Babu Lal Goel vs Shiv Kumar and Others

Manmohan Singh, J.—The present petition has been filed by the petitioner under Article 227 of the Constitution of India assailing the order

dated 19th October, 2011 whereby the learned District Judge in RCT No. 11/2011 dismissed the petitioner''s appeal filed against the order by

which the application of the respondents u/s 15(7) of Delhi Rent Control Act, 1958 was allowed by the ARC holding that the default is wilful and

contumacious and strikes off the defence of the petitioner who has challenged both orders. The facts leading to the petition are:

a) The tenanted premises i.e. Shop No. WZ-271, Nangal Raya, Jail Road, New Delhi was let out to the petitioner on 1989.

b) The respondent in the year 2003 filed an eviction petition u/s 14(1)(j) of the DRC Act with the allegation that the petitioner has caused damage

to the suit property. The respondent filed another eviction petition u/s 14(1)(a) of the DRC Act alleging default on the part of the petitioner in

payment of rent and in tendering rent for the period 1st January, 2003 to 31st December, 2005.

c) As the respondent has stopped accepting the rent therefore, the petitioner sends the arrears of rent for the period 1st January, 2003 to 31st

May, 2005 vide money order dated 4th April, 2005 @ Rs. 665/- per month, which money order is received back with the report of refusal by the

landlord.

d) The respondent again tenders the arrears of rent by money order and sends the arrears of rent for the period 1st January, 2003 to 31st

December, 2005 vide money order dated 6th January, 2006 which money order is also received back with the report that the respondent/landlord

has refused to accept the money order.

e) The eviction petition u/s 14(1)(j) of the DRC Act filed by the respondent is dismissed by the learned ARC, Delhi.

f) The learned ARC passed an order u/s 15(1) to deposit the arrears of rent @ Rs. 665/- per month within 30 days. The learned counsel for the

petitioner submitted the challan of Rs. 34,580/-towards due compliance of the said order with the learned ARC and later with the treasury. The

petitioner later deposited Rs. 2660/- towards rent for the period w.e.f. 1st October 2007 to 31st January 2008.

g) After having collected the above rentals, the respondent filed an application u/s 15(7) of the Act for delay in deposit of rent. The petitioner duly

filed a reply to the said application stating substantial compliance in the deposit of rent. The learned ARC allowed the application of the

respondent. Consequently, the petitioner filed an appeal u/s 38 of the DRC Act challenging the above order. The learned ARCT dismissed the

appeal. Hence, the present petition.

The issue arising before this Court is whether the learned ARCT has misinterpreted the provision of Section 15(7) of DRC Act?

The counsel for the petitioner submitted that the petitioner is doing a cloth business and is a contractor for supply of military dresses and for

submitting his tenders, procuring orders, taking measurement and designs of logos of various regiments and for making supplies he has to travel

almost all over India on regular basis and on account of non-availability in Delhi, minor delay took place in depositing rent which was neither

deliberate and intentional.

The counsel for the petitioner alleged malafide intent of the respondent behind filing the application u/s 15(7) and argued that the petitioner sent

money order dated 6th January, 2006 for the period 1st January 2003 to 31st December, 2005 was not accepted.

The counsel for the respondent, on the other hand, alleged delay in payment of rent and called for striking off the defence taken by the

petitioner.

The learned ARCT on perusing the material on record and hearing the arguments laid the following findings:

a) The petitioner deposited the amount on 7th July, 2007 though he got challan passed on 29th May, 2007 and therefore, his delayed in payment

by a month and five days. The period of one month expired on 3rd June, 2006 while the summer vacations began two days later. The petitioner,

therefore, cannot take excuse of courts being closed in summer vacations.

b) The rent for subsequent months has been deposited belatedly on as many as 9 occasions-delay of 15 days for October, 2007, two months and

16 days for February, 2008, 16 days for April, 2008, 16 days for February, 2010, one month for May, 2010, 6 days for July, 2010, one day for

August, 2010 and 7 days for October, 2010.

c) The manner in which the petitioner has deposited the rent shows that he has been doing so at his whims, fancies and leisure and the same is

nothing but wilful and contumacious.

