http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 10  

PETITIONER: BHOJA @ BHOJA RAM GUPTA

       Vs.

RESPONDENT: RAMESHWAR AGARWALA AND ORS.

DATE OF JUDGMENT16/03/1993

BENCH: ANAND, A.S. (J) BENCH: ANAND, A.S. (J) JEEVAN REDDY, B.P. (J)

CITATION:  1993 AIR 1498            1993 SCR  (2) 369  1993 SCC  (2) 443        JT 1993 (2)   375  1993 SCALE  (2)58

ACT: Bihar Building (Lease, Rent and Eviction) Control Act: Section 4-Rent-Enhancement of-Procedure-Excess rent paid  by tenant  whether  could  be  automatically  adjusted  against subsequent defaults in payment of monthly rent.

HEADNOTE: The  defendant-appellant was a tenant under  the  plaintiff- landlord on a monthly rent of Rs.70. The appellant defaulted In   the   payment  of  the  rent  or   the   suit-premises- residential-cum-shop premises-with effect from October, 1975 to June, 1976. As  the  appellant did not vacate the  premises  even  after being  served with a notice under section 106.  Transfer  of Property  Act,  a suit was filed for his eviction  from  the suit  premises,,  being  a  defaulter.   The  landlord  also pleaded his own bona fide requirement of the suit-promises. The  appellant-tenant  submitted that he  was  originally  a tenant  under  one Smt.  Sita Devi, the owner  of  the  suit premises at a monthly rent of Rs.55; that he was paying  the rent  to  Smt.  Sita Devi and after the  plaintiff  landlord purchased  the  house  from her in 1968,  he  continued  its tenant of plaintiff. that the plaintiff illegally  increased the  rent from Rs.55 to Rs.65 per month (and not Rs. 70  per mouth.) under threat of eviction that town( paid the rent at the rate of km, 6.5 per mouth upto the month commencing from 16.1.1976, when the plaintiff landlord refused to accept the same  with effect from 16.2..1976 that defendant-tenant  did not default In payment of rent as subsequently rent had been sent by Money Order that the landlord-plaintiff did not have any  bona fide necessity for the premises and that the  suit was not maintainable. The  Trial  Court hold that the suit  was  maintainable  the plaintiff  had cause of action for the suit and  tenancy  of the  defendant was validity terminated.  It also  held  also held that the defendant tenant was a defaulter and was 369 370 liable  to  be evicted from the primises.  It  however  held that  the plaintiff had failed to prove his  case  regarding bona fide requirement of the suit premises.  The Trial Court however  held  that the plaintiff-landlord  could  not  have

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 10  

enhanced the rent without taking recourse to the  provisions of Bihar Building (Lease, Rent and Eviction) Control Act and therefore the Court calculated the arrears of rent at  Rs.55 per month. The  Trial  Court decreed the suit partly and  directed  the defendanttenant  to vacate the suit premises and to  deliver the vacant possession of the same to the  plaintiff-landlord within 90 days from the date of the decree. Tenant-appellant  filed  a First Appeal  against  the  Trial Court’s  judgment.   Plaintiff-landlord  also  filed  cross- objections  challenging  the  finding  of  the  Trial  Court regarding determination of the rate of rent and the  arrears of  rent.   The First Appellate Court dismissed  the  Cross- objections  and confirmed the finding of the Trial Court  to the  effect  that the rent lawfully payable was Rs.  55  per month.   It  held that the defendanttenant was  a  defaulter with  effect from 16.5.1976 onwards and he was liable to  be evicted and dismissed the appeal of the tenant. The   Second  Appeal  filed  by  the  appellant-tenant   was dismissed  by  the High Court in limine,  against  which  by special leave the present appeal was filed in this Court. The appellant contended that since the rent lawfully payable per month was Rs. 55 per month and not Rs. 65 which was paid by the appellant, the excess amount paid should be adjusted, there   could  be  no  quotation  of  holding  appellant   a defaulter. (This plea of appellant was rejected by the First Appellate Court on the ground that no prayer for  adjustment in writing was made by him.) The respondent-landlord submitted that the excess rent  paid by  the  tenant to his landlord in pursuance of  a  mutually agreed  illegal  enhancement, could  not  get  automatically adjusted  against the subsequent defaults in the payment  of monthly rent. Dismissing the appeal of the tenant, this Court, HELD- 1.01. Section 4 of the Bihar Building (Lease, Rent and Eviction) Control Act creates an absolute prohibiton against illegal increase or enhacement of rent except in the  manner provided by the 371 provisions  of the Act itself and lays down that it  is  not even permissible for the parties to contract themselves  out of  such  a prohibition.  Thus, on its  plain  language  any increase  or claim to increase in the rent by  the  landlord would  be  unlawful  and any agreement to do  so  except  in accordance with the provisions of the Act would not cure the illegality. [377B-C] 1.02.  The Act does not contain any provision for  automatic adjustment  of excess rent.  Neither in reply to the  notice under Section 106 of the Transfer of Property Act nor in the written  statement  or  through any other  writing  was  the adjustment of excess rent towards the arrears claimed by the tenant  from  the  landlord.  There also  was  no  agreement between  the parties at any point of time for adjustment  of the excess rent illegally paid towards the rent falling  due subsequently. [377F] 1.03.  The rent payable in the instant case was  only  Rs.55 per  month  and the tenant was made to pay Rs.65  per  month from  1968 onwards after the property had been purchased  by the plaintiff-landlord under threat of eviction, it must  be held  that the increase in the rent from Rs.55 per month  to Rs.65  per  month  was unlawful and  the  landlord  was  not entitled  to recover anything more than Rs.55 per  month  by way of rent. [377C-D] 1.04.  The  excess rent paid by the tenant in  pursuance  of mutually agreed illegal enchancement thereof by the  parties

