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Harisondas Chunilal Chokshi Vs. Prabhavatiben - Court Judgment

LegalCrystal Citation
SubjectConstitution
CourtGujarat High Court
Decided On
Case NumberCivil Revn. Appln. No. 706 of 1971
Judge
Reported inAIR1973Guj240; (1973)GLR438
ActsConstitution of India - Articles 14 and 19
AppellantHarisondas Chunilal Chokshi
RespondentPrabhavatiben
Appellant Advocate J.G. Shah, Adv.; G.t. Nanavaty, Asst. Govt. Pleader, for;
Respondent Advocate M.C. Shah and; K.C. Shah, Advs.
Cases ReferredK. L. Gupte v. Corporation
Excerpt:
constitution - striking off defence - articles 14 and 19 of constitution of india and section 151 of code of civil procedure, 1908 - suit against petitioner tenant for possession of suit premises - trial judge order directing to deposit rent under section 11 (4) prior to putting up defence by tenant failing which tenant's defence be struck off - judge had no jurisdiction to direct to struck off defence - such anticipatory order cannot even be made under section 151 - held, order passed by trial judge without jurisdiction. - - 1. an interesting and important question as to the interpretation of sub-section (4) of section 11 of the bombay rents, hotel and lodging arises in this civil revision application house rates control act 1947 thereinafter referred to as ('the act') as well as.....p.d. desai, j.1. an interesting and important question as to the interpretation of sub-section (4) of section 11 of the bombay rents, hotel and lodging arises in this civil revision application house rates control act 1947 thereinafter referred to as ('the act') as well as relating to its constitutional validity similar questions were also raised in four other civil revision applications,. we have heard the learned advocates appearing in those applications as well when this matter was called on for hearing. this judgment will, therefore, dispose of common questions of law involved in all the five matters.2. the opponent is the landlord of a residential building bearing census no.s.h./2/130 situate in birasa's pole in the city of baroda, the petitioner is a tenant in possession of a part.....
Judgment:

P.D. Desai, J.

1. an interesting and important question as to the interpretation of sub-section (4) of Section 11 of The Bombay Rents, Hotel and Lodging arises in this civil revision application House Rates Control Act 1947 thereinafter referred to as ('the act') as well as relating to its constitutional validity similar questions were also raised in four other civil revision applications,. we have heard the learned Advocates appearing in those applications as well when this matter was called on for hearing. This judgment will, therefore, dispose of common questions of law involved in all the five matters.

2. The opponent is the landlord of a residential building bearing Census No.S.H./2/130 situate in Birasa's Pole in the City of Baroda, The Petitioner is a tenant in possession of a part of the said building, namely, four rooms on the third floor (hereinafter referred to as the suit premises) at Rs.90/- as rent per month. The opponent filed a suit, being Regular Civil suit No.586 of 1970 in the Court of the Civil Judge (Junior Division). Baroda against the petitioner inter alia for possession of the suit premises, recovery of a sum of Rs.747.03 Possession. being arrears of rent and mesne profits with future interest and for a permanent injunction restraining the petitioner from transferring the possession of the suit premises to any other person. The case of the opponent as set out in the plaint was that the petitioner was in occupation of the suit premises as a tenant since March 1, 1952 and that a sum of Rs.720/- was due from him as arrears of rent up to January 31, 1970. Act notice dated February 28, 1970 was therefore served upon the petitioner terminating his tenancy and calling upon him to hand over vacant possession of the suit premises to the opponent and further calling upon him to pay the arrears of rent, The petitioner, in response to the said notice, sent a sum of Rs.270/- only on or about March 20, 1970. The opponent, thereupon, instructed the petitioner on March 24, 1970 to send the balance of the amount due as arrears of rent. The opponent alleged that the petitioner did not comply with the requisition and neither handed over vacant possession of the suit premises nor paid the arrears of rent. On the contrary, the petitioner allegedly threatened that he would sub-let the suit premises. The suit was. therefore, filed on April 18, 1970 for the reliefs aforementioned.

3. The petitioner, by his written statement filed on august 28, 1970 resisted the suit. He admitted that he was a tenant in occupation of the suit premises at the rent of Rs.90/- per month. He alleged that the notice served upon him by the opponent was received on March 5, 1970 and that he had thereafter sent a total sum of Rs.810/- on or before April 25, 1970. He was, therefore, not a tenant in arrears of rent and the suit filed by the opponent was false and not maintainable. We are not concerned at this stage of the proceeding with the other defences raised by the petitioner. It would appear from the foregoing narration of facts that the petitioner did not raise a dispute as to the standard rent of the suit premises.

4. On January 18, 1971 the opponent made an application Exhibit 31 purporting to be an application under sub-section (4) of Section 11 of the Act, alleging that a sum of Rs.1,710/- was due from the petitioner as rent and/or mesne profits for the period of 19 months commencing from June 1, 1969 and ending with December 31, 1970 and that as against the said dues the petitioner had paid to the opponent a sum of Rs.710/- only. It was further alleged that the petitioner had not raised any dispute as to the standard rent of the suit premises. the opponent, therefore, prayed that in these circumstances the petitioner should be directed to deposit in the Court forthwith a sum of Rs.1,000/- (being the arrears of rent and mesne profits) and a further sum of Rs.300/- towards the costs of the suit. The opponent also prayed that the petitioner should be further directed to deposit in Court every month a sum of Rs.90/- during the pendency of the suit and that in case the petitioner failed to comply with the order of the Court, his defence should be struck off.

5. The petitioner filed his reply to the aforesaid application contending inter alia that sub-section (4) of Section 11 of the Act under which the application was purportedly made was unconstitutional and the application was, therefore, not maintainable. According to the petitioner the provisions of the said sub-section were violative of the fundamental rights guaranteed under Article 14 of the Constitution of India since they conferred arbitrary powers on the Court to pass orders of far-reaching consequences in case a tenant failed to comply with the directions issued by the Court under the said sub-section. The petitioner also contended that the provisions of the said sub-section were contrary to the provisions of Section 7 of the Act since they authorised the court to require a tenant to deposit in the Court such amount of rent as the Court considers to be reasonable due to the landlord without first determining the standard rent payable by him. These were the grounds on which the petitioner urged that the application made by the opponent was not tenable.

