Case: Paradise Industrial Corpn Bombay Vs. Kiln Plastics Products

The appellants-plaintiffs filed a suit against the defendants-respondents for recovery of possession of the property leased to them as also rent and mesne profits in March 1968. It was alleged that the defendant were in arrears of rent from 1st March 1966 and that the rent was Rs. 385/- a month. On 30th January 1968 a notice to quit was given to the defendants and the notice was served on 1st February 1968. On 20th February 1968 they filed an application under s.11 ofthe Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 for fixation of standard rent. It was thereafter that the suit was filed in March 19 65. On 23rd November 1968 the suit came up before a Judge of the Small Causes Court and after hearing the parties he made an order requiring the defendants to deposit Rs. 13, 090/- as rent due up to the end of December 1968 and interim standard rent of Rs. 308/per month to be paid beginning from February 15, 1969. It was further ordered that in default of the defendants depositing the amount the plaintiffs were at liberty to follow the consequential remedy under s.11(4) of the Ac t. The defendant did not deposit the amount ordered by the Court and on 24th February 1969 the plaintiffs applied to the Court praying for a notice to be issued to the defendants to show cause why they should not deposit the aggregate amount of rent and further rent of Rs. 385/- per month from 1st August 1969 till the disposal of the suit. There was a further prayer that in default of the deposit of the amount the defences of the defendants may be ordered to be struck off. Upon this application a notice was issued to the defendants and on 2nd June 1969 an order was made requiring the defendants to deposit Rs. 14, 607/- within one month and to continue to deposit Rs. 308/- per month in accordance with the earlier order . It was further ordered that in default of the deposit the defences of the defendants were to be struck off and that the suit should be placed for ex-parte orders on 15th July, 1969. the defendants failed to deposit arrears of rent and the suit cam e up for orders on 15th July 1969. The defendants were absent on that day and the suit was adjourned to 5th August 1969. On the 5th August the suit was again adjourned to 6th and on that day an ex-parte decree for possession, recovery of arrears of rent and costs was passed. However, on the 4th August the defendants had made an application stating that on proper calculation the amount of arrears of rent would come to Rs. 7065/- and praying for extension of time for deposit of this amount. The defendants were allowed to deposit the amount without prejudice to the rights and contentions of the parties and notice was ordered to be issued to the plaintiffs The defendants deposited the amount but did not take out and serve the notice on the plaintiffs and the notice was ultimately discharged for want of prosecution on 19th September, 1969. An appeal was filed before the Appellate Bench of the Small Causes Court against the ex-parte decree and it was dismissed. On an application file d before the High Court a learned single Judge set aside the decree passed by the Small Causes Court on 6th August 1969 as also . the decree passed by the Appellate Bench and also dismissed the suit.

Court's reasoning:
As far as we are able to see the only reas on which persuaded the learned Judge to come to this extraordinary conclusion was that under s.11(4) of the Act the only order that could be passed was an order directing, after fixing the interim standard rent to be deposited within a particular time, that if the tenant fails to comply with any order made as aforesaid, within such time as may be allowed by it, he shall not be entitled to appear in or defend the suit except with leave of the Court, which leave may be granted subject to such terms and conditions as the Court may specify, and the section did not authorise the Court to strike of the Defencesuse of the words defence struck off does not in any way affect the substance of the order and the learned Judge of the High Court was wholly in error in holding that because of the form of the order passed on June 2, 1960 the order was illegal and without jurisdiction. The order squarely falls within s. 11(4). What the law contemplates is not adoption or use of a formula it looks at the substance. The order is not therefore one without jurisdiction. It is one which the Judge was competent to make. Be it noted that the learned Judge does not hold that the amount ordered to deposited b y the defendants by the order dated June 2, 1969 was wrong or that it could not have been ordered at all. That order also fired the interim standard rent as contemplated by that section. That section itself con templates that the Court may order t he deposit of such amount of the rent as the Court considers to be reasonably due to the landlord. Therefore, the order dated June 2, 1969 could not be held to be invalid on any ground whatsoever; nor has it been held to be illegal any ground other than that the words used were not the proper ones. It is to be further noted that the order itself did not order the defenes be struck off, it only fixed the 15th July 1969 as the date for striking out the defences and to fix the suit for ex-part hearing. So, till the expiry of a month given by that order for the deposit of money the question of striking out the defence did not arise nor was it in fact struck out. On the date fixed for striking out defences and fixing the date, for ex-parte hearing the defendants did not appear nor did they appear on the 5th and 6th of August when the suit was fixed for hearing. Though they were permitted to deposit Rs. 7, 000/- on their application dated 4th August 1969 they did not take any further steps and so the notice was dismissed. The deposit of Rs. 7, 000/- does not make any difference to the decision in this case because it was allowed to be deposited without prejudice to the rights and contentions of the parties. The defendants did not even apply for setting aside the ex-parte decree giving proper reasons for their non-appearance on the 5th and 6th August. They went on appeal against the ex-parte decree. The Appellate Bench of the Small Causes Court could have decided the appeal only on the basis of the material before it and the learned Judge of the High Court did not rely upon any material whatsoever except the form of the order made on the 2nd June 1969 for not merely setting aside the decree but even dismissing the suit itself. The deposit of the money after the ex-parte decree was passed was wholly irrelevant in considering whether the ex-parte decree passed was a proper one and much more so whether the suit itself could be dismissed.We are unable to understand how the learned Judge found it possible to bring the case within the provisions of s. 12(3) of the Act. The tenants did not pay either on the 1st day of the hearing of the suit or on or before the date the Court fixed. Indeed on proper construction of law it is s. 11(4) that will apply. Section 12(3)(b) does not deal with a case like the present.