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  • Sub-section (1) of S. 14 of the Delhi Rent Control Act, 1958 (hereinafter the Act).
  • Ss. 22 and 26 of the Reserve Bank of India Act, 1934.
  • S. 13 of the Indian Coinage Act, 1906,
  • SECTION 4 COURT FEES ACT
  • Sub-section (2) of S. 14
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Citation Codes
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citation codes
Case Number
Advocates
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  • Sub-section (1) of S. 14 of the Delhi Rent Control Act, 1958 (hereinafter the Act).
  • Ss. 22 and 26 of the Reserve Bank of India Act, 1934.
  • S. 13 of the Indian Coinage Act, 1906,
  • SECTION 4 COURT FEES ACT
  • Sub-section (2) of S. 14
Smart Summary

Structured Summary of the Opinion — M.L. Jain, J.

Factual and Procedural Background

The Respondent (landlord) filed an eviction petition under Clause (a) of the proviso to Sub‑section (1) of Section 14 of the Delhi Rent Control Act, 1958 against the Appellant (tenant). The occupant had been introduced as a licensee but later claimed to be a tenant paying Rs. 200 per month from 1 March 1974. An order under Sub‑section (1) of Section 15 of the Act was passed on 7 March 1977 directing payment of arrears within one month; the tenant complied but the landlord appealed and lost on 1 March 1978.

The tenant defaulted again from 1 May 1977. After a letter promising a cheque that was not sent, the landlord served a notice dated 17 May 1978 (received 18 May 1978) calling for payment of all arrears since 1 May 1977 and stating that the proviso to Sub‑section (2) of Section 14 might now apply (three consecutive months' default). The tenant sent a registered cover on 23 May 1978 containing a demand draft of Rs. 2,400 addressed to the landlord's home; it was re‑directed, then returned undelivered with a remark "out of station for unknown period, returned to sender, 31/5".

Subsequent communications included a letter from the tenant's advocate (8 June 1978) offering alternatives for delivery and two money orders by the tenant: Rs. 200 on 9 June 1978 (refused) and Rs. 400 on 19 June 1978 (also refused). The landlord filed another eviction petition on 20 July 1978 on the ground that arrears had not been paid or tendered within two months of the notice. The tenant sent a cheque of Rs. 600 on 18 July 1978 which the landlord returned.

The tenant filed a written statement on 30 August 1978. By an order of the Additional Controller on 28 November 1978, all arrears were said to have been paid. On 30 January 1979 documents were admitted by consent and no oral evidence was recorded; the Additional Controller on 31 January 1979 ordered eviction. An appeal to the Tribunal failed on 29 January 1980. This second appeal followed.

The appeal was filed on 11 February 1980 with an uncertified copy and insufficient court‑fee; directions were given to file certified copies. The certified copy was filed on 14 April 1980 but without the requisite court‑fee and without an application for condonation of delay. The court held the appeal to be barred by time.

Legal Issues Presented

  1. Whether the second appeal was time‑barred and therefore incompetent because certified copies and requisite court‑fee were not properly filed within time.
  2. Whether the dispatch (by registered post) of a bank demand draft of Rs. 2,400 constituted a valid tender/payment of the arrears demanded in the notice (i.e., whether sending the demand draft satisfied the requirement to pay or tender "all the arrears" within two months under Clause (a) of the proviso to Sub‑section (1) of Section 14 of the Act).

Arguments of the Parties

Appellant's (Tenant's) Arguments

  • The tenant's counsel argued that the appeal should be deemed presented on 14 April 1980 and that a short delay (16 days) should be excluded because days spent obtaining the copy of the impugned judgment should not count against the limitation period. He relied on a prior decision treating the impugned judgment as a decree for the purpose of computing time to obtain copies.
  • On merits, the tenant argued that sending a bank demand draft (via registered post) for Rs. 2,400 to the landlord constituted a valid tender of payment of arrears of rent. Counsel also communicated with the landlord's counsel offering alternate means (sending draft to counsel or forwarding to a fresh address).