6. The application was posted for hearing and after hearing the petitioner as well as the opponent, the learned trial Judge passed an order on June 16, 1971 which may be fully set out:-

'Heard the learned advocates on both the sides. This is a suit for eviction on the ground of arrears of rent for a period of more than six months. The defendant No.1 has not raised dispute of standard rent. Hence in my opinion he must be ordered to deposit rent under Sec. 11(4) of the Rent Act prior to puting up his defence. I, therefore, order that defendant No.1 to deposit the arrears of rent of Rs.1,000/- till the date of suit plus the amount of rent due after the suit in Court on or before 1.7.1971. The learned advocate for the defendant submitted that defendant No.1 has deposited same amount in Court towards the arrears of rent but he has no material to say as to what amount his client has deposited in Court. However if he has deposited any amount in court the defendant No.1 to deposit the amount deducting the amount deposited by him till today. If he fails to deposit in Court the arrears of rent due till 30.6.1971 on or before 1.7.1971 his defence will be struck off.'

It is this order passed by the learned trial Judge which is impugned in this civil revision application.

7. Though the aforesaid order was challenged in the memo of the civil revision application of several grounds. at the hearing of the application, the challenge was confined only to the following three grounds:-

I. Sub-section (4) of Section 11 is violative of Article 14 of the Constitution of India inasmuch as on a proper construction of the said sub-section.:

(i) it confers unfettered, arbitrary and unchannelised powers on the Court to make orders having far-reaching effect and consequences including an order refusing to the tenant leave to defend the suit; and

(ii) it authorities the Court to make such orders without issued a notice or affording a reasonable opportunity of being heard to the tenant.

II. Sub-section (4) of Section 11 is ultra vires Article 19(1)(f) of the Constitution since it imposes an unreasonable restriction on the fundamental right of a tenant to hold property; the provisions of the said sub-section suffer from the vice of substantive and procedural unreasonableness and are not in public interest.

III. On a true and proper construction of sub-section (4) of Section 11 the trial court had no jurisdiction to pass the impugned order.

we shall proceed to examine these grounds in the order in which we have set them out above.

8. Act proper determination of these grounds depends primarily on the true interpretation of sub-section (4) and (5) of Section 11 in the light of the policy and object as well as of the other provisions of the Act and it would, therefore, be convenient to examine first the question of construction of the said sub-section of construction of the sub-sections. Before we do so, however, we may refer to some of the other sections of the Act which have a hearing on the question under consideration. The Act, as its preamble suggests, was enacted to amend and consolidate the law relating to the control of tents. repairs of certain premises, of rates of hotels and lodging houses and of eviction. The Act is undoubtedly enacted mainly for the benefit of tenants and to protect them from landlords who might exact exorbitant or unconscionable rents and evict them from the premises in their possession in these days of scarcity of housing accommodation. These twin objects run like a single thread through the entire fabric of the Act. In order to achieve these objects, the Act imposes certain restrictions on the right of landlords in the matter of charging rent and evicting tenants. Sub-section (1) of Section 12 provides that a landlord shall not be entitled to the recovery of possession of any premises so long as the tenant pays or is ready and willing to pay the amount of the standard rent and permitted increases, if any, and observes and performs the other conditions of the tenancy, in so far as they are consistent with the provisions of the Act. For the protection of tenants, this sub-section enacts a rule of decision and imposes a prohibition against a landlord recovering possession of the premises demised to a tenant so long as the tenant satisfies, the conditions prescribed in the said sub-section is available also to any person remaining, after the determination of the lease, in possession with or without the assent of the landlord. The protection given by sub-section (1) of Section 12 to a tenant is further subject to the provisions of Section 13 and also subject to certain limitations and restrictions, procedural as well as substantive, contained in Section 12. We are not concerned with that aspect in the present case and need not notice those provisions. Sub-section (2) of Section 12 enacts a further restriction on the landlord's right to recover possession of premises leased out to a tenant and provides that no suit for recovery of possession shall be instituted by a landlord against a tenant on the ground of non-payment of standard rent or permitted increases due until the expiration of one month next after the notice in writing of the demand of the standard rent for permitted Increases has been served upon the tenant in the manner provided in Section 106 of the Transfer of Property Act, 1882. this sub-section requires the landlord to give one more opportunity to the tenant to pay rent due by him before suing the tenant in ejectment on the ground of non-payment of standard rent or permitted increases.

The Act defines the expression 'standard rent' in sub-section (10) of Section 5. In order to define 'standard rent'. The legislature has taken certain rents as basic rents and they are referred to in clauses (a) and (by-law) (i) (ii) and (iii) of the said sub-section. The power to fix standard rent is conferred on the Court by sub-section (1) of Section 11 which provides that in any of the cases specified therein, the Court may, upon pose, or in any suit or proceeding. fix the standard rent at such amount as, having regard to the provisions of the Act and the circumstances of the case, the Court deems just, one of the cases , the Court deems just, one of the cases in which the Court has the power to fix the standard rent is where there is any dispute between the landlord and the tenant regarding the amount of standard rent. It would appear from the language employed in sub-section (1) of Section 11 that while determining the standard rent, the Court has to take into consideration (i) the provisions of the Act, (ii) the circumstance so each case and (iii)just character of the amount. The power to fix standard rent thus calls for regulated exercise of judicial discretion. Sub-section (2) of Section 11 empowers that Court to determine the amount of permitted increases if there is any dispute between the landlord and the tenant regarding such amount.

Nest come sub-sections (3), (4) and (5) of Section 11 which were substituted for original sub-section (3 ) by Gujarat Act 57 of 1963 These sub-sections read as under:-

'(3) If any application for fixing the standard rent or for determining the permitted increase is made by a tenant who under sub-section (2) of section 12, the Court shall make an order directing the tenant to deposit in Court forthwith, and thereafter monthly or periodically, such amount of rent or permitted increases as the Court considers to be reasonably due to the landlord pending the final decision of the application and a copy of such order shall be served upon the landlord. Out of the amount so deposited the court may make order for the payment of such reasonable sum to the landlord towards payment of rent or increases due to him, as it thinks fit. If the tenant fails to deposit such amount, his application shall be dismissed.

