Punita Sahni vs Kailash Sethi
2009 Latest Caselaw 3660 Del

*           IN THE HIGH COURT OF DELHI AT NEW DELHI

               Judgment reserved on: 14.07.2009
%              Judgment delivered on: 10.09.2009

+                          CM(M) NO.641/2009

      PUNITA SAHNI                             .....Petitioner
                        Through:    Ms. Aruna Mehta, Advocate

                  versus


      KAILASH SETHI                             .....Respondent
                        Through:    NEMO.


CORAM:
HON'BLE MR. JUSTICE VIPIN SANGHI

1.    Whether the Reporters of local papers may
      be allowed to see the judgment?                 No

2.    To be referred to Reporter or not?              Yes

3.    Whether the judgment should be reported
      in the Digest?                                  Yes


                             JUDGMENT

VIPIN SANGHI, J.

1. The petitioner has preferred the present petition to impugn

the order passed by Ms. Kaveri Baweja, Additional Rent Controller,

Delhi, in E-590/06/98 dated 26.04.2008 thereby striking off the defence

of the petitioner-tenant under Section 15(7) of the Delhi Rent Control

Act, as well as the appellate order passed by Sh. Rakesh Kapoor,

Additional Rent Control Tribunal (West) in R.C.A. No.02/09/08 on

23.03.2009, dismissing the petitioner‟s appeal from the first order.

2. The respondent-landlord had initiated eviction proceedings

against the petitioner under Sections 14(1)(b) and 14(1)(h) of the Delhi

Rent Control Act. An order under Section 15(2) of the said Act was

passed on 25.04.1994, whereby the petitioner was directed to, inter

alia, pay or deposit rent @ Rs.2,000/- per month by 15th of each

succeeding English calendar month.

3. The respondent moved an application under Section 15(7) of

the Act praying that the defence of the petitioner be struck off on

account of the failure of the petitioner to deposit or pay rent for the

months of June, July and August, 2006. After this application had been

moved, the petitioner moved an application to seek permission to

deposit the rent for the months of June, July and August, 2006. Both

these applications were considered and disposed off by the impugned

order aforesaid by the learned ARC. While the application under

Section 15(7) was allowed, the petitioner‟s application for deposit of

rent for the said period was rejected. The learned Additional RCT has

upheld the order passed by the learned ARC.

4. Admittedly, the rent for the aforesaid period was not

deposited as directed vide order dated 25.04.1994. The stand taken

by the petitioner before the learned ARC for not depositing the rent

was that the rent had been delivered to a clerk of the counsel Sh.

Sanjeev Mehta, named Ravi. However, Ravi played a fraud and did not

deposit the rent for the three months. It was stated that Ravi was

residing in a Jhuggi cluster area in Wazirpur, Delhi. It was further

stated that the receipt provided by the clerk was illegible and the

petitioner did not know that the rent for the said three months had not

been deposited. Condonation of delay in depositing the rent was

prayed for by the petitioner. The respondent, on the other hand,

challenged the story set up by the petitioner as being false. It was

contended that no action had been taken against the said clerk, nor

any complaint lodged against him either by the petitioner or his

counsel. The conduct of the petitioner in not depositing the rent for

these three months was also consistent with several previous defaults

in the deposit of rent.

5. The learned ARC while passing the order under Section 15(7)

took into consideration the fact that even the so called illegible copy of

the receipt, stated to have been furnished by the clerk Ravi, had not

been placed on record. The application seeking permission to deposit

the rent for the defaulted period had been moved only after the

respondent had moved the application under Section 15(7) of the Act.

The record pertaining to the earlier deposits made in Court showed

that the deposits had been made by the petitioner herself and not

through the clerk Ravi. The Court found it difficult to believe as to why

rent only for the months of June, July and August, 2006 was given to

the clerk of the Advocate for being deposited, when deposits for other

periods had been made by the petitioner herself. No affidavit of

counsel for the petitioner in support of the application had been filed.

The Court held that there was nothing to show that a clerk, named

Ravi, was in the employment of the petitioner‟s counsel.

