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B.P.N Shrivastava /Landlord v. Smt. Poori Bai /Tenant.

Delhi High Court
Mar 27, 1981
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Case Summary — Opinion of Leila Seth, J. (Oral)

Factual and Procedural Background

The respondent-landlady, Smt. Poori Bai, filed an application for eviction of the appellant-tenant, Mr. B.P.N. Shrivastava, from the first floor of premises No. D-34, Ajay Enclave, Subhash Nagar, New Delhi, under clause (a) of sub-section (1) of Section 14 of the Delhi Rent Control Act, 1958 ("the Act").

The application asserted that a notice of demand had been served by registered post (noted in the record as served on 30th June, 1970, with a notice dated 21st June, 1970 and an acknowledgement dated 30th June) and that a notice of termination of tenancy had been served (a notice dated 13th July, 1970 with an acknowledgement dated 3rd August, 1970). The petition was filed in September 1970 (the opinion contains references to filings on both 14th September, 1970 and 16th September, 1970).

The tenant filed a written statement dated 7th October, 1970 claiming, inter alia, that the landlady had cut off water and electricity and locked the premises from 20th May, 1970, thereby suspending the obligation to pay rent; the tenant also disputed service timing of the notice of demand and raised a dispute as to the agreed rent rate.

The Rent Controller, by order dated 3rd November, 1970 under sections 15(3)/15(1) of the Act, directed the tenant to deposit arrears and fixed the rent at Rs. 175 per month with effect from 10th January, 1970, directing deposit of arrears within one month and payment of future rent month by month by the 15th of each succeeding month. The tenancy month was admitted to run from the 10th of a month to the 9th of the next month.

The tenant initially deposited arrears and paid month-by-month for most periods but failed to deposit rent for 10th January, 1972 to 9th February, 1972 on time. The Rent Controller held on 16th May, 1972 that a valid notice of demand had been served and that the tenant had not complied with the order under section 15(3), thereby ordering delivery of possession to the landlady. The tenant's appeal to the Rent Control Tribunal was dismissed with costs.

The tenant then appealed to the High Court under section 39 of the Act. A central question on appeal was the meaning of the word "month" in section 15 (whether it referred to the British calendar month or the tenancy month). A Division Bench ultimately decided (29th September, 1980) that "month" referred to the tenancy month. The appeal was thereafter listed before Leila Seth, J., for final disposal.

Legal Issues Presented

  1. Whether the word "month" in Section 15 of the Delhi Rent Control Act refers to the British calendar month or to the tenancy month (i.e., the tenancy-specific period from the 10th to the 9th).
  2. Whether the tenant had complied with the Rent Controller's order under Section 15(3) read with Section 15(1) (deposit of arrears and payment of future rent month-by-month by the 15th), or whether there was non-compliance justifying eviction under Section 14(1)(a).
  3. Whether, after an order under Section 15(1), a tenant may unilaterally deduct or suspend rent for the purpose of repairs by relying on Section 44, or whether the tenant must first seek modification of the order from the Rent Controller.
  4. Whether the filing of the petition under Section 14(1)(a) was premature because the earlier notice of demand was waived by the issuance of a subsequent notice (i.e., whether a second notice or conduct constituted waiver of the first notice, affecting the two-month statutory period).

Arguments of the Parties

Appellant's (Tenant's) Arguments

  • The word "month" in the order under Section 15 meant the British calendar month, not the tenancy month; hence payments made on 15th March, 15th April and 15th May, 1972 complied with the order. He relied on Smt. Prakash Wati v. Shri Babu Ram (S.A.O No. 30 of 1972).
  • The order under Section 15(3) read with Section 15(1) had been complied with because the tenant was not required to deposit rent for 10th January, 1972 to 9th February, 1972 as annual repairs had been carried out after notice to the landlady under Section 44 of the Act (i.e., the tenant asserted a right to deduct one month's rent for repairs).
  • The tenant argued prejudice because his defence had not been struck out under Section 15(7); had it been struck out he would have had an opportunity to bring material on record relating to Section 44.
  • The petition under Section 14(1)(a) was alleged to be premature because the first notice of demand (Exhibit A6) was allegedly waived by the issuance of a subsequent notice (Exhibit A8), and the statutory two-month period from the later service had not elapsed when the petition was filed.

