25 September 1996
Supreme Court


Bench: MAJMUDAR S.B. (J)
Case number: Appeal Civil 12510 of 1996






DATE OF JUDGMENT:       25/09/1996




JUDGMENT:                             With                CIVIL APPEAL NO.12511 OF 1996         (Arising out of S.L.P. (C) No. 8896 of 1996)                       J U D G M E N T      S.B. Majumdar, J:      Leave granted in both the special leave petitions.      By consent of learned advocates of parties, the appeals were finally  heard and are being disposed of by this common judgment as  common questions  for consideration between the same parties arise for our decision in these appeals.      The common appellant in these appeals is the tenant and common respondents  are the  heirs of original landlord. The dispute centres  round the possession of two rooms belonging to the  respondents which  were let  out to the appellant by their  predecessor  in  interest  for  running  a  hotel  in Rourkela Town  situated in  District  Sundargarh  in  Orissa State. The  rent of the premises was fixed at Rs.l,000/- per month.      The present  litigation between  the parties  has  seen many ups  and downs  which will  be apparent  when we glance through the  chequered career  of this litigation leading to the present  proceedings. For  the sake  of convenience,  we will refer to the appellant as the tenant and predecessor in interest of  the respondents  as the landlord in latter part of this judgment.      The tenant  was inducted  in the two rooms on 15.8.1979 by the  landlord and  since then  the tenant  is running his hotel in  the premises.  The agreed  monthly rent,  as noted above, was Rs.l,000/- p.m. The landlord gave a notice to the tenant on  24.5.1984 calling upon his to vacate the premises on various  grounds mentioned in the notice. lt appears that thereafter  the  landlord  purported  to  enhance  the  rent unilaterally to  Rs,2,500/- p.m.  He, therefore,  refused to accept the  rent sent  by the  tenant by moneyorders for the months of  June 1984  onwards. As  according to the landlord from June  1984 the  rent was  to be  enhanced to Rs.2,500/-



p.m., the  moneyorders sent  by the  tenant from  June  1984 onwards towards   rent  at the  rate of Rs.1,000/- p.m. were refused by him. Thereafter, he filed an eviction proceedings on 14.11.1984  before the  Rent  Controlloer,  Panposh,  for evicting the  tenant under  Section 7(2)(i)  of  the  Orissa House Rent  Control Act,  1967 (hereinafter  referred to  as ‘the Act’). The said provision reads as under :-      "7. Conditions under which a tenant      can be  ejected. (l) A landlord who      seeks to  evict  his  tenant  shall      apply  to   the  controller  for  a      direction in that behalf.      (2) If the Controller, after giving      the tenant a reasonable opportunity      of  showing   cause   against   the      application, is satisfied-      (i) that the tenant has not paid or      tendered the  rent due  from him in      respect of  the house within thirty      days after  the expiry  of the time      fixed  it   the  agreement  of  the      tenancy  with   the  landlord   for      payment of  rent or  in the absence      of any  such agreement  by the last      day of  the  month  next  following      that for which the rent is payable;      or      (ii)........................"      The tenant  by  his  written  statement  contested  the proceedings and  submitted that  he was  not  a  tenant  who defaulted in payment of rent as the rent sent by him for the relevant months was refused by the landlord. Thereafter, the landlord filed  an application under Section 7(3) of the Act submitting that the appellant‘s defence be struck off and he be debarred  from contesting  the proceedings  as he had not paid the  admitted rent.  That application  was moved by the landlord on 6.12.1985 before the Rent Controller. The tenant resisted the  said application  by  his  written  objections dated 13.12.1985 stating that he had been remitting the rent at the agreed rate but the landlord had deliberately refused to accept  the same,  postal receipts  evidencing  of  money orders by  the landlord were produced before the court; some arrears that had accumulated subsequently were undertaken to be cleared.  On 17.1.1986,  the Rent  Controller allowed the landlord‘s application  under Section  7(3) of  the Act  and debarred the tenant from contesting the eviction proceedings Section 7(3) of the Act reads as under :-      "(3) When  an application  is  made      for the  eviction of  any tenant on      the grounds specified in cl. (i) of      sub.S.(2) the  tenant  shall  remit      the arrears  of rent as admitted by      him  up   to  the   date  of   such      remittance  to   the  landlord   or      deposit the  same  with  Controller      failing  which   he  shall  not  be      entitled     to     contest     the      proceedings."      It is this order of the Rent Controller which is on the anvil of  scrutiny in  this proceedings  as will  be cleared from the  narration of  subsequent stages of the proceedings between the parties.      The  appellant-tenant   filed  an   appeal  before  the Appellate Authority being H.R.C. Appeal No.l/86) against the order dated  17.1.1986 but  the Appellate Tribunal dismissed



