Agarwal Vs. Ganesh Prasad Sah & Ors  INSC 211 (9 August 1988)
S. (J) Natrajan, S. (J) Pathak, R.S. (Cj)
1988 AIR 1821 1988 SCR Supl. (2) 303 1988 SCC (4) 215 JT 1988 (3) 402 1988
Buildings (Lease, Rent and Eviction) Control Act, 1977: Sections 4, 7 and 8
-Eviction of tenant Sought by Landlord for default in payment of rent-Amount in
excess of rent paid by tenant without approval of Rent Controller- Whether
tenant entitled[led to adjustment towards rent arrears without exercising
option for such adjustment.
filed by the respondent-landlord for eviction of the appellant-tenant from the
leased premises on grounds of
in payment of rent for five months, and
use of leased premises, was decreed by the trial court and the appellate court
on first two grounds.
the contention of the appellant-tenant that a sum of Rs.l80 out of the advance
of Rs.300 paid to the respondent and the excess amount of rent at Rs.70 p.m. as
against the contractual rent of Rs.60 p.m., collected by the
respondent-landlord in contravention of sections 4 and 7 of the Bihar Buildings
(Lease, Rent and Eviction).Control Act, 1977, ought to have~ been appreciated
by the respondent landlord towards rent arrears, both the courts concurrently
held that there was no proof that the appellant-tenant had paid the advance and
that although increase in rent from Rs. 60 to Rs. 70 p.m. on the basis9 of
providing additional amenities was not permissible under the Act. the appellant
could not take advantage of the situation as he had failed to exercise his
option under s. 8(2) of the Act to seek adjustment of' the excess payment of
High Court sustained the decree on the ground of default in payment of rent.
Affirming the finding of the courts below, it observed that the appellant's
prayer for adjustment could be sustained only if he had exercised his right of
option under s. 8(2) of the Act. Assailing the view of the High Court the
appellant-tenant filed the appeal in this Court.
the appeal, this Court, PG NO 303 PG NO 304
1. Without the tenant calling upon the landlord to adjust the excess payments
towards the arrears of rent, he cannot seek such a right in the suit filed by
the tenant by way of defence in the suit for eviction. l308B]
Under sub-section (2) of Section 8 of the Bihar Buildings (Lease, Rent and
Eviction) Control Act, 1977 if any rent has been collected in excess of the
fair rent determined for a building, then the tenant is entitled to a refund of
the excess amounts paid by him, unless he opts for a different course of action
viz., the adjustment of the excess payment towards rent, past or future. [307G]
Though s. 8(2) deals with payment of excess rent for buildings for which fair
rent has been determined or re- determined by the Controller, the same
principle, in the absence of a different prescription under the Act, has to
govern the buildings for which the rent is payable in accordance with the terms
of the contract between the parties. [307H, 308A]
Therefore, even if the rent for the building leased out to the appellant had
not been determined by the but had been fixed by the parties themselves, the right
to seek adjustment of the excess payments made by the appellant has to be in
accordance with the principle set out in s. 8(2).
The High Court had. therefore. not erred in any manner in refusing to
countenance the appellant's plea regarding the adjustment of the excess payment
made by him towards arrears of rent, without his having opted for such
adjustment and calling upon the respondent to make such adjustments. [309E] Sarwan
kumar Onkar Nath v. Shri Subhas kumar Agarwalla,AIR 1987 SC 2302 and Smt Draupadi
and Ors. v. Gorakhnath Gupta and Ors.  Suppl. SCC 571 distinguished.
and Anr. v. Gulub Chand Prasad  2 .SCC 153 and Mohd Salimuddin v. Misri Lal,
 2 SCC 378 referred to.
APPELLATE JURISDlCTION: Civil Appeal No. 977 of 1986.
the Judgment and Order dated 30.7.1985 of the Patna High Court in Appeal from
Appellate Decree No. 96 of 1982.
305 M.P. Jha for the Appellant.
for the Respondents.
Judgment of the Court was delivered by NATARAJAN, J. This appeal by special
leave is directed against a judgment of the High Court of Patna in Second
Appeal No.96/82 confirming the decree for eviction passed by the lower Courts
against the appellant herein. The limited question for consideration in the
appeal is whether the Subordinate Courts and the High Court have committed an
error of law in holding that the appellant had rendered himself liable for
eviction for; non-payment of rent for the period 1-2-75 to 30-6-1975 in spite
of the courts holding that the appellant had paid excess rent of Rs.10 per
month for a period of 33 months.
facts are not in dispute and are briefly as under.
appellant was running a grocery shop in the leased premises and was paying an
agreed rent of Rs.60 per month to the respondent. The respondent terminated the
tenancy and filed a suit for eviction of the appellant on three grounds, viz.
bona-fide requirement of the premises for opening a shop
in payment of rent for five months; and
conversion of the leased premises from a residential house to grocery shop.
