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PETITIONER: HEM CHAND

       Vs.

RESPONDENT: THE DELHI CLOTH & GENERAL MILLS CO.  LTD.& ORS.

DATE OF JUDGMENT02/08/1977

BENCH: KAILASAM, P.S. BENCH: KAILASAM, P.S. CHANDRACHUD, Y.V.

CITATION:  1977 AIR 1986            1978 SCR  (1) 241  1977 SCC  (3) 483  CITATOR INFO :  O          1984 SC1392  (2,10,16)  RF         1987 SC 162  (10)  RF         1990 SC1009  (4)

ACT: Delhi Rent Control Act, 1958-ss. 14(1),15(1) and 15(7)-Scope of.

HEADNOTE: Section  14(1) of the Delhi Rent Control Act, 1958  provides that  no  tenant could be evicted except on  an  application made  to  the Rent Controller for an order for  recovery  of possession on one or more grounds specified in the  section. Clause  (a) to the proviso provides that if the  tenant  has neither  paid nor tendered the whole of the arrears  of  the rent  legally recoverable from him within two months of  the date on which a notice of demand for the arrears of rent has been served on him by the landlord in the manner prescribed, the  landlord  can apply for recovery of  possession.   Sub- section   (2)  provides  that  no  order  for  recovery   of possession  of  any  premises shall be made  on  the  ground specified  in  cl. (a) of the proviso if  the  tenant  makes payment or deposit as required by s. 15. Under s. 15(1)  the Rent Controller shall make an order directing the tenant  to pay arrears of rent with a direction that he should continue to  pay or deposit the rent month by month by the  fifteenth of each succeeding month.  Sub-section (6) lays down that if a tenant makes payment or deposit as required by sub-s.  (1) or sub-s. (3), no, order shall be made for, the recovery  of possession  on the ground of default in the payment of  rent by the tenant.  Sub-section (7) provides that if the  tenant fails  to make payment or deposit as required by  subs.  (1) the Controller may order, the defence against eviction to be struck out and proceed with the hearing of the application. The landlord-respondent filed an application under s. 14  of the Act for the eviction of the tenant-appellant on  grounds of  non-payment  of rent and  unauthorised  subletting.   In compliance  with  the  directions  of  the  Additional  Rent Controller  the tenant paid the arrears of rent upto a  date but failed to deposit the rent month by month whereupon  the landlord made an application under s. 15(7) for striking out the   tenant’s  defence  against  eviction.   Granting   the

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application  the  Rent Controller struck  off  the  tenant’s defence on the ground that on the date of the order (October 15,  1965) the tenant was in default.  On November 26,  1965 the  Rent  Controller  passed an order of  eviction  on  the ground of subletting. The Tribunal allowed the tenant’s appeals against the orders of the Rent Controller. On appeal by the landlord the High Court held that when  the tenant  failed  to  make a deposit of the  future  rents  in compliance with the order under s. 15(1) the right to obtain recovery  of  possession  of the  premises  accrued  to  the landlord and the Rent Controller had no power to condone the default of the tenant in the payment of arrears of rent  and to refuse to grant an order. Allowing the tenant’s appeal and remitting the matter to the High Court, HELD  :  1(a) The High Court was in error  in  allowing  the application  of the landlord on the basis of the failure  of the  tenant  to comply with the order under s.  15(1).   The High  Court was also in error in holding that the  right  to obtain  an order for recovery of possession accrued  to  the landlord. [246H] (b)The  High Court ought to have considered and  decided  in the  appeal whether the striking out of the defence  by  the Rent  Controller was right or not.  If the striking out  was right  then  as the Rent Controller had proceeded  with  the hearing  of  the application and passed an  order  directing possession to the landlord it ought to uphold the order.  In the event of the High Court holding that the order  striking out  the  defence  was erroneous then  the  order  directing recovery of possession should be set aside and the  petition heard by the Rent Controller after providing an  opportunity to the tenant to raise his defence. [247D] 242 A  2(a) The landlord’s contention that the word "may" in  s. 15(7)  should be construed as "shall" and that in the  event of non-compliance with s. 15(1) the defence against eviction should  be  struck out, has no force. In the context  of  s. 15(7)  it  is not necessary to construe the  word  "may"  as "shall".  It is also in keeping with the legislative  intent that  a discretion is conferred on the Controller either  to strike out the defence or not. [245G] (b)  It is clear from s. 15(7) that the,, enquiry will  have to  be, proceeded with even when the defence of  the  tenant has been struck out. [246E] 3.   The  High  Court  is right in  holding  that  the  Rent Controller  has no discretion to extend the time  prescribed under  s. 15(1).  Payment or deposit in compliance with  the order under s. 15(1) takes away the right of the landlord to claim  recovery  of possession on the ground of  default  of rent.  The legislature has given statutory protection to the tenant by affording him an opportunity to pay the arrears of rent  within  one month from the date of the  order.   ’Ibis statutory provision cannot be modified as rights of  parties depend on compliance with an order under s. 15(1). [247E-F]

