Hem Chand v. the Delhi Cloth & General Mills Co. Ltd.

that the High Court was in error in holding that under section 15 (1) of the Act the Rent Controller had no discretion to extend the time of one month prescribed under the section. It was 'further argued that in any event the High Court was in error in holding that the Rent Controller was bound to pass an order for recovery of posses­ sion by the landlord when there was a default in payment under section 15 (1) without further bearing of the application by the landlord. In order to appreciate the contentions of the parties it is dei;irable to set out the rele"'1nt provisions of the Act. The main objett for enacting the Delhi Rent Control Act is for providing control of rents and evictions. In order to achieve that object certain restric­ tions are placed on the landlord before getting a tenant evicted. Sec­ tion 14 ( 1) provides that no tenant could be evicted except on an application made to the Controller for an order for recovery of posses­ sion on one or more grounds specified in the section. We are con­ cerned with the ground of default in payment of rent which is pro­ vided for in section 14(1) (a). If the tenant has neither paid nor tendered the whole of the arrears of the rent legally recoverable from him within two months of the date on which a notice of demand for the arrears of rent has been served on him by thCl landlord in lhe manner prescribed, the landlord can apply for recovery of possession. Under the sub-section a notice of demand for arrears of rent should be served by the lancllord on the tenant r"quiring him to pay the arrears of rent within two months. If the tenant pays the arrears of rent within two months of the service of notice, the landlord can­ not get an order for recovery of possession on the ground of default in payment of rent. If the tenant fails to pay as required under section 14(1)(a) the proceedings are taken under section 15(1) of the Act. The Controller shall after giving the parties an opportunity of being heard, make an order directing the tenant to pay to the landlord or deposit with the Controller within one month of the date of the order, an amount calculated at the. rate of rent at which it was last paid for the period for which the arrears of the rent were legally - ; ,> - ,I" ' - ' -- -- - i ,. ' HBM CHAND v. D.C.M. (Kai/asam, I.) 245 recoverable from the tenant with a direction that he should contiuue A to pay or deposit the rent month by month by the fifteenth of each succeeding month. This is a second opportunity provided to the l!eunt to pay the arrears of rent even though he might not have complied with the notice under sectiou 14(1)(a). If the tenant pays the arrears of rent within one month from the date of the order of the Controller as required under section 15 ( 1) the landlord can- not have any further complaint about the default in payment of B rent for section 14(2) provides that no order for the recovery of possession of any premises shall be made on the ground specified in clause (a) of the proviso to sub-section (1) of section 14, if the tenant makes payment or deposit as required by section 15. Therefore if an order under section 15 (1) is duly complied with, the landlord cannot avail himself of the ground specified in section 14(1)(a), that is failure of the tenant to pay arrears of rent within two months of C the date of service of notice on the tenant. This position is made clear by section 15(6) which lays down that if a tenant makes pay­ ment or deposit as required by sub-section ( 1) or sub-section (3), no order shall be made for the recovery of possession on the ground of default in the payment of rent by the tenant. Thus far there is no dispute. A further question arises as to D what are the consequences if the tenant fails to comply with an order under section 15 (1) . On behalf of the tenant it was submitted that the period of one month prescribed under section 15(1) is not manda- tory and that the Rent Controller has discretion to extend the time. In any event it was submitted that the Rent Controller can only pro­ ceed with the hearing of the application and cannot accept failure to comply with section 15(1) by it<elf as the basis for making an E ordoc for recovery of possession. On behalf of the landlord it WM submitted that the view of the Full Bench that when a default is made in complying with an order under section 15(1), the Rent Controller is bound to pass an order for recovery of possession and cannot refuse the landlord's prayer for eviction, is correct. Section 15 (7) provides that if a tenant fails to make payment or deposit as required by section 15(1), the Controller may order the defence p against eviction to be struck out and proceed with the hearing of the application. It is. seen that on the failure by the tenant td make a payment, the Controller may order the defence to be struck out. This confers a discretion on the Rent Controller either to strike out the defence or not depending upon the circumstances ofl the case. It was contended on behalf of the landlord