(4) where at any stage of a suit for recovery of rent, whether with or without a claim for possession of the premises, the Court is satisfied that the tenant is withholding the rent on the ground that the rent is excessive and standard rent should be fixed, the Court shall, and in any other case if it appears to the Court that it is just and proper to make such an order the court may, make an order directing the tenant to deposit in Court forthwith such amount of rent as the Court considers to be reasonably due to the landlord. The court may further make an order directing the tenant to deposit in court monthly or periodically, such amount as it considers proper as interim standard rent during the pendency of the suit. The court may also direct that if the tenant fails to comply with any such order within such time as may be allowed by it, he shall not be entitled to appear in or defend the suit except with leave of the Court which leave may be granted subject to such terms and conditions as the court may specify.

(5) No appeal shall lie from any order of the Court made under sub-section (3) or (4).'

We are not concerned with the provisions of sub-section (6) and hence need not refer to them.

9. It would be a little pertinent to delve into the legislative history in order to ascertain the object of the legislature behind enacting these sub-sections and substituting them in the place of original sub-section (3). As stated earlier, the Act was enacted with a view to protecting the tenants against eviction and against their being compelled to pay exorbitant rents. It was, however, necessary at the same time to ensure that the landlords were not put to undue hardship at the hands of recalcitrant tenants who might seek shelter under the provisions of the Act by raising frivolous dispute as to standard rent or permitted increases and declining to pay to landlords any amount by way of rent. The protection against eviction, which is embodied in Section 12 is, therefore, made available to a tenant who pays or is ready and willing to only pay the amount of standard rent and permitted increases and observes and performs the other conditions of the tenancy in so far as they may not be inconsistent with the provisions of the Act, It is obvious, therefore, that a tenant who is not ready and willing to any and does not pay the amount of standard rent and permitted increases. If any, would not be entitled to the protection of the Act. One of the modes in which a tenant can show his readiness and willingness to pay the amount is laid down in the explanation to Section 12 which enacts a rule of evidence. The said explanation in substance provides said explanation in substance provides that if after the service of the notice upon the tenant by the landlord under sub-section (2) of Section 12 the tenant makes an application to the Court under Sub-section (3) of Section 11, before the expiry of the period of one month and thereafter pays or tenders the amount of rent or permitted increases specified in the order made by the Court till the disposal of the suit, the Court is bound to presume that the tenant is at the date of the decree ready and willing to pay the standard rent and permitted increases, Sub-section (3) of Section 11 as it stood before its deletion by Gujarat Act 57 of 1963 authorised the Court in case an application for fixation of standard rent or for determining the amount of permitted increases was made by a tenant who had received the notice from his landlord under sub-section (2) of Section 12, forthwith to make an order specifying the amount of rent or permitted increases to be paid by the tenant pending the final decision of the application. The amount of rent specified by the Court thereunder was in the nature of interim rent pending the final determination of the standard rent. The reason behind enacting sub-section (3) in its original form was to prevent the recalcitrant tenant from making an application for fixation of standard rent as pretext for refusing to pay rent to the landlord. Sub-section (3) as it then stood, however, imposed no obligation on a tenant to deposit any amount in the Court nor had the Court any power thereunder to compel the tenant to do so or pay to the landlord the amount, if any, that the tenant chose to deposit in Court during the pendency of the said application. The power to pay to the landlord a part or whole of the amount which the tenant may voluntarily deposit was, however, for the first time given to the court by an amendment which was effected by Bombay act 61 of 1953 which came into force with effect from March 31, 1954, By that amendment, sub-section (4) was added to Section 12 and it authorised the Court. pending disposal of any suit for recovery of possession., to pay to the landlord such amount towards payment of rent or permitted increase due to him as the Court thought fit out of any amount paid or tendered by the tenant in the Court it would thus appear that the Act, as it stood before its amendment by act 57 of 1963, did not make any provision for compelling the tenant to pay or deposit in Court any amount towards rent during the pendency of a suit for recovery of rent with or without a claim for possession even if there was no dispute as to standard rent. Even in proceedings initiated on an application under Section 11(1) such power was not exercisable by the court. Act suit for recovery of arrears of rent and possession or an application for fixation of standard rent ordinarily runs through the gamut of three courts and it usually takes several years before the same is finally decided. The result was that during all that period the tenant was in a position to withhold the rent sometimes on a false pretext that it was excessive. This used to cause great injustice and hardship to the landlords. It is in order to obviate this hardship and mischief that original sub-section (3) was deleted and sub-sections (3) and (4) were substituted in its place by Act 57 of 1963. This is abundantly clear from the statement of objects and reasons of the Amending act in which it is found stated that since original sub-section (3) did not contain any provision requiring the tenant to deposit the amount of rent in Court in a suit for recovery of rent, it was considered desirable to amend the said sub-section (3) and to insert in its place sub-sections (4) and (5) sop as to make the necessary provision in that behalf (vide: statement of objects and reasons, Gujarat government gazette, Part V dated September 12, 1963, p. 325). It is thus clear that sub-sections (3) and (4) are intended to protect landlords and to prevent recalcitrant tenants taking undue advantage of the protection afforded to them by the Rent act and its provisions would, therefore, have to be interpreted in a manner that may advance the remedy and suppress the mischief.

10. Turning now to the question of interpretation. We are not directly concerned in this proceeding with the question of the construction of sub-section (3) of Section 11. We may, however, briefly notice the provisions of the said sub-section since both sub-sections (3) and (4) are two component parts of a single scheme. The said sub-section casts a duty on the Court, in the proceedings initiated upon an application for fixing the standard rent or for determining the permitted increases made by a tenant who has received a notice from his landlord under sub-section (2) of Section 12 to make an order directing the tenant to deposit in court forthwith, and thereafter monthly or periodically, such amount of rent or permitted increases as the Court considers to be reasonably due to the landlord pending the final decision of the application. the ;provisions of sub-section (3), therefore, apply to a proceeding initiated upon an application under Section 12. In such a proceeding it is obligatory for the Court to make an order directing the tenant to deposit in the court forthwith and thereafter monthly or periodically such amount of rent or permitted increases as the Court considers to be reasonably due to the landlord. Be it noted, however, that by an order made under this sub-section, the Court does not fix the standard rent or determine the dispute as to permitted increases, it only directs the tenant to deposit forthwith and at stated intervals the amount towards rent or permitted increases which it considers 'to be reasonably due' top the landlord pending the determination of the application, In case the amount is deposited. sub-section (3) further authorises the Court to make an order for payment of such reasonable sum to the landlord towards rent and increases due to him as it thinks fit, If, however, the tenant fails to deposit such amount, the said sub-section authorises the Court to dismiss his application, Non-compliance with the order to make a deposit is, therefore, visited with the penalty of dismissal of the application.

