V.K. Verma vs Radhey Shyam

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Not extracted

Decision Date: 17 December, 1963

Coram: P.B. Gajendragadkar, K.C. Das Gupta, N. Rajagopala Ayyangar

In this matter the plaintiff, who is now the respondent, instituted a suit for ejectment on 8 September 1958 and subsequently filed an application under Section 13(5) of the Delhi and Ajmer Rent Control Act, 1952 (Act No XXXVIII of 1952). The plaintiff requested that the tenant be ordered to deposit both the arrears of rent and the future monthly rent by the fifteenth day of the month following each demand, in accordance with the law. The plaintiff claimed that the arrears amounted to Rs 722 7/‑ up to 30 June 1960. The rent originally stood at Rs 64 8/‑, but the plaintiff asserted that from 1 August 1959 the rent had been increased to Rs 70.95 np. The tenant opposed the application and, in a reply dated 1 August 1960, maintained that the rent rate had remained at Rs 64 8/‑ and that only Rs 516 ‑ was due as arrears calculated at that rate up to 30 June 1960. The tenant further expressed willingness to make the deposit.

The Subordinate Judge, First Class, Delhi, disposed of the application on 1 August 1960 and ordered that the tenant could deposit the arrears and the subsequent rent on a month‑by‑month basis at the rate of Rs 64 8/‑ per month. The judge clarified that, under Section 13(5), the order must be made at the rate at which rent was last actually paid and that any increase in rent could not be taken into account. On 13 December 1960 the plaintiff returned to the Sub‑Judge, alleging that the tenant had failed to deposit the rent for September 1960, which was required by 15 October 1960, and for October 1960, which was required by 15 November 1960. The plaintiff prayed that, on account of this alleged default, the tenant’s defence to the ejectment suit should be struck out. The tenant contested this claim, arguing that no valid order under Section 13(5) had been made and, even if such an order existed, that he had not committed any default. The learned Subordinate Judge rejected both contentions, finding that a default had indeed occurred in complying with the earlier order and consequently ordered that the tenant’s defence be struck off. The tenant appealed this judgment. The Court of Appeal, presided over by the Senior Sub‑Judge, Delhi, upheld the trial judge’s finding that a valid order under Section 13(5) had been issued and that the tenant had defaulted in making the required payments. The appellate court also rejected the tenant’s argument that the trial judge possessed a discretionary power to vary the time for payment and thus should have exercised such discretion in the tenant’s favour.

In this case the senior sub‑judge considered whether the court could exercise its discretion in favor of the tenant by extending the time for payment of rent. Relying on the Punjab High Court decision in Kanahiya Lal Balkishan Das v. Om Prakash Sharma, Civil Revision No. 583 of 1958 dated 23‑10‑1962, the senior sub‑judge held that the court could not, under any circumstances, extend the time fixed in an order made pursuant to Section 13(5) and could not condone the tenant’s default. Accordingly, he dismissed the tenant’s appeal. The tenant subsequently filed a petition under Section 35 of the Delhi and Ajmer Rent Control Act, 1952, before the High Court of Punjab. One of the grounds urged before the High Court was that the appellate court below had ignored Section 57 of the Rent Control Act, 1958. The High Court dismissed the petition summarily. The present appeal was then filed against the High Court’s order after special leave was obtained from this Court. The principal contention advanced in the appeal was that, had the appellate court considered Section 57 of the 1958 Act, it might not have struck out the plaintiff’s prayer for striking out the defenses. Section 57 of the 1958 Act, in its second subsection, provides that despite the repeal of the 1952 Act, all suits and proceedings pending under the 1952 Act shall be disposed of according to its own provisions, subject to the proviso that “in any such suit or proceeding for fixation of standard rent or for the eviction of a tenant from any premises to which Section 54 does not apply, the Court or other authority shall have regard to the provisions of the 1958 Act.” The Court examined the true scope and effect of this provision in Karam Singh Sobti v. Pratap Chand, Civil Appeal No. 392 of 1963 dated 29‑8‑1963. A majority of the Court held that the appropriate method of harmonising the substantive provisions of Section 57 with its proviso was to interpret the words “shall have regard to the provisions of this Act” to mean that “where the new Act has slightly modified or clarified the previous provisions, those modifications and clarifications should be applied.” To apply the principle articulated in Sobti’s case, the Court compared the provisions of Section 13(5) of the old Act with those contained in Sections 15(1) to (7) of the new Act. The comparison revealed that the provisions are substantially similar, differing only by slight modifications. One such modification is that, while Section 13(5) required the landlord’s application to be “for an order on the tenant‑defendant to deposit month‑by‑month rent at a rate at which it was last paid” in all suits for ejectment, Section 15 of the new Act makes a distinction

