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Judgment Summary — D.K. Kapur, J. (Appeal under Section 39, Delhi Rent Control Act, 1958)

Factual and Procedural Background

This appeal by the tenant (Shrimati Rama Gupta) arises from an eviction application founded on the ground of non-payment of rent. The landlord, Rai Singh Kain, succeeded before both the Rent Controller and the Rent Control Tribunal. The Controller and Tribunal based their decision on the proviso to section 14(2) of the Delhi Rent Control Act, 1958, concluding that the tenant had previously avoided ejectment by depositing rent in an earlier proceeding and therefore was not entitled to the protection of section 14(2) again.

Procedural history set out in the opinion:

  • An earlier eviction petition had been brought on two grounds: non-payment of rent and bona fide personal requirement. In that earlier proceeding an order directing deposit of arrears was passed. The tenant contested on the basis that the standard rent was Rs. 14 (contractual rent Rs. 50), did not make the deposit, and her defence was struck out. An eviction order followed on both grounds.
  • The tenant appealed twice to the Rent Control Tribunal. The Tribunal remanded the matter to the Controller to decide on merits after a fresh order under Section 15(3). After remand an order of 18 January 1963 again directed deposit at Rs. 50 per month; on appeal the Tribunal on 15 March 1963 directed interim deposit at Rs. 30 per month from 4 August 1960.
  • On 29 April 1964 the landlord's counsel withdrew the eviction petition before the Controller; the Controller's order recorded the withdrawal and directed payment to the petitioner of amounts deposited by respondent, "subject to adjustment on fixation of standard rent."
  • Following the withdrawal, the tenant again did not pay rent and the landlord served a notice of demand dated 27 December 1964 (claimed arrears Rs. 570 calculated at interim rate Rs. 30 per month). Non-compliance led to the present eviction petition instituted on 6 October 1966.
  • The tenant produced a receipt (Exhibit R-1) for Rs. 339.48 said to relate to rent and electric charges; both the Controller and Tribunal did not accept the receipt as genuine.
  • Separately, there were proceedings for fixation of standard rent initiated in December 1961 which culminated in an order dated 10 October 1966 fixing standard rent at Rs. 25 per month with effect from December 1961.

Legal Issues Presented

  1. Whether the tenant had already obtained the benefit under the proviso to section 14(2) of the Delhi Rent Control Act, 1958, in the earlier eviction proceedings (such that she would be disentitled to claim that benefit again).
  2. Whether the notice of demand (Exhibit A-2 dated 27 December 1964) was valid, given uncertainty about the legally recoverable rate of rent while standard-rent proceedings were pending and in view of the earlier interim rent order.

Arguments of the Parties

Appellant (Tenant) — Principal contentions

  • The tenant contended in earlier proceedings that the standard rent was Rs. 14 and therefore did not make the deposit ordered by the court; her defence was struck out in that earlier case.
  • In the present petition she claimed a receipt (Exhibit R-1) issued by the landlord purporting to show payment up to October 1966 (receipt for Rs. 339.48), seeking to demonstrate compliance with rent demands.
  • Counsel for the tenant (Mr. G.S. Vohra) submitted that the notice of demand Exhibit A-2 was invalid because it did not give two months' time as alleged and—importantly—because it was based on an interim rent of Rs. 30 which, it was submitted, had ceased to be operative when the earlier proceedings concluded (so the tenant could not be required to pay rent at that interim rate).

Respondent (Landlord) — Principal contentions

  • The landlord's position (as recorded in the eviction petition) was that the tenant had not complied with the demand for rent and was not entitled to protection under the Act because, by reason of the proviso to section 14(2), the tenant had previously obtained the benefit of avoiding eviction by depositing rent in earlier proceedings.
  • In the earlier proceedings the landlord's counsel later withdrew the eviction petition and sought payment of the amounts deposited to the petitioner; the Controller recorded the withdrawal and dismissed the application as per the landlord's statement.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Smt. Sumitra Rani v. Bennet Coleman Ltd., 1970 R.C.R. 566 Holding that if a tenant saves himself from ejectment by making a deposit (even though not strictly under Section 15), the tenant may be regarded as having obtained the benefit analogous to that under section 14(2). The court noted that in Sumitra Rani an ejectment order was passed on compromise conditioned on later payment; later payment satisfied the condition and eviction did not occur — the Court in that case construed that outcome as equivalent to a s.14(2) benefit. The present Court distinguished the instant facts from Sumitra Rani because in the present case the eviction petition was withdrawn by the landlord rather than the tenant obtaining the protection by deposit or satisfying a condition.
Life Insurance Corporation of India v. Meghraj Mannulal, 1970 R.C.R. 794 Payment of rent by the tenant on the first date of hearing (so that no Section 15 order was needed) can be equivalent to making a deposit post a Section 15 order, and thus amount to obtaining the benefit under section 14(2). The court recorded that this principle shows courts may treat certain payments which defeat ejectment as equivalent to a formal s.15 deposit. However, the present case was distinguished because this case involved voluntary withdrawal by the landlord, not a tenant's payment/prescribed deposit defeating ejectment.
Bhaj Datta v. Brij Narain Bagji, S.A.O. No. 192 of 1970 (decided 28 April 1971) Where a conditional ejectment order provides that eviction will be satisfied if the tenant pays by a specified date and that condition is fulfilled, the tenant is treated as having obtained the benefit equivalent to section 14(2). The judge (author of the present opinion) explained that in Bhaj Datta he had held conditional satisfaction of an ejectment order to be equivalent to s.14(2) benefit, because it amounted to an extension of time under section 15(1). He clarified that Bhaj Datta did not envisage the third possibility present here—withdrawal of an eviction petition by the landlord—which the present court held was not equivalent to granting the tenant a statutory benefit under section 14(2).