11. Next comes sub-section (4) of Section 11 with which we are immediately concerned in the present case, it is attracted in a case where the landlord has filed a suit for recovery of rent whether with or without a claim for possession of the premises in question. In other words, it applies to a suit for recovery of rent simpliciter as also to a composite suit for recovery of rent and possession. In such a suit, it contemplates in the first instance an order being made by the Court at any stage of the suit directing the tenant to deposit in court forthwith such amount of rent as the Court considers to be reasonably due to the landlord. What is important and requires to be noted , however is that in one set of circumstances it imposes a duty on the Court to make the aforesaid order whereas in other set of circumstances it leaves to the judicial discretion of the Court to make such an order. If the Court is satisfied that the tenant is withholding the rent on the ground that the rent is excessive and standard rent should be fixed the sub-section imposes a duty on the Court to make an order of the nature referred to above. In any other case, however, it empowers the Court to make such an order if it appears to the court that it is just and proper to make such an order. It would thus appear, in the first place, be made only where the rent has in fact not been paid; secondly, that it must be made where the Court is satisfied that the tenant is withholding the rent on the ground that the rent is excessive and standard rent should be fixed, and thirdly, that it may be made in any other case if it appears to the Court that it is 'just and proper' to make such an order. Unless the first and the second or the first and the third of these conditions are satisfied no order of the nature contemplated by sub-section (4) can be made by the Court, Furthermore the tenant can be directed to deposit only such amount of rent as the Court considers to be ' reasonably due' to the landlord. In considering whether it is just and proper to make such an order and also as to what amount of rent if reasonably due to the landlord , the Court will have to bear in mind inter alia the provisions of the act, the circumstances of each case and the reasonableness and justness of the amount claimed as due from the tenant by the landlord. Of course, an order of this nature is only preliminary to the trial of the suit and it would not be necessary for making such an interim order to have a full dressed trial. The Court will have to make an order on the basis of the affidavits filed by the parties or such other material as may be made available to it at that stage and may even enter upon a prima facie investigations into the question whether any amount whatever is due by the tenant to the landlord. For instance, if the tenant on affidavits or otherwise makes out a good defence of satisfaction, it would be open to the court to consider it at that stage and on the basis of the tentative conclusion reached by it on a prima faci inquiry, it may hold that no amount was reasonably due to the landlord by the tenant. We must make it clear, however, that the decision thus reached by the Court would be only for the purpose of determining whether in the facts and circumstances of the case an interim order ought or ought not to be made. It would not preclude the landlord or the tenant, as the case may be, from leading evidence in regard to the amount due by the tenant to the landlord at the trial of the suit. In other words, such an order would stage and even if the tenant deposits any amount which the court direct, his pleas, if any, that nothing was due, to the landlord would not remain untried.

12. sub-section (4) also empowers the court to make a further order directing the tenant to deposit in Court, monthly or periodically such amount as it considers proper as 'interim standard rent' during the pendency of the suit. This power is a discretionary power which the Court may exercise in a case where the tenant is withholding rent on the ground that it is excessive and standard rent should be fixed as also in any other case . Two things are required to be noted while considering the question of the scope and ambit of the power which this part of sub-section (4) confers on the Court: first that the amount which the Court directs the tenant to deposit in the court, monthly or periodically, must be such as 'it considers proper as interim standard rent' and secondly, that it is not the final determination of the suit. The exercise of judicial discretion in making such an order is in terms regulated by the provisions contained in the said sub-section. Before giving the requisite direction, the Court would have to satisfy itself that the amount which it directs a tenant to deposit is such as it considers proper as interim standard rent. The material and important expression to be noted in 'interim standard rent' which the legislature has advisedly used and not the expression 'interim rent'. In quantifying the amount, the Court would therefore, have to arrive at a prima facie or tentative conclusion at that stage on the material then available to it as to what could properly be the standard rent of the premises. In other words the court can direct the tenant to deposit in Court monthly or periodically only such amount during the pendency of the suit the provisions of the Act, the circumstances of the case and just character of the amount. We wish to make it clear however, that an order of such a nature would not be a final order but would be an order preliminary to the trial of the case as will as of the dispute as to standard rent. for the purpose of making such an interim order it would not be necessary to have a full trial at that stage and the Court would have to quantify the amount on a prima facie appreciation of the material then available to it after taking into account relevant considerations mentioned above. Such an order, however, would not preclude further hearing and final determination of issue will have to be ultimately decided on the evidence led at the trial. This aspect of the matter is clearly emphasized by the use of the expressions 'interim', and during the pendency of the suit' which are found prefixed and suffixed respectively to the expression 'standard rent' in sub-section (4)

13. Unlike sub-section (3) sub-section (4) does not contain a provision that out of the amount deposited in the Court the Court may make an order for the payment of any sum to the landlord towards the rent or permitted increases due to him. That is, however, so because as stated earlier, sub-section (4) of Section 12 provides that pending the disposal of any such suit (suit for recovery of possession), the court may, out of any amount paid or tendered by the tenant pay to the landlord such amount towards payment of rent or permitted increases due to him as the Court thinks fit. It is true that the power under sub-section (4) of section 12 can be exercised only when the deposit is made in a suit for recovery of possession on the ground of arrears of rent and that the said sub-section does not in terms apply to a suit for recovery of rent without a claim for possession. It appears to us, however, that having regard to the object with which the power has been conferred upon the court to direct the tenant to make deposits in Court and further having regard to the fact that once the amount is deposited it is in the custody of the court the power to pay to the landlord such amount towards rent as it thinks fit out of the amount deposited must be necessarily implies and that such power would inhere in the court Even in a suit for recovery of rent simpliciter, it would therefore, be open to the court to make an order for the payment of such reasonable sum to the landlord out of the amount deposited with it towards payment of rent or increases due to him as it thinks fit.