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 1748/74 and 669/75. Appeal by Special Leave from the Judgment and Order dated 8- 5-1972 of the Delhi High Court in S.A.0. Nos. 208 and 200 of 1967.                             AND

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            CIVIL APPEALS NOS. 713-714 OF 1976 Appeals  by Special Leave from the Judgment and Order  dated 25-5-1976  of the Delhi High Court in S.A.0. Nos.  49-50  of 1972.                             AND                 CIVIL APPEAL NO. 271 OF 1976 Appeal by Special Leave from the Judgment and Order dated 6- 2-1976 of the Delhi Court in S.A.0. No. 16 of 1972.                             AND SPECIAL LEAVE PETITION (CIVIL) NO. 1364 OF 1975 From  the  Judgment and Order dated 16-6-1975 of  the  Delhi High Court in S.A.0. 125 of 1975. B.   N. Lokur and A. G. Ratnaparkhi for the Appellant in (CA 1748/74 and 669/75). H.   K. Puri for Respondent No. 1. S.   N.  Andley, B. P. Maheshwari and Suresh Sethi  for  the Interveners.Sultan  Singh for the Appellants in  (CAs.  713- 714/16). S.   K. Mehta, K. R. Nagaraja and P. N. Puri for  Respondent In (S.A.  713-714 of 1976). F.   C.  Bedi  and A. G. Ratnaparkhi for the  Appellant  (In C.A.271/76). Uma Datta for the Respondent (In C.A. 271/76). 243 Sultan Singh for the petitioner in SLP (Civil) No. 1364/75. Uma Datta for the Respondent in (SLP (Civil) No. 1364/75. CIVIL APPEAL NOS : 1748 OF 1974 AND 669 OF 1975 The Judgment of the Court was delivered by KAILASAM, J.-These appeals are by certificate granted to Hem Chand,  the tenant, under the Delhi Rent Control Act,  1958, against the judgment of a Full Bench of the Delhi High Court holding that the time prescribed under section 15(1)  cannot be extended by the Rent Controller. , Municipal  Corporation of Delhi is the intervener in both the appeals. The  Delhi Cloth & General Mills Co. Ltd. is  the  landlord. The appellant-tenant occupied the premises at an agreed rent of Rs. 165/p.m. The tenant defaulted in payment of rent  and the landlord issued a notice of demand on 10th August,  1963 calling  upon the tenant to pay a sum of Rs.  2,970/-  being the  arrears  of  rent  and also  complaining  that  he  had unauthorizable  sublet the premises.  The tenant paid a  sum of  Rs.  1,000/-  only towards  arrears  within  the  notice period.  As the balance amount was not paid, on February 24, 1964, the landlord filed an application for eviction of  the tenant  under  section 14 of the Delhi Rent Control  Act  on grounds  of nonpayment of rent and unauthorised  subletting. It  impleaded the alleged sub-tenants also  as  respondents. On September 9, 1964, the Additional Rent Controller, on the application  of the landlord, passed an order under  section 15  (1), of the Act directing the tenant to deposit all  the arrears of rent due after deducting Rs. 1,000/- already paid and  future  rent at the rate of Rs. 165-  per  month.   The arrears  were  not  paid  within  a  month  but  the  tenant deposited  a sum of Rs. 3,455/- on December 15, 1964,  being the  rent  in  full  due till the  end  of  November,  1964. Subsequently, the rent was not deposited month by month  and on  July  15, 1965, the landlord made an  application  under section 15(7) of the Act and prayed that the defence of  the tenant against eviction be struck out.  The tenant then made good  the deficiency and deposited the rent upto  date.   On October 15, 1965, the Additional Rent Controller ’struck out the  defence of the tenant stating that on the date  of  the order  i.e.  October 1 5, 1965 there were arrears  of  rent. After that the Additional Rent Controller proceeded with the hearing of the, application of the landlord and on  November