Let me now discuss the law on the issue involved in the matter as to whether in view of facts and circumstances in the present case, the

petitioner is entitled to contest the matter or not by filing of written statement.

The following judgments are relevant for discussion:

a) Miss. Santosh Mehta Vs. Om Prakash and Others,

b) Mohd. Sualin and Others Vs. Sunila Chugh,

c) Agricultural Engineering Co. vs. Birla Cotton Spinning Weaving Mills, 1971 RLR (Note) 36

d) Bharat Pulverising Mills P. Ltd. vs. Tarachand Malik B. Trust etc., 1971 RLR (Note) 35

e) Arian Afghan Airlines Co. Ltd. Vs. Cycle Equipments (P) Ltd.,

f) Ram Swaroop Kathuria Vs. Nagpal Optical Co., .

g) Sheru Vs. Deputy Commissioner of Police, (Licensing), Delhi,

h) Banarsi Dass and Others Vs. Bindra Ban Gupta,

i) Kamal Kumar Vs. J.P.S. Malik, Presiding Officer, Labour Court and Others,

j) Ganesh Prasad Sah Kesari and Anr. vs. Lakshmi Narayan Gupta, (1985) 2 RCR 51

k) M. Mani vs. D. Ramalingam, 1976 RLR (Note) 57

l) Smt. Kamla Devi Vs. Sh. Vasdev,

i) In the case of Miss. Santosh Mehta Vs. Om Prakash and Others, it was held as under:

7....that is the only reasonable conclusion in the circumstances-that the tenant has not failed to pay and, in any case, the exercise of judicial

discretion must persuade the court not to strike out the defence of the tenant but give her fresh opportunity to make deposit of the entire arrears

due. In the present case the deposit has eventually been made in this Court when it directed such deposit to be made.

ii) In the case of Mohd. Sualin and Others Vs. Sunila Chugh, it was held as under:

Before me Mr. A.B. Saharaya, learned counsel for the appellant, has submitted that the discretion has not been exercised by the Tribunal on

correct principles and the learned Tribunal while exercising discretion of reversing the order of the Additional Rent Controller has ignored the

principles laid down by the Supreme Court and this Court in catena of cases formulating the principles on which powers u/s 15(7) of the Act could

be exercised. He referred to me the decisions in V.K. Verma Vs. Radhey Shyam, ; Hem Chand Vs. The Delhi Cloth and General Mills Co. Ltd.

and Another, ; Bimal Chand Jain Vs. Sri Gopal Agarwal, ; M/s. Bharat Pulverising Mills Pvt. Ltd. v. Tara Chand Malik Charitable Trust and Ors.

1973 (5) R.C.R. 1 and Arian Afghan Airlines Co. Ltd. Vs. Cycle Equipments (P) Ltd., , and submitted that it is not every default which calls for

striking out of the defense u/s 15(7) of the Act because the default has to be contumacious and thus submitted that since the discretion has not

been exercised by the learned Rent Control Tribunal on correct principles, it raises a substantial question of law and is liable to be set aside in

second appeal.

In V.K. Verma v. Radhey Shyam referred to earlier the Supreme Court observed as under:-

Under the old Act the Court had no option but to strike out the defense if the failure to pay or deposit the rent was proved; under the new Act the

Controller who takes the place of the court has a discretion in the matter, so that in proper cases he may refuse to strike out the defense.

Consequently the Court would not be bound to strike out the defense against ejectment but may or may not do so on a consideration of the

circumstances.

While interpreting Order 15 Rule 5(1) and (2) of the CPC the Supreme Court observed, in the matter of Bimal Chand Jain v. Sri Gopal

Agarwal (supra), as under:-

An order under sub-rule (1) striking off the defense is in the nature of a penalty. A serious responsibility rests on the court in the matter and the

power is not to be exercised mechanically. There is a reserve of discretion vested in the court entitling it not to strike off the defense if on the facts

and circumstances already existing on the record it finds good reason for not doing so. It will always be a matter for the judgment of the court to

decide whether on the material before it, notwithstanding the absence of a representation under sub-rule (2), the defense should or should not be

struck off. The word ""may"" in sub rule (1) merely vests power in the court to strike off the defense. It does not oblige it to do so in every case of

default.