14. Next comes the provision of sub-section (4) which authorities the court to direct that if the tenant fails to comply with any such order within such time as may be allowed by it he shall not be entitled to appear in or defend the suit except with leave of the Court which leave may be granted subject to such terms and conditions as the Court may specify. It is a discretionary power which enables the Court to direct that in the event of non-compliance with any of the orders made by it under the preceding part of the said sub-section the tenant would not be entitled to defend the suit except with the leave of the Court. The object behind enacting this part of sub-section (4) is evident. It provides the requisite sanction to the interim orders made by the Court under the said sub-section by authorising the Court to prescribe the consequences of non-compliance of its orders. The legislature clearly intended that sub-section (4) should be a complete code in itself and that it should not only provide for the Court issuing necessary directions for deposit of amount towards rent during the pendency of the suit, but that provision should also be made to secure the enforcement of such orders by investing the court with the power to penalise the party guilty of non-compliance with its orders. Unless such provision was made, the orders directing deposits to be made could have been rendered futile by a recalcitrant tenant by openly flouting them. it is with this object that the last part of sub-section (4) is enacted.

15. The question which we must next consider is as to at what stage such a direction can be given by the Court and further whether the tenant must be given a clear indication in advance that the Court would exercise the poser available to it under this part of sub-section (4) in case of non-compliance with its orders. Now, so far as the first pears to us that an order under this part of sub-section (4) can be made by the court either at the time at which it makes the orders specified in the earlier parts of the said sub-section or it may make it even later. if it finds that its order has not been complied with, by allowing the tenant simultaneously further time to comply with it. To give an illustration, if the Court has directed that the amount which it has ordered the tenant to deposit in the Court should be deposited on or before the fifteenth day of a given month. it order further issue a direction under the last part of sub-section (4) and provide that if the tenant fails to comply with such an order within the time prescribed he shall not be entitled to appear in an defend that suit except with the leave of the Court. it is open to the Court however, not to issue such a direction at that stage. If during the time allowed by the court the tenant is unable to make the deposit and approaches the Court for extension of time. it would be open to the court to issue the direction contemplated by the last part of sub-section (4) at that stage and order that if the tenant fails to comply with the order of deposit within the extended time allowed by it, he shall not be entitled to appear in or defend the suit except with the leave of the Court. The second aspect of the question which we have passed above is, however more important. It would clearly appear from the forgoing discussion that the consequence that the tenant shall not be entitled to defend the suit except with the leave of the Court is a consequence which follows upon the direction issued by the Court in that behalf which direction is issued to secure compliance with its order. the direction must. therefore, be issued at a point for time earlier than the consequence. In other words, the tenant must have notice in advance that if he fails to comply with the order made by the Court within the time allowed by it, he shall not be entitled to appear ion and defend the suit except with the leave of the Court. There must be a clear prior indication that his right to appear in and defend the suit would not be exerciseable by him except with the leave of the Court ion case he fails to comply with the order of the Court within the time limited by it. The right to defend is a valuable right under our system of administration of justice; it is also an essential and integral postulate of the rule of law by which we are governed. it would be idle to contend that that right could be taken away by the Court unless the tenant is told in advance that the consequence as set out in the last part of sub-section (4) will follow as a penalty in the event of non-compliance with the order of the Court. Act similar view has been taken by Sarela J. in Pirubhai Ramjibhai v. Trikamlal Nanjibhai : AIR1969Guj285 and we are in respectful agreement with the view expressed by him.

16. The next question which we must consider is as to what would be the scope and effect of the order passed under the last part of sub-section (4). In this connection it may be borne in mind that his provision is akin top the provision found in Order 37 r 2 of the code of Civil Procedure. In case such a direction is issued, non-compliance with the order of the Court would preclude the defendant from appearing in and defending the suit. it is true that the conjunction used in 'or' and not 'and' however, having regard to the context that the word 'not' appearing in the expression 'he shall not be entitled to appear in or defend the suit' qualifies both 'to appear in' and 'defend'. It is clear that the tenant in case of non-compliance with the order of the Court would neither be entitled to appear in nor defend the suit except with the leave of the Court if a Direction in that behalf has been issued by the Court. Unless the tenant applies for leave to defend and the leave is granted to him unconditionally, or if granted conditionally unless the conditions are fulfilled the tenant would not be entitled to appear and participate at the hearing of the suit: It requires to be noted, however, that this is not a provision analogous to the provision or Order XI, rule 212 of the Code of Civil :Procedure which speaks of striking out defence in case of non-compliance with the order of discovery made by the Court. If the tenant has already filed his written statement of defence or even led evidence before the order is made or becomes effective, the written statement of defence or the evidence on record, as the case may be, would not as it were be obliterated from the record nor does it necessarily follow that when leave to defend has been refused to the tenant, the Court would be bound to pass a decree in favour of the landlord. The rent Court is a court of limited jurisdiction and it will have to be satisfied that the grounds on which it can pass a decree exist in a given case. The Court would not, therefore, be able to pass a decree even in such a case of it finds from the pleading as well as from the evidence on record that the landlord has failed to make out such a case. It is also clear that the order refusing leave to defend would be effective only until the decree is passed by the trial court. It would not, however, affect the tenant's right to appeal in case a decree is passed against him and it would be always open to the tenant to prefer an appeal to an appropriate court under section 29 (1)(a) or (1) (by-law) of the act as the case may be.

17. We might also observe that the proper procedure which would be required to be followed in issuing a direction under the last part of sub-section (4) would be for the Court to state in its order in the first instance that unless the tenant complies with the order passed by it within the time allowed by it, he shall not be entitled to appear in or defend the suit except with the leave of the court. In case of non-compliance with such order, it would be open to leave to appear in and defend the suit and it that application the tenant may show cause as to why he could not comply with the order of the Court and pray that an unconditional order granting leave to defend should be passed. The Court after hearing both the sides will have to determine inter alia whether having regard to the circumstances of the case, non-compliance with the order of the Court was wilful or contumacious or was for reasons beyond the control of the tenant or for any other sufficient cause. it may then pass any of the following orders: (i) it may refuse leave to defend; (ii) it may grant leave to defend unconditionally or (iii) it may grant leave to defend on such reasonable terms and conditions as it may specify including the foundation that the amount should be deposited by the tenant in the court before entering upon defence. In considering the question as to which of the orders should be passed the Court would have to exercise its judicial discretion having regard to the facts and circumstances of each case.

