Skip to content


Sher Singh Gupta Vs. Prem Chand - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtDelhi High Court
Decided On
Case NumberSecond Appeal No. 42 of 1980
Judge
Reported inAIR1980Delhi305; 18(1980)DLT84; 1980(1)DRJ64; 1980RLR413
ActsDelhi Rent Control Act, 1958 - Sections 14(1)
AppellantSher Singh Gupta
RespondentPrem Chand
Advocates: R.K.Agarwal and; M.L. Bhargav, Advs
Cases ReferredKrishan Kumar v. Bimla Sehgal
Excerpt:
dehli rent connrol act, 1958 - sub-section 14 (1) (a) and 15 (7) cheque is not a legal tender payment by cheque is a conditional payment. a creditor is not bound to accept it. but if he accepts and the cheque is honoured it will be an effective discharge of the debt. on its encashment the tenant will be deemed to have paid or deposited the amount on the date on which the cheque was handed over. without striking out the defense it is not possible to order eviction on the ground of non-payment of rent. - - but the tenant was not satisfied. both failed. he held that the delay complained of was because the cheques were presented late by the state bank of india for encashment and for this the tenant could not be blamed. thereforee after the order dated 12th february, 1971 it was not..........consequent the landlord brought the ejectment application.(7) on 28th july, 1967 the additional rent controller made an order under section 15 of the act. he directed the tenant to deposit rent at the interim rate of rs. 55.00 per month which had been fixed at the interim rent in the earlier litigation between the parties. he asked the tenant to deposit arrears of rent with effect from 1st march, 1964 up todate as the interim rate of rs. 55.00 within on month. he further directed him to deposit future rent month by month at the same rate on or before the 15th of the following month till the disposal of the petition.(8) on 26th august, 1967 the tenant deposited all the arrears of rent up to 31st august, 1967 in the treasury. with regard to this period there is no dispute. the dispute.....
Judgment:

Avadh Bihari Rohatgi, J.

(1) This is an appeal from the order of the Rent Control Tribunal, dated 27th September, 1979.

(2) The appellant Sher Singh Gupta was a tenant of the ground floor of house No. 11311/1 situated on plot No. 23, Block No. 14-A, W.E.A. Karol Bagh, New Delhi. He took these premises on rent on 7th September, 1949 from Roshan Lal. Roshan Lal was at that time managing this property. On Bhagwat Sarup claimed that he was the owner of the property. Between Roshan Lal and Bhagwat Sarup litigation ensued. Finally the High Court held that Bhagwat Sarup was the owner. The appeal of Roshan Lal to the Supreme Court was dismissed. thereforee, the appellant became the tenant of Bhagwat Sarup.

(3) Bhagwat Sarup launched ejectment proceedings against the tenant under the Delhi and Ajmer Rent Control Act, 1952. The subordinate judge in the suit for ejectment made an order of eviction. On appeal the Additional District Judge set aside the order of eviction. But the tenant was not satisfied. He preferred a revision in the High Court. On 17th September, 1969 the revision petition filed by the tenant was dismissed. S. N. Andley J. held that there exists a relationship of landlord and tenant between Gupta and Bhagwat Sarup. This was one finding. The other finding was that the agreed rate of rent was Rs. 67.50 per month. This judgment set the controversy finally at rest as regards the relationship of landlord and tenant and the rate of rent. This judgment operates as resjudicata between the parties.

(4) On 20th February, 1967 the respondents, Prem Chand and Yashpal, sons of Bhagwat Sarup (Bhagwat Sarup had died in the meanwhile) brought anpplication for ejectment against the tenant under Section 14 of the Delhi Rent Control Act, 1958. Three grounds of ejectment were alleged. One was non-payment of rent. The second was that the premises were required by the landlords and that they had no other suitable accomodation. By a subsequent amendment a third ground of second default in the payment of rent was added. But counsel for the landlords state that they do not press the ground of second default before me. I am thereforee concerned only with two questions. One is whether the tenant is liable to ejectment on the ground of non-payment of rent. Second whether he is liable to ejectment on the ground that the premises are bonafide required by the landlords for themselves and their faimly.