Respondent's (Landlady's) Position, as Presented in the Opinion

  • The landlady asserted that a notice of demand had been served (Exhibit A6, with acknowledgment) and that a notice of termination had been served (Exhibit A8, with acknowledgment), and she sought eviction under Section 14(1)(a) for non-payment of rent. These factual assertions were pleaded in the eviction application and proved by documentary exhibits.
  • The Rent Controller and subsequent tribunals found that a valid notice of demand had been served and that the tenant had not complied with the order under Section 15(3), supporting the landlady's claim for possession.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Smt. Prakash Wati v. Shri Babu Ram, S.A.O No. 30 of 1972 (decided 21st April, 1972) Relied upon by the appellant for the proposition that "month" meant British calendar month for compliance with a Section 15 order. The court noted the appellant's reliance but recorded that a Division Bench had subsequently decided that "month" referred to the tenancy month; the appellant's reliance did not prevail.
Hem Chand v. D.C. & G. Mills, A.I.R. 1977 S.C. 1986 Interpreted Section 15(7) to confer discretion on the Rent Controller; "may" is not to be read as "shall" — striking out a defence is discretionary. The court applied this Supreme Court ruling to reject the contention that the tenant was prejudiced because his defence had not been struck out; striking out was discretionary and not mandatory.
Chamber of Colours & Chemicals Ltd. v. Shri Trilok Chand Jain, 1978 R.L.R. 343 Where tenanted premises are wholly destroyed or rendered substantially and permanently unfit, the lessee's option under section 108(e) of the Transfer of Property Act is to treat the lease as void; a lessee cannot unilaterally suspend rent. The court cited the observation to support the principle that there cannot be unilateral suspension of rent and that the tenant remains liable until a court order or agreement for reduction is obtained.
Kishan Chand v. Ramesh Chander and others, 1969 Rent C.J. 839 Where part of premises are surrendered at the instance of the tenant, the tenant must apply to the Rent Controller for a proportionate reduction of rent; unilateral suspension is not permissible. The court cited it to reinforce that a tenant cannot unilaterally stop paying rent or claim a reduction without an order or agreement.
Munshi Lal v. Thakur Prem Chand, 1979 R.C.J. 496 Section 14(2) gives a tenant a special statutory benefit of defeating an eviction petition by fully complying with an order under Section 15(3) read with Section 15(1); such orders must be strictly construed. The court relied on this authority to hold that orders under Section 15(3) read with Section 15(1) require strict compliance, including future monthly payments.
V. Dhonapal Chettiar v. Yasodai Ammal, A.I.R. 1979 S.C. 1745 Authority indicating that, in the Supreme Court's view, a prior notice of termination before filing an eviction petition may not be necessary (as per the court's discussion). The court noted this decision to observe that while a subsequent notice of termination is no longer necessary in light of that decision, it did not operate to waive the earlier notice of demand in the present facts.
Raj Kishan Jain v. Master Hoshiar Singh, A.I.R. 1971 Delhi 213 On waiver under Section 113 of the Transfer of Property Act: acceptance of rent or a second notice is normally good evidence of waiver, but not invariably so; context and accompanying acts determine whether waiver is established. The court applied this principle to examine the appellant's waiver argument and concluded there was no finding or adequate basis in the record to hold the first notice waived.
Prabhati v. Budho Devi, 1974 R.C.R. 334 Held that cause of action for ejectment for non-payment requires that the arrears claimed be those in respect of which a notice of demand has been served and the statutory period elapsed; absence of such averment defeats cause of action. The court distinguished that case on facts: in Prabhati there was no averment of a notice of demand; in the present case the notice (Exhibit A6) was averred and proved, so the petition was not premature.