18. Next comes sub-section (5) which provides that no appeal shall lie from any order of the Court made under sub-section (3) or (4). the effect of this provision is that no order under sub-section (4) would be an appealable order. The order may however, be subject to revision under section 115 of the Code of civil Procedure and also subject to the scrutiny of the High Court under Article 227 of the Constitution of India if it is found in a given case that the order raises a question which could be dealt with or decided in exercise of such posers. It may also be mentioned that Rules 9, 9-D and 13 of the Bombay Rents, Hotel and Lodging House Rates Rules, 1948, which deal with the procedure in appeals under section 29 (1) (a) and (b) of the Act, provide that the appellate court shall as far as may be and with necessary modifications follow the practice and procedure prescribed for appeals from original decrees by the Civil Procedure code, Section 105 of the code of Civil Procedure would therefore, be attracted and it would be open to a tenant to set forth any error, defect or irregularity in any order passed by the trial Court under sub-section (4) when he prefers an appeal under Section 29(1) (a) or (b) of the act, as the case may be, In such an appeal the tenant would be entitled to challenge inter alia an order refusing leave to defend or an order imposing onerous terms and conditions which might virtually have had the effect of denying to him the opportunity to defend the suit. It may be pertinent to note in this connection that a Division Bench of the Bombay High court has taken the view that in an appeal from the final order passed in a summary suit under order XXXVII of the code of Civil Procedure, it is open to the appellant to challenge the interlocutory order giving conditional leave to defend the suit on terms specified by the Court, (vide Mandalal v. Kedarnath, 32 Bom LR 660 = (AIR 1930 Bom 364)

19. Having dealt with the construction of sub-sections (4) and (5) of section 11 we will now proceed to consider the specific grounds of challenge urged on behalf of the petitioner.

Re. Ground I (i) :

20. It was strenuously urged on behalf of the petitioner that sub-section (4) of section 11 confers upon the Court an unfettered. arbitrary and unguided power to make orders which might have far-reaching effect and consequences and that the said sub-section was, therefore ultra vires Article 14. The argument, in our opinion, is untenable, while dealing with the question of construction of sub-section (4) we have indicated that the power conferred upon the court under sub-section (4) has to be exercised by the court on it being satisfied about the existence of the conditions laid down therein. The said sub-section prescribes the nature of proceedings in which the orders contemplated thereby and be made, it also prescribes the scope and ambit of such orders and, on a true and proper construction. it is clear that orders thereunder are to be made in the exercise of judicial discretion having regard to certain factors and in the light of the facts and circumstances of the case. The tenant could be directed to deposit in court forthwith only such amount of rent as the Court considers to be 'reasonably due' and further directed to deposit in the Court monthly or periodically only such amount as it considers proper as 'interim standard rent'. the discretion, if any, that the tenant shall not be entitled to appear in and defend the suit expect with leave of the court would become effective only if the tenant fails to comply with any such order passed by the Court and in considering the question whether leave should be granted or not in case of default and, if so, on what terms the court has again to take into account all the facts and circumstances of the case. This discretion, having been vested in a court of law, has to be exercised judicially on well-recognised principles and would be immune from challenge on the ground of arbitrariness or want of guidance. Furthermore in our opinion, the guidelines (are?) clearly contained in the statute; that apart the discretion being judicial is required to be exercised on general principles guided by rules of reason and justice on the facts of each case and not in any arbitrary or fanciful manner. If in a given case, the discretion is exercised in an arbitrary or unjudicial manner or in total disregard of relevant considerations or by taking into account irrelevant considerations. it would always be open to the party aggrieved to seek relief in appropriate proceedings, as indicated earlier. this challenge must, therefore, fail.

20. Re. Ground I (ii)

21. The argument under this had was that sub-section (4) does not in terms require that the court should make any of the orders thereunder after issuing a notice of affording a reasonable opportunity of being heard to the tenant and the sub-section is, therefore, violative of Article 14. This argument is also ill-founded. It is true that sub-section (4) does not in terms enact that the said sub-section, the Court should issue a notice to the tenant and give him an opportunity to controvert the case of the landlord or to put forward his own case. However, it appears to us clear, having regard to the nature of the orders which the court is authorised to pass under the said sub-section and the factors a which it is required to take into consideration before passing such orders that the duty of giving a notice as well as a hearing to the tenant must be necessarily implied. We also cannot overlook the fact that the power to make orders under the court and that such power is to be exercised in the course of a judicial proceeding. Under our system of administration of justice no order affecting the rights of a party would ordinarily be made by a court without issuing a notice and giving a hearing to such party, even if an ex parte order is passed to meet the exigencies of a situation, such order would not be confirmed unless the party likely to be affected thereby has been given an opportunity to put forward his case. It is therefore, plated by sub-section (4 ) can be made by the court without issuing a notice and giving a hearing to the tenant. The challenge on that ground must also, therefore, fail.

Re. Ground No.II :

22. The challenge under this head was formulated in the form of the following three grounds: (i) the unfettered and arbitrary power conferred on the Court under sub-section (4) authorising it to direct the tenant to deposit an amount which it considers reasonably due to the landlord as well as such further amounts, monthly or periodically, as it considers proper as interim standard rent, amounts to an unreasonable restriction on the right to hold property since it enables the Court to compel the tenant to pay into the Court a sum of money which may ultimately be found to be in excess of standard rent and, therefore, not due from him; (ii) exercise of power under the said sub-section might result in depriving the tenant of his property in the shape of money in cases where the standard rent is ultimately fixed at a lower rate and the amount paid to the landlord out of the amount deposited is found to be in excess of what was due to him on the fixation of standard rent; this consequence would follow because under Section 20 of the Act any amount paid on account of rent is recoverable by the tenant from the landlord within a period of six months only and in no proceeding would the interim standard rent be finally determined before the period of six months is over: (iii) the provisions of sub-section (4) suffer from the vice of procedural unreasonableness in that (a) an order passed under the last part of the said sub-section might deprive the tenant of his right to defend the suit and (b) no appeal lies from any order of the Court made under the said sub-section.

