Defendant In Eviction Suit Can’t Enjoy Property During Pendency Without Depositing Rent, Merely By Denying Landlord-Tenant Relationship: Supreme Court

The Supreme Court has stated that a defendant cannot enjoy the property during the pendency of the suit without depositing the amount of rent/damages by simply denying the landlord-tenant/lessor-lessee relationship.

In the context of the proposition of denial of plaintiff’s title and denial of landlord-tenant relationship between plaintiff and defendant, we may also observe that such a denial simpliciter does not and cannot absolve the lessee/tenant from depositing the due amount of rent/damages for use and occupation, unless he can show such payment was made in a lawful and bona fide manner. Of course, the question of bonafide is a question of fact that must be determined in each case on its facts, but it cannot be laid down as a general proposition that by simply denying the title of plaintiff or the relationship of landlord-tenant/lessor-lessee, a defendant of the present nature could enjoy the property during the pendency of the suit without depositing the amount of rent/damages, the bench of Honourable Justice Dinesh Maheshwari and Honourable Justice Aniruddha Bose observed while allowing the appeal in the case of Asha Rani Gupta v Sir Vineet Kumar (Civil Appeal 4682 of 2022).

The Court was deciding whether Order XV Rule 5 of the Code of Civil Procedure applied in this case. According to this provision, the defendant’s defense in an eviction suit can be struck off if the rent is not deposited on time.

According to the court, Order XV Rule 5 CPC embodies the fundamental principle that there is no “holidaying for a tenant in payment of rent or damages for use and occupation, whether the lease is subsisting or it has been determined.”

“The only basic requirement in a suit of the nature contemplated by Order XV Rule 5 CPC is the defendant’s character as the lessee/tenant in the suit premises,” the Court added.

Facts of the case:

In the current case, the plaintiff filed a suit in the Trial Court, claiming ownership of a shop after purchasing the registered sale deed from the previous owner. She also stated in the suit that the defendant was a tenant in the shop and was a chronic late payer of rent and taxes.

Denying the landlord-tenant relationship, the defendant claimed in his written statement that the alleged sale deed was illegal and void. The plaintiff had filed an application under Order XV Rule 5, CPC, requesting that the defendant’s statement be struck because the defendant had not deposited any rent and had not provided any evidence to establish payment of any rent. The defendant objected to the application on the grounds that the provisions invoked were only applicable in cases where the defendant accepted the plaintiff as his landlord. The Trial Court dismissed the defence because no evidence was presented by the defendant to show his payment of rent to the plaintiff, and even if the tenant denied the landlord-tenant relationship, the application under Order XV Rule 5 CPC was maintainable.

High Court’s Observations:

Because the ADJ upheld the single judge’s decision, the defendant petitioned the High Court. While granting the defendant’s application, the High Court directed the defendant to deposit the arrears of rent plus interest within one month and the current rent as determined by the Trial Court, month by month, by the seventh of every month during the pendency of litigation.

The plaintiff filed an appeal with the Supreme Court after being dissatisfied with the High Court’s decision. Counsel for the appellant contended that only the High Court misinterpreted and misapplied the provisions of Order XV Rule 5 CPC and granted the defendant’s petition by simply holding that he was entitled to some indulgence but without providing any specific reason or finding to overturn the considered orders passed by the subordinate Courts. Referring to Order XV Rule 5 CPC, Counsel stated that the defendant-respondent, as the tenant of the suit shop, was required to pay or deposit the entire rent for use and occupation of the shop in question, but he did not pay or deposit the due amount on the first hearing.

The respondent’s counsel contended that because he had taken a specific plea regarding the non-existence of a landlord-tenant relationship in Bimal Chand Jain v. Sri Gopal Agarwal: 1981 (3) SCC 486 and Manik Lal Majumdar and Ors. v. Gouranga Chandra Dey and Ors.: AIR 2005 SC 1090, he was not required to deposit any rent under Order XV Rule 5 CPC.

To decide whether the High Court was correct in reversing the order striking off defense under Order XV Rule 5 of the Code of Civil Procedure, 1908, the bench referred to a few basic factors related to the provisions of Order XV Rule 5 CPC that could be noticed immediately.

Court’s Findings:

“According to these provisions, in a suit by a lessor for eviction of a lessee after the determination of lease and for recovery of rent or compensation for use and occupation, the defendant is required to: (1) deposit the entire amount admitted by him to be due, together with interest at the rate of 9 percent per annum, on or before the first hearing of the suit; and (2) deposit the monthly amount due within a week of its accrual throughout the pendenc Failure to make either of these deposits may result in the Court dismissing his defense. The term “first hearing” refers to the date for filing a written statement or the date for hearing specified in the summons, or, if multiple dates are specified, the last of them. The term’monthly amount due’ refers to the amount due each month, whether as rent or damages for use and occupation at the admitted rate of rent after no other deductions except taxes, if paid to the local authority on the lessor’s account. It is expected, however, that before issuing an order striking off the defendant’s defense, the Court will consider the defendant’s representation, if made within 10 days of the first hearing or within 10 days of the expiry of one week from the date of accrual of monthly amount,” the Court stated.

The bench rejected the High Court’s view, saying, “With respect, the said conclusion of the High Court could only be said to be an assumptive one, being unsupported by any reason.” Of course, the High Court noted in paragraph 44 with reference to this Court’s decisions that the discretionary power must be exercised with great caution; however, such enunciation by this Court cannot be read to mean that whatever the fault and lack of bonafide in the defendant/tenant, he would be readily given the so-called ‘indulgence’ of not striking off defense. The statutory provisions and the referred decisions do not contemplate such an approach. In reality, such an approach would simply render the relevant legal provisions void. The anticipated prudence would necessitate the Court’s scrutiny of all relevant facts and evidence on record, rather than dismissing the defense on a routine basis.”

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Judgement Reviewed By Manju Molakalapalli.

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