# M. M. CHAWLA v. J. S. SETIII

- **Citation:** [1970] 2 S.C.R. 390
- **Court:** Supreme Court of India
- **Decided:** 1969-09-15
- **Case number:** Civil Appeal No. 1461 of 1969
- **Bench:** J. C. Shah, V. Ramaswam!, A. N. Grover
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/m-m-chawla-v-j-s-setiii-4828
- **Pages:** 15

## Headnote

B
Delhi R.,<;nl Control Act 1958-Suit for ejectment for non·pay111ent 01
rrnt for three consecutire nzonths-Tenant in- written state1nent c/ai1nin·•
ti.talion of standard rent-Such claim 111ade Gfter period of lbnitation laid
dn~·n in s. 12 cannot be entertaine'd-Ss. 4, 5, 6 or 15(3) do not support
c/011-.1-Benefit under s. 14(2) for a second tilne barred by proviJo tu
iub-1ection.
The appellant wns the tenant since before 1958 of cre!Jlin premises in
Delhi belonging to the respondent. The latter filed a proceeding for eject·
ing the appellant under s. 14( I) of the Delhi Rent Control Act, 1958, on
1be plea of non-payment of rent for seven months. Persuant to the direction of the Rent Controller the appe!lant paid the arrears under s. 14(:?)
of the Act and the proceeding was disposed of. The appellant ·~•in oom·
mitted default in payment of rent for three consecutive months and the
respondent again filed a fresh proceedin.I! for his ejectment under s. 14(1 ).
Jn his written statement the appellant asked the Rent Cohtroller to fi.~ tht!
.standard rant of the premises and further to give him agaiO the benefit of
s. 14(2). The Rent Controller rejected these picas and passed an order
in ejectment.
Appeals before the Rent Control Tribunal and the High
Court failed. In appeal by special leave before this Court the appellant
contended that the order of the Rent Controller \\'as illc,gal
because he
failed to fix the standard rent as claimed by the appelalnt. He also contended that the limitation period prescribed in s. 12 of the Act for an application for fixation of of standard rent did not apply where the claim \\as
made as a defence in a suit for ejectmcnt under s. I4(1)(C), and that in
any cveqt he was entitled to .the benefit of s. 14(2).
HELD : (i) The nppellanfs plea that the Rent Controller was bound
to fix the standard rent when the appellant iskcd for its fixation in his
\vi"itten statement must be rejected.
(a) The prohibition in ss. 4 and 5 of the Act operates only after the
standard rent has been fixed and not before.
Until the Rent Controller
has fixed the standard rent under s. 9. the contiact between the landlord
and t~nant determines the linbility.
Section 6 cnnnot be interpreted to
mean that standard rent can be regarded as fixed without an order from
the Controller. [400 F-H)
(b) Whens. 15(3) ~efers to a case in which there is a "dispute as to
the amount payable by the tenant" the dispute referred to is about contractual rent payable and not about the standard rent.
The expression
'"having regard to the provisions of the Act" has reference to ss. 9 and I:!..
The scheme of suh-s. (3) of s. 15 is that the interim rent will be paid
at the rate drdered by the Controller and if befor~ the procecdi.ng is dispOsed of standard rent is fixed by the Controller 1n an apphcatlon under
s. J 2, then in order to ohtain the benefit of s. 6 the. t~nant must pay the
arrears calculated on the basis of the standard rent w1~h1n one month f~on1
the date on which the standard rent is fixed o'r within such further t1n1c
as the Controller may allow. [402 B-G)
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M. M. CHAWLA V. J. S. SETHI (Shah, J.)
391
If in a proceeding under s. 14(1) (a) the tenant raises by way of
defence a contention that the standard rent be determined the Controller
may treat that as an application under s. 12 and deal wih it accordina
to law. But the Act ~onfers no power under s. 15(3) upon the Controlle:'.
The power to determine standard rent is
exercisable under s. 12
only.
[402 Bl
(c) Acceptance of the appellant's contention would lead to anomalous
results.
Under s. 12 standard re:nt may be given retrospective operation
for not more than one yca'r. But if a tenant is in arrears for more than one
year, on the contention of the appellant, the tenant would be liable to
pay arrears at the rate of standard rent determined for a period longer than
one year before the date on which he made a claim in his written staten1ent fdr determination of

## Text

390
M. M. CHAWLA
A
v.
J. S. SETIII
.
September 15, 1969
(J. C. SHAH, V. RAMASWAM! AND A. N. GROVER, JJ.j
B
Delhi R.,<;nl Control Act 1958-Suit for ejectment for non·pay111ent 01
rrnt for three consecutire nzonths-Tenant in- written state1nent c/ai1nin·•
ti.talion of standard rent-Such claim 111ade Gfter period of lbnitation laid
dn~·n in s. 12 cannot be entertaine'd-Ss. 4, 5, 6 or 15(3) do not support
c/011-.1-Benefit under s. 14(2) for a second tilne barred by proviJo tu
iub-1ection.