Respondent's (Landlord's) Arguments

  • The respondent contended that by the time the registered cover was endorsed as not delivered, additional rent had accrued and therefore there was no valid tender unless the subsequently accruing amount was also offered.
  • Implicit in the landlord's conduct was refusal of partial money orders and the cheque sent later; the landlord did not accept the draft where it was not delivered and refused the subsequent partial payments.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Malik Chand v. Zubeda Begum, I.L.R. (1974) 2 Delhi 160 Authority for procedural direction regarding filing certified copies in appeal proceedings. The court relied on this case to justify the direction that certified copies be filed within time and to hold that the initial order (requiring certified copies) was the only order that could be made under the circumstances.
Ram Mehar v. Raghbir Singh, (1969) 71 P.L.R. 171 Authority holding the impugned judgment to be a decree for certain procedural purposes (timing to obtain copy). The court used this decision to support exclusion of days spent in obtaining the copy of the impugned judgment when computing the period of limitation for filing the appeal.
Custodian Evacuee Property v. Prabhu Dayal Chhajan Lal, A.I.R. 1960 Punjab 298 Authority on court fees/limitation relevant to the competency of the appeal. The court cited this case, together with Section 4 of the Court Fees Act, in support of the conclusion that the appeal was barred by time because requisite court‑fee on the certified copy had not been paid.
Commissioner of Income Tax v. Ogale Glass Works Ltd., A.I.R. 1954 S.C. 429 Principle that where creditor has by express or implied agreement requested or agreed to receive payment through post, the post office can be treated as agent of the creditor. The court referred to this case to explain the circumstances in which postal delivery of a payment may be treated as payment to the creditor (i.e., when there is an agreement or request to accept payment through post).
Azamzahi Mills Ltd. v. Commissioner of Income Tax, (1976) 2 SCC 258; A.I.R. 1976 S.C. 1172 Similar principle regarding agency of post office or acceptance by post where creditor agrees to receive payment through post. The court cited this decision alongside Ogale Glass Works to support the proposition that postal delivery may operate as agent‑mediated payment only where agreement (express or implied) exists.
Jagat Tarini Dasi v. Naba Gopil Chaki, I.L.R. (1907) 34 Cal. 305 Authority that creditor may be deemed to have waived objection to the form of tender if he rejects tender for reasons other than illegality (e.g., insufficiency of amount). Referenced to explain circumstances in which a creditor's rejection of a non‑legal‑tender mode of payment may amount to waiver of the objection to form.
Damadilal v. Parashram, (1976) 4 SCC 855 : A.I.R. 1976 S.C. 2229 Supreme Court observation that in contemporary society an implied agreement to accept non‑cash modes (like cheques) may be reasonable but cannot be implied where circumstances indicate otherwise. The court invoked this case to note that an implied agreement to accept drafts/cheques may be inferred in some contexts, but that such an inference is not appropriate where circumstances (and pleading/proof) are absent.
Haji Sheikh Hasanoo v. S. Natcsa Mudliar & Co., A.I.R. 1959 Bom 267 Principle that any agreement to accept payment by cheque/draft must be pleaded and proved. The court cited this case to support the conclusion that, in the absence of pleading or proof of an express or implied agreement to accept non‑legal‑tender modes, such modes cannot be treated as valid tender.
Mohan Lal v. Kanwar Sen, A.I.R. 1954 All. 480 Authority holding that sending a bank draft was not payment or even a tender of payment in the absence of an agreement between parties to accept such mode. The court relied on this precedent to hold that sending a bank draft by post did not constitute a valid tender in the present case where no agreement to accept drafts was pleaded or proved.
Mohanlal Jogani Rice & Atta Mills v. Ramlal Onkarmal Firm, A.I.R. 1957 Assam 133 Authority that a demand draft is a conditional payment and cannot, by itself, constitute a valid offer in the absence of agreement or waiver. The court cited this case to reinforce the proposition that a demand draft, being conditional, does not automatically satisfy tender requirements absent agreement or waiver.
Abdul Bagi v. Akhlaq Ahmed, 1962 A.L.J. 1146 Statement about the duty of a tenant to find his landlord and offer arrears in legal tender (cash) or to use prescribed alternatives such as postal money order or court deposit. The court referred to this authority for the proposition that payment in legal tender (cash) or via money order or court deposit is the proper mode to discharge rent arrears absent agreement to accept other modes.

Court's Reasoning and Analysis

The court dealt first with the procedural objection to competency of the appeal. The appeal had been filed initially with an uncertified copy and with inadequate court‑fee; a direction was given to file certified copies. When the certified copy was filed on 14 April 1980, it lacked the requisite court‑fee and no condonation application was made. The court applied precedent and the Court Fees Act (Section 4) and held that the appeal was barred by time and thus incompetent. The court expressly relied on prior decisions for that conclusion.

Turning to merits, the court identified the sole substantive question as whether dispatch of the Rs. 2,400 demand draft by registered post constituted a valid tender of arrears in compliance with the landlord's notice under Clause (a) of the proviso to Sub‑section (1) of Section 14.