23. Before we proceed to consider the validity of these grounds, we may briefly consider the scope of the challenge based on the ground that the said sub-section is violative of the fundamental rights guaranteed under Article 19(1)(f) read with sub-clause (5) of the said Article. In this connection, it requires to be noted that in order to substantiate the said challenge the petitioner will have to establish two things: (i) that the provisions of sub-section (4) impose restrictions on his fundamental right to hold property and (ii) that the said restrictions are unreasonable. We may clarify that the challenge on behalf of the petitioner was directed not to the decision or order passed by the Court in the present case under sub-section (4) but to the sub-section itself which entitles the court to pass such orders which might be violative of the fundamental rights. In order to succeed in this challenge, the petitioner will have to establish that the proximate effect and operation of the impugned provisions are such as to take away or arbitrarily restrict the fundamental right of the petitioner under Article 19(1)(f). In other words, he will have to establish that the direct and inevitable consequence of the impugned provision is to deprive him of his property; mere [possibility or indirect effect of the impact of the impugned provision in a conceivable case would not vitiate the said provision (vide: Express Newspapers (P.) Ltd. v. Union of India : (1961)ILLJ339SC .

24. It would also be required to be borne in mind while testing the validity of the challenge advanced by the petitioner that none of the provisions contained in sub-section (4) has a direct and inevitable consequence of depriving the petitioner of his possession of the premises demised to him. If, in a given a tenant on account of his noncompliance with any of the orders passed by the Court under the said sub-section and ultimately a decree for possession in favour of the landlord is passed in such a suit, it cannot be said that the tenant has been deprived of his right to hold property as a result of the proximate effect and operation of sub-section (4). The challenge under Article 19(1)(f), therefore, must of necessity be confined to the deprivation or restriction on the right to hold property in the shape of money.

25. As regards the first ground of challenge under this head , it is obvious that it is founded on the premise that sub-section (4) confers arbitrary and unguided powers on the Court to pass orders authorised thereby. As pointed out earlier, this assumption is not warranted . The power conferred upon the Court depends upon regulated exercise of judicial discretion and the very premise on which this ground is founded is therefore, wanting,. The amount which the court can direct a tenant to deposit in the Court under sub-section (4) is an amount which it considers to be reasonably due to the landlord and which it further considers to be proper as interim standard rent, Even while making this order, the Court has to take into account relevant factors to which we have adverted earlier. This amount is deposited in the Court and paid to the landlord towards rent which the Court prima facie funds to be just and fair rent payable by the tenant to the landlord for the occupation of the premises in the tenant's possession. The amount deposited in the Court and paid to be landlord is recoverable by the tenant or is liable to be adjusted against future rent in case it is ultimately found that it is in tenant was liable to pay to the landlord. In these circumstances, we are unable to appreciate the contention that an order directing the tenant to deposit amounts in Court towards rent is a deprivation of his right to hold property in the shape of money or an unreasonable restriction on such right.

26. As regards the second ground of challenge under this head the argument though ingenious, is without substance. As pointed out earlier, the mere possibility or indirect effect of the impact of the impugned provision in conceivable cases would not vitiate the said provision. The argument advanced on behalf of the petitioner falls within the mischief of this rule and the challenge based on such premises cannot. therefore, be entertained. That apart, where an amount is deposited by the tenant in the Court towards rent and payment is made to the landlord under the order of the Court out of such amount, it would be implicit the order that if the Court finally assesses standard rent at a lower rate and if it is found on fixation of the standard rent at a lower rate that excess payment has been made to the landlord the excess payment would be adjusted under the final orders of the Court which passed the interim order. The order directing the tenant to deposit a particular amount forthwith or periodically made under sub-section (4) is essentially an order of a temporary character in the sense that it is to operate during the pendency of the proceeding and is subject to the final assessment of standard rent, It would not be open to the landlord to claim that no part of the interim rent receive by him is liable to be refunded even if the Court fixes standard rent at a rate less than the rate at which interim rent had been fixed. In our view therefore if the amount paid under an order made under Section 11(4) is in excess of the standard rent ultimately assessed, the excess amount received by the landlord is liable to be refunded by the landlord or adjusted against future rent by an order of the Court made at the time of final determination of standard rent.

27. Reliance was, however, placed on behalf of the petitioner on the provisions of section 20 of the act and it was urged that unless such excess amount of rent is recovered by the tenant from the landlord or adjusted against future rent within a period of six months from the date of payment, the claim for such recovery would be time-barred. We find that this is an argument of despair and that it [proceeds upon a misconstruction of Section 20 of the act. section 20 provides that any amount paid on account of rent after the date of the coming into operation of the Act shall except in so far as payment thereof is in accordance with the provisions of the Act, be recoverable by the tenant from the landlord to whom it was paid or on whose behalf it was received or from his legal representative at any time within a period of six months from the date of payment and may without prejudice to any other remedy for recovery be deducted by such tenant from any rent payable by him to such landlord. this section would have no application in case of an excess payment made in compliance with the order of the court under sub-section (4). The said section prescribes a period of limitation in respect of payment except in so far as the payment is made 'In accordance with the provisions of this act'. a payment made in compliance with an order of the court passed under sub-s. (4) would be a payment made in accordance with the provisions of the Act and S. 20 would not apply to such payment. the period for recovery of rant paid by the tenant in excess of standard rent would not therefore, be governed by the provisions of the said section. we are supported in the view which we are taking by the decision of Mr. Justice J.C. Shah ( as he then was) in Chakradeo v. Goolabanubai 58 Bom LR 454 where the learned Judge has taken the same view with regard to the provision of section 20.