Court's Reasoning and Analysis

The court proceeded by examining the factual record and applying the relevant statutory provisions and authorities cited in the pleadings and earlier orders. Key steps in the analysis were:

  1. The court accepted the factual finding that the notice of demand (Exhibit A6) and its acknowledgement had been placed before the Rent Controller and that the Rent Controller had validly concluded that a notice of demand had been served. The Rent Controller's reference to the notices and acknowledgements supported that factual finding.
  2. The Division Bench's earlier ruling (29th September, 1980) was taken as dispositive on the interpretive question of "month" in Section 15: the Division Bench held that "month" referred to the tenancy month (i.e., the tenancy-specific period) and not the British calendar month. The court accepted that interpretation as determining compliance with the Section 15 order.
  3. On the contention that the tenant was entitled to deduct a month's rent for repairs under Section 44, the court examined the record and found no supporting material: there was no evidence that a notice under Section 44 had been given to the landlady nor that any repairs had actually been carried out. The Rent Controller had made a similar factual finding.
  4. The court held that even if Section 44 were attracted, an order under Section 15(3) read with Section 15(1) must be strictly complied with and cannot be unilaterally altered by the tenant. If the tenant wanted to avail himself of Section 44 after an order under Section 15(1) had been made, he was required to move the Rent Controller to modify his earlier order; unilateral suspension or deduction was impermissible.
  5. The tenant's complaint that he was prejudiced because his defence had not been struck out under Section 15(7) was considered and rejected. The court relied on the Supreme Court decision in Hem Chand v. D.C. & G. Mills to conclude that Section 15(7) confers discretion on the Rent Controller; striking out is not mandatory and the tenant had not shown how he would have benefited.
  6. On the alleged waiver of the earlier notice of demand by the issuance of a subsequent notice, the court analyzed the Transfer of Property Act illustrations and the Raj Kishan Jain precedent. The court observed that acceptance of rent or issuance of a second notice is normally good evidence of waiver but not invariably so; waiver depends on the surrounding facts. There was no finding or adequate pleading that the first notice was waived; indeed the application specifically asserted service of the notice of demand and relied upon it.
  7. The court distinguished Prabhati v. Budho Devi on the basis of pleadings and proof: Prabhati lacked averment that the arrears were the subject of a notice of demand, whereas in the present case Exhibit A6 was pleaded and proved and the petition was filed after the statutory period had elapsed.

Holding and Implications

Holding: The appeal is dismissed with costs.

Implications:

  • The Rent Controller's order under Section 15(3) read with Section 15(1) was not complied with by the tenant and that non-compliance justified denying the tenant the statutory benefit under Section 14(1). The order for possession in favour of the landlady stands as affirmed.
  • The court reaffirmed that the word "month" in Section 15 refers to the tenancy month (per the Division Bench decision) and that orders under Section 15(3) read with Section 15(1) require strict compliance, including timely month-by-month payment as ordered.
  • The court held that a tenant cannot unilaterally suspend or deduct rent (including on the basis of alleged repairs under Section 44) after an order under Section 15(1) without moving the Rent Controller for modification; any deduction or suspension requires court permission or agreement.
  • No broader new legal principle was announced by this opinion beyond the application and reinforcement of existing authorities: the direct effect is the dismissal of the tenant's appeal and the affirmation of the Rent Controller's order; the opinion applies and relies upon earlier precedents rather than establishing a novel rule.

This summary is prepared strictly from the content of the provided opinion and does not add or infer facts or law beyond what appears in the text.

Show all summary ...

Leila Seth, J. (Oral):— This landlady-tenant litigation has had a chequered history.

Smt. Poori Bai, the respondent-landlady, filed an application for eviction of the appellant-tenant Mr. B.P.N Shrivastava from the first floor of premises No. D-34, Ajay Enclave, Subhash Nagar, New Delhi. The application was made under clause (a) of sub-section (1) of Section 14 of the Delhi Rent Control Act, 1958 (to be referred to in brief as ‘the Act’).

In the said application it was asserted that a notice of demand had been served by registered post on 30th June, 1970. It was also stated that the notice of termination of tenancy had been so served on 3rd August, 1970. This application under Section 14 (1)(a) of the Act was filed on 14th September, 1970.

A written statement dated 7th October, 1970 was filed by the tenant. It was contended therein, inter alia, that as the landlady had cut off the water and electricity supply to the demised premises with effect from 20th May, 1970 and looked the door leading to the premises, the obligation to pay rent or arrears was suspended: It was also asserted that the tenant had received a notice of demand for payment of arrears only on 11th August, 1970 and as such no valid notice had been served; the period of the months not having expired since the date of receipt of the notice, the petition was premature.

