Holding

A deposit made in the Rent Controller’s court before the first hearing fulfills the proviso to Section 13(2)(i), so the tenant is deemed to have paid the rent and the ejectment order must be set aside.

Summary

The appellant, a tenant of a shop owned by Sher Singh, was served with an ejectment application under Section 13 of the East Punjab Urban Rent Restriction Act, 1949 for alleged arrears of rent. The tenant deposited the full arrears, interest and costs with the Rent Controller on 4 May 1967, a week before the first hearing scheduled for 11 May 1967, and the controller was informed of the deposit. The Rent Controller rejected the deposit as not complying with the proviso to Section 13(2)(i) and ordered eviction, a decision upheld by the High Court. On appeal, the Supreme Court held that the Act does not prescribe a specific mode of payment and that a deposit made in the Rent Controller’s court before the first hearing satisfies the proviso, deeming the rent as paid and protecting the tenant from eviction. Consequently, the Supreme Court set aside the High Court’s order, dismissed the landlord’s ejectment application and allowed the appeal.

Issues considered

Whether a deposit of arrears of rent, interest and costs made by a tenant in the Rent Controller’s court before the first hearing satisfies the proviso to Section 13(2)(i) of the East Punjab Urban Rent Restriction Act, 1949 and thus bars an order of ejectment.

Legislation cited

East Punjab Urban Rent Restriction Act, 1949s. 13(1), s. 13(2)(i), s. 19, s. 6
Punjab Relief of Indebtedness Acts. 31

Subjects

rent controlevictiondepositprovisotenant protectionEast Punjab Urban Rent Restriction Actcivil appealspecial leave

Judgment

836

A SHJilO NARAIN '
v.
SHER SINGH

September 21, 1979
• B [S. MURTAZA FAZAL ALI, P. S. KAILASAM AND A. P. SEN, JJ.]
East Pu111ab T.Jrban Re111 Restriction Act, 1949, Provisa ta Secaon 13(2) (i)'
-Scope of-Whether tlie deposit by a tenant of the entire arrears of rent or the ...- '
Fair Rent fixed by the Rent Controller before the first date of hearing of the
ejectment application would amount to deposit on the .'first date of hearing so as
•
c to attract the' benefit under Section 13(2)(i) of the Act.

The proviso to clause (1) of sub~section (2) of section 131 of the East Punjab
Urban Rent Restriction Act, 1949, states that ''if the tenant on the first hearing
of the application for ejectment after due service pays or tenders the arrears of
rent and interest @ 6 % per annum or such arrears together with the co3t of
application assessed by the Controller, the tenant shall beo deemed to have duly
0 paid or tendered the rent within the timei showed in clause (i) of sub-section (2)
of section 13 of the Act, 1949". In such circumstances, an order for eviction
against the tenant cannot be passed.

The appellant v.•as a tenant under the respondent-landlord Sher Singh. On
21-3-67, Sher Singh filed an application under Section 13 of the East Punjab
Urban Rent Restrictions Act, 1949 for ejectment of the appellant-tenant from the
tenanted shop situate in Gurgaon Cantonment, on the ground of arrears of rent
E for the period from 9-11-65 to 8-3-67 at the agreed rate @ Rs. 15/- p,m. The
notice of the application for ejectment with the first date of hearing as 11-5-67
was served on the appellant-tenant on 22-4-67. On 29-4-1967 the appellant-
tenant made1 an application before the very same Rent Controller praying for
payment of arrears of rent i.e. Rs. 178.48 for the above period computed @
Rs. 10.62 p.m., being the fair rent fixed by that Court on 20-4-67 in an ear1ier
F application for :fixation of fair rent. The said amount was actually deposited
in the court of the Rent Controller on 4-5-67. On 11-5-67 the appellant tenant
tendered in the court to the Jandlord a further sum of Rs. 25 /· being the costs
and Rs. 2/- being the interest. This was not accepted on the ground that the
tender was not a valid one within the meaning of section 13(2)(i) of the Act.