6. The Court also examined the earlier conduct of the petitioner.

Rent for the months of September, 2006 to February, 2007 had been

deposited only on 15.02.2007. Rent for the months of March, 2007 to

July, 2007 had been deposited under Section 27 of the DRC Act on

31.05.2007. The rent for the months of August, 2007 to January, 2008

was deposited on 01.08.2007 vide DR. No. 670/06. Despite there

being an order passed under Section 15(2) of the Act, the petitioner

was taking recourse to Section 27 of the Act to deposit the rent. The

same was not being deposited in the court which passed the order

under Section 15 (2) of the Act. The learned ARC also noticed that the

rent for August, 2007 had been deposited only on 01.10.2007 along

with rent for the period September, 2007 to January, 2008. The Court

after considering the decisions relied upon by the petitioner observed

that there is no reason disclosed by the petitioner to come to the

conclusion that the non-compliance of the order under Section 15(2)

was unintentional. The Court held that the default committed by the

petitioner was contumacious and willful, and consequently allowed the

application under Section 15(7) and struck off the defence of the

petitioner. The Court rejected the petitioner‟s application dated

03.04.2008.

7. While dismissing the petitioner‟s appeal, the learned tribunal

observed that only with the appeal, a copy of the challan allegedly

handed over to the petitioner by the clerk Ravi of the counsel,

purported to be a receipt for deposit of rent, along with the affidavit of

counsel in support of the stand of the petitioner was filed. Even the DD

report against the clerk Ravi (not the First Information Report), had

been lodged on 16.05.2008 i.e. after the filing of the appeal. The

tribunal observed that the reason for non-filing of a police complaint

furnished by the petitioner, to the effect that the address of the clerk

was not available, could not be accepted as it was not necessary to

have the exact address of the clerk to be able to lodge a police

complaint. It was observed that if there was any truth in the stand

taken by the petitioner, immediately upon the fraud being discovered,

action would have been taken against the clerk by the petitioner and

by her counsel. This was expected of the counsel who belongs to the

legal fraternity and is thus capable of lodging the FIR on his own. The

tribunal also took note of the fact that even if the petitioner and her

counsel were not aware of the fraud, there was no explanation why no

steps were taken till 03.04.2008, when the petitioner moved the

application to seek condonation of delay, even though the respondent

had filed the application under Section 15(7) of the Act on 01.06.2007.

This shows that for nearly 10 months, despite being put to notice of

the application under Section 15(7) specifically alleging non-

payment/deposit of rent for three months, the petitioner did not bother

in this regard. The tribunal observed that the DD report, which was

lodged only on 16.05.2008, after the filing of the appeal on 12.05.2008

appeared to be merely an attempt to fill up a lacuna in the explanation

furnished by the petitioner.

8. The Tribunal also examined the reason why the petitioner had

made one deposit under Section 27 of the DRC Act, and not directly in

the Court dealing with the eviction petition. The Tribunal found from

the record that the petitioner had moved an application on 13.03.2006

for permission to deposit the rent for February, March, April and May,

2006, as she stated that she had to go to Bombay for treatment. The

said application was disposed off by the learned ARC with the remark

that the rent be deposited without prejudice to the rights and

contentions of the parties. However, the rent was not deposited on

that date. Thereafter, the petitioner resorted to the proceeding under

Section 27 of the Act as she had failed to deposit the rent for the

months of February, March and April, 2006 in time as per the directions

of the Court. The application for deposit of rent under Section 27 was

filed on 10.04.2006 on the plea that the respondent landlord had

refused to accept the rent tendered in person or through money order.

By this application rent of Rs.8,000/- for the period February, 2006 to

May, 2006 was deposited in the Court under Section 27 of DRC Act on

18.05.2006. Pertinently, notice of this application was not issued to

the landlady despite three opportunities being granted to the

petitioner. Eventually, the application was dismissed for non-

prosecution on 31.08.2007. The tribunal, therefore, concluded that the

deposit made under Section 27 was not legally made. The tribunal

held that from the conduct of the petitioner it was evident that the

delay in depositing the rent for the aforesaid period was contumacious

and willful. The tribunal relied upon the following extract from

Maragathammal v. Kamalammal (2006) 8 SCC 152:

"14. We see no reason why the respondent lodged the schedule as late as on 21.11.95 i.e. just the previous day prior to 22.11.95 by which date when she was directed to deposit the entire admitted arrears in Court u/s 11. The respondent could have lodged this schedule on the very next day after the order dated 09.11.95 i.e. on 10.11.95 or within a day or two thereafter. We see no reason why she waited till the eve of 22.11.95, which was the last date of depositing the entire rent in Court.

