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Arian Afghan Airlines Co. Ltd. Vs. Cycle Equipments (P) Ltd. - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtDelhi High Court
Decided On
Case NumberSecond Appeal No. 57 of 1973
Judge
Reported in14(1978)DLT19; 1978RLR427
ActsDelhi Rent Control Act, 1958 - Sections 15(1)
AppellantArian Afghan Airlines Co. Ltd.
RespondentCycle Equipments (P) Ltd.
Advocates: S.N. Chopra and; Prem Shanker, Advs
Cases ReferredHem Chand v. The Delhi Cloth and General Mills Co. Ltd.
Excerpt:
.....the landlord pleaded that the lease being a fixed one, no notice was necessary.; the additional rent controller made an order under section 15(1) of the act on the application of the landlord requiring the tenant to deposit the alleged arrears of rent and future rent. the order was challenged by the tenant in appeal and the tribunal modified the original order with regard to the quantum of the amount to be deposited. the tenant deposited a sum of rs. 50,400/- within the time as required by the appellate order but committed default in the deposit of the subsequent rent from november 1, 1969 to april 30, 1970. the landlord thereupon sought an order under section 15(7) of the act for the striking out of the defense of the tenant and by an order of august 13, 1970 the defense of the..........'no notice, of termination has been received by the respondent'. on april 1, 1970, the additional rent controller made an order under section 15(1) of the act on the application of the landlords requiring the tenant to deposit the alleged arrears of rent and future rent.. the order was challenged by the tenant in appeal i and the tribunal modified the original order with regard to the quantum of the amount to be deposited. the tenant, deposited a .sum of , within time as required by the appellate order but i committed default in the deposit of the subsequent rent from november,j., 1969 to april 30, 1970,the landlords thereupon sought an order order-section 15(7). of. the actjor the striking out of the defense of the, tenant and by an order of august: 1,3, 1970, the defense of the tenant.....
Judgment:

H.L. Anand, J.

(1) This Second Appeal under section 39 of the Delhi Rent Control Act, 1958, for short the Act, by a tenant against an order of eviction, which comes up before us .on a reference by a learned Single Judge of this Court, raises some interesting questions of law and was filed in the following circumstances:

(2) Arian Afghan Airlines Company Limited, for short the tenant, had taken on lease the premises in dispute on March 1, 1964, from its previous owners M/s Lila Ram and Sons on a monthly rent of Rs. 1800.00 by an unregistered agreement for a period of four years with an option of renewal. Before the petition for eviction, out of which the present appeal, arose, the landlord had sought the eviction of the tenant on the 'ground of non-payment. As no notice of termination of tenancy had been given prior, to the:said petition, the same was withdrawn with permission to file afresh one.The present petition-was subsequently filed in 1969 by the present owners, for short,the landlords, and the eviction was sought on the ground of non-payment of rent. In para (14) of the petition an averment was made that the premises had been let out ''on lst March, 1964 for four years (copy of the agreement enclosed)'. It was further stated that 'the tenancy is according to the English Calendar month terminating on the first of each month'. The copy of the agreement, which was enclosed with the petition, purports to be an unregistered- agreement and was not proved at the trial of the petition. It was entered into on March 18, 1964. and provides 'that this-lease shall be deemed to have come into effect as from 1st March, 1964' and 'that the lease shall be for aperiod of four years commencing from 1st March, 1964'. It further provides on the. expiry of the term 'the lessee shall be entitled to extend the term of the. lease for a further period of four years'. In para 18(b)(b) it was averred that a notice terminating the tenancy dated 17-2-1968 was served on the respondent to vacate the premises on the expiry for the month of February, 1968'. In para 18(b)(c).of the petition it was, however, alleged : 'That the tenancy was for four years from 1-3-1964. The period of tenancy has already expired for the tenancy stands terminated by efflux of time. No notice for termination is necessary'. In the 'additional pleas' the factum of the filing, .and withdrawal of the earlier petition was mentioned. The notice dated February 17, 1968,: of which the copy was proved at the trial as Ex. P3, mentions the fact that the lease was for a period of four years and expired 'on the 6th of February, 1968' and. that the 'tenancy thus stands terminated'.,. The tenant was required to pay. the; arrears 'within two months from the date of the notice. In his reply to the petition, the tenant admitted the allegations container in para (1.4) of the petition. The averments made in paras 18(b)(b) and (c) were, however, denied by the tenant and it was alleged that no proper legal notice had been enserved on the respondent' and that. 'no notice, of termination has been received by the respondent'. On April 1, 1970, the Additional Rent Controller made an order under Section 15(1) of the Act on the application of the landlords requiring the tenant to deposit the alleged arrears of rent and future rent.. The order was challenged by the tenant in appeal I and the Tribunal modified the original order with regard to the quantum of the amount to be deposited. The tenant, deposited a .sum of , within time as required by the Appellate order but I committed default in the deposit of the subsequent rent from November,J., 1969 to April 30, 1970,The landlords thereupon sought an order order-Section 15(7). of. the ActJor the striking out of the defense of the, tenant and by an order of August: 1,3, 1970, the defense of the tenant was struck out. On the same-date the Additional Rent Controller recorded the evidence of the landlords consisting of the statement of the General Attorney of the landlords and by a separate order directed the eviction of the tenant. The order was upheld by the Tribunal in appeal and that is how the tenant came in Second Appeal to this Court.