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26,  1965,  passed  an order of eviction on  the  ground  of subletting.    He declined to order eviction fornonpayment of rent because the tenant had deposited the arrears of rent on the date when the defence was struck out. Aggrieved  by  these  orders the tenant  filed  two  appeals before  the  Rent Control Tribunal, one  against  the  order striking  out  the defence and the other against  the  order granting eviction.  The Tribunal decided both the appeals in favour  of  the  tenant holding that since  the  tenant  had gradually  cleared off arrears amounting to Rs.  5,000/-  or more which indicated his bona fide intentions to pay an  the rent  his defence ought- not to have been struck  out.   The delay in making 244 the deposits was condoned subject to payment of Rs. 150/- by the  tenant  as  cost.  The order  of  the  Additional  Rent Controller  striking. out the defence and granting an  order for  eviction in favour of the landlord was set aside.   The case was remanded for being tried on merits after giving the tenant  an opportunity to defend his eviction on the  ground of subletting. Aggrieved  at the orders of the Tribunal the landlord  filed two appeals before the High Court.  The appeals were,  heard by  a  single  Judge  but having  regard  to  the  important questions  of law the matter was referred to a  Full  Bench. The  Full  Bench held that when a tenant  makes  default  in deposit  or payment under section 15 the Rent Controller  is bound  to  pass  an order for recovery  of  possession.  and cannot refuse the landlord’s prayer for eviction.  The  Full Bench held that Rent Controller had no right to condone  the delay.   if  any,  in  making  payment  according  to   the, requirements of section 15(1) of the Act. Before  us it was submitted by the learned, counsel for  the appellant  that the High Court was in error in holding  that under  section 15(1) of the Act the Rent Controller  had  no discretion to extend the time of one month prescribed  under the  section.  It was ’further argued that in any event  the High Court was in error in holding that the Rent  Controller was bound to pass an order for recovery of possession by the landlord  when there was a default in payment under  section 15(1)  without  further hearing of the  application  by  the landlord. In order to appreciate the contentions of the parties it  is desirable  to  set out the relevant provisions of  the  Act. The  main object for enacting the Delhi Rent Control Act  is for  providing control of rents and evictions.  In order  to achieve  that object certain restrictions are placed on  the landlord  before  getting a tenant evicted.   Section  14(1) provides  that  no  tenant could be  evicted  except  on  an application made to the Controller for an order for recovery of  possession  on  one or more  grounds  specified  in  the section.   We  are concerned with the ground of  default  in payment of rent which is provided for in section 14(1)  (a). If the tenant has neither paid nor tendered the whole of the arrears of the rent legally recoverable from him within  two months  of  the  date on which a notice of  demand  for  the arrears  of rent has been served on him by the  landlord  in the  manner prescribed, the landlord can apply for  recovery of possession., Under the sub-section a notice of demand for arrears  of  rent should be served by the  landlord  on  the tenant  requiring him to pay the arrears of rent within  two months.   If the tenant pays the arrears of rent within  two months of the service of notice, the landlord cannot get  an order for recovery of possession on the ground of default in payment  of  rent.  If the tenant fails to pay  as  required