The court recited the applicable legal principles as expressed in statute and authority: a debt is discharged by payment in legal tender (cash/coin as under Section 13 of the Indian Coinage Act, 1906, and paper currency as under Sections 22 and 26 of the Reserve Bank of India Act, 1934) and, in the absence of agreement to the contrary, the tenant must offer arrears in legal tender by handing cash to the landlord or, if refused, deposit in court or send by postal money order (post office acts as agent of remitter).

The court analyzed the nature of non‑cash instruments: cheques and demand drafts are not legal tender and will discharge debt only where there is an express or implied agreement between creditor and debtor to accept that mode or where the creditor has waived objection to the form of payment. The court surveyed the jurisprudence (including Mohan Lal v. Kanwar Sen, Mohanlal Jogani, Damadilal v. Parashram, and authorities about postal agency) and concluded that, absent pleading and proof of an express or implied agreement to accept a draft, sending a demand draft by post is not a valid tender.

Applying these principles to the facts, the court observed: (a) the registered cover containing the draft was returned undelivered with an endorsement indicating non‑delivery; (b) there was no pleading or proof of any agreement by the landlord to accept payment by draft or through the post; (c) the subsequent offers (money orders and cheque) were for partial amounts and were refused; (d) the tenant had allowed rent to accumulate for twelve months, which cast doubt on his bona fides. The court rejected the respondent's argument that additional rent had accrued by the time of the non‑delivery, holding the relevant comparison is whether all arrears due on the date of receipt of the notice were paid or offered.

On these bases the court agreed with the findings of the two courts below that no valid offer/tender of the entire arrears had been made in compliance with the notice, and therefore eviction was justified.

Holding and Implications

APPEAL DISMISSED.

Implications and direct effects:

  • The appellate court found the appeal to be time‑barred on the procedural point and, on merits, held that the tenant had not established a valid tender of arrears in compliance with the landlord's notice.
  • The eviction order of the lower forum was upheld; the tenant could not escape eviction on the basis of the demand draft sent by post.
  • The court made no order as to costs and allowed the appellant two months' time to vacate the premises.
  • The opinion does not articulate any broader precedent‑making implications beyond the court's application of existing statutory provisions and cited authorities to the facts of this case.

This summary is based exclusively on the information contained in the provided opinion and does not infer or add information beyond that text.

    Phalwant Singh v. Jai Narain .

    M.L Jain, J.:— The Respondent who is the landlord filed an eviction petition against the appellant who is the tenant before the Controller under Cl. (a) of the proviso to Sub-section (1) of S. 14 of the Delhi Rent Control Act, 1958 (hereinafter the Act). The petitioner lamented that the occupant was introduced into the premises as a licensee but later on he refused to vacate the premises and claimed that he was a tenant at Rs. 200.00 per month, since March 1, 1974. The respondent succumbed to this stand and filed a petition for eviction on the ground of non-payment of rent and an order under Sub-section (1) of S. 15 of the Act was passed on March 7, 1977, directing the appellant to deposit arrears of rent within one month. The respondent complied, though he also filed an appeal which he lost on March 1, 1978.

    2. The tenant defaulted again in the payment of rent since May 1, 1977. He only sent a letter on April 11, 1978 telling the landlord that he will be sending a crossed cheque of Rs. 2400.00 on April 20, 1978. It was not done. The landlord gave a notice of demand on May 17, 1978, which was received by the respondent on May 18, 1978. In this notice the landlord called upon the tenant to pay all rents remaining unpaid since May 1, 1977. He also pointed out that since he had defaulted in the payment of rent for three consecutive months at least from February 1, 1978, to April 30, 1978, he was now no more entitled to an order under S. 15 of the Act in view of the proviso to Sub-section (2) of S. 14 thereof. Upon receipt of this notice, the tenant sent on May 23, 1978, a registered cover containing a Demand Draft on the Bank of India of Rs. 2,400.00 on the home address of the landlord. It was re-directed to his office. Finally, the cover was received back on June 2, 1978, bearing a remark “out of station for unknown period, returned to sender, 31/5″. On June 8, 1978, the advocate of the tenant wrote a letter to his counterpart that according to his client's information, the landlord was in Delhi and was attending his office but was upto some device. He requested him to advise his client to collect the pay order from his residence or if so desired, the pay order may be sent to his address. Thereafter, the tenant sent two more amounts as follows:

    (1) Rs. 200.00 by money order on June 9, 1978, which was refused, and

    (2) Rs. 400.00 by money order on June 19, 1978, which too was refused.