It is admitted that the respondent tenant has been deliberately avoiding the payment of the rent as and when it fell due. Thus, we respectfully disagree with the view taken by the Madras High Court and we uphold the orders of the Rent Controller dated 09.11.95 and 22.3.96. The impugned judgment of the High Court is set aside and the respondent tenant is granted two months‟ time to vacate the premises in question, failing which she will be evicted by police force."

9. Before me learned counsel for the petitioner has submitted

that the default and delay in depositing of rent was neither willful nor

contumacious. She has sought to place reliance on the following

decisions in respect of her submissions.

10. She refers to the following decisions: -

(i) J. Jermons v. Aliamal & Ors. 1999 (7) SCC 382;

(ii) Santosh Mehta vs. Om Prakash 1980 (1) AIRCJ 697;

(iii) Vatan Mal vs. Kailash Nath 1989 (2) AIRCJ 683;

(iv) Ariana Afgan Airlines Company Ltd. vs. Cycle Equipment, 1979 (1) AIR CJ 58;

(v) Swamy Ratanbabu vs. Wamanrao Shankarrao Deshmukh 1996(1) AIRCJ 17;

(vi) Bibi Amna Khatun & Anr. vs. Zahir Husain & Anr. 1981 (1) AIRCJ 426;

(vii) Hukum Chand vs. Madan Lal 1986 (1) RCR 284;

(viii) Bandi Shah vs. Gangauri Shah 1979 (1) AIRCJ 563; and

(ix) Vijender Kishan Gupta & Anr. vs. Yusuf Engineering Company Pvt. Ltd & Anr. 2008 (102) DRJ 758.

11. The Rent Controller has discretion whether or not to strike out

the defence of the defaulting tenant due to his failure to comply with

the order passed under Section 15 (2) of the Act. This judicial

discretion has to be exercised by the Rent Controller by examining the

facts of the case before him, which would require a consideration of

the explanation furnished by the tenant for his said failure.

12. In Aero Traders Private Limited Vs. Ravinder Kumar

Suri (2004) 8 SCC 307 the Supreme Court in the light of its earlier

decision, has held that Section 15 (7) of the Act confers a discretionary

power on the Rent Controller to strike out the defence of the

defendant. The said power should not be exercised mechanically

without any application of mind to the facts of the case. The Supreme

Court quoted the meaning of "judicial discretion" from Black‟s Law

Dictionary to mean "the exercise of judgment by a judge or court

based on what is fair under the circumstances and guided by the rules

and principles of law; a court's power to act or not act when a litigant is

not entitled to demand the act as a matter of right." The word

"discretion" connotes necessarily an act of a judicial character, and, as

used with reference to discretion exercised judicially, it implies the

absence of a hard-and-fast rule, and it requires an actual exercise of

judgment and a consideration of the facts and circumstances which are

necessary to make a sound, fair and just determination, and a

knowledge of the facts upon which the discretion may properly

operate. (See 27 Corpus Juris Secundum page 289). When it is said

that something is to be done within the discretion of the authorities

that something is to be done according to the rules of reason and

justice and not according to private opinion; according to law and not

humour. It only gives certain latitude or liberty accorded by statute or

rules to a judge as distinguished from a ministerial or administrative

official, in adjudicating on matters brought before him.

13. The learned ARC and the learned Rent Control Tribunal have

given detailed reasons for the exercise of their discretion to strike off

the defence of the petitioner tenant. The question which arises for my

consideration is whether in the facts of this case it can be said that the

exercise of the said discretion by the learned ARC and by the learned

Rent Control Tribunal is erroneous, or not according to law or that they

have failed to exercise the jurisdiction vested in them.

14. In my view, looking at the facts narrated hereinabove it

cannot be said that the exercise of the discretion by the courts below

is erroneous, arbitrary or that they have failed to exercise the

jurisdiction vested in them. Admittedly, despite the order passed by

the learned ARC under Section 15 (2) of the Act dated 25.04.1994, the

rents for the month of June, July and August, 2006 was not

paid/deposited by the petitioner. The stand of the petitioner that the

rent had been tendered to the clerk of the counsel Sh. Sanjiv Mehta by

the name of Ravi, has not been believed by the courts below. The

reasons given by the courts below appear to be germane and it cannot

be said that they are not founded upon relevant considerations.