that the word "may" should be construed as "shall" and in the event of non- G comnliance with section 15(1) the nefence against eviction shol'ld be struck out. This contenti<in cannot be accepted for in the context of section 15(7) it is not necessary to construe the word "may" as "shall". It is also in keeping with the legislative intention that a discretion is conferred on the controller either to strike out the defence or not. Further it is significant to note that the •ub- section was amended and the word "may" was introduced in place H of the word "shall" in the Delhi and Ajmer Rent Control Act, 1 <1<;' Section 13(5) as it stood in that Act provided that on fue failure of the tenant to deposit the arrears of rent within fifteen days of the date of the order or to deposit the rent at such rate for any month by the 15th of the next following month, the Court shall order the defence against ejectment to be struck out. The introduction of the word "may" in the place of "shall" should be given its due mean­ ing. The contention of the learned coun~el on behalf of the tenant that the secton confers a discretion on the Rent Controller to strike out the defence or not has to be accepted. If the defence is not struck out the hearing of the application of the landlord will h•ne lo be proceeded with giving opportunity to the tenant to raise his defence but if the defence is struck out the Rent Controller will proceed with :he hearing of the application of the landlord and if the iandlord makes out a case, order his application for recovery of possession. The result is that if the tenant deposits the rent in accordance with the notice under section 14(1) (a) or complies with an order tmder section 15 (I) within one month from the date of the order, the land­ lord cannot recover possession of the premises on the ground specified in section 14(1) (a). But if there is non-compliance of both sec­ tions 14(l)(a) and section 15(1), the cause of action of the hnd­ lord praying for possession of the premises on the ground of failure to pay arrears of rent survives and the landlord can proceed with the application and make out his case. The provisions of the Act do nut warrant the view that in the event of the failure of the tenant to deposit the rent under section 15 (I) the Rent Controller is bound to pass an order for recovery of the possession for it yet remains for the landlord to prove his case that there was non-compliance of section 14(1)(a). It is clear from section 15(7) that an inquir<. will haYe to be proceeded with even when the defence of the tenant has been struck out. More so this procedure is applicable when lhe defence is not struck out but only there is a failure to comply with an order under section 15 (1). The Full Bench of the Delhi High Court has held that if the landlord fulfils the conditions m"ntioned in the clauses to the proviso to sub-section (I) of section 14. includ­ ing clause (a), the Controller was bound to pass an order for reco­ very of possession against the tenant and cannot refuse the landlord the prayer for eviction. In the concluding part of its judgmcn' the Full Bench expressed its view that when the tenant failed to make a deposit of the future rents 'n compliance with the order passed under section 15 (1) against him a right to obtain an order for recovery of possession accrued to the landlord and the Controller had no power to condone the default of the tenant and to refuse to grant this order. While we agree with the view of the Full Bench that the Controller has no power to condone the failure of the tenant to pay arrears of rent as required under section 15 (1), we are satisfied that the l'ull Bench fcll into an error in holding that the right to obtain an order for recovery of possession accrued to the landlord. As we have set out earlier in the event of the tenant failing to comply with the order under section 15 (1) the application will have to be heard giving an opportunity to the tenant if his defence is not struck out under sec­ tion 15 (7) and without hearing the tenant if his defence is struck ont. The Full Bench is therefore in error in allowing the applica­ tion of the landlord on the basis of the failure of the tenant to comply with an order under section 15 ( 1). The landlord - ( \.. ' > / ' ' ' . ' - 7 ( HEM CHAND v. D.C.M. (Kailasam,.J.) 247 had appealed to the High Coort against the order of the Tribunal setting aside the Rent Controller's order striking out the defence. The High Court ought to have considered and decided in the appeal whether the striking out of the defence by the Rent Controller was right or not. If the striking out was right then as the Rent Cont­ roller had proceeded with the hearing of the application and passed an order directing possession to the landlord it ought to be upheld, but in the event of the High Court holding that the order striking out the defence by the Rent Controller was erroneous then the order directing recovery of possession should be set aside and the petition of the landlord heard by the Rent Controller after providing an