(3) On the basis of the material before it, the Additional Rent Controller had returned the finding that the tenancy had been terminated by a notice copy of which was proved as Ex. P3. In appeal before the Tribunal the tenant urged that notice, of which Ex. P3 was a copy, was not a valid notice of termination. The Tribunal, however, did not record any finding with regard to the validity of the notice. The Tribunal, however, observed that in para (14) of the Petition for eviction the respondent had pleaded that the premises had been let out on March 1, 1964, for four years and since this averment had been admitted as correct by the tenant the tenancy was for a fixed period thereby obviating the need for a notice of its termination. It was further observed that in any event the defense of the tenant having been struck out, the plea of want of notice was not available to the tenant- It was further observed that the order striking out the defense having not been appealed against had become final and could not, thereforee, be called in question in the appeal before the Tribunal against the final order of eviction. Reliance was placed on the decision of this Court in the case of L.T. Thadani v. Yogeshwar Dayal.(l)

(4) Before the learned Single Judge a contention was raised on behalf of the tenant that notice, of which Ex. P3 was a copy, was not a valid notice of termination in that it did not conform to the requirements of such a notice as envisaged by Section 106 of the Transfer of Property Act and that in spite of the fact that the defense of the tenant had been struck out. Courts were bound to consider, if the tenancy had been validly terminated. This claim was contested on behalf of the tenant and it was urged that the lease was for a fixed period thereby obviating the need turn termination of the tenancy. On behalf of the tenant this contention was resisted on the ground that even so the lease deed entitled the tenant to a further renewal and for that reason the defense could not be struck out. On behalf of the landlords a further contention was urged that a previous application for eviction filed against the tenant was tantamount in law to a notice, of termination and that no further notice was necessary. The learned Single Judge referred the matter to a larger Bench as these contentions appeared to the learned Judge to involve important questions of law which were likely to arise in a number of cases and, thereforee, needed to be authoritatively determined.

(5) The principal questions in controversy between the parties in courts below, as indeed before the learned Single Judge, and before us, have been whether the tenant was entitled to canvass the validity of notice terminating the tenancy notwithstanding the order striking out the defense of the tenant and if such a plea was still open, whether the tenancy in the present case needed to be and had been validly terminated or not. These contentions were, however, raised throughout and were considered to be determinative of the ultimate question of the liability of the tenant to be evicted on the assumption that the order of the Controller striking out the defense of the tenant, having never formed subject matter of an appeal against it, had become final and could not, thereforee, be called in question either in the appeal against the final order of eviction before the Tribunal or in the present second Appeal, The assumption that appears to have been made i) throughout, and which was possibly induced by the Full Bench decision of this Court i nthe case of The Delhi Cloth and General Mills Co. Ltd. v. Hem Chand & another (2), which during the material time held the field, was that once there was default by a tenant in complying with an order under section 15(1) of the Act, the striking out of the defense of the tenant must ipso facto follow, thereby entitling the landlord in an order of eviction, without anything more. The , questions that, thereforee appear to be baste and would go to the root of the matter i.e. (a) if the order under section 15(7) had become final, and (b) if not, as to its validity and its impact on the rights and obligations of the parties must, thereforee, be considered before embarking on an examination of the other questions, should they survive such a consideration.