G
This objection was accepted by the Rent Controller and ·an ejectment order was
passed. On first appeal the District Judge reversed the said order. In the
Revision before the High Court, the High Court remanded the matter to the first
Appellate Court for fresh orders in view of this Court's 1uling in Vidya Prachar
'·I

Trust v. Basant Ram [1970] I S.C.R. 66. The Firnt Appellate Court affirmed
the ejectment order. In the further revision to the High Court, the learned
single Judge referred it to the Division Bench which in turn referred rn to a third
Judge. The third Judge agreed with the single Judge that the payment of fair •
rent fixed on 4-5-67 was not a valid tender within the meaning of section 13(2) (i)
H t)f the Act. The single Judge, therefore, dismissed the revision petition and
confirmed the orders .of ejectment of the courts below.
Allowing the appeal by special leave, the Court.

·'
SHEO NARAYAN V. SHER SINGH 837

HELD: J. Proviso to section 13(2)(i) of the East Punjab Urban Rent Res- A
trictions Act, 1949 requires three essential conditions: (1) that there must be an
application for ejectment before the Court, (2) that even after due service the
tenant <lees not pay or tender the arrears of rent and interest at 6 per cent per
annum together with oost9 ass'essed by the Controller, (3) that if the payment as
required ·by the aforesaid two conditions is made then the tenant shall be deemed
to have paid rent vt ithin the time required by law. The last part of sec!ion 13
1

enjoins that v;·here the conditions of the proviso are, not fulfilled the Controller B
shall make an order directing the tenant· to put the landlord in possession and
where he is satisfied that the rent has been paid, the application of the landlord
must be rejected. [841 A-C]

2. There is no magical formula or any prescribed manner in \\ hich rent can ,
1

be deposited by the tenant with the landlord. The rent can be deposited by
placing the money in the hands of the landlord which could amount to actual
tender. The second mcxle of payment is to deposit t."'ie amount in the court where
c
a case is pending in such a manner so as to make the amount available to the
landlord without any hitch or hindrance whenever he wants it. Even the Act
does not prescribe any particular mcxle of deposit. In fact, the use of the \vords;.
"tender or deposit" in the proviso clearly p0stulate that the rent can be given~
to the landlord in either of the two modes. (1) It may be tendered to the land-
lord personally or to his anthorised agent or it may be deposited in Court which D.
IS dealing with the case of the landlord to his knowledge· so that the landlord
may withdraw the deposit whenever he likes. In the instant case the appellant
tenant chose the second coutse. [842 A~C]

3. A deposit before the Rent Controller where the case of the landlord
was subjudice would be a valid deposit, if it was in fact in existence on the date
of ihe first hearing to the knowledge of the landlord. In fact, if lhe tenant
deposits the rent even before the first date of hearing it is a solid proof of his
E
bonafides in the, matter and the legal position would be that if the rent
is deposited before the first date of hearing, it will be deemed to ha·ve been
deposited on the date of the hearing also because the deposit continues to
remain in the court on that date and the position would be as if the tenant
had deposited the rent in court for payment to the landlord. [842 D-E]

Jn the instant case, all the· conditions necessary for the application of tlie F
proviso have been complet~ly fulfilled. This is more particularly so when
the Controller gave notice to the counsel for the respondent on the first date
of hearing that the amount had been deposited \.Yith the Controller. [842 E~F]

Vidya Prachar Trust v. Pandit Basant Ram, [1970] I S.C.R. explained and
distinguished.
G
Dulicluznd v. Maman Cluznd, C.A. 1744/69 dated 27-3-79 followed.
Mehnga Singh &: Ors. v. Dewan Dilbagh Rai & Ors., (1971) P.L.R. 57
overruled.

Obs1rvation

The R\!nt Control Act is a piece of social Ifgislation designed to protect H
the tenant from eviction by landlords on frivolous, insufficient or pureiy techni-
cal p;rollJilds. Even as the Act allows eviction of the tenant on the ground of
17---625SCI/79
r '
838 SUPREME COURT REPORTS [l98QJ l S.C.R.