The Court noted that the new legislation separates cases in which possession is sought on the ground of rent arrears left unpaid within two months of a demand notice from other ejectment proceedings. In the first category, the Controller is authorised to order the tenant to pay rent at the rate at which rent was last actually paid. In the second category, the Controller may order payment at the rate that is legally recoverable, which may differ from the tenant’s previous payment rate. The Court identified another significant difference concerning the consequence of a tenant’s failure to make the required deposit under the former statute. Under Section 13(5) of the old Act, if the tenant did not deposit the arrears within fifteen days of the order date or failed to deposit the rent for any month by the fifteenth of the following month, the Court was mandated to strike out the defence against ejectment. The language of that provision stated that “the Court shall order the defence against ejectment to be struck out.” Section 15(7) of the new Act addresses the same situation but uses different wording, providing that “If a tenant fails to make payment or deposit as required by this section the Controller may order the defence against eviction to be struck out and proceed with the hearing of the application.” The Court observed that the substitution of the mandatory phrase “the Court shall order” with the discretionary phrase “the Controller may order” represents a deliberate legislative modification favouring the tenant. Accordingly, under the old statute the Court had no choice but to strike out the defence once non‑payment was proved, whereas under the new statute the Controller, who now substitutes for the Court, possesses discretion to refrain from striking out the defence in appropriate cases. By comparing Section 13(5) with the provisions of Section 15, the Court concluded that the amendment introduced by Section 15(7) amounts only to a slight modification of the earlier law. Relying on the authority of Sobti’s case, C.A. No. 392 of 1963 decided on 29‑8‑1963, the Court held that the modified provisions must be applied to the present suit. The practical effect of that application, the Court explained, is that the trial Court would no longer be bound to strike out the defence against ejectment but could decide, after considering the circumstances, whether to do so. Finally, the Court observed that both the Sub‑Judge who made the original order and the Senior Sub‑Judge who affirmed it on appeal failed to consider the provisions of Section 15(7), a point that was clear from the record. It is not disputed that the rents for September 1960 and October 1960 were not...

The tenant had actually paid the rent that was due under the court’s earlier order, but the payment was made on December 6, 1960, rather than within the time specified. It is reasonable to conclude that when the Subordinate Judge considered the landlord’s request in June 1962 to strike out the defence against ejectment, he would have taken the fact that the rent had been paid in December 1960 into account if he had, as required by Section 57 of the new Act, given due regard to the provisions of Section 15(7) of that same Act. In the same way, the Senior Sub‑Judge who heard the appeal would also have been bound by Section 57 to consider the December‑1960 rent payment, and therefore would have taken that fact into consideration had he complied with the statutory duty imposed by Section 15(7). It was under these circumstances that the tenant filed an application before the High Court invoking Section 35 of the 1952 Act. Section 35, as it stands, provides that “the High Court may, at any time, call for the record of any case under this Act for the purpose of satisfying itself that a decision made therein is according to law and may pass such order in relation thereto as it thinks fit.” The Supreme Court later examined the true scope of Section 35 of the Delhi and Ajmer Rent Control Act, 1952, in the decision of Hari Shankar v. Girdhari Lal Choudhury. In that case, the appellate court had intervened on a plain finding of fact, so that the specific question of what mistake of law would permit the High Court to exercise its revisional powers did not arise directly for consideration. Nevertheless, that question was argued before the Court, and the Court delivered its judgment. Justice Hidayatullah, speaking for the majority, emphasized the distinction between an appeal and a revision and explained that the expression “according to law” in Section 35 refers to the decision taken as a whole and should not be equated with simple errors of law or fact. The majority also agreed with the observations of Chief Justice Beaumont in Bell and Co. v. Waman Hemraj concerning the scope of Section 25 of the Provincial Small Cause Courts Act. Those observations suggest that a Court may intervene only where the unsuccessful party has not received a proper trial conducted according to law. Illustrative instances include situations where the court acted without jurisdiction, relied on evidence that should not have been admitted, denied the party a fair opportunity to be heard, or placed the burden of proof on the wrong side. However, the learned Chief Justice carefully noted that these examples were not meant to exhaust all possible circumstances that might justify judicial interference.

In this case the Court observed that the legal proposition articulated in the decision of Hari Shankar continues to operate as binding authority. That authority persists provided it has not been supplanted by a different statement upon reconsideration by this Court. Nevertheless, the Court expressed the view that the facts of the present matter fall within the ambit of Section 35 of the 1952 Act, as was indicated in the Hari Shankar decision. The Court explained that when a statutory provision obliges a trial court to consider certain provisions, a failure to do so necessarily means that the trial was not conducted in accordance with law. Section 57 of the Act of 1958 expressly imposes on the trial court a duty to have regard to the provisions of the 1958 Act in the situations enumerated therein. The Court found that neither the Subordinate Judge who originally passed the order nor the Senior Subordinate Judge who heard the appeal discharged this statutory duty. Accordingly, the Court held that the trial in the lower courts was clearly not conducted in accordance with the law. The Court then addressed the argument raised by counsel for the respondent, who pointed out that the lower courts apparently had not been drawn to the requirements of Section 57. The Court held that even if the reference to Section 57 had been omitted, the legal position remained unchanged. While courts ordinarily decide cases on the basis of the submissions made by counsel, the Court stressed that an omission by counsel does not relieve the court from the obligation to follow clear statutory mandates. Consequently, the Court concluded that the failure of the tenant’s counsel to highlight Section 57 could not justify the High Court’s refusal to intervene. The Court therefore determined that the High Court should have exercised the power conferred by Section 35 of the 1952 Act. It also held that the High Court should have set aside the order that struck out the tenant’s defence to the ejectment suit. Accordingly, the Court allowed the appeal, annulled the order passed by the lower courts, and directed that the plaintiff’s application to strike out the tenant’s defence be rejected. In view of the unique circumstances, the Court ordered that each party bear its own costs and expressed the hope that the suit would be concluded swiftly under the provisions of the Act.