Kapur, J. in the aforesaid matter of M/s. Bharat Pulverising Mills Private Ltd. New Delhi v. Tara Chand Malik Charitable Trust and Ors. in an

elaborate judgment observed as under:-

This is not a provision for punishing the tenant. The sub-section is intended to enable the court to have an effective way of enforcing compliance

with its orders u/s 15. In the case of failure to deposit the rent, the Controller has a discretion to strike out the defense but normally such a penalty

will be imposed only when there is a contumacious or willful disregard of the order. If there is a merely late compliance of the order, I do not think

it can be considered to be contumacious or willful disregard of the order. The provisions of Section 15(7) must be read to be not dissimilar to the

provisions of Order 13, Rule 21, CPC where it is settled law that only a willful or contumacious default in complying with the order for discovery

or inspection can lead to the striking out of the defense.

Again a Division Bench of this Court in the aforementioned case of M/s. Arian Afghan Airlines Co. Ltd. v. M/s. Cycle Equipments (P) Ltd.

observed as under:-

While it is not possible to lay down exhaustively the circumstances in which an order striking out the defense may follow, for that is what the

Legislature left unsaid in its wisdom. Where, however, the tenant has substantially complied with the order or there are circumstances of a

motivator nature, it would not be proper to strike out the defense and deprive the tenant of the opportunity to defend an ejectment action.

20....If one looks at the conduct of the appellants one notices that right from February 1973 till 29th August, 1975 the rent was invariably being

deposited in advance and some time to the extent of more than six months in advance and even the last payment which was made before the filing

of the application for striking out the defense by the landlord a deposit had been made on 29th August, 7975 which covered the payment of rent

right till 29th February, 1976. This conduct shows that the appellants never wanted to withhold the rent and in fact out of abundant caution, so that

they may not commit a default, they had invariably deposited the rent in advance.

The Tribunal unfortunately completely ignored that while passing an order u/s 15(7) of the Act it is not the default which has to be looked into

but it has also to see the circumstances and the previous conduct of the tenant. It cannot be said on the facts of the present case that the

circumstances were such or the conduct was such that an order for striking out the defense must be passed. The learned trial court for good

reasons looking at the past conduct of the appellants declined to strike off the defense and also noticed, as soon as the application was filed, the

appellants realised their mistake and much before the application for striking out the defense came up for decision, the appellants had deposited the

entire rent. The Controller had also noticed the previous conduct of the tenants in paying rent much in advance to the time when it become due

even. The default could not be called contumacious or willful.

In these circumstances it must be held that the Tribunal committed a grave error of law in striking off the defense of the appellants u/s 1 of the

Act. The Tribunal did not take into account the aforesaid principles laid down in the aforesaid authorities and junked to the conclusion. Merely

because the default remains unexplained, the Tribunal was duty bound to strike out the defense, is not the correct approach. All the facts and

circumstances of the case have to be seen and unless, as observed by Kapur J, the default is contumacious the defense ought not to have been

struck off.

23....But when the discretion has been exercised without the principles for exercise of discretion being kept in mind the discretion is vitiated and

like the present case raises a substantial question of law.

iii) In the case of Ram Swaroop Kathuria Vs. Nagpal Optical Co., it was held as under:

It is now well settled by the Supreme Court that the authorities under the Rent Control Act have a discretion for condoning the delay which may

occur in deposit of rent and it is not mandatory to strike out the defense of the tenant in case certain delay occurred in deposit of rent. In the

present case, it has to be kept in view that the entire arrears of rent and up-to-date rent were deposited in time. It is true that a tenant is bound to

comply with the order made u/s 15(1) with regard to deposit of rent month by month. However, if the tenant commits default in deposit of rent that

should not lead to the conclusion that the delay made by the tenant is contumacious or willful. The Explanation which may be given by the tenant,

when an application u/s 15(7) is moved, has to be examined on its own merits without being swayed by any warning being administered....

The Rent Controller, in my view, should have examined the Explanation given by the tenant with regard to omission to deposit rent of mouths of

July and August 1984 in time without being obsessed with the warning administered vide order dated September 12, 1984.