~A non-payment of arrears of rent the proviso affords. sufficient prot'e.ction to the
tenant against eviction if the tenant deposits the· rent in ac1.:ordance \\'ith the )
proviso. [844 B-C]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 80 of 1977.
Appeal by Special Leave from the Judgment and Order dated
B 4-f.J-1976 of the Punjab and Haryana High Court in Civil Rev. No.
226 of 1971.
Suresh Sethi (Amicus Curiae) for the Appella'nt.
Yogeshwar Prasad and Mrs. Rani Chhabra for the Respondent.
C The Judgment of the Court was delivered by
FAZAL ALI, J. This appeal by special leave is directed against
the judgmJnt of the Punjab and Haryana High Court dated 4th Novem-
ber, 1976 dismissing the revision petition filed by the appellant before
the High Court.
This case has rather a chequered career and travelled through
various stages and finally when it came to the High Court the case
was remanded and after remand another Nvision petition was filed
before the High Court which was heard by a Single Judge who referred
it to a Division Bench as in his opinion a substantial question of law
was involved in the case. Woon the case went before the Division
Bench consisting of Pandit and B. S. Dhillon, JJ. the two Judges differed
from each other and the case was referred to a third Judge, namely,
Mittal, J. who agreed with Pandit, J. and dismis&"d the petition. Hence
this appeal.
In order to understand the point of law involved in this case, it
may be necessary to give a brief resume of the facts leading to the
F appeal. It app;:ars that the appellant-defendant was a tenant of a shop
belonging to one Sher Singh and was situated in Gurgaon Cantonment.
Sher Singh gave an application on 21-3-1967 under the provisions of
the East Punjab Urban Rerrt Restriction Act 1949 (hereinafter referred
to as the Act) against the defendant-appellant for eviction from the
shop on the ground that he had defaulted in payment of the rent and
G
arrears for the period 9-11-196,2 to 8-3-1967. Notice of this applica-
tion for 11th May 1967 was issued on the 22nd March, 1967 and
was actually served on the defendant appellant on 22nd April, 1967.
On the 29th April, 1967 the defendant-appellant made an application
before the Senior Sub-Judge who was also the Rent Controller for
H depositing a sum of Rs. 179.48 being the rent along with interest due.
The amount was however deposited before the Rent Controller on the
4th May, 1%7. It appears that the first date of the heari·ng of the
SHEO NARAYAN v. SHER SINGH (Fazal Ali, J.) 839

;application was 11th May, 1967 on which date the Rent Controller A
made the following order :
· "Present : Mr. Vijay Pal Singh for the petitioner
Mr. P. L. Kakkar for the respondent
The respondent's counsel Sh. P. L. Kakkar has been B
1
informed that the petitioner has deposited Rs. 179 .48 paise
on 4-5-67. Papers are filed."
Even before this date when the amount was ac!ually deposited by the
'appellant, the Rent Controller had passed the following order :-
"Present : Sh. Shiv Narain Petitioner. c
The rent be deposited at the responsibility of the peti-
tioner and after that notice be issu~d on payment of P.F.
for the respondent for 11-5-67."
It is, therefore, manifest that in the instant case a deposit of the D
rent and the arrears along with in~cr~st had actually been made before
the first date of hearing to the knowledge of the Court and the Court
had acknowledged the fact of the deposit of the amount. Again, on
1he first date of hearing i.e. 11th May, 1967 the Rent Controll~r inform-
ed counsel for the applicant respo'nderrt that a sum of Rs. 179.48 had
been dyposited. It is, therefore, clear that the applicant respondent E
was apprised d'arly of the fact that the amount in question had actually
bee~ deposite&and was at his disposal and he could withdraw the
same from the Court of the Rent Controller whenever he liked. Despit,
:these facts, the Rent Controller held in its order dated the 2nd becem-
ber, 1967 that the deposit was not made in accordance with the proviso
to section 13(2) (i) of the Act, and, therefore, the appellant being a F
defaulter the application was allowed and ejectment was ordered.
Thereafter, the app,llant went up in appeal to the District Judge who
was the Appellate Authority under the Act which differed from the
Niew taken by the Rent 'controller and by his Order dated 22nd Feb-
rnary, 1968 having held that the deposit was valid dismissed the appli-
cation filed by the respondent for evicting tlie appellant. Thereafter G
a revision was filed to the High Court which was remanded to the
District Judge for deciding the case afresh, and particularly having
"'gard to the decision of this Court in the case of Shri Vidya Prachar
Trust v. Pandit Basa.~t Ram('). On remand the District Judge
accepted the application of the respondent and affirmed the order of the
H
Rent Controller directing ejectment of the appellant. Thereafter the
{I) [1970] I S. C. R. 66.
840 SUPREME COURT REPORTS E19SOJ r s.c.a.