(5) The Additional Controller by order dated 20th July, 1976 ordered the eviction of the tenant. He held that the tenant was liable to eviction on the ground of non-payment of rent under Section 14(l)(e) of the Act. On the ground of personal requirement he dismissed the case of the landlords. Both parties went to the tribunal. The tenant appealed. The landlords crossobjected. Both failed. The tribunal held that the tenant was liable to eviction on the ground of non-payment of rent. He dismissed the appeal of the tenant. He also found that the landlords did not require the premises for their own use and that the accomodation of the four room set which was already in their possession was reasonably suitable for their residence. So he dismissed the ground of bona fide requirement which was taken by the landlords in cross-objections. From the decision of the Tribunal the tenant has filed the present appeal. The landlords have again filed cross-objections on the ground that the premises are required bonafide for themselves and the members of their family dependent on them.

(6) First I take up the appeal of the tenant. Before the application for ejectment was filed in February, 1967 a notice of demand dated 15th, October, 1966 was served on the tenant. In this notice the tenant was required to pay arrears of rent from March 1, 1964, to 31st December, 1966 at the rate of Rs. 67.50 per month. As regards the period preceding' this, namely, from 1st August, 1959 to 29th February, 1964 a sum of Rs. 12.50 per month was demanded being the balance of rent due from' the tenant. From 1959 to 1964 the tenant had paid rent to landlords at the rate of Rs. 55.00 per month. But as the agreed rate of rent was Rs. 67.50 they claimed the balance amount at the rate of Rs. 12.50 up to February, 1964. Thereafter rent was claimed at the rate of Rs. 67.50 per month. This notice was duly served on the tenant. But he did not pay. Consequent the landlord brought the ejectment application.

(7) On 28th July, 1967 the Additional Rent Controller made an order under Section 15 of the Act. He directed the tenant to deposit rent at the interim rate of Rs. 55.00 per month which had been fixed at the interim rent in the earlier litigation between the parties. He asked the tenant to deposit arrears of rent with effect from 1st March, 1964 up todate as the interim rate of Rs. 55.00 within on month. He further directed him to deposit future rent month by month at the same rate on or before the 15th of the following month till the disposal of the petition.

(8) On 26th August, 1967 the tenant deposited all the arrears of rent up to 31st August, 1967 in the treasury. With regard to this period there is no dispute. The dispute begins from October, 1967. Subsequently every month the tenant was depositing rent in the State Bank of India at the rate of Rs. 55.00 per month. He was doing so not in cash but by cheques. Every time he will draw a cheque in favor of the court and deposit the same in the treasury. This practice of depositing monthly rent by cheques continued right from October 1967 to September, 1969.

(9) Now what happened in this case was this. The cheque were accepted by the State Bank of India on behalf of the court. Sometimes the cheque was given on the 15th, sometimes on 13th and sometimes on 12th of the month. But every time it was before the 15th of the month. The bank accepted the cheques. Then the State Bank of India sent the cheque from their branch office to their main office for collection. The cheque was then presented to the tenant's banker who paid the amount of the cheque. They never dishonoured any cheque of the tenant. After the amount was collected the challan filled in by the tenant was returned to the court with the seal of the date on which the amount was credited in the books of account of the bank. This date was positively a date after the 15th of the month almost in every case. The collection took time. This was why the challan showed that the amount was received much after the 15th of each month, sometimes on 20th sometimes on 24th and sometimes on 28th and so on.