Court's Reasoning and Analysis

The court proceeded through a sequence of legal determinations grounded in the statutory text and the factual record:

  1. Interpretation of section 14(2) proviso: The court emphasised that the proviso to section 14(2) applies only where the tenant has availed of the statutory protection by making a payment or deposit under section 15 — in short, when the tenant "got the benefit" under section 14(2).
  2. Examination of the earlier proceedings and the nature of any deposit: Although a deposit had been made in accordance with court orders in earlier proceedings, the record did not show that the deposit resulted in the tenant obtaining the benefit under section 14(2). The earlier ejectment petition was not dismissed because the tenant had made a deposit; it was dismissed because the landlord withdrew the petition and took out the deposit. The court concluded that a landlord's voluntary withdrawal of an eviction petition cannot be equated to the tenant having obtained the statutory benefit under section 14(2).
  3. Distinction from precedents: The court carefully distinguished the present case from Sumitra Rani and LIC v. Meghraj Mannulal, which treated certain payments or compromises as equivalent to s.14(2) protection. Those cases involved situations where the tenant's payment or a compromise condition directly resulted in avoiding eviction; the present case involved withdrawal by the landlord for reasons not of record and thus did not amount to the tenant obtaining the statutory benefit. The earlier self-authored decision (Bhaj Datta) was also distinguished on the ground that it dealt with conditional orders that effectively extended time under section 15(1), whereas here the landlord's withdrawal created a different situation.
  4. Validity of the notice of demand (Exhibit A-2): The court accepted the tenant's submission that the notice of demand was invalid because it relied on a rate of interim rent (Rs. 30) that had ceased to be operative once the prior eviction proceedings were withdrawn. The standard-rent proceedings remained sub judice and, in the absence of an interim rent order under section 10 or an operative interim rate, the legally recoverable rent could not be ascertained on 27 December 1964 (or within two months thereafter). Because the legally recoverable rent was unknown, the tenant could not tender the correct arrears and therefore could not comply with the demand — meaning the notice could not serve as a valid cause of action for ejectment on the ground of non-payment of rent.
  5. On Exhibit R-1 (receipt): The court observed that had it not been for the fundamental defect in the notice of demand, it would have remanded the case to the Controller to determine the genuineness of Exhibit R-1 and to pass an order under Section 15, since the Rent Control Tribunal's treatment of Exhibit R-1 was described as "most unsatisfactory." The court noted reasons suggesting Exhibit R-1 could be genuine (the standard-rent fixation at Rs. 25 and absence of affirmative evidence by landlord that signatures were not genuine) and said the Tribunal's requirement of a handwriting expert was not necessarily correct. Nonetheless, because the notice itself was invalid, remand was unnecessary for the final disposition in this appeal.

Holding and Implications

Holding:

APPEAL ACCEPTED; the order of ejectment is set aside.

The court's principal conclusions and immediate implications for the parties (based exclusively on the opinion):

  • The Controller and the Tribunal erred on a substantial question of law in holding that the tenant had obtained the benefit under section 14(2) in the earlier proceedings; the withdrawal of the earlier eviction petition by the landlord did not constitute the tenant obtaining that statutory benefit.
  • The notice of demand (Exhibit A-2 dated 27 December 1964) was invalid because the legally recoverable rate of rent was not ascertainable at that time (standard-rent proceedings were pending and no operative interim rent order existed), and thus it could not furnish a cause of action for eviction for non-payment of rent.
  • Consequent orders: Because the decision turned principally on the invalidity of the notice of demand, the court ordered that the parties bear their own costs throughout.
  • The court did not make an express pronouncement that it was creating any broad new legal precedent; the decision applied statutory interpretation and distinguished prior authorities to the facts of this case, producing the direct effect of setting aside the ejectment order and remitting no further relief to be granted by remand (since the cause of action itself was defective).

