The Supreme Court has clarified that that although Order XV Rule 5 CPC is meant to secure deposit of admitted rent/damages by a tenant during the pendency of the suit, the power to strike off the defence is not automatic or mechanical merely because default has occurred; it is a penal and discretionary power which requires the Court to determine the “first date of hearing,” assess due or substantial compliance, and consider whether the default is wilful, deliberate, contumacious, or bona fide before imposing the consequence of striking off the defence.
The Apex Court further held that where the foundational aspects relevant to Order XV Rule 5 CPC, including the “first date of hearing,” proper opportunity, and the nature of the default, have not been properly examined, and where the Trial Court and High Court have each failed to comprehensively address those aspects, the proper course is to set aside the impugned orders and remand the matter to the Trial Court for a fresh, reasoned determination after affording adequate opportunity to both parties.
A Two-Judge Bench comprising Justice S.V.N. Bhatti and Justice Prasanna B. Varale observed that the controversy was confined to the applicability and exercise of jurisdiction under Order XV Rule 5 CPC and the correctness of the High Court’s orders in the circumstances of the case. It observed that Order XV Rule 5 CPC is intended to ensure that a tenant does not continue in possession without depositing admitted rent or damages during the pendency of the suit, but at the same time the consequence of striking off the defence is drastic and, though the provision is mandatory in form, it has been interpreted as conferring a degree of judicial discretion.
The Bench reiterated that the use of the word “may” in Order XV Rule 5(1) vests power in the Court to strike off the defence but does not oblige it to do so in every case of default. The Court must consider any representation under sub-rule (2), and even otherwise, on the material already on record, it may decline to strike off the defence if good reason exists. The power is penal in nature and cannot be exercised mechanically; the Court must examine whether there has been substantial compliance and whether the default is wilful or contumacious.
Further, the Bench observed that striking off the defence is an exceptional step meant for grossly recalcitrant situations and not a routine consequence of mere failure to pay rent. The provision requires a judicial discretion informed by the circumstances of the case, and the Court must see whether there is wilful failure, deliberate default, or volitional non-performance showing defiance or gross neglect.
On the facts, the Bench found that the Trial Court had allowed the application under Order XV Rule 5 CPC primarily on the ground of non-deposit within time, but certain foundational aspects, particularly the determination of the “first date of hearing” and the issue of proper service and opportunity, had neither been conclusively determined nor adequately examined. The Bench reiterated, that the “first date of hearing” is not a mere formal or procedural date, but the date on which the Court proposes to apply its mind to the controversy and, if necessary, frame issues. In the absence of a clear determination of such a date, the foundation for invoking Order XV Rule 5 CPC becomes uncertain.
The Bench also noted that while the High Court had granted the respondent an opportunity to deposit rent and had later extended time on the explanation furnished, procedural law is intended to advance justice and not defeat it. The Bench stated that procedural rules are the handmaid of justice and should be construed to promote justice and prevent miscarriage. However, the respondent’s lapses could not be entirely overlooked, since despite opportunities and assurances, the amount was not deposited within the prescribed timeline and another application for extension had to be filed. Even so, the explanation indicated that the delay was neither gross nor wholly unexplained.
The Bench ultimately found fault with both forums: the Trial Court had proceeded somewhat mechanically in invoking the penal consequence of striking off the defence, while the High Court, in granting extension, had not sufficiently reconciled its later indulgence with its earlier conditional order. In those circumstances, the Bench considered it appropriate to remand the matter to the Trial Court for fresh consideration.
Briefly, the appellants/landlords challenged the Allahabad High Court’s orders, by which the High Court had interfered with the Trial Court’s order striking off the tenant’s defence under Order XV Rule 5 CPC and had thereafter granted extension of time to the tenant for deposit of rent. The dispute arose from a tenancy in respect of two halls in premises at Kanpur Nagar, where the respondent was running “Gyan Vaisnav Hotel.” The monthly rent was revised to Rs. 25,000 in September 2020; rent was paid for September and October 2020, but thereafter the tenant stopped payment.
The landlords alleged default in payment of rent from November 2020 to June 2021 amounting to Rs. 2 lakhs and issued a legal notice under Section 106 of the Transfer of Property Act, terminating the tenancy and demanding arrears. Thereafter, they instituted Civil suit under Section 15 of the Provincial Small Causes Courts Act read with Section 106 of the Transfer of Property Act, seeking eviction, recovery of arrears of rent of Rs. 2.37 lakhs and future and pendente lite damages at Rs. 2,000 from August 16, 2021 till actual eviction.
During the suit proceedings, ex parte proceedings were initially ordered against the respondent on March 08, 2022, but were later recalled on November 10, 2022 on an application under Order IX Rule 7 CPC subject to costs of Rs. 1,000. The landlords then filed an application under Order XV Rule 5 CPC seeking striking off of the defence on the ground that the tenant had failed to deposit the entire arrears of rent, damages, and costs on or before the first date of hearing as mandated. The tenant also filed an application under Order VII Rule 11 CPC contending that the suit was barred by the Uttar Pradesh Regulation of Urban Premises Tenancy Act, 2021, but that application was rejected on July 21, 2023.
The tenant subsequently filed objections and a delayed application under Order XV Rule 5 CPC seeking condonation of delay and acceptance of deposit of rent and interest for the period April 01, 2021 to August 30, 2021. The Trial Court allowed the landlords’ application under Order XV Rule 5 CPC, holding inter alia that the defendant had accepted the plaintiff as co-owner and landlord and had neither deposited rent in compliance with Order XV Rule 5 CPC nor made a representation within the time prescribed under sub-rule (2).
In revision, the High Court allowed the tenant’s revision and directed deposit of monthly rent of Rs. 1,500 on or before December 31, 2024, with a stipulation that failure would result in striking off the defence. When the respondent failed to deposit in time, the High Court allowed an application for extension of time, the explanation being that local counsel had gone abroad and the deposit for the period October 01, 2024 to March 31, 2025 had not been made in time.
Appearances:
R. Nedumaran, Sr. Adv., Anurag Dubey, Adv., Anu Sawhney, Adv., Maitri Goal, Adv., Ashish Kumar Upadhyay, AOR, Varun Ranjan, Adv., for the Appellants
M/S MPS Legal, AOR, Prabhat Chaurasia, Adv., Jasdeep Singh Dhillon, Adv., Anirudh Jamwal, Adv., Aditya Bajaj, Adv., Kenisha Savla, Adv., for the Respondents