the said  appeal by its order dated 21.1.1987. That resulted in the  first writ  petition being  O.J.C. No.  620 of  1987 filed   by the  tenant  in  the  High  Court  of  Orissa  on 16.2.1987.  Pending  this  writ  petition,  the  proceedings before the  Rent Controller  were continued  further and  on 17.2.1987 when  the landlord  was examined  before the  Rent Controller, the  tenant was not allowed to cross-examine him on the ground that his defence was already struck off and he was not  permitted to  contest the eviction proceedings. Not only that  but as  a consequence  on 27.2.19875  an ex parte decree for  eviction came to be passed against the tenant on two grounds,  namely, (i)  that the  tenant  was  in  wilful default of  payment of  rent; and (ii? that the premises had been impaired by the outlets for exhaust fans constructed by the tenant  in the  hotel premises.  The High  Court in  the aforesaid pending  writ petition  was apprised of this Court in the  aforesaid pending writ petition was apprised of this fact. The  High Court  by its order dated l9.3.1987 disposed of the  writ petition  filed by the tenant by observing that as the  ex parte  decree as  already passed  the tenant  may challenge the  same in  appeal and  may all possible grounds including the  contention that  the order debarring him from contesting the  proceedings was  bad in  law Accordingly, on 25.3.1987 the  tenant challenged  the ex parte decree before the Appellate Tribunal wherein he challenged not only the ex parte decree  dated  27.2.1987  but  also  the  order  dated 17.1.1986 debarring  him  from  contesting  the  proceeding. Pending this  appeal the  tenant by  his  application  dated 29.6.1987 requested  the appellate  court to  permit him  to cross-examine the landlord and to adduce evidence in defence on the  ground that  the order dated 17.1.1986 debarring him from contesting the proceedings was erroneous. The appellate court rejected  this application.  Consequently, the  tenant filed  second   writ  petition  before  the  High  Court  on 19.7.1987 challenging  the aforesaid  order of the appellate authority. The  High Court  disposed  of  that  second  writ petition on  21.7.1987 by  allowing the same and quashed the order dated  29.6.1937 passed by the appellate court against the tenant.  It was    held  by  the  High  Court  that  the appellate authority  should consider  the application of the tenant  for   leading  further  evidence  after  determining whether the  tenant was  illegally debarred  from contesting the eviction  proceedings. in  views  of  the  High  Court’s earlier order  dared 19.3.1987. In the pending appeal before the Tribunal  the tenant accordingly was heard on merits and by its  order dated  24.2.1988, the appellate authority held that the order dated 17.1.1986 passed by the Rent Controller debarring the tenant from contesting the case was incorrect. The appellate  court consequently  allowed both the sides to lead evidence in support of their respective contentions the merits of  the eviction  petition.  For  that  purpose,  the matter was adjourned to 11.11.1988 when the landlord did not present himself  in the  court  for  cross-examination.  His tesimony recorded  earlier. therefore, was found to be of no avail and  as a result of which the appeal late set aside by its order  of even  the ex  parte order dated 27.2.1987. The eviction petition  was dismissed  by the appellate court. In the meantime,  the landlord  expired. His  legal heirs,  the present respondents,  filed a  writ petition  in  June  1990 before the  Orissa High  Court challenging  the order  dated 24.2.1988 passed  by the  appellate authority  by which  the landlord‘s application  under Section  7(3) was dismissed by the appellate court and they also challenged the order dated 11.11,1988 passed  by the  appellate authority expunging the evidence  of   the  landlord  and  dismissing  the  eviction