Pertinently, the petitioner herself used to make the deposit of rent in

court and it was only in relation to the three months in question that it

is claimed that the rent was tendered to the clerk named Ravi for being

deposited in the court. Despite becoming aware of the factum of the

rent not having been deposited in the court (when the respondent filed

the application under Section 15 (7) of the Act on 01.06.2007) no steps

were taken by the petitioner or her counsel to take any action against

the so called clerk called Ravi till as late as 16.05.2008. Action was

taken only after the application under Section 15(7) filed by the

respondent/landlord had been allowed and the petitioner‟s application

to seek deposit of rent had been dismissed by the learned ARC, and

only after the appeal had been preferred before the learned Rent

Control Tribunal on 12.05.2008. The conduct of the petitioner in the

past had been rather casual and recalcitrant in the matter of deposit of

the rent. Both the learned ARC and the learned Rent Control Tribunal

have extracted various instances when rents for varying periods were

deposited late and in breach of the order passed under Section 15(2)

of the Act. I may note that there are some minor discrepancies in the

dates contained in the order of the learned ARC, and in the order of the

Rent Control Tribunal in this regard. However, it is not disputed before

me that there was delay in deposit of rents for the concerned months.

Even going by the dates of deposit as recorded by the learned ARC

which are more favourable to the petitioner, it is evident that rent for

the months of September, 2006 to February, 2007 was deposited on

15.02.2007 and for the months of March, 2007 to July 2007 had been

deposited under Section 27 of the Act on 31.05.2007. Despite being

put to notice as early as in June, 2007 of the application filed by the

respondent under Section 15 (7) with regard to the non-

payment/deposit of rents for the months of June, July and August,

2006, for almost ten months the petitioner did not take any steps to

deposit the rent and it was only on 03.04.2008 that the petitioner

moved the application to seek condonation of delay in depositing rent.

Moreover, the deposit of rent for the months of February, March, April

and May, 2006 was also irregularly made under Section 27 of the Act

and not in compliance of the order under Section 15 (2) of the Act. On

account of the conduct of the petitioner the said rent did not in fact

reach the respondent/landlord within time and the respondent was not

even made aware of the rent being deposited in the court under

Section 27 of the Act. The rent for these four months was initially

directed to be deposited by the learned ARC in response to the

petitioner‟s application that she has to go Bombay for treatment.

However, that was not done. The petitioner then initiated proceedings

under Section 27 of the Act on 10.04.2006 to deposit the rents for the

months of February to May, 2006. The rent for these months was

deposited under Section 27 of the Act only on 18.05.2006. Despite

repeated opportunities, notice was not issued to the respondent/

landlord as steps were not taken by the petitioner. The application

under Section 27 of the Act was eventually dismissed for non

prosecution on 31.08.2007. In these circumstances, in my view, the

learned tribunal was completely justified in concluding that the

petitioner had failed to pay/deposit rents in a legal manner even for

these months. There was absolutely no explanation for such conduct

of the petitioner and the tribunal cannot be faulted for having

concluded that the conduct of the petitioner was contumacious and

willful. In Shanti Prasad Jain (D) through LRs Vs. Prakash Narain

Mathur 158 (2009) DLT 483 a similar argument was raised with

regard to the non-payment/deposit of rent. In that case it was pleaded

that on legal advice, the petitioners had not paid or deposited the rent.

This court rejected the said explanation as no action had been taken

against the counsel who was alleged to have advised against the

payment / deposit of rent in compliance of the order under Section 15

(1) of the Act. The Supreme Court upheld the view of this Court.

15. I may also take note of the recent decision of the Supreme

Court in Sarla Goel & Ors. Vs. Kishan Chand 2009 (9) SCALE 392.

This was a case concerning the application of Section 14 (1) (a) read

with Section 14 (2), Section 15 (1), Section 15 (7) and Section 27 of the

Act. The Supreme Court interpreted the expression „may‟ used in

Section 27 of the Act to mean „shall‟. The court quoted from its earlier

decision in Atma Ram Vs. Shakuntla Rani 2005 (7) SCC (1) the

following extract:

"It will thus appear that this Court has consistently taken the views that in Rent Control Legislations if the tenant wishes to take advantage of the beneficial provisions of the Act, he must strictly comply with the requirements of the Act. If any condition precedent is to be fulfilled before the benefit can be claimed, he must strictly comply with that condition. If he fails to do so he cannot take advantage of the benefit conferred by such a provision."