28. On behalf of the petitioner, reliance was however placed on the decision of Chagla, C.J. in Karamsey Kanji v. Velji Virji, 56 Bom LR 619 and on two decisions of the Supreme court, namely. Manganlal v. Chandrakant : [1969]1SCR58 and Jamnadas v. Narayanlal, AIR 1970 SC 1221 and it was urged that these decisions clearly ruled that section 20, which gives a tenant general right of recovery of the over-paid rent within six months of the date of payment, would bar recovery of such excess payment beyond the period of limitation even by deduction or adjustment. We are unable to agree with the contention urged on behalf of the petitioner. all the three decisions referred to above refer to payments made voluntarily by the tenant and not to payment made in compliance with the order of the court under sub-section (3) or (4) of Section 11. a tenant who voluntarily pays to the landlord any amount towards rent which is ultimately found to be in excess of standard rent, must undoubtedly take action for recovery of such excess payment by bringing a sit or making deduction or adjustment within a period of six months. where, however, the amount of rent is paid in compliance with the orders of the court such payment would be in accordance with the provisions of the Act and even though more than six months might have elapsed since the date on which the excess amount of rent was paid by the tenant the orders the court by the landlord out of the amount deposited by the tenant. the tenant would still be entitled to obtain an order from the Court directing the landlord to refund the excess amount paid by him or to adjust the excess payment made against the rent accruing due at the stage when the final order is passed.

29. As regards the third ground it raises two questions: fist whether the provisions of sub-section (4) in so far as they authorise the court to direct that if the tenant fails to comply with any order passed by the Court under the said sub-section within such time as may be allowed by it, he shall not be entitled to appear in or defend the suit except with leave of the court can be said to restrict or deprive the tenant of any of his fundamental rights guaranteed by Article 19 and if so, whether such restriction is unreasonable and, secondly, whether the fact that no appeal lies from any of the orders passed under sub-section (4) makes the provisions of the said sub-section susceptible to challenge under article 19(1)(f) of the ground that they suffer from the vice of procedural unreasonableness. In this connection. we must observe in the first place that right to defend. though a valuable right is not a fundamental right; it is a open to the legislature to provide restrictions on a citizen's right to defend in a legal proceeding or to regulate his right to defend in such proceeding and the provisions which prescribe such restrictions cannot be impugned as contravening any fundamental right (vide: Navinchandra v. Bachubhai : AIR1969Guj124 ). A rule can be made by the legislature that the defendant will have to adopt a certain procedure and to act in a particular manner within a certain time in order to be heard in a legal proceeding. The provisions of sub-section (4) are in the nature of rules of procedure framed with certain objects in view (reference to which has already been made in the earlier part of this judgment) and they cannot be said to contravene any of the fundamental rights. Secondly, we are unable to see how the last part of sub-section (4) of its own force and as a direct. proximate and inevitable consequence can be said to affect the right to hold property. Mere possibility of leave to defend being not granted and a decree for possession being passed in a conceivable case of that nature would not vitiate the said provision. Thirdly, as indicated earlier, the impugned part of sub-section (4) leaves the Court with enough discretion in the matter of granting leave to defend the suit and the discretion has to be exercised judicially and the terms and conditions. if any, subject to which leave to defend is granted are to be imposed having regard to the circumstances of the case and other relevant considerations. In these circumstances, we are unable to uphold the challenge to the last part of sub-section (4) on the ground that it violates Article 19 of the Constitution.

30. The challenge based on the ground that an order made under sub-section (4) is not appealable and therefore that part of the said sub-section suffers from the vice of procedural unreasonableness is again without substance. In the first place for the reasons already indicated a challenge under Article 19(1)(f) is not open at all in considering the provisions of sub-section (4) is competent is a matter of no consequence since the powers to make orders under the said provision vested in a Court of law and the powers are to be exercised by it in its judicial discretion on being satisfied about the existence of certain conditions. The Court has to pass several orders in the course of a judicial proceeding and not all orders are made appealable even under the Code of Civil Procedure. Besides, it is well settled that the mere fact that no appeal lies from a decision is by itself and in all case not a ground for declaring a provision of law as violative of the fundamental rights guaranteed under the Constitution (See for illustration, K. L. Gupte v. Corporation, Greater Bombay. : [1968]1SCR274 ). We have already have earlier that in cases of arbitrary or ultra vires orders it would be open to the party aggrieved by such order to move the High Court to quash such orders in the exercise of its powers under Section 115 of the Code of Civil Procedure or under Article 227 of the Constitution. The present case is an instance in the point. That apart. it would be open to a party aggrieved by an order refusing leave to end or imposing onerous conditions while granting leave to defend. to challenge the validity of such an order in the appeal which may be preferred from the final decree. A person aggrieved by such an order is, therefore. not wholly without remedy and the order is not made final in that sense. This ground of challenge must. therefore. be rejected.

Re. Ground No. III :

31. There is substance in this ground of challenge urged on behalf of the petitioner. The impugned order has been fully set out in the earlier part of this judgment and it would appear therefrom that the Court has directed that if the petitioner fails to deposit in Court the arrears of rent on or before July 1, 1971, his defence would be struck off. While dealing with the question of construction of sub-section (4) of Section 11, we have pointed out that the Court has no jurisdiction under this sub-section to direct that the defence may be struck off. Such an order could not. therefore, have been passed under sub-section (4) of Section 11. Such an anticipatory order directing that defence would be struck off could not have been made even under Section 151 of the Code of Civil Procedure, since such an order cannot be said to be necessary for the ends of justice or to prevent or to prevent abuse of the process of the Court. Simply because a party has not complied with the order of the Court. it cannot be said to involve failure of justice or abuse of the process of the Court. That apart. the Court could not have anticipated. on the date on which the order was made. whether non-compliance of its order would be wilful or contumacious. Such an anticipatory order could, therefore, never have been made under Section 151 of the Code. The conclusion is. therefore, inevitable that the last part of the order is wholly without jurisdiction and would have to be set aside.

32. The question then is as to what final order should be passed in this proceeding. Since we are of the opinion that the last part of the learned trial Judge's order is unsustainable. we would have ordinarily quashed only that part of the order. It appears to us. however, that in the present case in order that a proper workable order can be made by the learned trial Judge after taking into consideration all the relevant factors, it would be desirable to set aside the whole order and to remand the matter to the trial Court for passing fresh orders on the application Ex. 31.

33. In the result. the petition is allowed. The impugned order passed by the trial Court is set aside. The matter is remanded to the trial Court with a direction to rehear the application filed by the opponent and to dispose it of in the light of the observations made in this judgment and in accordance with law. Rule made absolute with no order as to costs in terms aforesaid.

34. Petition allowed.


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