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

"In the context of the proposition of denial of title of the plaintiff and denial of relationship of landlord and tenant between the plaintiff and defendant, we may also observe that such a denial simpliciter does not and cannot absolve the lessee/tenant to deposit the due amount of rent/damages for use and occupation, unless he could show having made such payment in a lawful and bonafide manner. Of course, the question of bonafide is a question of fact, to be determined in every case with reference to its facts but, it cannot be laid down as a general proposition that by merely denying the title of plaintiff or relationship of landlord- tenant/lessor-lessee, a defendant of the suit of the present nature could enjoy the property during the pendency of the suit without depositing the amount of rent/damages, the bench of Justices Dinesh Maheshwari and Aniruddha Bose observed while allowing the appeal.

The Court was deciding the applicability of Order XV Rule 5 of the Code of Civil Procedure in the case. As per this provision, the the defence of the defendent in an eviction suit can be struck off on if there is default in depositing the rent dues.

The court also opined that 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 the suit of the nature envisaged by Order XV Rule 5 CPC is the character of defendant as being the lessee/tenant in the suit premises," Court further added.

In the present matter the plaintiff had filed a suit before the Trial Court averring that she was the owner of a shop as she had purchased the registered sale deed from the erstwhile owner. She also stated in the suit that the defendant who was a chronic defaulter in payment of rent and taxes was a tenant in the shop.

Denying the relationship of landlord and tenant, the defendant asserted in his written statement that the alleged sale deed was illegal and void. Praying for striking off the defendant's statement, the plaintiff had preferred an application under Order XV Rule 5, CPC on the ground that the defendant had not deposited any rent and had not adduced any evidence to establish payment of any rent. The application was contested by the defendant on the ground that the provisions invoked were only applicable to a case where the defendant accepted plaintiff as his landlord. The defence was struck off by the Trial Court by observing that no evidence was placed on record by the defendant to show his payment of rent to the plaintiff and observed that even if the tenant would deny the relationship of landlord and tenant, the application under Order XV Rule 5 CPC was maintainable.

Since the ADJ upheld the view taken by the single judge, the defendant approached the High Court. The High Court while allowing defendant's application, set aside the orders impugned before it, directed the defendant to deposit the arrears of rent together with interest within one month and f to deposit the current rent as determined by the Trial Court, month by month, by seventh of every month during the pendency of litigation.

Aggrieved by the High Court's order, the plaintiff approached the Top Court. Counsel for the appellant urged that only he High Court has misinterpreted and misapplied the provisions of Order XV Rule 5 CPC and has allowed the petition filed by the defendant by merely holding that he was entitled to some indulgence but, without giving any specific reason or finding to overturn the considered orders passed by the subordinate Courts. Referring to the provisions contained in Order XV Rule 5 CPC, Counsel submitted that as per the said provisions, the defendant-respondent, being 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 neither paid nor deposited the due amount on the first hearing.

Relying on the law laid down 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, the respondent's counsel submitted that when he had taken specific plea regarding non-existence of relationship of landlord and tenant, he was not liable to deposit any rent in terms of the Order XV Rule 5 CPC.

To adjudicate on the issue as to whether the High Court was right in reversing the order striking off defence in terms of Order XV Rule 5 of the Code of Civil Procedure, 1908, the bench referred to few basic factors related with the provisions of Order XV Rule 5 CPC could be noticed at once.

"As per 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 under the obligation: (1) to deposit the entire amount admitted by him to be due together with interest at the rate of 9% per annum on or before the first hearing of the suit; and (2) to regularly deposit the monthly amount due within a week of its accrual throughout the pendency of the suit. The consequence of default in making either of these deposits is that the Court may strike off his defence. The expression 'first hearing' means the date for filing written statement or the date for hearing mentioned in the summons; and in case of multiple dates, the last of them. The expression 'monthly amount due' means the amount due every month, whether as rent or damages for use and occupation at the admitted rate of rent after making no other deduction except taxes, if paid to the local authority on lessor's account. It is, however, expected that before making an order striking off defence, the Court would consider the representation of the defendant, 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," Court said.

Disapproving the view by the High Court, the bench said, "With respect, the said conclusion of the High Court could only be said to be an assumptive one, being not supported by any reason. In paragraph 44, of course, the High Court observed with reference to the decisions of this Court that the discretionary power must be exercised with great circumspection but, such enunciation by this Court cannot be read to mean that whatever may be the fault and want of bonafide in the defendant/tenant, he would be readily given the so-called 'indulgence' of not striking off defence. Such an approach is neither envisaged by the statutory provisions nor by the referred decisions. In fact, such an approach would simply render the relevant provisions of law rather nugatory. The expected circumspection would require the Court to be cautious of all the relevant facts and the material on record and not to strike off the defence as a matter of routine."

Case Title: Asha Rani Gupta v Sir Vineet Kumar| Civil Appeal 4682 of 2022

Citation : 2022 LiveLaw (SC) 607

Code of Civil Procedure 1908 - Order XV Rule 5 - it cannot be laid down as a general proposition that by merely denying the title of plaintiff or relationship of landlord- tenant/lessor-lessee, a defendant of the suit of the present nature could enjoy the property during the pendency of the suit without depositing the amount of rent/damages (Para 14)

Code of Civil Procedure 1908- Order XV Rule 5- As per 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 under the obligation: (1) to deposit the entire amount admitted by him to be due together with interest at the rate of 9% per annum on or before the first hearing of the suit; and (2) to regularly deposit the monthly amount due within a week of its accrual throughout the pendency of the suit. The consequence of default in making either of these deposits is that the Court may strike off his defence. The expression 'first hearing' means the date for filing written statement or the date for hearing mentioned in the summons; and in case of multiple dates, the last of them. The expression 'monthly amount due' means the amount due every month, whether as rent or damages for use and occupation at the admitted rate of rent after making no other deduction except taxes, if paid to the local authority on lessor's account. It is, however, expected that before making an order striking off defence, the Court would consider the representation of the defendant, 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 (Para 9.1)