Disposition: Appeal accepted; ejectment order set aside; parties to bear their own costs.

    Shrimati Rama Gupta v. Rai Singh Kain .

    D.K Kapur, J.:— This appeal under Section 39 of the Delhi Rent Control Act, 1958 is by the tenant. The appeal arises of an application for eviction brought on the ground of non-payment of ent. The landlord, Rai Singh Kain, has succeeded both before the Rent Controller as well as the Rent Control Tribunal. The decision has been given on the basis that the tenant, Shrimati Rama Gupta had previsously avoided ejectment by depositing the rent in court, and hence she was not entiled to get that benefit again. In other words, the decision is based on the proviso to section 14(2) of the Act. The tenant has now appealed to this Court. A very simple question arises for decision in this case namely: did the tenant get any benefit under section 14(2) of the Act in a previous eviction case based on the ground of non-payment of rent? The facts of the case may now be set out The previous application for eviction under the Act was brought on the ground of non-payment of rent as well as on the ground of bona fide personal requirement. In those proceedings an order directing the deposit of arrears of rent was passed. The tenant contested the case on the ground that the standard rent was Rs. 14/-, as against the contractual rent of Rs. 50/-, hence she did not make any deposit and her defence was struck out. Subsequently, an order for eviction was also passed against her on both grouads of ejectment. She filed two appeals to the Rent Control Tribunal which were accepted by Shri Pritam Singh Pattar, the then Rent Control Tribunal, who remanded the case back to the Controller with a direction to him to re-decide the case on marits after passing a fresh order under Section 15(3) of the Act. After remand the Additional Rent Controller again passed an order on 18th January, 1963 directing the deposit of arrear of rent and the future rent at the rate of Rs. 50/- per month. An appea was taken against this order, which was accepted by the Rent Control Tribunal on 15th March, 1963, and the tenant was directed to deposit arrears of rent at the interim rate of Rs. 30/- per month with effect from 4th August, 1960 upto-date within one month.

    2. On 29th April, 1964 a statement was made by the counsel for the landlord before the Controller, withdrawing the eviction petition and the following order was passed:—

    “In accordance with the statement of the counsel for the petitioner, the application stands dismissed. The amount deposited by respondent be paid to the petitioner subject to adjustment on fixation of standard rent. Parties shall bear their own costs.

    Sd/- Sudarshan Aegarwal,

    A.R.C “Delhi.”

    3. It appears that after this order the tenant again did not pay the rent to the landlord and hence a notice of demand dated 20th July, 1964 was sent to her claiming Rs. 570/- as arrears of rent calculated at the interim rate of Rs. 30/ per month. This, was not complied with and hence the present eviction petition on the ground of non-payment of rent was instituted on 6th October, 1966. In this petition it was stated that the “tenant had not complied with the demand for rent made on 27th December, 1964 and she was not entitled to protection under the Act because of the proviso to section 14(2) of the Act The tenant contested this and also claimed that a receipt Exhibit R-1 had been issued by the landlord relating to the rent up to October 1966. This receipt is for Rs. 339.48 and states that the payment is for rent for ten months of 1956 plus electric charges for the bill of August 1966 paid in the month of October 1966 and now rent is to be paid for the month of November 1966. This receipt has not been accepted as genuine by both the Controller and the Tribunal.

    4. The provisions of section 14(2) of the Delhi Rent Control Act, 1958, are as follows:—

    “No order for the recovery of possession of any premises shall be made on the ground specified in clause (a) of the proviso to subsection (1), if the tenant makes payment or deposit as required by section 15.

    Provided that no tenant shall be entitled to the benefit under this sub-section if, having obtained such benefit once in respect of any premises, he again makes a default in the payment of rent of those premises for three consecutive months.”