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under  section  14(1) (a) the proceedings  are  taken  under section  15  (1)  of the Act.  The  Controller  shall  after giving  the parties an opportunity of being heard,  make  an order directing the tenant to pay to the landlord or deposit with  the  Controller within one month of the  date  of  the order, an amount calculated at the rate of rent at which  it waslast paid for the period for which the arrears of  the rent werelegally 245 recoverable from the tenant with a direction that he  should continue  to pay or deposit the rent month by month  by  the fifteenth  of  each  succeeding month.   This  is  a  second opportunity  provided  to the,Meant to pay the  arrears,  of rent even though he might not have complied with the  notice under  section 14(1) (a). If the tenant pays the arrears  of rent  within  one month from the date of the  order  of  the Controller as required under section 15(1) the landlord can- not have any further complaint about the default in  payment of  rent  for section 14(2) provides that no order  for  the recovery of possession of any premises shall be made on  the groundspecified in   clause  (a) of the proviso to  sub- section (1) of section 14,if the tenant makes payment or deposit as required by section’ 15.Therefore ifan order under  section  15(1) is duly complied  with,  the  landlord cannot  avail  himself of the ground  specified  in  section 14(1) (a),that(a),  that  is failure of the tenant  to  pay arrears of rentwithin two months of the date of service of  notice  on  the tenant.This position is  made  clear  by section 15(6) which lays down that if a tenantpayment or deposit as required by sub-section (1) or sub-section (3),no order  shall be made for the recovery of possession  on  the ground of default in the payment of rent by the tenant. Thus far there is no dispute.  A further question arises  as to  what are the consequences if the tenant fails to  comply with an order under section 15(1).  On behalf of the  tenant it  was  submitted that the period of one  month  prescribed under  section  15(1)  is not mandatory and  that  the  Rent Controller has discretion to extend,the time.In any event it was submitted that the Rent Controller can only proceed with the hearing of the application and cannot accept failure  to comply with section 15(1) by itself as the basis for  making an  order  for  recovery of possession.  On  behalf  of  the landlord  it was submitted that the view of the  Full  Bench that when a default is made in complying with an order under section 15(1), the Rent Controller is bound to pass an order for recovery of possession and cannot refuse the  landlord’s prayer  for  eviction, is correct.  Section  15(7)  provides that  if  a  tenant  fails to make  payment  or  deposit  as required  by  section 15(1), the Controller  may  order  the defence  against eviction to be struck out and proceed  with the  hearing  of the application.  It is@ seen that  on  the failure by the tenant to make apayment,  the  Controller may  order  the  defence to be  struck  out.This  confers  a discretion  on the Rent Controller either to strike out  the defence or not depending upon the circumstances of,the case. It  was contended on behalf of the landlord that  the  word, "may"  should  be construed as "shall" and in the  event  of noncompliance   with  section  15(1)  the  defence   against eviction  should be struck out.  This contention  cannot  be accepted  for  in  the context of section 15(7)  it  is  not necessary to construe the word "may" as "shall".  It is also in keeping with the legislative intention that a  discretion is  conferred  on the controller either to  strike  out  the defence or not.  Further it is significant to note that  the subsection was amended and the word "may" was introduced  in