(10) The landlords made an application to the Additional Controller for striking out the defense of the tenant on the ground that he had not complied with the order dated 28th July, 1967. The Additional Controller struck out the defense. He held that the tenant was not regularly depositing the rent by the 15th of each subsequent month as was the order and as he had deposited the amount after the 15th in each case it was a case of default. So he struck out his defense. From the order of the Additional Controller the tenant appealed to the tribunal. The tribunal by order dated 12th February, 1971 set aside the order striking out the defense. He held that the delay complained of was because the cheques were presented late by the State Bank of India for encashment and for this the tenant could not be blamed. There was no default on his part. There was no dishonesty. Nor any intentional or willful default. As under Section 15(7) of the Act it is discretionary for the Controller to strike out the defense of the tenant, the tribunal found that this was not a case in which the tenant's defense ought to be struck out. He thereforee accepted the appeal of the tenant and set aside the order of the Additional Controller.

(11) As a result of the tribunal's order dated 12th February, .1971 the tenant was allowed to contest the ejectment proceedings. The landlords gave evidence of their bona fide requirement. The tenant cross-examined the witnesses. The case was then finally argued. The controller made an order of eviction against the tenant on the ground of non-payment of rent, as I have said. The claim of personal requirement he rejected. Two questions arise for decision. One is on the appeal of the tenant and the other is on the cross-objections of the landlords which counsel have now confined to the ground of bonafide requirement.

(12) On the tenant's appeal the question is : Has the tenant rendered himself liable to ejectment on the ground of non-payment of rent The tenant gave cheques to the State Bank of India along with treasury challans. These cheques were uncashed later on. The order of the controller directed the tenant to deposit rent month by month by the 15th of the following month. From the challans it appears that the rent was paid beyond the 15th of the month. Obviously the cheques could not have been encased on that very date by the State Bank of India. The collecting banker took time to collect the amount from the tenant's banker. Both the controller and the tribunal found that this delay in the collection of the amount was attributable to the tenant and that he had committed default in the deposit of rent. The tribunal said : 'So it is the tenant who has committed defaults intentionally in depositing month to month rent.' The tribunals, in agreement with the controller, ordered the eviction of the tenant on the ground of non-payment of rent. Whether they were right in so doing is the only question that arises on the tenant's appeal.

(13) In my opinion the tenant cannot be held to be in default. He made payments by cheques. He was entitled to do so. A cheque is a conditional payment. A creditor can legally refuse to accept anything but legal tender in discharge of a debt. Since cheque is not a legal tender, he is not bound to accept the instruments as a means of payment, unless it is part of the contract that this method of payment shall be employed. But if a cheque is tendered to him as payment, and he does not at the time raise any objection, then this method of payment will, if the instrument be duly honoured, operate as an effectual discharge of the debt. Unless accepted unconditionally, any payment except in legal tender, is a conditional payment i. e. discharge from the debt is conditional upon the cheque being duly honoured upon presentation. (Scheldon's Practice and law of Banking 10th ed. p. 14)

(14) As soon as the cheque is handed over to the treasury it can be said that the tenant has paid or deposited the amount. If the cheque is dishonoured then certainly it must be held that the tenant has not paid the amount. But if the cheque is paid by the tenant's banker and the amount is received by the treasury the tenant cannot be Held to be in default. Whether the amount is realised by the treasury after a few days or after a few weeks is not the concern of the tenant. He has done his part by depositing the cheque of the required amount with the treasury officer on or before the 15th of the month. It is not disputed that in .each case over this period of 24 months which ;s the subject matter of the complaint before me all the 24 cheques of the tenant were honoured by his bank. The amount was duly received. The tenant's banker had the necessary funds in his hands. On presentation the cheque was honoured every time without exception. Such was the mandate of the tenant. This conception of the cheque as a mandate and the obligations interse of the mandator and the mandatory, nam(r)ly, the customer and the banker, lie at the heart of the modern banking system. We all pay our taxes by cheques. Why cannot the tenant deposit rent by cheque It is his duty to see that his banker pays the cheque to the collecting banker. If the cheque is dishonoured, the drawer suffers the consequences.

(15) The challans were sent to the court. The only thing was that the treasury challans bore the date of receipt after the 15th. But that does not mean that date will be taken as the date of payment. The date of deposit is the date on which the cheque was given.