    5. The proviso reproduced above clearly applies only when the benefit of avoiding eviction has once been availed of by deposit of rent under section 15 of the Act. The facts set out above show that a deposit was in fact made in accordance with the orders of the court in an earlier case. However, there is no material on record to support the view of the Controller or the Tribunal that this deposit led to the appellant getting a benefit under section 14(2). The previous ejectment petition was based on the ground of non-payment of rent as well as bona fide personal requirement. As far as the claim based on non-payment of rent was concerned, it could fail either because there was no valid notice of demand under section 14(l)(a) of the Act or it could fail under section 14(2) by reason of the tenant making a deposit. If the-case had been decided on mertis then the tenant's clairs that the standard rent was Rs. 14/- would have been gone into and a decision would have been arrived at to determine whether there had been any default in the pay me it of rent. The landlord, however, took the simplest way out of this situation by withdrawing the rent deposited in the court and also by witndrawing the ejectment petition. It is impossible to come to the conclusion that the tenant got a benefit under section 14(2) when the case was withdrawn. The previous ejectment petition was not dismissed on the ground that the tenant had made a deposit, but on the ground that the landlord withdrew the ejectment petition. This voluntary act of the landlord cannot be said to be a benefit to the tenant under section 14(2) of the Act.

    6. In this connection, I have now to distinguish three decisions given by this Court. The first two of these are the decisions of P.N Khanna, J., reported as Smt. Sumitra Rani v. Bennet Coleman and Ltd. . 1970 R.C.R 566 and the Life Insurance Corporation of India v. Meghrqj Mannulal . 1970 R.C.R 794. In both these cases it was held that if the tenant saves himself from ejectment by making a deposit, though not in compliance with section 15, it is still possible to reach the conclusion that he got the benefit under section 14(2). In Sumitra Rani's case, an ejectment order was passed on a compromise, with the condition that if the tenant paid the rent later, the order of ejectment would stand satisfied. The rent was paid later and hence eviction did not take place. Clearly, there was a benefit though not exactly in the terms envisaged by section 14(2) of the Act and the Court was able to construe the section to hold that the benefit was equivalent to the one that the tenant could have got under section 14(2). In the case of the Life Insurance Corporation of India aforementioned, payment of the rent was made by the tenant on the first date of hearing so that no order under section 15 was necessary and the ejectment petition failed. The Court held that the tenant's payment of rent was the same thing as making a deposit after an order under section 15 of the Act had actually been passed and hence the benefit under section 14(2) had been obtained earlier.

    7. In the third case, Bhaj Datta v. Brij Narain Bagji . S.A.O No. 192 of 1970 decided on 28th April, 1971, I held that when a conditional order of ejectment was passed, the condition being that the ejectment would be satisfied if the rent up to a particular date was paid to the landlord by the tenant within the time mentioned in the order and that condition was eventually satisfied and eviction did not take place, it was a case of a tenant getting a benefit equ valent to that mentioned in S. 14(2). The reasons which prompted me to say so were that the said order really amounted to the landlord extending the time which the Court had given under section 15(1) of the Act. I. therefore, come to the conclusion that there were only two possibilities in the case of an ejectment case based on non payment of rent: If the arrears were deposited under section 14(2) the ejectment petition would fail and if not, the ejectment would take place. As the ejectment had not taken place, I held that was due to the benefit under section 14(2). I did not at that time envisage the third possibility which has arisen in the present case. That possibility is that the landlord withdraws his eviction petition. In such a case, no benefit under section 14(2) is involved. I cannot hold that the withdrawal of an eviction petition amounts to the same thing as a statutory benefit to the tenant. If the landlord had wanted this result to come about, he should have fought out that case on merits. There may be many other reasons for the withdrawal of the eviction petition which do not appear on the face of the record I need not say more, as 1 am satisfied that the withdrawal of an ejectment petition cannot be held to be the granting of a benefit to the tenant under section 14(2) of the Act.

    8. In the circumstances, I come to the conclusion that the Controller and the Tribunal have erred on a substantial question of law and should have held that the tenant did not get a benefit under section 14(2) of the Act in the earlier ejectment proceedings.