A appellant filed a revision before the High Court which, as already indi-
cated, had a varied career before the High Court and was ultimately
decided against the appellant and in favour of the applicant respondent.
The ihree Judg;!s of the High Court who heard the case have been
greatly influenced by the decision of this Court in Shri Vidya Prachar
Trust case (supra). It appears that the previous Division Bench of
the Punjab and Haryana High Court in the case of Mehnga S~'lgh & Ors.
v. Dewan Dilbagh Rai & Ors(') had followed the Supreme Court
decision and taken the view that the deposit in the circumstances was
not valid.
We have gone through the judgment of the Judges of the High
Coilrt and we are unable to agree with the interpretation placed by
them on the proviso to section 13 (2)(i) of the Act. We are also
constrained to observe that the High Court has misapplied the decision
of this Court in Vidya Prachar- Trust case (supra) which is clearly
distinguishable from the facts and circumstances of this case.
D Before dealing with the point of law involved it may be necessary
to extract portions of the Act with which we are concerned. In the
instant case, we are mainly concerned with section 13 of the Act
which may be extracted thus : -
" 13. (1) x - x x
'
E (2) A landlcyd who seeks to evict his tenant shall apply to
the Controller for a direction in that behalf. If the Con-
troller, after giving the tenant a reasonable opportunity of
showing cause against the applicant, is satisfied-
(i) that the te'nant has not paid or tendered the rent due
by him in respect of the building or rented land within
fifteen days after the expiry of the time fixed in the
agreement of tenancy with · his landlord or in the
absence of any such agreement, by the last day ot the
month next following that for which the rent is
payable:
·G Provided that if the tenant on the first hearing of the applica-
tion for ejectinent after the due service pays or tenders the
arrears of rent and interest at six per cent per annum on
such arrears together with the cost of application assessed
by the Controller, the tenant shall be deemed to have duly
paid or tendered the rent within the time aforesaid.
•ff x x ~ x x
El) (1971) P. L. R. 57.
SHEO NARAYAN v. SHER SINGH (Fazal Ali, J.) 841

The Controller may make an order directing the tenant to A
put the landlord in possession of the building or rented land
and if the Controller is not so satisfied he shall make an order
rejecting the application."
The decision of the case mai'nly turns upon the interpretation of the
proviso to section 13, which requires three essential conditions: (1) B
that there must be an application for ejectment before the Court, (2)
that even after due service the tenant does not pay or tender the
arrears of rent and interest at 6 per o:mt per annum together with
costs assessed by the Controller, .(3) that if the payment as required
by the aforesaid two conditions is made then the tenant shall re deemed
to have paid rent within the time required by law. The last part of c
section 13 enjoins that where the conditions of the proviso are not
fulfilled the Controller shall make an order directing the tenant to put
the landlord i'n possession and where he is satisfied that the rent has
been paid, the application of the landlord must be rejected.
Thus, the sole question which has to be determined in the instant
case is as to whether or not the deposit made by the appellant was D \
legally valid. The grounds on which the High Court held the deposit to
bo invalid were ( 1) that the rent was deposited in the Court of the
Rent Controller without there being a'ny express provision in the Act
requiring the tenant to deposit the rent in Court, (2) that even if the
deposit be held to be valid since it was made not on the date of the
first hearing but before that date, the deposit did not conform to the
conditions required in the proviso. Thirdly, the High Court relied
mainly on the decision of this Court in Vidya Prachar Trust case
(supra) and held that the deposit was not valid.
Before examining the case of this Court in the case of Vidya
Prachar Trust case (supra) it may be necessary to comment on the F
reasons given by the High Court in rejecting the case of
the appellant. We have already indicated above that the
appellant first moved the Rent Controller for· making a
deposit of Rs. 179.48 and then made the actual deposit on the
4th May, 1967 i.e. to say a week before the date of the first hearing
fixed· by the Rent Controller. It is also not disputed before us or for
that matter also, also before the courts below that the amount deposited •
by the appellant consisted of not only the arrears of rent but also costs
and interest as required by the proviso to section 13 of the Act.
Fourthly, it is also established that after the. deposit was made before
the Rent Controller he did not return the same to the appellant on H
the ground that he had no jurisdiction to receive it but oh the other
hand directed that notice of the deposit may be given to the respondent
842 SUPREME COURT REPORTS [1980] l s.c.R.