16. In Atma Ram (supra) the Supreme Court further observed:

"The Act, therefore, prescribes what must be done by a tenant if the landlord does not accept rent tendered by him within the specified period. He is required to deposit the rent in the Court of the Rent Controller giving the necessary particulars as required by Sub- section (2) of Section 27, There is, therefore, a specific provision which provides the procedure to be followed in such a contingency. In view of the specific provisions of the Act it would not be open to a tenant to resort to any other procedure. If the rent is not deposited in the Court of the Rent Controller as required by Section 27 of the Act. and is deposited somewhere else, it shall not be treated as a valid payment/tender of the arrears of rent within the meaning of the Act and consequently the tenant must be held to be in default."

17. The Supreme Court also extracted portions from its earlier

decisions in E. Palanisamy Samy Vs. Palanisamy (D) by LRs. &

Ors. 2003 (1) SCC 123 wherein it had been observed:

"The rent legislation is normally intended for the benefit of the tenants. At the same time, it is well-settled that the benefits conferred on the tenants through the relevant statues can be enjoyed only on the basis of strict competence of the statutory provisions.

Equitable consideration have no place in such matters. The statute contains express provisions. It prescribes various steps which a tenant is required to take. In Section 8 of the Act, the procedure to be followed by the tenant is given step by step. An earlier step is a pre- condition for the next step. The tenant has to observe the procedure as prescribed in the statute. A strict compliance of the procedure is necessary. The tenant cannot straight away jump to the last step i.e. to deposit rent in court. The last step can come only after the earlier steps have been taken by the tenant. We are fortified in this view by the decisions of this Court in Kuldeep Singh v. Ganpat Lal and Anr. 1996 (1) SCC 243 and M. Bhaskar v.

            J.   Venkatarama       Naidu    1996    (6)   SCC
            228.............

            8. Admittedly the tenant did not follow the

procedure prescribed under Section 8. The only submission that was advanced on behalf of the appellant was that since the deposit of rent had been made, a lenient view ought to be taken. We are unable to agree with this. The appellant failed to satisfy the conditions contained in Section 8. Mere refusal of the landlord to receive rent cannot justify the action of the tenant in straightaway invoking Section 8(5) of the Act without following the procedure contained in the earlier sub-sections i.e. Sub-sections (2), (3) and (4) of Section 8. Therefore, we are of the considered view that the eviction order passed against appellant with respect of the suit premises on the ground of default in payment of arrears of rent need no interference."

18. Though Sarla Goel (supra) was not directly dealing with the

case falling under Section 15 (2) read with Section 15 (7) of the Act,

but was a case falling under Section 14 (1) (a) read with Section 14 (2),

15(1) and 27 of the Act, what is of relevance to note is the fact that the

Supreme Court has sought to enforce strict discipline in the matter of

payment / deposit of rent by the tenant who seeks the protection of

the beneficial rent control legislation.

19. Now I proceed to consider the various decisions cited by

learned counsel for the petitioner. In J. Jermon (supra) the default in

payment of rent had been occasioned on account of prohibitory order

of the tax Recovery Officer, wherein it was directed not to pay the rent

to the landlord who was also injuncted from receiving the rent uptil

further orders of that authority. In the light of those prohibitory order

the Supreme Court observed that if there were reasonable grounds for

the tenant to believe that he was prohibited and restrained from

paying rent, then due, on account of this statutory compulsion. In

these circumstances the court held that it cannot be said that the

tenant had committed willful default in payment of rent. The facts of

this case are materially different from the facts in hand.

20. In Miss Santosh Mehta (supra) the Court, in light of the fact

that previously all arrears of rent had been paid by the tenant by

cheuqe or in cash to her advocate; the amount received by the

advocate was not deposited in Court or to the landlord; a complaint

was made to the Bar Council Of Delhi, the moment she got to know

about the fraud of Advocate, took the view that the tenant could not be

said to have failed to pay the rent. The Court concluded that the

tenant had done all that she could have done. The same cannot be

said of the present petitioner. The facts of this case are also materially

different from the facts in hand.