A dispute with regard to the agreed rate of rent was also raised. As such the Rent Controller passed an order under section 15(3)/15(1) of the Act, on 3rd November, 1970, directing the tenant to deposit arrears of rent at the rate of Rs. 175/- per month with effect from 10th January, 1970 up to date within one month of the order. He further directed the deposit of future rent at the rate of Rs. 175/- per month, month by month by the 15th of each succeeding month

It is an admitted fact that the tenancy month was from the 10th of the month to the 9th of the next month according to the British Calender month. On 28th November, 1970 the tenant deposited the arrears of rent for the period 10th January, 1970 to 9th November, 1970. Thereafter, the tenant deposited the rent month by month admittedly within time. However, no rent was deposited for the period 10th January, 1972 to 9th February, 1972. Subsequently, the tenant deposited rent for the period 10th February, 1972 to 9th March, 1972 on 13th March, 1972 and for 10th March, 1972 to 9th April, 1972 on 15th April, 1972 and for 10th April, 1972 to 9th May, 1972 on 15th May, 1972.

On 16th May, 1972, the Rent Controller held that as the relationship of landlord and tenant had not been denied and it was not in dispute that the tenant was in arrears of rent and, in fact, a valid notice of demand had been served, the tenant was not entitled to the benefit of section 14(1) as he had failed to comply with the order passed under section 15(3) of the Act. He accordingly ordered the tenant to deliver possession of the premises to the landlady.

Before reaching his decision, he referred, inter alia, to the notice of demand Exhibit A6 which is dated 21st June, 1970. He also referred to the acknowledgment due receipt partaining to this notice which is dated 30th June, 1970 (Exhibit A-7). He also referred to another notice dated 13th July, 1970, referred to in the petition, as the notice of termination of tenancy fxhibit A8 and the acknowledgment due thereto which is Exhibit A 9 and dated 3rd August, 1970. It was only after recording these facts that he came to the conclusion that a valid notice of demand had been served.

With regard to the order passed under section 15(3) of the Act, he noticed that there had been no payment of rent for the period 10th January, 1972 to 9th February, 1972 by 24th February, 1972; and even if the subsequent deposit made on 13th March, 1972 be treated as a payment for that period it was out of time, and so too would be the other payments thereafter. That is why there was noncompliance of the order under section 15(3) of the Act.

The tenant appealed and the Rent Control Tribunal dismissed his appeal with costs.

Thereafter the tenant filed an appeal in this Court under section 39 of the Act. His main contention was that on a correct interpretation of the word “month” in section 15 of the Act there had been no default under section 15 and as such his appeal must be allowed. He urged that “by the 15th of each succeeding month was ment the British Calendar month and not the tenancy month and as the payments had been made on 15th March, 1972, 15th April, 1972 and 15th May, 1972 respectively, there had been a compliance with the order of 3rd November, 1970. He relied on a decision of this Court in Smt. Prakash Wati v. Shri Babu Ram, S.A.O No. 30 of 1972 decided on 21st April, 1972.

As I felt that this question required consideration by a larger bench, by my order dated 20th October, 1978, I directed the appeal to be laid before the Hon'ble Chief Justice for directions. Thereafter, the Division Bench heard the counsel and by its judgment and order dated 29th September, 1980 decided that the ‘word “month” referred to the tenancy month and not to the British Calendar month. It was a reference to a period of time which must elapse between the making of the order and the payment or deposit of the money. It could not have reference to the expiry of any particular month especially as rent is not recoverable or due for a part of a tenancy month.

As a result of the decision on this question, the appeal has now been listed before me for hearing and disposal.

Having lost the first round, Mr. M.C Anand, learned counsel for the appellant, now contends that the order under section 15(3) read with section 15(1) has been complied with as no rent was required to be deposited for the period 10th January, 1972 to 9th February, 1972 as annual repairs had been carried out. He submits that the tenant had done so after notice to the landlady under the provisions of section 44 of the Act.