oppor­ tunity to the tenant to raise his defence . Now the question that remains is whether the Rent Control­ ler has any discretion to extend the time prescribed in section 15 (I). This section requires the Controller, after hearing the parties, to make an order directing the tenant to pay to the landlord or deposit with the Controller within one month of the date of the order, the arrears of rent, with a direction that he should continue to pay or deposit, month by month, a sum equivalent to the rent. This is a second opportunity given to the tenant to pay arrears of rent. Without the protection given under the Act the landlord can on 15 days' notice ending with the month get the tenant evicted. The Rent Control Act protects the tenant from such eviction and gives him an oppor­ tunity to pay the arrears of rent within two months from the date of notice of demand as provided in section 14(1)(a). Even if he fails to pay, a further opportunity is_ given to the tenant to pay or deposit the arrears within one month under section 15 (I). Such payment or deposit in compliance with the order under section 15 (1) takes away the right of the landlord to claim recovery of possession on the ground of default in payment of rent. The legislature has given statutory protection to the tenant by affording him an opportunity to pay the arrears of rent within one month from the date of the order. This statutory provision cannot be modified as rights of parties depend on the compliance with an order under section 15 (1). In the cir­ cumstances, we agree with the Full Bench that the Rent Controller has no discretion to extend the time prescribed under section 15 ( 1). The result is that the appeal by the tenant is allowed and the matter remitted to the High Court with the direction that it shall hear both the appeals preferred by the landlord afresh and dispose them of according to law in the light of our observations. If the High Court holds that the Rent Controller was right in striking out the defence of the tenant, it will allow the appeals of the landlord and direct re­ covery of possession from the tenant. But m the event of the High Court holding that the order of the Rent Controller striking out the defence was erroneous, it will remit the matter to the Rent Controller for fresh disposal, after hearing the parties. Ordered accordingly. There will be no order as to costs. CIVIL APPEAL NOS. 713-714 OF 1976 These two appeals are by the tenant by special leave against the judgment of the High Court of Delhi confinning the order of the Rent Controller and the Rent Tribunal and directing his eviction. - B 248 SUPREMB COURT REPORTS [1978] 1 5.C.R. The eviction was sought for on the grounds of non-payment of rent and acquisition of alternative residence. An order under sec­ tion 15(1) was passed by the Rent Controller directing the tenant to pay arrears of rent within the time allowed and to continue to pay future rent in accordance with the provisions of the section. The tenant did not pay or deposit the rent as directed. The landlord filed an application under section 15 (7) and the Rent Controller struck out the defence and proceeded to dispose of the application of the landlord on taking evidence. On May 17, 1971 the eviction was ordered. Appeals were preferred by the. tenant against the order striking out the defence and directing eviction on account of default in payment of rent. The single Judge of the High Court following the Full Bench decision in The Delhi Cloth and ~neral Mills Co. Ltd. vs. Hem Chand and Anr. (1972 DLT 473) held that the time prescribed un­ der section 15 ( 1) cannot be extended and as the tenant had failed to comply with an order made under that section the appeals were dismissed. Though two appeals were preferred both of them wer<> disposed of on the ground that the Rent Controller had no jurisdiction to extend the time and condone the delay. The question as to whether the striking out of the defence by the Rent Controller was pro(>« or not was not considered by the court. We have held ~her that if it is found that the striking out of the defence was erroneous the tenant is entitled to an opportunity to defend the application, but if it is found that the defence was properly struck out, then the tenant's appeals will have to be dismissed. Both the appeals are remitted to the High Court for disposal in the light of the observations made above. No order as to costs. CIVIL APPEAL NO. 271 OF 1976 This appeal is by the tenant by special leave against the judgment of the Delhi High Court dismissing the tenant's appeal. The tenant failed to pay or deposit arrears of rent as directed under section 15(1) of the Delhi Rent Control Act. In this case the defence of the tenant was not struck out under section 15 (7). The finding of the fOUrtS below that the tenant failed' to comply with an order under section 15 ( 1) is not disputed. The order of eviction is therefore correct and this appeal is dismissed. No order as to costs. SPECIAL LEAVE PETITION (CIVIL) NO. 1364 OF 1975 No merits. Dismissed. P.B.R. ."\ \' - >