The appellant wns the tenant since before 1958 of cre!Jlin premises in
Delhi belonging to the respondent. The latter filed a proceeding for eject·
ing the appellant under s. 14( I) of the Delhi Rent Control Act, 1958, on
1be plea of non-payment of rent for seven months. Persuant to the direction of the Rent Controller the appe!lant paid the arrears under s. 14(:?)
of the Act and the proceeding was disposed of. The appellant ·~•in oom·
mitted default in payment of rent for three consecutive months and the
respondent again filed a fresh proceedin.I! for his ejectment under s. 14(1 ).
Jn his written statement the appellant asked the Rent Cohtroller to fi.~ tht!
.standard rant of the premises and further to give him agaiO the benefit of
s. 14(2). The Rent Controller rejected these picas and passed an order
in ejectment.
Appeals before the Rent Control Tribunal and the High
Court failed. In appeal by special leave before this Court the appellant
contended that the order of the Rent Controller \\'as illc,gal
because he
failed to fix the standard rent as claimed by the appelalnt. He also contended that the limitation period prescribed in s. 12 of the Act for an application for fixation of of standard rent did not apply where the claim \\as
made as a defence in a suit for ejectmcnt under s. I4(1)(C), and that in
any cveqt he was entitled to .the benefit of s. 14(2).
HELD : (i) The nppellanfs plea that the Rent Controller was bound
to fix the standard rent when the appellant iskcd for its fixation in his
\vi"itten statement must be rejected.
(a) The prohibition in ss. 4 and 5 of the Act operates only after the
standard rent has been fixed and not before.
Until the Rent Controller
has fixed the standard rent under s. 9. the contiact between the landlord
and t~nant determines the linbility.
Section 6 cnnnot be interpreted to
mean that standard rent can be regarded as fixed without an order from
the Controller. [400 F-H)
(b) Whens. 15(3) ~efers to a case in which there is a "dispute as to
the amount payable by the tenant" the dispute referred to is about contractual rent payable and not about the standard rent.
The expression
'"having regard to the provisions of the Act" has reference to ss. 9 and I:!..
The scheme of suh-s. (3) of s. 15 is that the interim rent will be paid
at the rate drdered by the Controller and if befor~ the procecdi.ng is dispOsed of standard rent is fixed by the Controller 1n an apphcatlon under
s. J 2, then in order to ohtain the benefit of s. 6 the. t~nant must pay the
arrears calculated on the basis of the standard rent w1~h1n one month f~on1
the date on which the standard rent is fixed o'r within such further t1n1c
as the Controller may allow. [402 B-G)
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M. M. CHAWLA V. J. S. SETHI (Shah, J.)
391
If in a proceeding under s. 14(1) (a) the tenant raises by way of
defence a contention that the standard rent be determined the Controller
may treat that as an application under s. 12 and deal wih it accordina
to law. But the Act ~onfers no power under s. 15(3) upon the Controlle:'.
The power to determine standard rent is
exercisable under s. 12
only.
[402 Bl
(c) Acceptance of the appellant's contention would lead to anomalous
results.
Under s. 12 standard re:nt may be given retrospective operation
for not more than one yca'r. But if a tenant is in arrears for more than one
year, on the contention of the appellant, the tenant would be liable to
pay arrears at the rate of standard rent determined for a period longer than
one year before the date on which he made a claim in his written staten1ent fdr determination of standard rent and may be entitled to reopen
closed transactions.
The legislature could not havo intended that the
tenant in default should be entitled to evade the statutory period of limitation prescribed by the expedient of refusing to make an application so as
to obtain an advantage to which he is not entitled if he moves the Controller in a substantive application for d~termination of standard
rent.
[404 E-FJ
Ml s. Sura; Bairam Sawlmey & Sons v. Dr. D. Kiri, (1965) 67 P.L.R.
1197, S. K. Chntter;ee & A11r. v. J. N. Ghoshal, (1966) P.L.R. (Delhi
Section) 354 and Ch<mder Bhan v. Na11d Lal & Anr. (1969) All India
Rent Control Journal 629, disapproved.
Jiwan Industries Private Ltd. v. Snntosh & Company,
(1965)
67
P.L.R. 241, Lala Mnnohar Lal Nathan Mal v. Medal Lal Mllrari
Lal,
A.I.R. 1956 Pb. 190. and
Smt. Radhey Piari v. S. KaTyan
Si11gh,
A.LR. 1959 Punjab, 508, referred to.
