High Court Of Delhi
ARIAN AFGHAN AIRLINES COMPANY LIMITED - Appellant
Versus
CYCLE EQUIPMENT PRIVATE LIMITED - Respondent
SECOND APPEAL 57 of 1973
Decided On : 05/05/1978
Delhi Rent Control Act, 1958 - Section 15(1), 15(7) - Striking out of defence - Discretion of Rent Controller - Circumstances to be considered - Order striking out defence set aside - Remand for decision according to law.
Fact of the Case:
Tenant failed to comply with an order under Section 15(1) of the Delhi Rent Control Act, 1958, to deposit arrears of rent and future rent. The Rent Controller struck out the tenant's defense under Section 15(7) of the Act. The tenant challenged the order in appeal, but the Tribunal upheld the order. The tenant filed a second appeal to the High Court.
Finding of the Court:
The High Court held that the Rent Controller had erred in striking out the tenant's defense without considering the circumstances of the case. The Court held that the discretion to strike out the defense under Section 15(7) must be exercised judicially, and that the Rent Controller should consider factors such as the extent of the default, the reasons for the default, and the tenant's overall compliance with the order under Section 15(1). In this case, the tenant had substantially complied with the order, and the default was relatively minor. Therefore, the Rent Controller should not have struck out the defense.
Issues: 1. Whether the Rent Controller had the discretion to strike out the tenant's defense under Section 15(7) of the Delhi Rent Control Act, 1958. 2. If so, what circumstances should the Rent Controller consider in exercising its discretion?
Ratio Decidendi: 1. The High Court held that the Rent Controller had the discretion to strike out the tenant's defense under Section 15(7) of the Delhi Rent Control Act, 1958. The Court noted that the word "may" in Section 15(7) indicated that the Rent Controller had a choice in the matter. 2. The Court held that the Rent Controller should consider the following circumstances in exercising its discretion under Section 15(7): * The extent of the default * The reasons for the default * The tenant's overall compliance with the order under Section 15(1)
Final Decision: The High Court set aside the orders of the Tribunal and the Rent Controller, and remanded the proceedings to the Rent Controller for a fresh decision. The Court directed the Rent Controller to consider the circumstances of the case and to exercise its discretion judicially in deciding whether to strike out the tenant's defense.
( 1 ) THIS Second Appeal under section 39 of the Delhi Rent Control Act, 1958, for short the Act, by a tenant against an order of eviction, which comes up before us. on a reference by a learned Single Judge of this Court, raises some interesting questions of law and was filed in the following circumstances :
( 2 ) ARIAN Afghan Airlines Company Limited, for short the tenant, had taken on lease the premises in dispute on March 1, 1964, from its previous owners M/s Lila Ram and Sons on a monthly rent of Rs. 1800. 00 by an unregistered agreement for a period of four years with an option of renewal. Before the petition for eviction, out of which the present appeal, arose, the landlord had sought the eviction of the tenant on the ground of non-payment. As no notice of termination of tenancy had been given prior, to the:said petition, the same was withdrawn with permission to file afresh one. The present petition-was subsequently filed in 1969 by the present owners, for short,the landlords, and the eviction was sought on the ground of non-payment of rent. In para (14) of the petition an averment was made that the premises had been let out on lst March, 1964 for four years (copy of the agreement enclosed)". It was further stated that "the tenancy is according to the English Calendar month terminating on the first of each month". The copy of the agreement, which was enclosed with the petition, purports to be an unregistered- agreement and was not proved at the trial of the petition. It was entered into on March 18, 1964. and provides "that this-lease shall be deemed to have come into effect as from 1st March, 1964" and "that the lease shall be for aperiod of four years commencing from 1st March, 1964". It further provides on the. expiry of the term "the lessee shall be entitled to extend the term of the. lease for a further period of four years". In para 18 (b) (b) it was averred that a notice terminating the tenancy dated 17-2-1968 was served on the respondent to vacate the premises on the expiry for the month of February, 1968". In para 18 (b) (c ). of the petition it was, however, alleged : "that the tenancy was for four years from 1-3-1964. The period of tenancy has already expired for the tenancy stands terminated by efflux of time. No notice for termination is necessary". In the "additional pleas" the factum of the filing,. and withdrawal of the earlier petition was mentioned. The notice dated February 17, 1968,: of which the copy was proved at the trial as Ex. P3, mentions the fact that the lease was for a period of four years and expired "on the 6th of February, 1968" and. that the "tenancy thus stands terminated". ,. The tenant was required to pay. the; arrears within two months from the date of the notice. In his reply to the petition, the tenant admitted the allegations container in para (1. 4) of the petition. The averments made in paras 18 (b) (b) and (c) were, however, denied by the tenant and it was alleged that no proper legal notice had been enserved on the respondent" and that. "no notice, of termination has been received by the respondent". On April 1, 1970, the Additional Rent Controller made an order under Section 15 (1) of the Act on the application of the landlords requiring the tenant to deposit the alleged arrears of rent and future rent. . The order was challenged by the tenant in appeal I and the Tribunal modified the original order with regard to the quantum of the amount to be deposited. The tenant, deposited a. sum of ,rs. 50,400. 00 within time as required by the Appellate order but I committed default in the deposit of the subsequent rent from November,j. , 1969 to April 30, 1970,the landlords thereupon sought an order order-Section 15 (7 ). of. the Actjor the striking out of the defence of the, tenant and by an order of August: 1,3, 1970, the defence of the tenant was struck out. On the same-date the Additional Rent Controller recorded the evidence of the landlords consisting of the s
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