Trial Court and the Appellate Court decreed the suit for eviction on the first
two grounds but not on the third ground The High Court sustained the decree for
eviction on the second ground and deemed it unnecessary to go into the merits
of the other ground on which eviction was ordered.
regards the non-payment of rent for the period 1-2- 1-1975 to 30-6-l975, the
appellant conceded that he paid the rent only on 30-7-75 but nevertheless
contended that he had paid an advance of Rs. 300 and out of the said advance a
balance of Rs. 180 was available or appropriation towards the rent arrears, and
secondly, the respondent had collected a sum of Rs 70 every month towards rent
as against he contractual rent of Rs.60 for a period of 33 months and the
excess Collection was in contravention~ of Sections 4 and 7 of the Bihar
Buildings (Lease, Rent and Eviction ) Control Act, 1977 (for short the Act) and
as such it ought to have been appropriated by the respondent towards the rent
arrears. The Trial Court and the Appellate Court concurrently held that there
was no proof the appellant had paid an advance of Rs.300 and hence the question
of PG NO 306 appropriating the balance in the advance- amount towards arrears
of rent did not at all arise. Regarding the second plea pertaining to the
excess payment of Rs.10 every month for a period of 33 months and the
adjustment of the excess payment towards the rent arrears, the Courts held that
the increase of the rent from Rs.60 to Rs.70 per month on the basis of the
respondent providing additional amenities was not permissible under the Act but
nevertheless, the appellant cannot take advantage of the situation because he
had failed to exercise his option to seek adjustment of the excess payment
towards the rent arrears. The High Court,as already stated, affirmed this
finding of the Courts below and has observed that the appellant's prayer for
adjustment of the excess Payment can be sustained only if he had exercised his
right of option under Section 8(2) as the Section lays down that any payment
made in excess of the fair rent fixed for a building has to be refunded to the
person whom it was paid or at the option of such person it can be adjusted
towards the arrears of option (emphasis supplied). The view taken by the High
Court is assailed by that: appellant in this appeal.
urged by the learned counsel for the appellant that since the courts have found
that the respondent was not entitled to receive excess payment of Rs. 10 per
month towards the amenities provided by him without the approval of the Rent
Controller, he was bound to adjust the excess payments towards the arrears of
rent and therefore he was not entitled to seek the appellant's eviction merely
because the appellant had failed to exercise' his option under Section 8(2) of
the Act for the appropriation of the excess payment towards the arrears of
rent. It was further urged that so long as the excess payment had not been
refunded, the respondent cannot seek eviction of the appellant on the ground of
arrears of rent. Mr. M.P. Jha sought to draw support for his arguments from the
decision in Sarwan Kumar Onkar Nath v. Shri Subhas Kumar Agarwalla, AIR l987
SC: paid as advance rent for two months should have been adjusted towards the
rent for the months of September and October 1972 without reference to his
delayed payment of the rent in January 1973 was accepted by this Court and the
judgment of the High Court taking a contrary view was set aside. This Court
observed that since the sum of Rs. 140 had been specifically given by way of
advance rent for two months. the landlord should have adjusted the amount
towards the arrears even in the absence of a specific request from the tenant
in that behalf. Learned counsel for the appellant also placed before us another
judgment of this Court in Civil Appeal No. 1276 of 1988 dated 30th March 1988 Smt. Draupadi and Ors. v. Gorakhnath
Gupta and Ors., where the PG NO 307 tenant's plea for adjustment of excess
amounts lying in the hands of the landlord towards the rent of excess amount
lying in the hands of the landlord towards the rent due for two months viz.
February and March 1966 was sustained and the tenant's appeal was allowed.
the arguments of the appellant's counsel, Mr S.N. Jha, learned counsel for the
respondent submitted that this was not a case where the appellant had paid any
rent in advance but a case here the appellant had been provided some amenities
and in return therefor he had agreed to pay an additional sum of Rs.10 per
month. Such being the case, the addition payment of Rs. 10 was really not an
excess payment of rent in the strict sense of the term but only a pay- ment
made without due permission being obtained from the Control- C ler. It was also
urged that as the additional payment of Rs.10 was made as per a mutual
agreement reached between the parties, this would be a case where ~he parties
were 'in pari delicto' and in that resultant situation, one of the parties
cannot seek the Court's aid to score an advantage over the other. To strengthen
his contention, the respon- dent's counsel relied upon the decision of a Full
Bench of the Patna High Court in Gulab Chand prasad v. Budhwanti und Anr., AlR
1985 Patna 327 and the dismissal of the appeal arising therefrom by this Court
in Budhwanti and And. v. Gulab Chand prasad.  2 SCC 153.