(ii) The earlier proceeding against the appellant was disposed of o.n his
payment of arrears of rent for seven months. Thereby the appellant had
on the earlier occasion obtained the benefit of s. 14(2). Having again
made default in payment of rent and not having made any payment under
s 15 he was not entitled for a second time to the benefit of s. 14(2).
The ~ords "no tenant shall be entitled to the benefit under this sub-8ection"
in the oroviso sub-s. (2) of s. 14 are not directory. Even on the assumption that the proviso is not mcndatory there was no justification for ii:iterfering with the finding of the High Court that the appellant was not entJtled
to the benefit of s. 14(2). [405 E-G]
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1461 of
1969.
A?peal by special leave from the ;udgment and decree dated
January 24, 1969 of the Delhi High Court in S.A.0. No. 203-D
Of 1966.
B. C. Misra and R. P. Aggarwal, for the appellant.
Hardev Singh and S. K. Gambhir, for the respendent.
The Judgment of the Court was delivered by
Shah, J, Man Mohan Chawla was since before 1958 tenant
of certain premises in Delhi belonging to J. S. Sethi. The contractual rent of the premises was Rs. 160 per month. Sethi filed
a petition under s. 14(1) of the Delhi Rent Control Act, 1958 for
392
SUPREME COURT REPORTS
[1970J2 S.C.R.
an order in ejectment against Chawla on the plea that the latter
bad committed default in paying rent for seven months consecutively.
Pursuant to a direction of the Rent Controller, Chawla
deposited the rent claimed, and the amount deposited was paid
over to Sethi and the proceeding was disposed of.
Chawla again committed default for three consecutive months,
and Sethi commenced another proceeding under s. 14(1) of the
Delhi Rent Control Act for an order in ejectment. Chawla denied
the claim that he had committed default in payment of rent. He
pleaded that he had on March 19, 1963 sent to Sethi Rs. 320 by
a postal money order which Sethi had refused to accept.
Sethi
denied that a money order sent by Chawla was brought to him by
the postal peon.
Chawla also pleaded that the contractual rent
was excessive and that the rent of the premises let to him could
not exceed Rs. 50 per month and prayed that standard rent may
be fixed by the Controller. The Controller rejected that contention of Chawla and passed an order in ejectment. The order of
ejectment passed by the Controller was confirmed in appeal by the
Rent Control Tsibunal, and a second appeal to the High Court was
also umuccessful.
Chawla has appealed to this Court with special leave.
In 'upport of the appeal counsel for Chawla contended : (i)
that the Controller was bound to determine the standard rent of
the premises in the proceeding instituted by Sethi, and since the
Controlkr failed to do so the order in ejectment was illegal; (ii)
the Courts below were in error in holding that Chawla could not
obtain the benefit of S; 14(2) of the Delhi Rent Control Act, 1958;
(iij) t11 at the legal presumption arising from the despatch of a postal
lrioney order for Rs. 320 addressed to Sethi had been ignored by
all tae courts; and (iv) that Chawla had made a deposit of rent for
three months and if that deposit be taken into account Chawla
was not in arrears for three consecutive months at the date of the
initiation of the proceeding.
Not much need be said about .contentions (iii) and (iv).
The
fourth plea W:!_s not raised before the Rent Controller and the Rent
Control Tribunal; it was sought to be urged for the first time before
the High Court and the High ~ourt declined to entertain that plea.
We have. not permitted counsel to raise that plea, for its determination depends upon proof of facts which were never proved.
All the Courts have held that Chawla had failed to prove his
case· that a postal money order for Rs. 320 sent by Chawla was
duly addressed to Sethi and that Sethi refused to accept the postal
money order when it was tendered to him. The only evidence in
support of that case was a postal receipt for despatch of a money
order for Rs. 320 to Sethi. It did not bear tlie residential address
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M. M. CHAWLA V. J, S. SETHI (Shah, J.)
393
-0f Sethi. Sethi deposed that no one had tendered to him the postal
money order. His testimony has been believed. The third con·
tention must therefore fail.
We may now turn to the first and the second contentions
It is necessary to bear in mind that under the Delhi Rent Act, a
proceeding for recovery of rent does not lie before the Controller;
it lies in the civil court. The Controller is authorised to try a proceeding for ejectment or for determination or for determination.
of standard rent, or for determination of fair rent in respect of a
hotel and lodging house.
The relevant provisions of the Delhi Rent Control Act, 1958
which have a bearing on the two contentions remaining to be determined may first be n_oticed :
Section 2(k) defines "standard rent" as meaning in relation to
any premises, "the standard rent referred. to in section 6 or where
the standard rent has been increased under s. 7, such increased
rent". Chapter II deals with the quantum and the procedure for
determination of standard rent, and related matters. Section 6 of
the Act deals with the quantum of standard rent. Insofar as it is
relevant, it provides :
"(l) subject to the provisions of sub-section (2),
'standard rent', in relation to any premises means-
(A) in the case of residential premises-
(!) where such premises have been let out at any
time before the 2nd day of June 1944-
(a) if the basic rent of such premises per annum
does not exceed six hundred rupees the basic rent; or
(b) if the basic rent of such premises per annum
exceeds six hundred rupees,
the basic rent together
with ten per cent of such basic rent;
G
(2) where such premises have been let out at any
time on or after the 2nd day of June 1944-
(a) in any case where the rent of such premises has
been fixed under the Delhi and Ajmer-Merwara Rent
Control Act, 1947, or the Delhi and Ajmer Rent ConH
trol_ Act, 1952-
(i) if such rent per annum does not exceed twelve
hundred rupees, the rent so fixed; or
394
SUPREME COURT REPORTS
[1970] 2 S.C.R.
(ii) if such rent per annum exceeds twelve hundred
rupees, the rent so fixed together with ten per ceat of
such rent;
(b) in any case,
the rent calculated on
the
basis of seven and one-half per cent per annum of the
aggregate amount of the reasonable cost of construction
and the market price of the land comprised in the premises on the date of the commencement of the constrnction :
Provided that where the rent so calculated exceeds
twelve hundred rnpees per annum, this clause shall have
effect as if for the words "seven and one half per cent",
the words "eight and one-fourth per cent" has been substituted:
,,
Section 7 provides for lawful increase of standard rent
111
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tain cases and for recovery of other charges. Section 9 authori0
ses th~ Controller to fix the standard rent of the premises.
Insofar as it is relevant, it provides :
"(!) The Controller shall, on an application made to
him
in this behalf, either by the landlord or by the
tenant, in the prescribed manner, fix in respect of any
premisesE
(i) the standard rent referred to in section 6; or
(ii) the increase, if any, -referred to in.section 7;
(2) In fixing the standard rent of any premises or
the lawful increase thereof, the Controller shall fix an
amount which appears to him to be reasonable having
regard to the provisions of section 6 or section 7 and
,::e circumstances of the case.
f3)
(4)
(5) the standard rent shall in all cases be fixed for
a tenancy of twelve months :
Provided that where any premises are let or re-let
for a period of less than twelve months, the standard
rent for such tenancy shall bear the same proportion
to the annual standard rent as the period of tenancy
bears to twelve months.
(6) .
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M. M. CHAWLA v. J, S. SETHI (Shah, J.)
~95
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(7) In
fixing the standard rent of any premises
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under this section, the Controller shall specify a date
from which the standard rent so fixed shall be deemed
to have effect;
Provided that in no case the date so specified shall
be earlier than one year prior to the date ,of the filin2
of the application for the fixation of the standard rent."
Section J 0 provides for fixation of interim rent in an application for determination of standard rent. That section states :
"If an application for fixing the standard rent or for
determining the lawful increase of such rent is made
under se.:tion 9, the Controller shall, as expeditiously
as possible, make an order specifying the amount of
the rent or the lawful increase to be paid by the tenant
to the landlord pending final decision on the application
and shall appoint the date from which the rent
or
lawful increase so specified shall be deemed to have
effect".
Section 12 insofar as it is relevant provides :
"Any landlord or tenant may file an application to
the Controller for fixing the standard rent of the premises or for determining the lawful i.ncrease of such
rent,-
( a) in the case of any premises which were let, or
in which the cause of action for lawful increase of rent
arose before the commencement of this
Act,
within
two years from such commencement;
(b) in the case of any premises let after the commencement of this Act,-
( i) where the application is made by the landlord,
within two years from the date on which the premises
were It~ to the tenant against whom the application is
made;
. \ii) where the application is made by the tenant,
w1thm two years from the date on which the premises
were let to the tenant; and
(c) in the case of any premises in which the cause
of action for lawful increase of rent arises after the commencement of this Act, within two years from the date
on which the cause of action arises :
Provided that the Controller may entertain the application after the expiry of the said period of two years,
396
SUPREME COURT REPORTS
[1970] 2 S.C.R.
if he is satislied that the applicant was prevented by
A
sufficient cause from filing the application in time".
An application for fixation of standard rent must be made within
two years of the date of the commencement of the Act if the premises were Jet before 'the date of the commencement of the Act,
and if the premises were let after the commencement of the- Act
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within two years from the date. of Jetting. The Controller is authorised to entertain the application after expiry of the period of two
years if he is satisfied \hat the applicant was prevented by sufficient cause from filing the application in time. Section 4 modifies
the contract for payment of rent. It provides :
"(1) Except where rent is liable to periodical increase by virtue of an agreement entered int<' before the
1st day of January 1939, no tenan( shall, notwithstanding any agreement to the contrary, be liable to pay to
his landlord for the occupation of any premises any
amount in excess of the standard rent of the premises,
unless, such amount is a lawful increase of the standard
rent in accordance with the provisions of this Act.
(2) Subject to the provisions of sub-section (1 ), .any
agreement for the payment of rent in excess of the standard rent shall be construed as if it were an agreement
for the payment of the standard rent only".
By section 5 it is provided :
"(1) Subject to the provisions of this Act, no person
shall claim or receive any rent in excess of the standard
rent, notwithstanding any agreement to the contrary.
"
Section .14 which is in Ch. III deals with protection of tenant
against eviction. Insofar as it is relevant the section provides :
"(1) Notwithsti\)lding anything to the contrary contained in any other Jaw or contract, no order or decree
for the recovery of possession of any premises shall be
made by any court or Controller in l'avour of the landlord against a tenant :
Provided that the Controller may, on an application
made to him in the prescribed manner, make an order
for the· recovery of possession of the. premises on one
or more of the following grounds only; namely :-
(a) That the tenant has neither paid nor tendered
the whole of the arrears of the rent legally recoverable
from him within two months of the date on which a
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1'.'.. M. CHAWLA V. J, S. SETHI (Shah, J.)
397
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notice of demand for the arrears of rent has been served
on him by the landlord in the manner prnvided in secfion 106 of the Transfer of Property Act, 1882;
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(2) No order for the recovery of possession of any
premises shall be made on the ground specified in clause .
(a) of the proviso to sub-section (1), if the tenant makes
payment or deposits as reqnired l:y section 15 :
Provided that no tenant shall be entitled to the benefit under this sub-section, if, having obtained sucli benefit once in respect of any premises, he again makes a default in the payment of rent of thqse premises for' three
consecutive months.
"
Section 15, insofar as it is relevant, provides:
"(l) In every proceecling for the recovery of possession of any premises on the ground specified in clanse
(a) of the proviso to sub-section (1) of section 14, the
Controller shall, after giving the parties an opportunity
of being hefll'd, make an order directing the tenant , to
pay to the landlord or deposit with the Controller within
one month of the date of the order, an amount calculated
at the rate of rent at which it was last paid for the period
for which the arrears of the rent were legally recoverable
from the tenant including the period subsequent thereto
upto the end of the month previous to that in which payment or deposit is made and to continue to pay or deposit, month by month, by the fifteenth of each succeeding month, a sum eguivalertf tg the rent at that rate.
(2) .
( 3) If, in any proceeding referred to in sub-section
/1), or sub-section (2), there is any Jispute as to the
amount of rent payable by the tenant, the Controller
shall, within fifteen days of the date of the first hearing
of the proceeding, fix an interim rent in relation to the
premises to be paid or deposited in accordance with the
provisions of sub~section (1) or sub-section (2), as the
~ase may be, until the standard rent in relation thereto
1s fixed having regard to the provisions of this Act and
the amount of arrears, if any, calculated on the ba;is of
th~ s.tandard rent shall be paid or deposited by the tenant
within one month of the date on which the standard rent
398
SUPREME COURT REPORTS
[ 1970] 2 S.C.R.
i> fixed or such further time as the Controller may allow
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in this behalf.
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(4) .
(5) .
(6) If a tenant makes payment or deposit as required
by sub-section (1) or sub-section (3), no order shall be
made for the recovery of possession on the ground of
defavlt in the payment of rent by the tenant, but the
Controller may allow such costs as he may deem fit to
the landlord.
(7) If a tenan' 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".
Counsel for Chawla maintained that the period of limitation
prescribed by s. 12 only applies to petitions made to the Controller
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by a landlord or a tenant for fixing standard rent, but it has no
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application to a defence raised to a petition for ejectment filed by
a landlord under s. 14 that the contractual rent exceeds the standard rent and requests that the ~tandard rent be determined. Cqunsel contends that since in the present case. the Controller failed,
though expressly requested by Chawla by his written statement
to e~quire into the standard rent payable the proceedings were
vitiat'eil and the order made by the Controller was illegal. It is
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common ground that the written statement was filed more than
two years after the date on which the tenancy commenced and if
an application under s. 12(a) or (b) was made on that date it would
be barred by the law of limitation. But counsel said that in terms
s. 12 applies to a substantive application and not to a defence. He
relied in respect of his contention to various indication, which he
F
contends, arc to be found in the Act. Counsel says that by virtue
of the provisions of ss·. 4 and 5 recovery of rent by a landlord in
excess of the standard ~nt is prohibited. But in our judgment the
prohibiHon in ss. 4 and 5 operates only after the standard rent of
premises is determined and not till then. So Jong as the standard
rent is not determined by the Controller, th.~ tenant must pay the
contractual rent : after the standard rent is determined th.o landG
lord becomes disentitled to recover ail amount in excess of the
standard rent from the date on which the determination operates.
We are unable to agree that standard rent of a given tenement
is by virtue of s. 6 of the Act a fixed q:iantity, and the liability
for payment of a tenant is circumscribed thereby even if the stanH
<lard rent is not fixed by order of the Controller. Under the
scheme of the Act standard rent of a given tenement is that amount
only which the Controller determines. Until the standard rent is
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M. M. CHAWLA v. J. S. SETHI (Shah, J.)
399
fixed by the Controller the contract between the landlord and the:
tenant determines the liability of the tenant to pay rent.
Tha~ is.
clear from the terms of s. 9 of the Act. That section clearly indicates that the Controller alone has the power to fix the standard
rent, and it cannot be determined out of court. An attempt by
the parties to determine by agreement the standard rent out of
court is not binding. By section 12 in an application for fixation.
of standard rent of premises the Controller may give retrospective
operation to his adjudication for a period not exceeding one year
before the date of the application. 111e scheme of the Act is entirely inconsistent with standard rent being determined otherwise
than by order of the Controller. In our view, the prohibition
against recovery of rent in excess of the standard rent applies only
from the date on which the standard rent is determined by order
of the Controller and not before that date.
Counsel contends that by s. 15(3) it is expressly contemplated
that a request may be made for determination of standard rent as
a defence to an action in ejectment, and since the Legislature has
provided no time for making such a defence, the bar of limitation
prescribed by s. 12 has no application. But th.~ Le~islature has
provided for making an application for determination of standard
rent ~nd llas rrc.;cribed a period of limitation in that behalf. Sec.
tion 14 enables the landlord to file a petition in ejectment before
the Controlh on the ground that the tenant has failed to pay or
tender the arrears of rent lega1ly recoverable from him within two
month'; of the date on which a notice of demand for the arrears of
rent hn.s bee.n served on him by the landlord In such a case, under·
s. 15(!) where the rnte of renr is accepted b•lt there is a dispute as
to the payment of rent, the Controller will proceed to determine
whether payment according to the contract has been made. By
sub-section ( I ) of s. 15 it is provided that the Controller shall
make an order directing the tenant to pay to the landlord or deposit with the Controller within one month of the date of the order,
an amount calculated at the rate at which rent was last paid. But
the clame in terms provides that this has to be done after giving
the parties an opportunity of being heard. If the Controller was
obliged to pa% an order calling upon the tenant to pay to
the
landlord, or to deposit in his Court the amount of rer.t calculated
at the rate at which it was last paid for the period for which the
arrears of rent were legally recoverable from the tenant. there
would be no scope for a hearing to be given to the tenant and it
would put a premium upon false claims by landlords. Even though
the expression "shall" is nsed, it is, in our judgment, directorv.
The tenant is entitled to show that he has paid the rent claimed
from him. If he proves that he has paid the rent the demand for
denosit of arrears under sub-section (I) of s. 15 'cannot be made.
Suh-section (3) of s. 15 refers to cases in which there is a dispute·
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SUPREME COURT REPORTS
[1970] 2 S.C.R.
:as to the amount of rent payable by the tenant. In that case the
•Controller has to fix within fifteen days of the date of the first hear-
"ing of the proceeding, interim rent for the premises to be paid or
deposited in accordance with the provisions of sub-section
( 1)
until the standard rent in relation thereto fixed having regard to
the provisions of the Act. The determination of interim rent will
be for the period after the date of th~ application and also for
arrears.
Counsel for Chawla contended that the expression "disput~ as
to the amount of rent payable by the tenant" in sub-s. (3) of s. 15
·means a dispute raised by the tenant as to the "standard rent payable''. We are unable to agree.
The dispute, referred to in s.
15(3) is the dispute about contractual rent payable.
Wh~n such a
dispute is raised the Controller has, within fifteen days of the date
of the first hearing of the proceeding, to fix interim rent payable
by the tenant in accordance with the provisions of sub-s. (I) including the arrears, and such payment has to be made until the
standard rent in relatipn thereto is fixed "having regard to the
provisions of the Act". Sub-s. (3) provides that "interim rent" is
10 be paid at the rate at which it was last paid ti.11 standard rent is
determined, but thereby it is not implied that standard rent is to be
determined as an issue arising in the action for ejectment : the
clause only means that when there is a dispute relating to the rate
of contractual rent payable the Controller shall within fifteen days
of the date of the first hearing of the proceeding fix the interim
rent, and the amount so fixed shall be paid by the tenant until the
standard rent in relation to the premises is fixed in an appropriate
proceeding ~nder the Act. The expression "having regard to the
provisions of this Act" has in our judgment reference to ss. 9 and
12. Payment of arrears and standard rent under sub-s. (3) must
be made within one month of the date on which the standard rent
is fixed, or within such further time as the Controller may allow
in that behalf.
The scheme of sub-s. 3 of s. 15 is only that the interim rent
·will be paid at the rate ordered by the Controller, and before the
proceeding is disposed of standard rent of the premises is fixed by
the Controller in an application under s. 12, then in order to obtain benefit of s. 6 the tenant must pay the arrears calculated on
the basis of the standard rent within one month from the date on
which the standard rent is fixed or within such further time as the
Controller may allow.
If in a proceeding under s. 14(1)(a) the tenant ra.ises by way of
defence a contention that the standard rent be determined the Con-
. trolfor may treat that as an application under s. 12 and deal with
it according to law. But the Act confers no power under. s. 15(3)
·upon the Controller.
The power to determine standard rent is
exercisable under s. 12 only.
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M. M. CHAWLA V, J. S. SETHI (Shah, J.)
401
Our attention was drawn to a number of decisions of the Punjab and the Delhi High Courts in which it was held that the Rent
Controller has in a petition in ~jectment jurisdiction to determine·
the standard rent payable by the tenant. In Jiwan Industries Private Ltd. v. Santosh & Company(') .-Bedi, J., held that the Rent
Controller could fix the standard rent in a proceeding in ejectment
even after the application of the landlord for ejectment of the
tenant had been dismissed. In Messrs Sura; Bairam Sawhney &
Sons. v. Dr. D. Kiri(')-Gurdev Singh, J., held that the Control
!er had jurisdiction under s. 15(3) to determine the standard rent
in an application for eiectment based on the plea of non-payment
of rent, if the tenant raised a contention that the contractual rent
is in excess of the standard rent. The learned Judge was of the
view that the language of sub-s. (3) of s. 15 covers even those
cases in which an application for fixation of standard rent if made
independently would be barred by time prescribed under s. 12 of
the Act, since the limitation prescribed under s. 12 applies only
to an application made for fixation of standard rent and not to a
plea taken up by th'e tenant in defence to an action for his eviction under proviso (a) to sub-s. (1) of s. 14 of the Act. If the
tenant deposits the arrears of rent, observed the learned Judge, but
at the same time contends that the rent claimed from him is in
excess of the standard rent the Controller has to go into the question of standard rent and he cannot order payment of the entir~
arrears of rent deposited unless he finds that the arrears so deposited are not in excess of the arrears calculated at the rate at which
the standard rent is fixed.
In S. K. Chatterjee and Anr. v. J. N. Ghoshal(') S. K. Kapur.
J., held that the words "any dispute as to the amount of rent payahle by the tenant" in sub-s .. (3) of s. 15 refers to the dispute
arising between the parties on account of claim of a party for fixation of standard rent. The learned Judge further held thats. 15(3)
in terms confers powers to order payment or deposit of arrears at
the interim rate of rent. If the disagreement between the parties
be both as to agreed rent and the standard ren~. the power will be
exercised under s. 15(3) because the standard rent will prevail over
tit~ agreed rent. He also held that s. IS provides a code by itself
ns to the nature of enquiry, the Controller has to fix an interim
rent within IS days of the date of the first hearing of the proceeding. Tf this has to be done after a fullftedged enquiry compliance
with section I 5(3) would become impossible. This by itself indicates that the authorities constituted under the Act are to make·
an enquiry in a summary manner.
(1) (1965) 67 P.L.R. 241.
(2) (1965) 67 P.L.R.1197.
(3) (1966) P.L.R. (Delhi Section) 354.
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·suPREME COURT REPORTS
[1970]2 S.C.R.
V. S. Deshpande, J., in Chander Bhan v. Nand Lal and
Anr. (')--observed that his observation in the case which is under
appeal in this case that the expression "having regard to the provisions of this Act" used ins. 15(3) seemed to refer inter a!ia to
ss. 9 and 12 of the Act, and that observation was "not strictly
necessary for the decision of that case" inasmuch as there was no
dispute as to the rate of rent in that case and hence s. 15 ( 3) was
not attracted at all. The learned Judge also observed that there
were two distinct provisions in thz Act for fixation of standard
·rent-the first in s. 9 under which an application for the fixation of
standard rent is made, for which limitation is provided bys. 12 of
the Act; the other is in s. 15 ( 3) of th<" Act, and that applies only
when there is "a genuine dispute" between the parties regarding the
rate and the amount of rent. These observations prompt the comment that if the view expressed be correct the period of limitation
prescribed by s. 12 is rendered practica11y nugatory. If a written
statement filed in an application for ejectment under s. 14(1)(a)
raises no defence on the merits and contains a request for determination of standard rent, it would be illogical to hold that if made
in a substantive petition it would be barred, but because it is a
request made in a written statement in answer to a claim for ejectment it is free of the limitation prescribed by s. 12.
It is to be noticed that under s. 12 standard 1ent may be given
retrospective operation for not more than one year. But if a tenant
is in arrears for more than one year, on the contention advanced
by counsel for Chawla the tenant would be liable to pay arrears
at the rate of standard rent determined for a period longer than
one year before the date on which he made a claim in his written
statement for determination of stand2rd rent and may be entitled
to reopen closed transactions. The legislature could not have intended that the tenant in default should be entitled to evade the
statutory period of limitation prescribed by the expedient of refusing to make an application so as to obtain an advantage to
which he is not entitled if he moves the Controller in a substantive
application for determination of standard rent. In our view the
expression "having rega;d to the provisions of this Act" occurring
in sub-s. (3) of s. 15 means "having regard to sections 9 and 12
and other relevant provisions of the Act. In our view Deshpande,
J., in the judgment under appeal was right in the view that he
took, and that the refinement he sought to introduce in the latter
judgment in Chandrabhan v. Nand Lal and Anr. (') cannot be
· accepted as correct.
The judgments to which our attention was invited appear to
have proceeded upon earlier judgments of the Punjab High Court
·in Lala Manohar Lal Nathan Mal v. Madan Lal Muran· Lal(2)
I) (l 969) All ln~ia Rent Control Journal 623.
(2) A.l.R. 1956Pb.190.
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M. M. CHAWLA V. J, S. SETHI (Shah, J.)
403
and Smt. Radhey Piari v. S. Kalyan Singh('). But both these
cases were decided on the interpretation of ss. 8 to 11 of the Delhi
and Ajmer Rent Control Act 38 of 1952 in which it was eiipressly
provided that the standard rent shall be fixed on an application
made to the Court for that purpose or in an application in any .
suit or in any proceeding. We need express no opinion whether
the cases under the Delhi and Ajmer Rent Control Act 38 of 1952
were correctly decided.
But the difference in the phraseology
used in the Delhi Rent Control Act 59 of 1958 does not appear
to have been noticed in the judgments cited at the Bar in support
of the contention that to a written statement fj].ed by a tenant when
an application is made under s. 14(l)(a) the conditions of s. 12
do not llpply.
We are of the view that the Rent Controller, the Rent Control
Tribunal and the. Higl! Court were right in the view they have
expressed.
The second contention is also without substance. The tenant
had made no attempt to pay the rent which was demanded of him.
Sub-section (2) of s. 14 enacts that the Controller shall not pass
an order for recovery of possession of any premises if the tenant
makes payment or deposit as required by s. 15. The bar to the
jurisdiction of the Controller arises when the tenant pays or deposits interim rent as required by s. 15(3) and an application for
fixation of standard rent is not payment or deposit required by s.
s. 15. In any event by virtue of the proviso to sub-s. (2) of s. 14
Chawla is not entitled to the benefit of sub-s. (2) for he had earlier
committed default in payment of rent in respect of the premises
and a proceeding was instituted against him for recovery of possession.
That proceeding was disposed of after he deposited the
amount of rent due by him. By depositing the amount in court
in the previous proceeding, Chawla clearly obtained the benefit
under s. 14 (2) in respect of the premises occupied by hhn as a
tenant. Thereafter he made another default in payment of rent
for three consecutive months. Chawla was, therefore, not entitled
to claim the protection of sub-s. (2) of s. 14 for he made no payment as required by s. 15 and also because he had previously obtained the benefit of sub-s. (2) by maing a deposit in the earlier
proceeding.
The contention of counsel for Chawla that the proceeding started by Sethi against him was dismissed and that Chawla had not
obtained any benefit in respect of the premises under sub-s. (2)
of s. 14 does not require serious consideration. Chawla obtained
an order of disposal of the proceeding by depositing the amount
ordered to be deposited by him under s. 15. That was clearly a
(6) A.LR. 1959 Punjab 508.
404
SUPREME COURT REPORTS
(1970] 2 S.C.R.
benefit which he obtained under s. 14(2). The plea that "no tenant
shall be entitled to ·the benefit under this sub-section" is only
directory is without substance. In any event the High Court was
of the view that having regard to the conduct of Chawla he having
committed default previously and having obtained the benefit of
sub-s. (2) in respect of the premises he was not entitled to the same
benefit in this proceeding.
Assuming that the proviso to sub-s.
(2) of s. 14 is not mandatory on that question we express no
opinion-we are clearly of the view that the High court having
declined to grant the benefit of sub-s. (2) of s. 14 to Chawla, no
case is made out for our interference.
The appeal fails and is dismis~ed with costs.
G.C.
Appeal dismissed.
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