petition. The  High Court allowed the writ petition filed by the respondents  by Its  order dated  5.10.1993 holding that the  order   dated  17.1.1986   debarring  the  tenant  from contesting the  eviction petition  was correct order and the tenant was  therefore, not  entitled to contest the eviction proceedings and consequently it was held that the orders the appellate authority  dated  24.2.1988  and  11.11.1988  were liable to be set aside. However, the High Court held that as the appellate  court had  not examined  the merits of the ex parte order  of eviction  even in  the light  of  order  not permitting the tenant to contest the proceedings, the matter was required  to be  remitted to the appellate authority for examining the legality of the ex parte order for eviction in the light  of the  material on  record. It  is this order of 5.10.1993 which  is the  subject-matter of appeal by special leave arising  out of S.L.P, (Civil) No.8896 of 1996. In the meantime., the  remanded proceedings  before  the  appellate authority  as   per  the  order  of  the  High  Court  dated 5.10.1993. were  disposed of  by the  appellate authority by taking the  view  that  as  the  tenant  was  debarred  from contesting the  proceedings the evidence of the landlord had to be accepted and the tenant even could not be permitted to cross-examine the landlord. Accordingly, the  ex parte order of eviction  as passed  by the  Rent Controller on 27.2.1987 was once  again restored  by the  appellate authority dated. The said  order of  the appellate authority dated 29.10.1994 was carried  in third writ petition being O.J.C. No. 7468 of 1994 by the tenant before the High Court of Orissa. The said writ petition  came to  be dismissed  by the  High Court  on 14.11.1994 whereby  the High  Court confirmed  the ex  parte decree for  eviction as  passed by  the Rent  Controller  on 27.2.1987 which  in its  turn was confirmed by the appellate authority by  its order  dated 29.10.1994. The said order of the High  Court dated  14.11.1994 id  the subject-matter  of appeal arising at of S.L.P. (Civil) No.5268 of 1995.      The resaid  narration of  facts shows  that the  entire dispute and  controversy between  the parties  centres round the legality  and validity  of  the  order  dated  17.1.1986 passed by  the Rent  Controller whereby  the tenant  was not permitted to  contest the eviction proceedings. in the light of Section  7(3) of  the Act.  The legality  and validity of this order  was not  accepted by  the appellate authority by its order  dated 5.10.1986.  The High  Court vide  its order dated 5.10.1993  however upheld  the validity  of the  order dated 17.1.1986.  If the  said order  of the Rent Controller dated 17.1.1986  as passed  under Section 7(3) of the Act is found to  be bad  then the  impugned order of the High Court dated 5.10.1993  confirming the  same and all the subsequent orders dated 29.10.1994 and 14.11.19947 would fall through.      A mere  look at Section 7(3) of the Act shows that when an application  was moved by the landlord under Section 7(2) for evicting  the tenant  on the  ground that the tenant had not paid or tendered the rent due from him in respect of the house within  thirty days after the expiry of the time fixed in the  agreement of  the  tenancy  with  the  landlord  for payment of  rent the  tenant will  be require  to remit  the arrears of  admitted rent  and if  he  does  not  remit  the admitted arrears  of rent  to the  landlord or  deposits the same with  the controller,  he  shall  not  be  entitled  to contest the proceedings.      Now it  may be  noted that  when the  landlord moved an application under  Section 7(3)  of the  Act before the Rent Controller  on  6.12.1985,  the  tenant  filed  his  written objection and  pointed out  that prior  to the filing of the eviction proceedings  he had  been remitting the rent at the



