1976 (2) TMI 184 - HC - Indian Laws

Summary

Issues Involved
1. Striking out the defense under Section 15(7) of the Delhi Rent Control Act, 1958.
2. Legitimacy of the respondents' belief regarding the stay order.
3. Application of Section 15(7) concerning willful or contumacious default.
4. Impact of the previous application for striking out the defense.
5. Procedural implications of the stay order on the deposit of rent.

Detailed Analysis

1. Striking Out the Defense Under Section 15(7) of the Delhi Rent Control Act, 1958
The Rent Controller initially struck out the defense of the respondents under Section 15(7), but this decision was reversed by the Rent Control Tribunal. The appellants sought the restoration of the Rent Controller's order. The Tribunal found that the respondents had made the required deposits, albeit belatedly, due to a misunderstanding caused by a stay order from the High Court. The Tribunal's decision was based on the finding that the respondents did not intend to withhold rent deliberately.

2. Legitimacy of the Respondents' Belief Regarding the Stay Order
The respondents believed that the stay of proceedings by the High Court meant they did not need to deposit the rent. The Tribunal found this belief to be understandable, although incorrect. The High Court order staying the proceedings led the respondents to think they were not required to make any deposits. This belief was substantiated by the fact that they deposited the entire rent as soon as the application under Section 15(7) was moved.

3. Application of Section 15(7) Concerning Willful or Contumacious Default
The Tribunal examined whether the delay in making deposits was willful or contumacious. The Tribunal concluded that the respondents were misled by the stay order, and thus their default was not willful. The High Court noted that the Controller has the discretion to strike out the defense based on the tenant's actions. The Tribunal's decision was influenced by the fact that the respondents made timely deposits after December 1967 and continued to do so up to the date of the appeal.

4. Impact of the Previous Application for Striking Out the Defense
The appellants had previously applied for striking out the defense in November 1967, which was dismissed for non-prosecution after the respondents made the required deposits. The High Court agreed with the Tribunal that a subsequent application on the same grounds was barred. The appellants had already withdrawn the arrears of rent deposited by the respondents, and thus could not seek to strike out the defense again on the same grounds.

5. Procedural Implications of the Stay Order on the Deposit of Rent
The High Court discussed the procedural implications of the stay order, noting that the stay of proceedings should ideally clarify whether the tenant is required to continue depositing rent. The High Court refrained from expressing a final view on whether the stay order also stayed the order under Section 15(1) directing the deposit of rent. The High Court suggested that the Rent Controller should provide a choice to the tenant to either pay the landlord directly or deposit the rent in court to avoid such complications.

Conclusion
The High Court dismissed the appeal, agreeing with the Rent Control Tribunal that the respondents were misled by the stay order and had not willfully defaulted in depositing the rent. The previous application for striking out the defense barred the subsequent application on the same grounds. The High Court emphasized the need for clarity in stay orders regarding the obligation to deposit rent and suggested procedural improvements to avoid similar issues in the future. The case was directed to be decided expeditiously by the Rent Controller.