(16) In Commer. of Income-tax Bombay v. M/s Ogale Glass Work Ltd., Ogale Wadi, : [1954]25ITR259(SC) the Supreme Court said :

'THATa sum of money may be received in more ways than one cannot be doubted. It may be received by the transfer of coins or currency notes or a negotiable instrument which represents and produces cash and is treated as such by businessmen.'

(17) Payment by cheque was thus held a valid mode of discharging one's liability. (See also Dharmendra Nath and ors. v. Jagdish Prakash 1976 R.C.R. 375.

(18) In a developed society payment by cheque has become a more convenient mode of discharging one's obligation. In Parsaram v. Damadi Lal 1971 R.C.R. 201 (M.P.) the arrears of rent were sent by cheque and the same was held to be a valid tender. Bhave J. observed .' It is no doubt true that issuance of a cheque does not operate as discharge of the obligation unless it is encashed, and it is treated as a conditional payment. Yet, in my view, this is a sufficient tender of arrears if the cheque is not dishonoured. In the present day society I am of the view, implied agreement should be inferred that if the payment is made by a cheque that payment of cheque would be accepted.'

(19) In Damadi Lal v. Paras Ram, 1976 R.C.R. 585 on appeal the Supreme Court approved of these observations. A cheque, unless dishonoured, was held to operate as a valid discharge of debt and, if the cheque was sent by post and was honoured on presentation, the date of payment is the date when the cheque was posted, In contemporary society a payment by cheque, unless dishonoured, ought to be regarded as a valid discharge of debt.

(20) Applying this principle to this case it must be held that the delivery of the cheque to the State Bank of India was valid deposit as the cheque in each case was admittedly given before the 15th of the month in terms of the order of the controller.

(21) I, thereforee, hold that the tenant has not committed any default. He is not liable to eviction on the ground of non-payment of rent.

(22) There is yet another point. On the ground of non-payment of rent the tenant can be evicted after his defense is struck out under S. 15(7) of the Act. For this very period his defense was struck out by the Additional Controller by order dated 27th November 1969. From that order the tenant had appealed to the tribunal. The tribunal by order dated 12th February 1971 had set aside the order striking out the defense. The tribunal found that there was no default and if it was, it was 'a mere technical default,' as he put at it. I have now taken the view that there is no default at all. thereforee after the order dated 12th February, 1971 it was not open to the tribunal to order the eviction of the tenant on that very ground and for that very period which had been the subject matter of an appeal in 1969 and which was decided in fovour of the tenant on 12th February, 1971.

(23) The landlords had complained to the controller that the tenant's defense was liable to be struck out because of the non-compliance of the order dated 28th July, 1967. This application was accepted by the additional controller. On appeal the tribunal had set aside his order. Now without striking out the defense again it is not possible to pass an order of eviction. Surprisingly this is precisely what the authorities have done. They ordered the tenant's eviction without striking out his defense on the ground of non-payment of rent. S. 14(l)(A) lays down that non-payment of rent shall be a ground of ejectment. The machinery is provided in S. 15 read with S. 14(2). The two are complementary. The rights and liabilities of the landlord and the tenant cannot be worked out unless the procedure indicated in S. 15 is followed. It will be strange if the tenant is evicted on the ground of non-payment of rent in the case of first default without making an order requiring him to deposit rent, and on his failure to do so, without striking out the defense. In this case the defense was once struck out by the additional controller. On appeal the tribunal set aside the order in 1971. The period of the alleged default is the same. But in 1979 the tribunal ordered the ejectment of the tenant holding that the tenant had defaulted in the deposit of rent. But this had already been once decided in favor of the tenant in 1971. How could he be ejected on that very ground when the tribunal had already held earlier that there was no default in the deposit of rent. And if at all there was any, it was a 'technical default' which the tribunal was prepared to disregard altogether. This previous order was totally overlooked in this case.

(24) The order of which the landlords complained of non-compliance was passed under S. 15. Now S. 15(7) reads :

'IFa tenant fails to make payment or deposit as required by this section, the Controller may order the defense against eviction to be struck out and proceed with the hearing of the application.'