    3. The landlord filed the present petition for eviction on July 20, 1978, on the ground that in spite of the said notice, the tenant failed to pay or tender the arrears within two months of the relief of the said notice and he was therefore, liable to eviction. On July 18, 1978, the tenant sent a chrque of Rs. 600.00 which was returned by the landlord under a registered cover to the tenant. He then filed his written statement on August 30, 1978, Later on, in virtue of an order made by the Addl. Controller on November 28, 1978, all the arrears are said to have been paid.

    4. January 30, 1979, was fixed for admission of documents. By the consent of the parties the documents were exhibited. No evidence was recorded. After hearing arguments, the learned Addl. Controller by her order of January 31, 1979, passed an order of eviction. An appeal to the Tribunal failed on January 29, 1980. Hence, this second appeal.

    5. This appeal was filed on February 11, 1980, but with an uncertified copy of the impugned judgment, through bearing court-fee stamp of Rs. 2.75 p. An application was moved the same day for exemption from filing of the certified copies. On February 13, 1980, it was directed that the certified copies be filed within time. This was the only order that could be made in view of Malik Chand v. Zubeda begum, I. L. R. (1974) 2 Delhi 160. The certified copy was filed on April 14, 1980, but without the requisite court-fee and without any application for condonation of delay. It was contended that the appeal was barred by time. The learned counsel for the appellant pointed out that if the appeal is deemed to have been presented on April 14, 1980, then there is a delay of 16 days only which he, under the law, is entitled to have excluded in computation of time. He explained that the appellant applied on February 1, 1980, for a copy of the impugned judgment which is a decree as held in Ram Mehar… v. Raghbir Singh…., (1969) 71 P. L. R. 171. Though the copy appears to have been ready on February 12, 1980, but he had been called to collect the copy on February 14, 198o’, which he did on that day. After exclusion of these 14 days taken in obtaining the copy, he should have filed the appeal on April, 12, but April 12 was a second Saturday and April 13 was a Sunday on both of which days the court remained closed. So, the copy could be and was filed only on April 14. I agree. But the court-fee paid on the uncertified copy cannot be treated as court-fee paid on the certified copy. The appeal was not competent even on that day and is, therefore, barred by time: I hold so. Section 4 of the Court Fees Act and the Custodian Evacuee Property v. Prabhu Dayal Chhajan Lal, A. I, R. 1960 Punjab 298, fully support me in this view.

    6. Now, merites as well. It was urged before the Addl. Controller that in the circumstances of the case stated above, no default had occurred because the tenant had tendered the arrears of rent. As far as the subsequent offer by money orders and by cheque are concerned they cannot be taken into account because they did not represent the full amount of the arrears. I can also not accept the submission that the notice served by the landlord under Cl. (a) of the proviso to Sub-section (1) of S. 14 of the Act was only for arrears of rent for three months and, therefore, even if the entire arrears of rent were not offered, the said Clause (a) will not be attracted. Thus the sole question involved in this second appeal is whether the despatch of a draft of Rs. 2400.00 was valid offer of payment.

    7. The learned counsel for the respondent submitted that by the time of the alleged endorsement of non-delivery of the registered cover, some more rent had accured and, therefore, there will be no valid tender within the meaning of the law unless that amount was also offered. This argument is rejected because it is not supported by the language of the said Cl. (a). What that clause means is that if any arrears of rent are due then a notice requiring payment of all the arrears within two months will be served. The requirement of law will be satisfied if all the arrears that are due on the date of the receipt of the notice are paid or offered.