(6) It has not been in dispute that the order under section 15(1) of the Act made by the Additional Rent Controller, as modified by the Tribunal, required the tenant to deposit a sum of Rs. 50.400.00 on account of arrears of rent for the period ending October 31, 1969, and rent with effect from November 1, 1969, to date within one month of the date of the order at the agreed rate. The order was modified by the Tribunal on May 26, 1970. The tenant was further directed to deposit future rent month by and in accordance with law. It has been a common case of the parties that while the tenant deposited a sum of Rs. 50.400.00 within the prescribed time, rent for the period with effect from November 1, 1969, to July 1970, had not been deposited until August 6, 1970, when the landlords moved an application under section 15(7) of the Act. According to the tenant, the rent for the subsequent period had not been deposited because there was some ambiguity in the order of the Tribunal, but this plea was turned down by the Controller, and it was held that there was no ambiguity and since admittedly, there has been no compliance with a part of the order, there was 'no option but to strike out the defense of the tenant' which the Controller accordingly did. This was followed by an order of eviction. In the appeal against the order of eviction, the contention of the tenant that the Controller ought not to have struck out the defense of the tenant was repelled on the ground that, the order not having been appealed against, had become final. By this decision, the Tribunal felt relieved of the responsibility of considering the question as to the propriety of the order striking out the defense. This was apparently consistent with the law with regard to the matter as it was then understood to be, but the true legal position is quite different. This Court had occasion to consider a similar question in the context of an order under section 15(1) of the Act in the case of Shri Kehar Singh v. M/s. Raghunandan Saran Ashok Saran (3). and it was held. disagrecing with the earlier view of the Punjab High Court and of a number of learned Single Judges of this Court, that such an order being of an interlocutory nature could be subject matter of a ground in an appeal against the final order of eviction and could not be said to have become final merely because an appeal against it had not been filed. It was further pointed out that the finality that attached to such an order had reference to collateral attack by independent proceedings. The Tribunal accordingly fell in error in treating the order as a closed chapter and in its consequential refusal to examine its validity and propriety, because what applied to an order under section 15(1) of the Act, would apply with full force to an order under section 15(7) of the Act. Both the orders are essentially of the same nature. The Tribunal was. thereforee, bound to consider if the order was a proper one and to consider the appeal on that basis.

(7) What then is the effect if the question as to the validity of the order under section 15(7) was still at large? One way would be to accept the appeal on that ground and remand it for a proper decision to the Tribunal, but the entire material is before us and such a course would appear to be not only unnecessary but unfair to the parties. We have, thereforee, examined the order ourselves and are of the view that the same was wholly unjustified. Admittedly, the order had not been fully complied with. What then is the consequence if an order under section 15(1) is not fully complied with? Is the order striking out the defense a must in such situation or is there a discretion in the Controller to take the penal action of striking out the defense? If so, how is such a discretion to be exercised? The order of the Controller striking out the defense assumes that the moment there was a default, however minor or partial, and whatever its extent may be, the axe must fall on the tenant and the defense must be struck out. This apparently is how the Full Bench decision was understood at the relevant time to be. The position was clarified only later by the Supreme Court in its decision in the case of Hem Chand v. The Delhi Cloth and General Mills Co. Ltd. & Another(4), where it was pointed out that sub-section (7) of section 15 affords a discretion to the Rent Controller to strike out the defense or not according to circumstances of the case. It is interesting to notice in this context that the expression used in the 1952 Rent Act in the analogous provision was 'shall' and it was substituted in the present Act for 'may' thereby making it abundantly clear that striking out was not a mandatory requirement but was a matter of discretion. This is so because even though the purpose of section 15(7) was partly to compel the tenant to comply with orders made under section 15(1) but nevertheless section 15(7) was not intended to operate as an engine of oppression against the tenant, who must be deprived of his defense the moment there is a default, irrespective of the extent of it or the circumstances in which it was made. There is thus no automation introduced in the provisions, so that the moment there was a default, its fall out must be on the tenant by the striking out of the defense. If there is a default, it is for the Controller to consider the totality of circumstances attending on the default and to exercise its discretion on the basis of well known principles for the exercise of judicial discretion. In the way the Tribunal looked at the finality of the order, it devoted no attention to this aspect either. The result has been that the gullitone fell on the tenant almost in a mechanical manner. What then are the circumstances which would justify an order striking out the defense or which would militate against such a conclusion? While it is not possible to lay down exhaustively the circumstances in which such an order 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. In the present case, the tenant had been required to deposit Rs. 50,400.00 on account of the arrears which by all standards was a very large amount. This amount was deposited by the tenant within the time allowed by the order. The default was only in the deposit with regard to the rent for the period November 1, 1969, to July 1970, which the tenant attributed to an ambiguity in the order, a contention which did not prevail with the Controller. But that apart, is it possible to ignore that the tenant deposited a very large amount and the default was confined to a comparatively minor part of the order. The tenant cannot be said, in the circumstances, to have been guilty of such conduct so as to attract the extreme penalty provided in sub-section (7) of section 15. There was, thereforee, no justification in striking out the defense and there is no doubt in our mind that if the true legal position had been clarified at that point of time, such an order would not have been made-