A
for 11-5-1967. Furthermore, the trial court on 11-5-1967 that is the
first date of hearing recorded an order that the respondent's coun>e1
had been informed that the amount had been deposited. There is ncr
magical formula or any prescribed manner in which rent can be depo-
sited by the tenant with the landlord. The rent can oo deposited by
placing the money in the hands of the landlord which would amount
.B to actual tender. The second mode of payment is to deposit the
amount in the court where a case is pending in such a maimer so
as to make the amount available to the landlord without any hitch
or ·hindrance whenever, he wants. it. Even the Act does uot prescribe
any particular mode of deposit. In ~act, the use of the words "tender
or. deposit" in the proviso clearly postulate that the rent can be given
c •
to the landlord in either of the two modes. (1) It may be tendered
to the landlord personally or .to his authorised agent or it may be
deposited in Court which is dealing with the case of the landlord to
his knowledge so that the landlord may withdraw the deposit whenever
he likes. In the instant c~se the appellant tenant chose the second
course. How can it be said that a deposit before the Rent Controller
D
where the case of the landlord was sub-judice would not be a valid
deposit if it was in fact in existence on the date of the first hearing
to the knowledge of the landlord. The reasoning of the High Court
that the re'nt was deposited earlier than 11-5-1967 and is therefore;
invalid does not appear to us at all. In fact, if the tenant deposits
E the rent even before th.e first date of hearing it is a solid proof of
his bonafides in the matter and the legal position would be that· if
the rent is deposited before the ,first date of hearing, it will be deemed
to have been deposited on the. date of the hearing also because the
deposit continues to remain in the court on that date and the pPSition
would be as if the tenant has deposited .the rent in court for paymept
F to the landlord. This is more particularly so when the Controller gave
notice to counsel for the respondent on the first date of hearing that
the amount had been deposited with the Controller. rn these circum-
stances, we are satisfied that all the conditions necessary for the appli-
cation of the proviso have been completely fulfilled in this case and
the High Court was not at' all justified in allowing the application of
..
G the landlord and directing ejectment of the appellant.

Coming now to the case of Vidya Prachar Trust case (supra) which
is the sheet anchor of the judgment of the High Court we think that
it is clearly distinguishable from the facts of this case. In the first
place, although in that case also an application under section 13 of
H the Act had, been made by the applicant for the eviction of the respo'n-
dent on the ground that rent was not paid, the tenant on the first
date ·of hearing did not tender the rent, cost and interest as required
SHEO NARAYAN v. SHER SINGH (Fazal Ali, J.) 843

by the proviso but only a part of the rent. It is, therefore, ma"nifest
that in the case which was being dealt with by the Supreme Court
the first condition enjoined by the proviso was not fulfilled', at all and
on that ground alone it could be held that the deposit was not valid.
Secondly, the deposit in that case was made not before the Ren:
Controller li"nder the proviso to section 13 of the Act but was made
before the Judge under section 31 of the Punjab Relief of Indebtedness B
Act which had absolutely no application to proceedings for eviction
taken under the Act. ThUIS, a deposit made before some other court
had no nexus with the arrears df p~nt for which an application for
ejectment was filed before the Rent Controller. Thirdly, it was pointed
out by this Court that the tenant had deposited even one month's rent
in advance which under the provisions of section 19 read with section 6
c
· of the Act was an offence if the landlord had withdrawn the rent.
Thus, the tenant in that case had deposited the rent in a manner and
Jlllder circumstances under which it could not be made available to
the landlord even if he wanted to withdraw it because the landlord
may have entailed a criminal penalty. Those are the fact> on the basis D
of which this Court held that the deposit was not valid. In this con-
nection this Court observed as follows :-
"There is only one savi·ng for the tenant and that is
when he tenders the full rent in Court before the Rent
Controller together with interest and costs. In the present E
case, the tenant did tender rent but only for a portion of
the P'eriod and he relied on his deposit under the Relief of
Indebtedness Act as due discharge of his liability for the
earlier period. It. may be state.ct that the deposit before the
Senior Sub Judge was made not only of arrears of rent but
prospectively for some future period for which the rent was F
then not dne."