    8. A debt is discharged, in the absence pf a contract to the contrary, by payment in legal tender, that is, in the coin of the realm as envisaged in S. 13 of the Indian Coinage Act, 1906, and in paper currency as envisaged in Ss. 22 and 26 of the Reserve Bank of India Act, 1934. It is a duty of the tenant to find his landlord and to offer the amount of arrears to, him in person or through an agent in legal tender that is cash or bank notes Abdul, Bagi v. Akhlaq Ahmed, 1962 A. L. J. 1146; and if he refuses to receive the payment, then in order to escape the consequences of default, to make deposit in the court under S. 26 of the Act or to send it by a postal money order because in that case tender is made by the postal agency in the legal tender of the country. The post office is the agent of the remitter) but where creditor has by express or implied agreement or request agreed to receive payment through post, the post office is also the agent of the creditor, vide Commissioner of Income Tax v. Ogale Glass Works Ltd., A.I.R 1954 S. C. 429, and Azamzahi Mills Ltd. v. Commissioner of Income Tax, (1976) 2 SCC 258 : A.I.R 1976 S.C 1172. But, unless otherwise agreed in advance, or implied by subsequent conduct, the landlord is not bound to accept any other mode of paymerit, be it a cheque or a demand draft. The objection to the form of the tender may, however, be waived expressly or impliedly by the creditor, and he will be deemed to have so waived the objection, if he rejects any other tender not on the ground of its legality but on the ground of the insufficiency in amount, or on some other ground; see Jagat Tarini Dasi v. Naba Gopil Chaki, I. L. R. (1907) 34 Cal. 305. However, in Damadilal v. Parashram, (1976) 4 SCC 855 : A.I.R 1976 S. C. 2229, the Supreme Court observed that in the contemporary society, it is reasonable to suppose that such an agreement is implied but it cannot be done so where circumstances of the case indicate otherwise. It was, therefore, urged that there being an absence of circumstances to the contrary, the bank draft which is on a higher footing than a cheque, sent by post by the tenant to landlord towards payment of arrears of rent was a valid tender of rent. The tenant's counsel even wrote to the counsel of the landlord that it has not been possible for the post office to deliver the registered cover to the landlord and therefore, if the counsel agreed he could send the draft to him or he could forward the draft to the landlord if fresh address was applied to him. In a situation like this, much can be said on either side. A mischievous landlord may refuse that any money was offered to him and the best evidence that the tenant can provide to prove his offer is the record of the post office and the bank. But, here again, in order to defeat the law, the landlord may make himself scarce and make it impossible for the post office to have the article delivered. On the other hand, it is no obligation of the landlord to be available at his place of address all the time in anticipation of the post’ which may arrive at any moment in the day or to approach the bank to collect the amount. It is, therefore, necessary that payment in cash is made or offered in legal tender, in person, or by money order or through the court, but if there is an express or implied agreement that the liability can as well be discharged by a cheque or a bank draft delivered in person or sent through the postal agency, then in that case such an agreement has to be pleaded and proved: Haji Sheikh Hasanoo v. S. Natcsa Mudliar and Co. A.I.R 1959 Bom 267 There is no such pleading and, therefore, no proof in the case before us. In Mohan Lal v. Kanwar Sen, A.I.R 1954 All. 480, where it was not even alleged by the tenant that there was an agreement between the parties that the landlord will accept the rent by a bank draft in payment of arrears of rent, sending of a bank draft was held not to amount to payment or even a tender thereof. There was here no case of waiver either; because the question of refusing the bank draft on any ground other than the ground that it was not a legal tender, did not arise because the registered letter could not be delivered and the addressee did not even know that the cover contained a demand draft. A grievance was made that the Addl. Controller decided the case without oral evidence. But the record shows that the parties agreed to lead no evidence and the documents exhibited were considered sufficient evidence to decide the case. This was legally permissible. A demand draft is an order from one bank to the other or to its branch against the payment already deposited with it. There is no agreement in the High Courts whether a demand draft is a negotiable instrument being a cheque, or a bill of exchange or otherwise. But granting that it is a negotiable bill of exchange, and guarantees payment because it cannot be easily countermanded by the person purchasing it or by the bank to which it is presented, all the same it is a conditional payment and cannot, therefore, by itself constitute a valid offer in the absence of an agreement and proof of an agreement express, or implied or waiver; see Mohanlal Jogani Rice & Atta Mills v. Ramlal Onkarmal Firm, A.I.R 1957 Assam 133. So, when the notice was served upon the tenant, it was his duty to offer the payment in prevalent currency and in case of his refusal, it was neither proper nor permissible in the absence of an agreement or conduct to the contrary to make the landlord to approach the bank in order to collect this dues. The very fact that the tenant had-allowed the rent to pile up for twelve months shows that his intention was to harass the landlord and his bona fides are seriously in question. The two courts below have found that this is a case in which no valid offer of payment has been made and the tenant was liable to eviction. Upon consideration, I agree with them and hold that the tenant could not prove that he had tendered the arrears in compliance to the notice of demand and hence he could not escape eviction.

    9. I, therefore, find no force in this appeal, and dismiss the same. However, I shall make no order as to costs. The appellant shall however, be allowed two months time to vacate the premises.

    10. Appeal dismissed.

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    Comments

    Phalwant Singh v. Jai Narain .
    (Jul 11, 1980)