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place  of  the  word "shall" in the  Delhi  and  Ajmer  Rent Control  Art, 1952.  Section 13(5) as it stood in  that  Act provided  that on the failure of the tenant to  deposit  the arrears of rent within fifteen days of 246 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.   The  introduction of the word "may" in the  place  of "shall"  should be given its due meaning.The  contention  of the learned counsel on behalf of the tenant that the section confers  a discretion on the Rent Controller to  strike  out the  defence or not has to be accepted.  If the  defence  is not  struck  that  the hearing of  the  application  of  the landlord  will have to be proceeded with giving  opportunity to  the  tenant to raise his defence but if the  defence  is struck out the Rent Controller will proceed with the hearing of the application of the landlord and if the landlord makes out   a  case,  order  his  application  for   recovery   of possession. The  result  is  that if the tenant  deposits  the  rent  in accordance  with  the  notice under  section  14(1)  (a)  or complies with an order under section 15(1) within one  month from  the  date of the order, the land.lord  cannot  recover possession  of  the  premises on  the  ground  specified  in section  14(1) (a).  But if there is non-compliance of  both sections 14(1)(a) and section 15(1), the cause of action  of the  landlord praying for possession of the premises on  the ground  of failure to pay arrears of rent survives  and  the landlord  can proceed with the application and make out  his case.   The provisions of the Act do, not warrant  the  view that  in the event of the failure of the tenant  to  deposit the rent under section 15(1) the Rent Controller is bound to pass  an  order for recovery of the possession  for  it  yet remainsfor the landlord to prove his case that there  was non-complianceof  section  14(1)  (a).  It  is  clear  from section  15  (7) that an inquiry will have to  be  proceeded with  even  when the defence of the tenant has  been  struck out.  More so this procedure is applicable when the  defence is not struck out but only there is a failure to comply with an  order under section 15(1).  The Full Bench of the  Delhi High  Court  has  held that if  the  landlord  fulfills  the conditions  mentioned in the clauses to the proviso to  sub- section  (1)  of  section  14,  including  clause  (a).  the Controller  was  bound  to pass an  order  for  recovery  of possession against the tenant and cannot refuse the landlord the  prayer  for eviction.  In the concluding  part  of  its judgment  the  Full Bench expressed its view that  when  the tenant  failed  to  make a deposit of the  future  rents  in compliance with the order passed under section 15(1) against him  a right to obtain an order for recovery  of  possession accrued  to the landlord and the Controller had no power  to condone  the  default of the tenant and to refuse  to  grand this  order.While  we agree with the few of the  Full  Bench that  the Controller has no power to condone the failure  of the tenant to pay arrears of rent as required under  section 15(1),  we  are satisfied that the Full Bench fell  into  an error  in  holding  that the right to obtain  an  order  for recovery of possession accrued to the landlord.  As we  have set out earlier in the event of the tenant failing to comply with the order under section 15(1) the application will have to  be  heard  giving an opportunity to the  tenant  if  his defence  is not struck out under section 15(7)  and  without hearing  the tenant if his defence is struck out.  The  Full Bench  is therefore in error in allowing the application  of