careful consideration of the contentions of the parties. we are clearly of the
view that the pleas of the appellant have no merit in them. It is no doubt true
that it has been held by the Trial Court and the Appellate Court that the
increase of rent by Rs. 10 per month by way of return for the additional
amenities provided by the respondent was not permissible under the Act because
Section 4 does not permit any increase being made in the rent except in
accordance with the provisions of the Act. In spite of this finding. the
Question for consideration would be whether the respondent has to necessary
adjust the excess payments towards arrears of rent and desist from filing a
suit for eviction of the appellant for non-payment of rent.
in that context the legislative prescription contained in sub-section 2 of
Section 8 of the Act assumes significance. The sub-section inter-alia provides
that if any rent has teen collected in excess of the fair rent determined for a
building. then the tenant is entitled to a refund of the excess amounts paid by
him unless he opts for a different course of action viz. the adjustment of the
excess payment towards rent. past or future. Though Section 8(2) deals with
payment of excess rent for buildings for which the fair rent has been
determined or re-determined PG NO 308 by the Controller, the same principle, in
the absence of a different prescription under the Act, has to govern the
buildings for which the rent is payable in accordance with the terms of the
contract between the parties. It therefore follows that even if the rent for
the building leased out to the appellant had not been determined by the Controller
but had been fixed by the parties themselves, the right to seek adjust- ment of
the excess payments made by the appellant has to be in accordance with the
principle set out in Section 8(2). Viewed in that light the logical conclusion
will have to be that without the appellant calling upon the respondent to
adjust the excess payments towards the arrears of rent, he cannot seek such a
right in the suit filed by the respondent by way of defence in the suit for
High Court has not therefore committed any error in holding that without the
appellant exercising his option and calling upon the respondent to adjust the
excess payments towards arrears of rent he cannot seek an automatic adjustment
of the excess payments made by him and con- tend that he was not liable to be
evicted for non-payment of rent.
not think the .Judgment in Sarwan Kumar Onkar Nath's case (supra) can be of any
assistance to the appellant in this case. Manifestly that was a case where the
tenant had paid two months rent in advance and as such the advance payment
could always he adjusted towards rent by the landlord whenever the tenant
committed default in payment of rent. Notwithstanding this position the
landlord in that case took the stand that without a specific direction to him
by the tenant to adjust the advance payment towards the rent arrears he was not
bound to make such adjustment. It was in that context this Court set aside the
judgment of the High Court and allowed the tenant's appeal and held that
inasmuch as the tenant had paid the rent for two months in advance the landlord
could not put forth a plea that the tenant had failed to give him specific
directions for adjustment of the advance towards arrears of rent and in the
absence of such direction he was entitled to seek the eviction of the tenant.
The judgment was confined to the facts of the case as made clear by the
following sen- tence in the judgment. "On the facts and in the
circumstance of the case we are satisfied that the appellant was not in arrears
of two months rent." The judgment does not lay dawn any general principle
that in whatever circumstances the excess payment has been made and whatever be
the period of default the landlord was bound to adjust the excess payment
towards arrears of rent and exonerate the tenant of the default committed by
him in payment of rent. Even that:
in Civil Appeal No. 1276/88 will stand confined to the facts of that case and
it does not lay down a ratio of general application to all cases in which a
tenant seeks adjustment of excess payments towards his rent arrears.
309 Learned counsel for the respondent submitted that there is another
perspective to the appellant's case and viewed from that angle also the
appellant has to fail in his contention. The argument was that since the
appellant had been as much a party as the respondent to the contravention of
Section 4 of the Act by agreeing to pay an extra amount of Rs.10 per month in
return for the amenities provided in the premises, the doctrine of "in pari
delicto" was attracted and hence the appellant cannot claim any indulgence
on the ground he is a tenant and subjected to exploitation by the landlord.
There is neither justice nor grace, it was urged, in the appellant pleading for
an advantageous treatment for himself in the eviction proceedings instituted by
the respondent. The learned counsel referred to the observation in Mohd. Salimuddin
v. Misri Lal, [19861 2 SCC 378 in the following terms:
doctrine ("in pari delicto") is attracted only when none of the
parties is a victim of such exploitation and both parties have voluntarily and
by their free will joined hands to flout the law for their mutual gain."
We do not think it necessary to go into this aspect of the matter because of
our view that the High Court had not erred in any manner in refusing to
countenance the appellant's Plea regarding the adjustment of the excess payment
made by him towards arrears of rent without his having opted for such
adjustment and calling upon the respondent to make such adjustments. For the
same reason it is also not necessary for us to advert to the decision of the Patna
High Court in Gulab Chand PRASAD, (supra) and the decision of this Court in the
appeal arising there from in Budhwanti and Anr. v. Gulab Chand Prasad. (supra).
result the appeal fails and is accordingly dismissed. There will, however, be
no order as to costs.