This point had been also raised before the Rent Controller. But the Rent Controller held that there was no justification for non-deposit of rent from 10th January, 1972 to 9th February, 1972. He also noticed that no application had been moved by the tenant to get the order under section 15(3) read with section 15(1) modified or set aside nor was there anything on record to indicate that any notice as required under section 44 of the Act had been given or any repairs carried out. The Rent Controller further held that even assuming a notice had been given and repairs carried out, there was non-compliance of the order under section 15, as no permission had been taken from the court for deducting this amount.

It has, therefore, to be seen whether the tenant was entitled of his own accord to deduct a month's rent for the purpose of repairs under section 44 of the Act. As already noticed, the Rent Controller has found that there was nothing on record to show either that a notice had been given to the landlady under section 44 and/or any repairs carried out. Mr. M.C Anand, however, contends that had his defence been struck out under section 15(7) he would have had an opportunity to bring this material on record. The striking out of his defence was mandatory and he has been prejudiced by it not being so struck out.

To say the least, this is a most unusual submission for a tenant to complain of being prejudiced because his defence has not been struck out. Though in the past there had been differences as to whether it was mandatory to strike out the defence in case of non-compliance with an order under section 15(1), the petition is now clear as a result of the decision of the Supreme Court in Hem Chand v. D.C & G. Mills, A.I.R 1977 S.C 1986. The Supreme Court has held that section 15(7) confers a discretion on the Rent Controller either to strike out the defence or not depending upon the circumstances of the case. In the context of section 15(7), the word “may” therein cannot be construced as “shall”.

In any case, it is not clear to me as to how the tenant could have benefited by his defence being struck out. There is no doubt about the fact that no material was brought on the record to indicate that the provisions of section 44 were attracted. But even assuming there was, it would appear to me that an order under section 15(3) read with section 15(1) has to be strictly complied with and cannot be unilaterally changed by the tenant.

As such, it would appear to me that if a tenant wants to avail of the benefit of section 44 after an order under section 15(1) has been passed, he must move the Rent Controller for modification of his order under section 15(3) read with section 15(1). He cannot unilaterally take a decision to exercise a right under section 44 when there is an order of the court requiring him to pay rent month by month by the 15th of the succeeding month.

The observations of S.N Andley, J. (as he then was) in the case of the Chamber of Colours & Chemicals Ltd. v. Shri Trilok Chand Jain, 1978 R.L.R 343 while dealing with a case of tenanted premises having been destroyed by fire are pertinent. The learned Judge opined that where tenancy premises are wholly destroyed or rendered substantially and permanently unfit by fire, the right of the lessee under section 108(e) of the Transfer of Property Act is to exercise his option and treat the lease as being void. In such a case the lessee cannot continue to hold on to the premises or say that the lease continues but he will not pay the rent. There cannot be any nnilateral suspension of rent. The tenant continues to be liable for the whole of the rent until he obtains an order from the Court or agreement from the landlord for reduction of the proportionate part of the rent.

In Kishan Chand v. Ramesh Chander and others, 1969 Rent C.J 839, this Court held that where a part of premises are surrendered at the instance of the tenant, it is his duty to apply to the Rent Controller for proportionate reduction of rent. He cannot unilaterally suspend payment of rent. He continues to be liable for the whole of the rent until he obtains an order of the Court or agreement of the landlord for reduction of a proportionate part of the rent.

In Munshi Lal v. Thakur Prem Chand, 1979 R.C J. 496, Deshpande, J., as he then was, held that the correct principle of interpreting section 14(2) is that the tenant is allowed by section 14(2) a special statutory benefit of defeating the landlord's petition for eviction by fully complying with the order under section 15(3) read with section 15(1). As such the order must be strictly construed. This means compliance not only of that order for payment of arrears of rent but also with regard to future payment of rent month by month.