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the  landlord on the basis of the failure of the  tenant  to comply with an order under section 15(1).  The landlord 24 7 had  appealed  to the High Court against the  order  of  the Tribunal setting aside the Rent Controller’s order  striking out the defence. The High Court ought to have considered and decided  in  the  appeal whether the  striking  out  of  the defence by the Rent Controller was right   or   not.If   the striking  out  was  right then as the  Rent  Controller  had proceeded with the hearing of the application and passed  an orderdirecting  possession to the landlord it ought  to be upheld,but in theevent  of  the High  Court  holding that  the  order  striking  out  the  defence  by  the  Rent Controller  was erroneous then the order directing  recovery of  possession should be set aside and the petition  of  the landlord  heard  by the Rent Controller after  providing  an opportunity to the tenant to raise his defence. Now the question that remains is whether the Rent Controller has  any direction to extend the time prescribed in  section 15(1)This section requires the Controller, after hearing the parties,  to make an order directing the tenant to  pay  the Controller  within one month of rent, with a direction  that he  should continue to pay or deposit month by month, a  sum equivalent  opportunity given to the, tenant pay arrears  of rent.  Without the  protection given under the Act the an or cad on 15 days’ notice ending with the month get the  tenant evicted.  The Rent Control Act protects the tenant from such eviction and gives him an opportunity to pay the arrears  of rent within two months from the date of notice of demand  as provided  in section 14(1) (a).  Even if he fails to pay,  a further opportunity is given to the tenant to pay or deposit the  arrears  within one month under  section  15(1).   Such payment  or  deposit  in compliance  with  the  order  under section 15(1) takes away the right of the landlord to  claim recovery  of possession on the ground of default in  payment of  rent.  The legislature has given statuary protection  to the tenant by affording him an opportunity to pay the  areas of  rent within one month from the date of the  order.  This statutory provision cannot be modified as rights of  parties depend  on  the  compliance  with  an  order  under  section 15(1).In  the  circumstances, we agree with the  Full  Bench that  the  Rent Controller has no discretion to  extend  the time prescribed under section 15(1). The  result is that the appeal by the tenant is allowed  and the  matter  remitted to the High Court with  the  direction that  it  shall  hear  both the  appeals  preferred  by  the landlord afresh and dispose them of according to law in  the light of our observations.If the High Court holds that the Rent Controller was right in striking out the defence  of  the tenant, it will allow the  appeals  of  the landlord and direct recovery of possession from the  tenant. But in the event of the High Court holding that the order of the Rent Controller striking out the defence was  erroneous, it  will remit the matter to the Rent Controller  for  fresh disposal,  after hearing the parties.  Ordered  accordingly. There will be no order as to costs. CIVIL APPEAL NOS. 713-714 OF 1976 These two appeals are by the tenant by special leave against the judgment of the High Court of Delhi confirming the order of  the Rent Controller and the rent Tribunal and  directing his eviction. 248 The eviction was sought for on the grounds of non-payment of rent  and  acquisition of alternative residence.   An  order under section 15 Iwas   passed  by  the  Rent   Controller

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directing the tenant to pay arrears of rent within the  time allowed  and  to continue to pay future rent  in  accordance with  the provisions of the section.    The tenant  did  not pay or deposit the rent as directed.  The landlord filed  an application  under  section 15(7) and  the  Rent  Controller struck  out  the defence and proceeded to  dispose,  of  the application of the landlord on taking evidence.  On May  17, 1971  the eviction was ordered.  Appeals were  preferred  by the  tenant against the order striking out the  defence  and directing eviction on account of default in payment of rent. The single Judge of the High Court following the Full  Bench decision  in The Delhi Cloth and General Mills Co. Ltd.  vs. Hem  Chand  and  Anr.  (1972 DLT 473)  held  that  the  time prescribed under section 15(1) cannot be extended and as the tenant  had failed to comply with an order made  under  that section the appeals were dismissed.  Though two appeals were preferred  both of them were disposed of on the ground  that the  Rent Controller had no jurisdiction to extend the  time and  condone  the  delay.  The question as  to  whether  the striking out of the defence by the Rent Controller was proper or  not  was not considered by the court.           We  have held  earlier that if it is found that the striking  out  of the defence was     erroneous  the tenant is entitled to  an opportunity to defend the     application,  but  if  it   is found  that  the defence was properly struck out,  then  the tenant’s  appeals  will  have to  be  dismissed.   Both  the appeals  are remitted to the High Court for disposal in  the light of the observations made above.  No order as to costs. CIVIL APPEAL NO. 271 OF 1976 This  appeal is by the tenant by special leave  against  the judgment  of  the Delhi High Court dismissing  the  tenant’s appeal.  The tenant failed to pay or deposit arrears of rent as  directed under section 15(1) of the Delhi  Rent  Control Act.  In this case the defence of the tenant was not  struck out  under section 15 (7).  The finding of the courts  below that the tenant failed to comply with an order under section 15(1)  is not disputed.  The order of eviction is  therefore correct and this appeal is dismissed.  No order as to costs. SPECIAL  LEAVE PETITION (CIVIL) NO. 1364 OF 1975 No  merits. Dismissed. P.B.R. 249