that power vested under Section 15(7) of the Act, 1958 is discretionary and not mandatory and depends on contumacious or deliberate default and must be construed harmoniously so as to balance the rights and obligations of the tenant and the landlord and the power under Section 15(7) of Act, 1958 being an exception to be exercised with due care and circumspection.