Order XV Rule 5 CPC | Tenant's Defence Cannot Be Struck Off Without Examining If Default In Rent Deposit Was Wilful : Supreme Court

The Supreme Court has observed that it is impermissible to strike off the tenant's defence at the threshold under Order XV Rule 5 of the Code of Civil Procedure, 1908, without determining the “first date of hearing” and the issue of proper service and opportunity of hearing to the tenant to examine whether the default was wilful or bona fide. “The power to strike off the defence under Order XV Rule 5 CPC, though couched in mandatory terms, is not to be exercised mechanically. The Court must consider whether there has been substantial compliance and whether the default is wilful or contumacious…Striking off the defence is a serious matter and ought not to be resorted to unless there is a clear case of deliberate default or contumacious conduct on the part of the tenant.”, observed a bench of Justice S.V.N. Bhatti and Justice Prasanna B. Varale. Background The dispute arose out of a tenancy concerning two halls where the respondent-tenant was operating “Gyan Vaisnav Hotel.” According to the landlords, the monthly rent had been revised to Rs. 25,000 in September 2020, and the tenant defaulted in payment from November 2020 onwards. After issuing a notice terminating tenancy under Section 106 of the Transfer of Property Act, the landlords instituted a Small Causes Court suit seeking eviction and recovery of arrears. During the pendency of the proceedings, the landlords moved an application under Order XV Rule 5 CPC seeking striking off of the tenant's defence on the ground of non-deposit of rent. The Trial Court allowed the plea on August 5, 2023 and struck off the defence. The tenant challenged the order before the High Court. The High Court partly allowed the revision petition and directed the tenant to deposit rent at the rate of Rs. 1,500 per month instead of Rs. 25,000, while warning that failure to deposit the amount within the stipulated time would result in striking off the defence. Subsequently, despite the tenant's default, the High Court granted further extension of time on the ground that the local counsel had gone abroad. Aggrieved by these developments, the landlords approached the Supreme Court.DecisionSetting aside the impugned orders, the judgment authored by Justice Varale held that the "first date of hearing", defined as the date on which the court proposes to apply its mind to the controversy in the suit, must first be determined. It clarified that a prayer for striking off the defence for non-payment of rent cannot be considered on any earlier date fixed for procedural compliance alone, and that such determination must also be preceded by proper service of notice on the tenant. The Court said that the Trial Court had erred in allowed the landlord's plea for striking off the defence at the threshold, without determining the first date of hearing, and whether the default on the part of the tenant was bonafide or willful. “…the Trial Court proceeded to allow the application under Order XV Rule 5 CPC and struck off the defence of the respondent primarily on the ground of non-deposit of rent within the stipulated time. However, from the record, it appears that certain foundational aspects, such as determination of the “first date of hearing” and the issue of proper service and opportunity, were neither conclusively determined nor adequately examined.”, the court observed. “In the absence of a clear determination of such a date, the very foundation for invoking Order XV Rule 5 CPC becomes uncertain.”, the court added. Also, the Court found fault with the High Court's approach. It held that while the High Court initially passed a conditional order directing deposit within a stipulated period, it later granted extension of time without adequately reconciling the earlier conditional direction with the subsequent indulgence shown to the tenant. Resultantly, the matter was remitted back to the trial court for fresh consideration on the aspect of Order X Rule 5, CPC.The Court directed that the trial court must :1. Determine, in accordance with law, the “first date of hearing” of the suit;2. Examine whether there has been due compliance or substantial compliance with the requirements of Order XV Rule 5 CPC;3. Consider whether the default, if any, is wilful or bonafide;4. Pass a reasoned order after affording adequate opportunity to both parties.HeadnoteCode of Civil Procedure, 1908 — Order XV Rule 5 — Striking off defence for non-deposit of rent — Discretionary vs. Mandatory nature — Held, the power to strike off the defence under Order XV Rule 5 CPC, though couched in mandatory terms, is not to be exercised mechanically - It is in the nature of a penalty and carries a serious responsibility - Supreme Court must consider whether there has been substantial compliance and whether the default is wilful, deliberate, or contumacious, rather than resorting to it as a routine visitation of a punitive extreme. [Paras 16, 17]Code of Civil Procedure, 1908 — Order XV Rule 5 — First Date of Hearing —...

Order XV Rule 5 CPC | Tenant's Defence Cannot Be Struck Off Without Examining If Default In Rent Deposit Was Wilful : Supreme Court

Yash Mittal

The Court further held that determination of 'first date of hearing' and the service of summons on the tenant was essential before striking off defence.

This is a premium content
Available exclusively to
Our subscribers

INR 1099+GST

Tags

Yash Mittal

Order XV Rule 5 CPC | Tenant's Defence Cannot Be Struck Off Without Examining If Default In Rent Deposit Was Wilful : Supreme Court

Yash Mittal

The Court further held that determination of 'first date of hearing' and the service of summons on the tenant was essential before striking off defence.

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

Tags

Yash Mittal

This is a premium content
Available exclusively to
Our subscribers