Be that as it may, it is evident from the record that the tenant had deposited the rent of July and August on 1/10/1984 and ''has been depositing

the rent of subsequent months as well. That would show that the tenant had no intention of willfully disobeying the order of the Court passed u/s

15(1). The tenant could not be termed as contumacious defaulter. For the delay made in the deposit of rent the other party has not suffered any

such damage which cannot be compensated with costs. I think it is a fit case where the delay ought to have been condoned on payment of some

costs.

I allow the appeal, set aside the impugned order and condone the delay made by the tenant in deposit of rent, subject-matter of the impugned

orders, on payment of Rs. 500/- as costs. The parties are directed to appear before the Rent Controller for further proceedings in the case on

April 19, 1993.

iv) In the case of Banarsi Dass and Others Vs. Bindra Ban Gupta, it was held that:

Let us notice the legal position with regard to the exercise of discretion u/s 15(7) of the Act. In Sh. Shanti Sarup Khullar Vs. Sh. O.P. Sood &

Ors. (C.M. (M).11/1996), I had occasion to summarize the same.

The legal position on the question of Section 15(7) of the Act is well-settled. The Section confers upon the Rent Controller a discretion in the

matter of striking out of defense. Small and marginal delays in deposit deserve to be condoned and ignored, especially when the order is

substantially complied. Moreover, if there are extenuating and mitigating circumstances, coupled with plausible Explanation for default, the defense

may not be struck out and delay can be condoned. However, cases of contumacious and willful default, gross negligence, reckless conduct and

indifferent attitude to order of deposit, would render the defense liable to be struck out.

Reference may also be usefully made to the decision of this Court in K.C. Sharma Vs. Sant Ram Sharma 1996 R.L.R. 13, where it was held that

delay in payment of rent of a month, was not intentional or deliberate and it was neither willful nor contumacious as only stubborn refusal to submit

to orders of Court amount to contumacy....

v) In the case of Ganesh Prasad Sah Kesari and Anr. vs. Lakshmi Narayan Gupta, 1985 (2) DLT 51 it was held as under:

The tenant has deposited all the arrears. There was some irregularity in making the deposit but it was not of such a nature as to visit the tenant

with the consequence of striking off his defence. Therefore the Judgment of the High Court directing that the defence be deemed to be struck off is

set aside and the order of the learned trial Judge is restored for the reasons herein stated.

vi) In the case of Smt. Kamla Devi Vs. Sh. Vasdev, , it was held as under:

7.....In any case, the delay in depositing Rs. 2,150/- could not be termed as wilful, deliberate and contumacious non-compliance of order u/s 15(1)

passed on 27.1.1984. The landlord was entitled at the most to some compensation. In the premises, the Additional Rent Controller condoned the

delay in depositing Rs. 2,150/- by the tenant. It was held that the respondent was entitled to get the benefit of the provisions of Section 14(2) of

the Act.

In view of the settled law and facts of the present case, it appears to me that it was not necessary to take drastic steps to striking off the

defence of the petitioner. Rather, it appears that the petitioner in every step was trying to pay the rent but it was landlord who refused to receive

the rent. There was no wilful failure, or defiance on his behalf. He deposited the challan in the treasury in time within the stipulated period of 30

days. The expiry date was 3rd June, 2007. He deposited the challan and got passed on 29th May, 2007. The few days delay was occurred after

the summer vacations were over. The explanation in this regard was also given. No doubt for subsequent period, many occasions there was a

delay in depositing the rent. However, he had been depositing regularly.

Under these circumstances, all the objections raised by the respondents/landlord have to be considered on merit and as per law. But at the

same time, his right to contest the matter cannot be closed by striking off defence. At least in one form, he is entitled to put his case which is to be

decided on the basis of pleadings. Therefore orders passed by the court below are set aside.

The order of striking off defence is set aside. The petitioner is granted four weeks time to file the written statement.

It is made clear that the matter be decided as per its own merit and in accordance with law and without any influence of the present order.

The present petition is accordingly allowed. Pending application(s) are also disposed of. No costs.