It would, therefore, appear to me that where an order for deposit of rent has been made under section 15(3) read with section 15(1) of the Act, the tenant cannot unilaterally suspend the payment or deposit of rent as ordered by the Rent Controller, and should he do so he undoubtedly commits a breach of the order. In any case, as above noticed, in the facts of this case, section 44 was not at all attracted as neither the notice to the landlady nor the carrying out of repairs has been established. It would, therefore, appear that the tenant had no justification in not complying with the order under section 15(3) read with section 15(1)

The next submission made on behalf of the appellant is that the filing of the petition under section 14(1)(a) of the Act was premature as the period of two months had not elapsed after the service of the notice of demand. The contention is that the notice of demand Exhibit A 6 dated 21st June, 1970 which was served on 30th June, 1970, had been waived by the issuance of a subsequent notice dated 13th July, 1970, Exhibit A8, which was served only on 3rd August, 1970. As the petition was filed on 16th September, 1970, a period of two months had not elapsed from the date of service of the subsequent notice. Counsel based his submission on an analogy of Section 113 of the Transfer of Property Act and its illustrations which read:

(a) A, the lessor, gives B, the lessee, notice to quit the property leased. The notice expires. B tenders, and A accepts, rent which has become due in respect of the property since the expiration of the notice. The notice is waived.

“(b) A, the lessor, gives B, the lessee, notice to quit the, property leased, The notice expires, and B remains in possession. A gives to B as lessee a second notice to quit. The first notice is waived.”

It is relevant to note in these illustrations that the lessee remains in possession after the notice to quit expires and the lessor voluntarily either accepts rent or gives a fresh notice to quit, thereby indicating his intention to waive the earlier notice.

This court dealing with the question of waiver under Section 113 of the Transfer of Property Act in Raj Kishan Jain v. Master Hoshiar Singh, A.I.R 1971 Delhi 213. held that it is not as if the effect of acceptance of rent or the giving of a second notice to quit is to waive the first notice to quit always and invariably. Such conduct is normally good evidence of the landlord's intention to waive the notice to quit. However, in suitable cases, the landlord can show that despite such conduct he did not intend to waive the notice to quit. In each case the question to be considered is whether such conduct by itself gives rise to the presumption of waiver or whether such conduct is accompanined by other acts which prevent the raising of the presumption of fact about the waiver of the notice to quit.

The question of waiver of the first notice of demand has not been raised earlier, nor is there any finding of fact on this point. In the application for eviction under section 14(1) (a) it has been asserted in paragraph 18(a) and 18(b) that a notice of demand had been served on 30th June, 1970. It would, therefore, appear, that the landlady had an effective cause of action on 1st September, 1970. Since the tenant had been granted the statutory period of two month to pay the arrears, the landlady could have proceeded with the matter. Since at that time it was also considered to be necessary to give a notice of termination of the tenancy before filing a petition, this is what the subsequent notice is. But, in view of the decision of the Supreme Court in V. Dhonapal Chettiar v. Yasodai Ammal A.I.R 1979 S.C 1745, this is no longer necessary. But this cannot have the effect of waiving the notice of demand.

It is also pertinent to note that the order under section 15(3) read with section 15(1) for payment of the arrears of rent had initially been complied with by the tenant and he had not raised the question of waiver. In fact, it is clear from the facts of the case that Exhibit A6 was the notice of demand and Exhibit A8 the notice of termination, though non-payment of rent is also mentioned therein.

The decision in the case of Prabhati v. Budho Devi, 1974 R.C.R 334 relied on by the appellant's counsel is clearly distinguishable. What the learned Judge has observed therein is that the cause of action for an application for ejectment on the ground of non-payment of rent is not merely non-payment of any rent but non-payment by the tenant of such arrears of rent in respect of which a notice of demand has been served on the tenant and a period of two months has expired from the date on which each notice has been served on the tenant. There is no doubt that this is the correct position at law. But the reason that the court held therein that there was no cause of action described in the application was that there was no averment in the application that the rent which was claimed to be in arrears ever formed the subject matter of a notice of demand. In fact, no notice was even mentioned in the application and the one that was enclosed with the application demanded rent for a period for which rent had been already paid according to the record. As already noticed above, the facts here are clearly different and the notice served on 30th June, 1970 was both mentioned in the application and proved. The application was only filed on 16th September, 1970 after the period of two months had elapsed. As such, it is clear that the mandatory provision contained in section 14(1)(a) has been complied with and the petition was neither premature nor without jurisdiction.

In the result, for the reasons outlined above, the appeal is dismissed with costs.