agreed rate of Rs.l,000/- every month by moneyorders but the landlord deliberately  refused to  accept the same. Not only he raised this objection but he produced the postal receipts evidencing  refusal   of  rent  by  moneyorders  during  the relevant months  when the  rent was so tendered. Under these circumstances, the  Rent Controller could not have persuaded himself to  take the  view that  the tenant had not remitted the arrears  of rent.  In fact,  he  had  not  admitted  the arrears of  rent. He,  on  the  other  hand,  contested  the existence of  such arrears  of rent  which had given rise to the eviction proceedings against him. In this connection, it would   relevant to  note the  contention of the landlord or the appellate  court which  was rejected  by its order dated 24.2.1988 and by which the appellate court earlier had taken the view  that  the  order  of  the  Rent  Controller  dated 17.1.1986 was  bad in law. The contention of the landlord in support of  the application  under Section 7(3), as noted by the appellate  authority; in  the said  order,  was  to  the effect that  if for  the month  the  rent  remitted  by  the opposite party  that   the tenant  is not  accepted  by  the applicant-landlord.  it  does  not  mean  that  the  tenants responsibility of  offering the  rent ceases  and in  such a case he  should go  on submitting  the admitted  rent  every month, also  sending with  the arrears  of rent  and in this case as it was not done by the tenant, the application under Section   7(3), of  the Act  was maintainble.  The appellate authority in  the said  order of  24.2.1988 rightly took the view that  there was  no  obligation  on  the  tenant  while submitting the  rent for  current month  that he should also remit with  it the  arrears of rent refused by the landlord, every month and accordingly the Rent Controller was wrong in debarring the  tenant from  contesting the case. In our view this was  the  correct  approach  on  the  applicability  of Section 7(3)  of the  Act the  facts of the present case and the appellate  court was  justified at that stage in holding that the  order  of  the  Rent  Controller  dated  17.1.1336 debarring the  tenant from  contesting the  proceedings  was erroneous. It.  is this  order of  the  appellate  authority which was  set aside by the High Court by the impugned order dated 5.10.1993  which is  placed for  our scrutiny  in  the present proceedings.  The  High  Court’s  reasoning  in  the impugned order  dated 5.10.1993  is found  at page 36 of the paper-book, which reads as under :-      "...The tenant becomes evictable on      proof of  the allegation  of wilful      default in the payment of rent, But      Section 7(3)  of the  Act  wants  a      tenant to pay or deposit arrears of      rent as  admitted by  him.  If  the      landlord refused to accept rent for      which reason  the rent could not be      paid by  the tenant,  it would  not      amount to wilful default within the      meaning of section 7(2) of the Act,      for which  reason  he  may  not  be      evicted on  that ground.  But,  the      tenant in such a case will still be      in arrears  of rent.  The aforesaid      sub-section (3)  of section 7 gives      absolute  liberty   to  the  tenant      either  to  admit  or  deny  as  to      whether he  is in  arrears of rent.      The tenant  in this  case  has  not      stated  in  the  written  statement      that he  is not in arrears of rent.



    On  the   contrary,  he   filed  an      application before  the  Controller      praying for  time  to  deposit  the      arrear  rent.   That   apart,   the      Controller also  took into  account      the fact  that the rent remitted by      the tenant  was not accepted by the      landlord for which reason this rent      has   not    been   paid   and   is      outstanding as  arrears. As already      stated, the  House Rent  Controller      may not  be  justified  making  any      investigation or inquiry whatsoever      to  be   whether  the  rent  is  in      arrears because it is the admission      of the tenant which were would make      him liable  to deposit  the arrears      rent pursuant to the requirement of      section   7(3)    of    the    Act.      Application of  the  tenant  before      the House  rent Controller  praying      for time to deposit the arrear rent      amounts to a clear admission on his      part, the  order of  non-despsit of      rent would  visit the  consequences      envisaged in  that section. We are,      therefore, of  the view  that there      was enough  justification  for  the      House Rent  Controller to debar the      tenant    from    contesting    the      proceeding under  section  7(3)  of      the Act.  as the tenant admitted to      be in  arrears of  rent and did not      deposit the  same  as  required  by      section 7(3) of the Act."      It is  also interesting  to note  what the  respondents have to  say in connection with landlord’s application under Section 7(3) of the Act. In their counter-affidavit filed in the  present   proceedings  by  Sripati  Pati,  son  of  the landlord, it has been stated in paragraph 3 as under :-      "...As regards  the refusal  of the      money orders  it is stated that the      agreed  rent   was  Rs.2,500/-  per      month and (not Rs.l,000/- per month      as  averred   by  the  petitioner);      hence  the   landlord  refused   to      accept the  same. That  apart.  the      tenant did  not send the house rent      (as admitted  by him)  duly as will      be evident  from the  record of the      case.  Assuming  for  the  make  of      argument   that    the   rent   was      Rs.l,000/- per month which was sent      by  the  tenant/petitioner  to  the      landlord which  was alleged  to  be      refused than  the petitioner should      have  sent  the  current  rent  due      along with  the arrears  which  was      refused   earlier.   However,   the      petitioner has failed to fulfil his      obligation in this regard."      In  our   view.  the  said  stand  clearly  implies  an admission on  the part  of the respondents that the landlord had refused  to accept  the rent  sent by moneyorders at the rate of  Rs.l,000/- per  month and  on the  contrary it  was