21. In Vatan Mal (supra) the Supreme Court held that merely

because there had been some delay or omission here and there in

payment/deposit of rent over a long period of time (eight years in that

case) it could not be said that there was willful default committed by

the tenant. The Supreme Court in that case was concerned with the

interpretation of Section 13A of the Rajasthan Premises (Control of

Rent and Eviction) Act, 1950, and the Supreme Court held that the

tenant would not be denied the benefit of Section 13A because the

Section has been given overriding effect in so far as the suits and other

proceedings which are pending on the date of the promulgation of the

Ordinance whereby Section 13A was introduced. The language of

Section 13A of the aforesaid Act is materially different from the

provisions contained in Section 15 of the Delhi Rent Control Act.

Moreover, even on facts the situation in Vatan Mal (supra) is

materially different from that before me. I am, therefore, of the view

that this decision has no relevance in the facts of the present case.

22. In Arian Afgan Airlines (supra), the default in payment of

arrears of rent was attributable to some ambiguity in the order. The

Court after considering the tenant had deposited a very large amount

and the default was confined to a comparatively minor part of the

order in which there was ambiguity, held that in the circumstances, the

tenant cannot be said to have been guilty of such conduct so as to

attract the extreme penalty provided in Section 15(7) of the Act.

However, in the present case there is no such ambiguity in the order

passed under Section 15(2) of the act, which could be said to have

created any confusion in the mind of the appellant. The default in

payment is entirely attributable to the petitioner.

23. In Ratanbabu (supra) the court in the light of the facts that

the landlord had been earlier receiving the rents at irregular intervals

and never at any time protested against the receipt of rent paid

belatedly, came to the conclusion that though the tenant is under

obligation to pay monthly rent regularly but by conduct there is a

contract to the contrary that the rent paid at irregular intervals would

not constitute habitual default in payment of rent. The facts in

Ratanbabu (supra) are materially different from the case in hand as

there was never an intention of the landlord to condone the delayed

payment of rent and the respondent had instituted the suit for eviction

for default in payment of rent. Hence, this case does not advance the

case of the appellant. Moreover, there does not appear to be any

pleading to this effect to establish any past regular course of conduct

on the part of the parties.

24. In Hukum Chand (supra), the tenant had paid the arrears of

rent along with rents for the months of February and March. In the

light of these facts, the Court was of the view that the landlord should

be deemed to have waived the default in payment of rent by accepting

the delayed payment as determined by the Court 20.04.1981. The

landlord on the very next day i.e. on 21.04.1981 filed an application

under Section 13(s) of the Rajasthan Premises (Control of Rent

Eviction) Act, 1950 for striking of the defence of the tenant after

accepting the arrears. In the present case the application moved by

the respondent under Section 15(7) had been moved before accepting

the rent for the defaulted months. In fact, there was no tender by the

petitioner of the rent for the defaulted months. Consequently, there

was no question of the respondent accepting the same. This decision,

therefore, has no application in the facts of this case.

25. Similarly in Bandi Shah (supra), the principle of waiver was

applied. In this case the landlord had moved an application for striking

of the defence on account of non-payment of rent on time.

Subsequently the landlord made an application for withdrawal of rent

deposited by the tenant. In these circumstances the Court was of the

view that there had been a waiver of his rights by the landlord since he

had himself made an application to withdraw the rent deposited by the

tenant for the defaulted period. Facts in both Hukum Chand (supra)

and Bandi Shah (supra) are materially different from the case in hand

and does not support the cause of applicant.

26. Vijendra Kishan Gupta (supra) is also of no assistance to

the petitioner, as it was not a case under the Delhi Rent Control Act.

Moreover, there is no ratio discernible from this judgment to the effect

that whenever the tenant is in default in payment of rent the tenant is

entitled to further time being granted by the Court for making deposit

of rent.

27. Consequently, I am of the view that none of these decisions

are of any aid to the petitioner. The learned Additional Rent Controller

and the learned Rent Control Tribunal have exercised the judicial

discretion vested in them regularly by consideration of relevant facts

and application of correct principles. I find no infirmity in the

impugned orders. Accordingly, I dismiss this petition.

(VIPIN SANGHI) JUDGE SEPTEMBER 10, 2009 as/rsk/dp