(8) What happens then if the order striking out the defense is out of the way? The defense of the tenant is obviously restored thereby conferring on him the unrestricted right to raise all permissible defenses to ejectment. Here again, the question arises whether we should, thereforee accept the appeal and remand the matter to the Controller for a decision according to law after a full trial of the petition since, in view of the order striking out the defense, the proceedings have virtually been of an ex parte nature. The other alternative is to consider the material on the record and arrive at our own conclusion as to the liability of the tenant to eviction. There is something to be said for either of the views. There has been no proper trial of the petition nor indeed a proper decision in the appeal by the Tribunal in that the tenant suffered from the handicap of his defense having been struck out. Why should this Court, take upon itself the responsibility of a virtual fresh trial which may perhaps involve both oral and documentary evidence as also deprive the parties of the right of first appeal to the Tribunal. On the other hand, it could be urged with some justification that even if the defense of the tenant was restored, the ultimate questions in controversy, in the face of the existing pleadings. are as to the nature of the tenancy, the need for its termination, the validity of the termination and its effect on the rights and liabilities of the partics. It may perhaps not involve any oral or documentary 'evidence in addition to what has come on record, questions posed being primarily of law. Even if the parties are deprived of the right of first appeal, they have the benefit of a decision by this Court, thereby curring out some unnecessary stages in the litigation between the parties. On the basis of ihe latter view, we were also addressed on the main questions in controversy. Afier hearing learned counsel for the parties, it appears to us that the proper course to follow would be to set aside the two orders, as indeed the order striking out the defense of the tenant and to remand the proceedings to the Additional Rent Controller for decision according to law. In view of the order striking out the defense, there, has been no proper trial of the petition for eviction. The pleas of the parties as to the nature of the tenancy, the need and the validity of the notice terminating the tenancy and its impact on the rights and obligations of the parties are not pure questions of law, but are mixed questions of law and fact, which .may necessitate both oral and documentary evidence and would, in any event, justify the statement of the parties and cross-examination of each other. The agreement of least, though placed on the record, was not proved. The language in 'which the averments in. the Petition for eviction are made with regard to the nature of the tenancy and the notice of termination are rather ambiguous and even mutually contradictory leaving considerable scope for controversy. In particular, the averments in the Petition as to whether the tenancy was for a fixed term or was from month to month are prima facie contradictory and it may, thereforee, by necessary for the parties to suitably amend the pleadings so as to bring out the real questions in controversy between the parties.

(9) In the result, the appeal succeeds in part, the orders of the Tribunal and the Additional Rent Controller are set aside, the order of the Additional Rent Controller striking out the defense is also set aside, the proceedings are remanded to the Additional Rent Controller for decision according to law on a trial of the Petition for eviction according to law after giving the parties an opportunity to amend the pleadings, if they so desire, and to produce oral as well as documentary evidence.. The original proceedings were initiated in the year 1973. The Additional Rent Controller would, thereforee, conduct further proceedings with expedition and would conclude the same, as far as possible, within a period of six months from the date the records are received by it. The records would be remitted forthwith. The parties are directed to appear before the Additional Rent Controller on May 22, 1978.

(10) In the peculiar circumstances, parties would bear their respective costs of the present proceedings.


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