    9. 1 may now deal with another submission made by Mr. G.S Vohra, learned counsel on behalf of the appellant which has some bearing on the order that 1 now have to pass. Mr. Vohra submits that the notice of demand. Exhibit A-2 is invalid. He basis this contention firstly, on the ground that the notice does not give two months time to pay the arrears of rent as mentioned in section 14(1) (a). 1 think on this point the submission is not well-founded because the notice need not prescribe a period which is fixed by the Act itself. The second contention is that the notice of demand is based on the interim rent fixed by Shri Pritam Singh Pattar, vide his order dated 15th March, 1963, Exhibit A 1 whereby he fixed Rs. 30/- as the interim rent. Mr. Vohra submits that the interim rent came to an end at the conclusion, of those proceedings on 29th April 1963 and hence there was no obligation to pay any arrears of rent at the rate of Rs. 30/- per month and a demand based at such a rate was invalid. This submission has considerable force, because if the proceedings came to an end in April 1963. I cannot see how the interim rent under Section 15(3) of the Act can survive even after the proceedings came to an end. Mr. Vohra also points out that there was another proceeding under the Act, for the fixation of standard rent brought by his client in December 1961 which terminated in an order of Shri P.K Bahri Additional Rent Controller dated 10th October 1966, whereby the standard rent of the premises was fixed at Rs. 25/- with effect from December 1961. Thus at the time the notice of demand, Exhibit A-2 dated 27th December, 1964, was issued on behalf of the landlord to the tenant the rate of interim rent had not been fixed, and hence it was not possible for the tenant to comply with the same. This according to Mr. Vohra would mean that even without the protection of sections 14(2) and 15, the application for eviction should fail as it is based on an invalid notice of demand. 1 find that I have to accept this submission of Mr. Vohra, in the circumstances of this case. It appears to me that the interim rent which was fixed at P.s 30/- came to an end after the eviction petition was withdrawn on 24th September, 1963. The landlord should have approached the Additional Rent Controller before whom the application for standard rent was pending to fix an interim rent under section 10 of the Act, so as to be in a position to adjust the rent already paid by the tenant as well as to enable him to demand future rent In the absence of such an order the rate of rent remained sub-judice before the Additional Rent Controller and, therefore, the landlord could not make any demand at the rate of Rs. 30/- per month nor could the tenant comply with the same. It seems to be somewhat odd that the eviction petition out of which this appeal has arisen should have been filed on 6th October, 1966 only four days before the order fixing the standard rent was passed by the Additional Rent Controller.

    10. The next question to be considered is: what is the effect of a demand under Section 14(l)(a) of the Act if the demand is at the wrong rate? The answer in my view does not depend on the proper amount being demanded from the tenant but depends on the failure of the tenant to comply with the same by making a tender of the arrears of the rent. It was for the tenant to tender the legally recoverable rent after the service of the notice. However the tenant did not know what was the legally recoverable rent because the question of standard rent was still sub-judice in the court of the Additional Rent Controller. The legally recoverable rent could have only been ascertained if an order for interim rent had been passed by the Additional Rent Controller in the standard rent proceedings under Section 10 of the Act. There being no such order the legally recoverable rent was not ascertainable on 27th December, 1964 or within two months of that date. In the circumstances it was not possible for the tenant to comply with the demand of the landlord. In this connection it is necessary to remember that the contractural rent of the premises was Rs. 50/- per month and the standard rent was claimed by the tenant to be only Rs. 14/- per month, whereas the standard rent eventually fixed was Rs. 25/- per month. In the absence of an order under Section 10 it was quite impossible to say on 27th December, 1964 whether any legally recoverable rent was due to the landlord. In any case, I must hold that the tenant could not have complied with the demand for rent made as the interim rate of rent fixed by Shri Pritam Singh Pattar by his order, had ceased to be operative. In this view of the matter, I come to the conclusion that as the notice of demand was not capable of being complied with by the tenant in view of the rate of the rent being unknown, the same cannot serve as a cause of action for ejectment on the ground of non-payment of rent. If this peculiar complication regarding the rate of rent, had not arisen in this, I would have remanded the case back to the Controller to redetermine whether Exhibit R-1 was genuine or not. I would have done so, as the Rent Control Tribunal has given a most unsatisfactory decision on this point. It has been held that though the signatures appear genuine the possibility of the receipt being forged could not be excluded, It is also stated in the order under appeal that though the signatures resemble the genuine signatures, thev cannot be held to be the signatures of the landlord in the absence of the evidence of a handwriting expert. I do not think that this is a correct approach. There are circumstances which shows that Exhibit R-1 is gengine. Firstly, there is the decision of the Additional Rent Controller dated 10th October, 1966 fixing the standard rent at Rs. 25/- per month with effect from December, 1961, and, secondly, there should have been some evidence by the landlord to show that the signatures were not genuine. In any case, the document cannot be discarded as being non-genuine on the ground mentioned by the learned Rent Control Tribunal. As 1 say, I would have normally remanded this case back to the Controller to determine the genuineness of Exhibit R-1 and also to pass an order under Section 15 of the Act as the tenant is entitled to the protection of the same there being no previous benefit under section 14(2). However, it is not necessary to do so in this case, as I have come to the conclusion that there was no cause of action at the time the notice of demand Exhibit A-2 was issued because it was not known at that time as to whether there were any arrears of rent.

    11. In the circumstances, this appeal has to be accepted and the order of ejectment has to be set aside. In view of the fact that this decision has been arrived principally on account of the notice of demand not being valid, I order that the parties will bear their own costs throughout.

    12. Appeal accepted

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    Comments

    Shrimati Rama Gupta v. Rai Singh Kain .
    (May 6, 1971)