Case Note & Summary
The litigation arose from an eviction petition filed by landlord Prem Chand Jain (since deceased, represented by respondent no.1) against tenant M/s Jain Motor Car Co., Delhi, before the Rent Controller, Delhi, seeking eviction from premises No.XI/4239-A, Raj Kishan, Jain Street, Darya Ganj, Delhi, on grounds of default in payment of rent and sub-letting. The Additional Rent Controller passed an order dated 24 March 1971 under Section 15(1) of the Delhi Rent Control Act, 1958, directing the tenant to deposit all arrears of rent due from 1 June 1970 within one month and to deposit future rent at Rs.200 per month by the 15th of each succeeding month, after adjusting Rs.800 received by the landlord. While proceedings were pending, the landlord applied on 22 March 1972 under Section 15(7) to strike out the tenant's defence, alleging that rent for February 1972 due by 15 March 1972 was deposited only on 30 March 1972. The application was rejected by the Additional Rent Controller on 24 April 1979, and the landlord's appeal was dismissed by the Rent Control Tribunal on 19 April 1973. The landlord filed second appeal SAO No. 198 of 1973 in the High Court. Meanwhile, the Third Additional Rent Controller by order dated 27 October 1975 allowed the main eviction petition on the ground that the tenant had defaulted in depositing the February 1972 rent by the due date and that the Rent Controller had no power to condone the delay or extend time, rendering the tenant ineligible for protection under Section 14(2). The Rent Control Tribunal dismissed the tenant's appeal and the landlord's cross-objections on 20 March 1978, reiterating no power to condone delay. The tenant preferred second appeal SAO No. 125 of 1978 in the High Court, which was heard with the landlord's earlier second appeal. By judgment and order dated 19 August 1982, the High Court dismissed the tenant's second appeal and allowed the landlord's second appeal, holding that the tenant had committed default and striking out the defence. The tenant then filed the present appeals in the Supreme Court. The core legal issue was whether the Rent Controller had jurisdiction or discretion to condone the delay in deposit of monthly rent and whether the default automatically resulted in striking out defence and eviction. The appellant contended that the High Court misinterpreted Sections 15(1) and 15(7). The Supreme Court examined Sections 14(1), 14(2), 15(1) and 15(7), noting that the Act provides two opportunities to the tenant to avoid eviction: first, by paying arrears within two months of notice of demand; second, by complying with an order under Section 15(1) to pay or deposit arrears and future rent. The Court referred to Delhi Cloth & General Mills Co. Ltd. v. Hem Chand, AIR 1972 Delhi 975 (FB), which held that Rent Controller had no jurisdiction to condone delay, and Hem Chand v. Delhi Cloth & General Mills Co. Ltd., AIR 1977 SC 1986, which upheld no extension of time for initial deposit but held striking out defence was discretionary and eviction not automatic. The Court also considered Shyamcharan Sharma v. Dharamdas, AIR 1980 SC 587, where a three-judge Bench under the analogous U.P. Accommodation Control Act held that the discretion not to strike out defence necessarily implies discretion to condone default and extend time. Applying these principles, the Court concluded that the word 'may' in Section 15(7) vests discretion in the Controller, and the High Court erred in treating the provision as mandatory and in automatically striking out the defence. The appeals were accordingly allowed, the High Court judgment set aside, and the orders of the Rent Controller and Tribunal rejecting the landlord's application to strike out defence were restored, thereby setting aside the eviction order.
Headnote
A) Rent Control - Deposit of Rent - Mandatory vs Directory - Delhi Rent Control Act, 1958, Sections 15(1), 15(7) - The requirement to deposit monthly rent by the 15th is not absolute and the Controller has discretion to condone delay - Landlord sought eviction for tenant's failure to deposit February 1972 rent by 15 March 1972, with deposit made on 30 March 1972; Rent Controller and Tribunal rejected striking out application reasoning no power to condone, but High Court held no power to condone and struck out defence; Supreme Court held that the word 'may' in Section 15(7) confers discretion and the power to condone delay is necessarily implied - Held that the High Court erred in treating the provision as mandatory and in automatically striking out defence (Paras 13-16). B) Rent Control - Striking Out Defence - Scope of Section 15(7) - Delhi Rent Control Act, 1958, Section 15(7) - Striking out defence is discretionary, not automatic - Landlord applied under Section 15(7) for a single delayed deposit of monthly rent; Controller may order defence struck out or not; if discretion exists not to strike out, discretion exists to condone default; decisions in Delhi Cloth & General Mills and Hem Chand considered, with Hem Chand approving no extension for initial deposit but Shyamcharan Sharma holding discretion under analogous UP Act - Held that Controller has discretion and High Court's automatic striking out was unsustainable (Paras 15-16). C) Rent Control - Protection Against Eviction - Effect of Default in Monthly Deposit - Delhi Rent Control Act, 1958, Sections 14(1)(a), 14(2), 15(1) - Tenant's default in monthly deposit does not ipso facto forfeit protection under Section 14(2) - Eviction order was based solely on late deposit for one month; Controller had earlier allowed eviction holding no power to condone; Tribunal affirmed; Supreme Court considered second opportunity under Act and held that non-compliance with deposit direction does not automatically lead to eviction, but discretionary striking out and subsequent hearing - Held that eviction order was premature and set aside (Paras 13-14, 16). D) Precedent - Conflict Between Supreme Court Decisions - Discretion Under Rent Control Legislation - Delhi Rent Control Act, 1958 and U.P. Accommodation Control Act, 1961 - Following Shyamcharan Sharma that discretion to condone delay exists - Earlier Hem Chand upheld no extension for initial deposit, while Shyamcharan Sharma held for analogous UP Act that discretion not to strike out defence implies discretion to condone default; Supreme Court resolved in favour of discretion for monthly deposits - Held that Rent Controller has discretion and High Court judgment to contrary is erroneous (Paras 15-16).
Issue of Consideration
Whether the Rent Controller under the Delhi Rent Control Act, 1958 has jurisdiction or discretion to condone delay in depositing monthly rent due under Section 15(1), and whether failure to deposit monthly rent by the 15th automatically entails striking out defence under Section 15(7) and eviction under Section 14(2).
Final Decision
Appeals allowed. Judgment and order of Delhi High Court dated 19 August 1982 set aside. Orders of Rent Controller and Rent Control Tribunal rejecting landlord's application under Section 15(7) and dismissing landlord's eviction petition restored. Held that Rent Controller has discretion to condone delay in deposit of monthly rent under Section 15(7) and that tenant is not automatically liable to be evicted for delayed deposit.
Law Points
- Section 15(7) word 'may' confers discretion
- power to strike out defence is discretionary not automatic
- power to condone delay in monthly deposit implied
- eviction not ipso facto on default
- tenant gets second opportunity under Section 14(2) read with Section 15(1)
- High Court erred in treating Section 15(1) mandatory for subsequent monthly deposits