It appears from the ohservations of this Court extracted above that
·the deposit was prima facie invalid. This Court further observed as
follows:-

"It is impossible to think that the' landlords would be G
••
r~quired to .go to the Court of the Seuior Sub Judge with a
view to findmg out whether their tenants have deposited P~"nt
due to them or not ...... On the whole therefore we are
of opinion that the deposit und•"r section 31
of the Relief of
Indebte.dness Act did not save the tenant from the conse-
R
quences of ~h: default as contemplated by s. 13 of the Urban
Rent Restnctlon Act."
844 SUPREME COURT REPORTS [1980] 1 S.C.R.

A The effect of this observation is that the deposit was made in a
wrong court and under such circumstances that the deposit could not
be available to the landlord whenever he wanted. It was against the
background of these special facts and circnrnstances that this Court
in the Vidya Prachar Trust case (supra) held that the deposit was not
valig. In the instant case we find that the deposit made by the
B appellant does not suffer from any such infirmities as were present in
Vidya Prachar Trust case (supra).

Finally, we would like to observe that the Rent Control Act is a
piece of social legislation designed to protect the tenant from eviction
c by landlords on frivolous, insufficient or purely technical gronnds. Even
as the Act allows eviction of the tenant on the ground of non-payment
of arrears of rent the proviso affords sufficient protection to the tenant
against eviction if the tenant deposits the rent in accordance with the .
proviso. Vidya Prachar Trust case (supra) was reconsidered by this

D
' Court in a recent decision in the case of Du/i Chand . v. Maman
Chand(') by a Bench of three Hon'ble Judges of which one of us
(Kailasam, J.) was a party and while distinguishing the case this Court
made the fo:Jowing observations :-

"We need not deal with all the contents that have been
canvassed on both sicJ.~s. Nor do we feel the necessity of
E reconsidering the decision in Vidya Prachar Trust v. Basant
Ram because on facts, the instant case is clearly distinguish-
able from that case. Here, before us, the rent for the mo"nths
of February, March and April 1964 was deposited by the
tenant to the credit of the landlord in the very court of the
Rent Controller in which the landlord subsequently filed the
F eviction petition. The deposit lying in the Treasury was in
the legal custody and control of the court of the Rent Con-
troller, and at the first hearing, if not earlier, the landlord
was informed that he was entitl·~d to withdraw that deposit.
Thus, even if the tenant had obtained the order of the Rent
Controller for making the dep06it, by referring to section 31
G of the Relief Act, the fact remained that the money was
in custodia legis and could be ordeted to be paid to the land-
lord there and then by the Court at the first hearing."

It was further held by this Court that where the tenant makes the
H deposit of the arrears of rent and interest informing the landlord at the

(I) C. A. 1744 of 1969 decided on 27·3·1979.
·sHEO NARAYAN l'. SHER SINGH (Fazal Ali, J.) 845

1first hearing then the requirem~nt of the law has been sufficiently com- A
plied with. 1n this connection, the Court observed thus : -
"The tenant by making deposit of the arrears of rent and
jnterest and costs and informing the landlord at the first
·hearing that he could receive the same from the Court, had
substantially cQlllplied with the requirement of the said B
·proviso."
ln the instant case we have already pointed out that the appellant had
fulfilled all the conditions of the proviso and had deposited the rent
arrears, costs and interest on the first date of hearing and he, therefore,
complied with all the requirements of the proviso and was, therefore,
entitled to the protection given by the statute. In view of the legiil c
.opinion we have formed regarding the interpretation of provisq to sec-
.tion 13 of the Act it is manifest that the judgment of the High Court
is legally erroneous and the case of Mehnga Singh (supra) is hereby.
overruled, as it had wrongly applied and misconstrued the decision of
ihis Court in Vidya Prachar Trust case (supra). ·o
For these reasons, therefore, we allow this appeal, set aside the
judgment of the High Court and dismiss the application of the respon-
dent for ejectment of the appellant. In the peculiar facts and circum-
stances of this case the parties will pay and bear their own costS
throughout. 1I
E

S.R. Appeal allowed.

"-· .