expected by  the landlord that the tenant must send the rent not only  for the  current month but also the earlier months rent which  was in  arrears and  was refused by the landlord earlier. The  said stand  is patently  wrong and  cannot  be sustained for supporting order under Section 70 of the Act,      In our  view the  aforesaid reasoning of the High Court is clearly  unsustainable on  the record of the case, In the first place  the tenant  had never  admitted that  he was in arrears of  rent. On the contrary he had contested the claim of the  landlord under Section 7(3) of the Act by submitting documentary proof of coupens of moneyorders to show that for the relevant  months prior  to the  filling of  the eviction proceedings from  April l984  onwards every month he went on sending the  agreed rent  by the  rate of Rs.l,000/- p.m. by moneyorders which were consistently refused by the landlord. In order  to  avoid  further  complication,  he  might  have requested the  Rent Controller to permit, him to deposit the arrears of  rent and  that would  not be an admission on his part that he was a defaulting tenant. It is also interesting to note  that even the High Court held on the stand taken by the tenant  that eviction  petition itself  may fail and the tenant would  not be  liable to  be ejected yet according to the High  Court such  an important defence which went to the root of  the maintainability  of  the  eviction  proceedings could not  be permitted  to  be  raised  by  the  tenant  by contesting such prima facie incompetent eviction proceedings and the  tenant would  be told  off the  gates under Section 7(3) of  the Act,  To say the least, such reasoning is self- contradictory. On  fact we  find that  the tenant,  from the incaption of  the proceedings by filing written statement as well as  by filing  written objection  to application  under Section 7(3)  of the Act was unequivocally pointing out that he was  not admitting  that he was in arrears of rent on the contrary, he  was contesting  such claim  of  the  landlord. Consequently. on the facts of the present case. Section 7(3) of the Act was not attracted at all. The Rent Controller was therefore, patently  in error in granting the application of the landlord  by its  order dated  17.1.1986. The  order was rightly set  aside by the appellate Court by its order dated 5.10.1993. The  impugned  order  of  the  High  Court  dated 5.10.1993 is,  therefore, set  aside as  being found  to  be patently erroneous.  Once this  conclusion  is  reached,  it necessary follows that the subsequent order of the appellate authority dated  29.10.1994 passed  pursuant  to  the  order dated 5.10.1993  of the  High Court which is set aside by us cannot survive  and is,  therefore, quashed.  Similarly  the subsequent  order   of  the   High  Court  dated  14.ll.1994 confirming  the  order  of  the  appellate  authority  dated 29.10.1994  also   would  not   survive.  As  a  result  the subsequent order of the High Court dated 14.11.1994 impugned in the  companion appeal is also set aside. Both the appeals are accordingly  allowed. The  order of  Rent Controller are dated 17.1.1986  allowing the  landlord‘s application  under Section 7(3)  of the  Act is  quashed and  set aside and the said application  is ordered  to be  dismissed. The ex parte decree for  possession dated  27.2.1987 is  also set  aside. There  sult  is  that  the  eviction  proceedings  filed  by theoriginal landlord,  the predecessor  in interest  to  the respondents, will  now stand  restored at the stage at which they were pending before the Rent Controller, Panposh, prior to the  order dated 17.1.1986. The said eviction proceedings will be permitted to be contested by the appellant-tenant on all permissible  grounds on  merits.  The  Rent  Controller, Panposh,  will   permit  the  respondents  as  well  as  the appellant to  lead both  documentary and  oral  evidence  in



support of  their respective  cases and  having  given  full opportunity to  the parties  to prove their respective cases on merits,  the Rent  Controller, Panposh,  will decide  the eviction proceedings  afresh in  accordance with  law. There will be no order as to costs . Ordered accordingly.