(25) It is this power which the controller can exercise if the tenant does not make payment or does not deposit the amount as ordered by him. The power is to strike out the defense and to proceed with the hearing of the application. But without striking out the defense it is net possible to order eviction on the ground of non-payment of rent. Where, as in this case, anorder under S. 15 was passed by the additional controller immediately after the institution of the case at the invitation of the landlord, I think, without invoking the power of S. 15(7) it is not possible for the controller or for that matter the tribunal to order of eviction of the tenant on the ground of non-payment of rent, because to hold otherwise will be to take the tenant by surprise at the final hearing of the case without telling him that he is in default and that it is proposed to strike out his defense.

(26) Now the cross-objections. The landlords who are the owners of the property say that they bonafide require the premises. They are two brothers-Prern Chand and Yashpal. The tribunal found that Yashpal was not living in Delhi. He was residing outside. The fisrt floor of the house in question had admittedly fallen vacant. This is now in possession of Prem Chand. Prem Chand has a family of five-be, his wife and three children Two sons-18 and 17 years and one daughter of 9 years of age. The four room set is a separate unit of property. The tribunal found that this set of four rooms was sufficient for the needs of a family of five. He held that the ground of bona fide requirement was not made out. He, thereforee, dismissed the cross-objection.

(27) The question of bonafide requirement has again been agitated before me. I find that there is no change in the circumstances of the family. Conditions have not altered a bit between September 27, 1979 when the tribunal decided the case and today when I am hearing the appeal. Nothing new has been brought to my notice to persuade-me to hold that the premises are bonafide required. Counsel submitted that Prem Chand wants to occupy the ground floor, as he has a special preference for it. I am not impressed by this argument. If the choice of the landlord is capricious the court can certainly control it. I find, as did the tribunal, that this four room set is reasonably suitable for Prem Chand's family. This one unit of habitation is sufficient for a family of live.

(28) Counsel referred me to my decision in Krishan Kumar v. Bimla Sehgal 1976R.C.R.249. That was adecision on different facts. I do not think that case assists the landlords here.

(29) There is one another aspect of the case which remains to be noticed. When the appeal of the tenant was pending before the rent control tribunal the landlords took possession of the promises from the tenant on 9th October, 1976. This was done in execution of the order of eviction passed by the additional controller. The tenant did not ask for stay for dispossession. The landlords applied to the controller for warrant of possession. In execution of the warrant the tenant was dispossessed in 1976 and since then he is out of possession. This is why I gave this case an immediate hearing. Now that the tenant has succeeded in this appeal he is entitled to the possession of the premises from the landlords forthwith.

(30) Counsel for the landlords have argued that the tenant should be required to deposit Rs. 12.50 per month for the period from 1.3.1964 to 9.10.1976 the date on which he was dispossessed. It is admitted by the tenant that for this period he has paid rent at the rate of Rs. 55.00 per month, the interim rate fixed by the additional controller. No doubt the rent has been held to be Rs. 67.50 by this court in revision. The tenant ought to pay the difference of Rs. 12.50 per month. He is prepared to do so. This amount comes to Rs. 1887.50 Counsel for the landlords agree that they have received an excess amount of Rs. 151.00 from the tenant. They are prepared to give a credit for it. thereforee the net amount comes to Rs. 173550. The tenant is directed to deposit this amount of Rs. 1735.50 within one month from today. He will do so in cash with the additional controller. But the landlords will not be entitled to withdraw the amount so deposited unless and until they hand over possession to the tenant in terms of my order.

(31) In the cross-objections the question of allotment of accommodation to the tenant by the Government had been raised. I have not allowed the landlord's counsel to argue this question as it was not a ground of tenant's eviction in these proceedings, separate proceedings, I am told, are pending. I have, however, nothing to do with them. I direct the landlords to put the tenant back into possession forthwith.

(32) For these reasons the tenant's appeal is allowed with costs. The landlord's cross-objections are dismissed with costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //