1964 (1) TMI 52 - SC - Indian Laws

Summary

Issues Involved:
1. Validity of the Rent Controller's order for the appellant to deposit back rents.
2. Existence and validity of an alleged agreement to adjust rent against professional fees.
3. Impact of the Income-tax Officer's notice under Section 46(5A) of the Indian Income-tax Act on the payment of rent.
4. Whether proper opportunity was given to the appellant to prove his plea.

Detailed Analysis:

1. Validity of the Rent Controller's Order:
The Supreme Court upheld the Rent Controller's order directing the appellant to deposit back rents at Rs. 300 per month from July 1, 1957. The Rent Controller's decision was based on the finding that the appellant had not paid rent after March 31, 1958. The Rent Control Tribunal and the High Court of Punjab affirmed this decision, noting that the appellant failed to provide sufficient evidence of an agreement to adjust the rent against professional fees. The Supreme Court agreed with the lower courts, stating that the order was made after giving the appellant an opportunity to be heard and was justified in the circumstances.

2. Alleged Agreement to Adjust Rent Against Professional Fees:
The appellant claimed an agreement existed with the landlord to adjust the rent against professional fees. However, the courts found this plea to be an afterthought, as the appellant did not mention such an agreement until September 14, 1959. The letter dated October 15, 1957, from the landlord, which the appellant relied on, did not support the existence of a continuous agreement to adjust rent against fees. The courts concluded that the appellant's plea was a mere device to avoid paying rent, and the Supreme Court concurred with this assessment.

3. Impact of Income-tax Officer's Notice:
The appellant argued that the notice under Section 46(5A) of the Indian Income-tax Act prevented him from paying rent without incurring personal liability. The Supreme Court dismissed this argument, noting that the Rent Controller had ordered that the deposited rent would not be paid to anyone until a clearance certificate was obtained from the Income-tax Department. The appellant's failure to inform the Income-tax Officer of his position and his refusal to deposit the rent with the Rent Controller indicated an attempt to avoid payment rather than a legitimate concern about liability.

4. Opportunity to Prove Plea:
The appellant contended that he was not given a proper opportunity to prove his plea regarding the alleged agreement to adjust rent against fees. The Supreme Court clarified that Section 15(1) of the Delhi Rent Control Act allows for an interim order to deposit rent before the full trial of the case. The courts had provided the appellant with an opportunity to be heard, and the interim order was justified based on the evidence available at that stage. The appellant would still have the chance to present oral evidence regarding the alleged agreement during the trial.

Conclusion:
The Supreme Court dismissed the appeal, affirming the decisions of the Rent Controller, Rent Control Tribunal, and High Court of Punjab. The appellant was granted two months from the date of hearing to deposit the arrears of rent from April 1, 1958, in the Court of the Rent Controller. The appeal was deemed wholly devoid of merit and was dismissed with costs.