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 10  

does  not get automatically adjusted against the  subsequent defaults  in the payment of the monthly rent under  the  Act and even under the general law such an automatic  adjustment is not countenanced. [381B] 1.05.  A tenant cannot save himself from the conseqences  of eviction  under  the  Act on the ground of  default  in  the payment  of  rent by claiming automatic  adjustment  of  any excess rent paid consequent upon mutual enhacement of  rent, even  if  illegal unless there is an agreement  between  the parties  for such an adjustment.  The tenant may also  in  a given  case seek adjustment of the excess rent in the  hands of  the landlord against the arrears by specifically  asking the  landlord  for such an adjustment before riling  of  the suit  or in response to the notice to quit and even  in  the written  statement  by way of set off within the  period  of limitation and by following the procedure for claiming  such a  set  off, while resisting the claim for eviction  on  the ground  of  default in payment of arrears of  rent  but,  he cannot claim ’automatic adjustment. [381 H, 382A-B] 372 Mohd.  Salimuddin v. Misri Lal and Anr., [1986] 1 NCR   622, M/s, SarwanKumar  Onkar Nath v. Subhus  Kumar  Agarwalla [1987] 4 SCC 546, distinguished,, Gulab Chand Prasad v. Budhwanti and Anr., AIR 1985 Patna 327 (F.B.)  and Nune Panduranga, Rao v. Divvala Gopala Rao,  AIR 1952 Madras 827, approved. Budshwanti  and Anr. v. Gulab Chand Prasad [1987]2 SCC  153, referred to.

JUDGMENT: CIVIL APPELLATE JURISDICTION Civil Appeal No.2924 of 1985, From  the  Judgment and Order dated 124, 1985 of  the  Patna High Court in SA, No.2A of 1985(R). J.P. Goyal.  M.R. Bidsar and Rajesh for the Appellant D.P. Mukherjee for the Respondents. The  Judgment of the, Court was delivered by DR.   ANAND, J. This appeal by special leave, filed  by  the tenant,  is  directed against the dismissal  of  his  Second Appeal, in limine by the High Court of Patna (Ranchi  Bench) on 12,4.1985, The landlord filed a suit for eviction of the appellant from the   residential-cum-shop  premise,  situate   at   holding No.224/D Ward No.7 Bazar Mohalla Jugsalai, Shorn of  details the case of the landlord is that the appellant was a  tenant Under  him on a monthly  rent  of Rs. 70, but had  not  paid the  rent of the disputed premises with effect from  October 1975 to June, 1976 and  being a defaulter for more than  two months. was liable to be evicted.  The landlord also claimed arreas of rent from October 1975 to June, 1976 amounting  to Rs.  630.   The  landlord also pleaded  his  own  bona  fide requirement of the suit premises.  The suit was filed in the Court  of  Munsif, Jamshedpur in 1976 because even  after  a notice  under Section 106 of the Transfer of  Property  Act, terminating the tenancy had been served on the tenant he did not vacate the priemises.  The suit was resisted and it  was pleaded on behalf of the tenant-appellant that the  premises in  dispute  originally  belonged to one  Suit.   Sita  Devi Khirwal from whom he  373 had  taken the premises on monthly rent of Rs. 55;  that  he had  been  paying the rent to Smt.   Sita  Devi  Khirwal,all along  and after the plaintiff-landlord purchased the  house from  her in MS, the defendant continued as his  tenant  but

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 10  

the plaintiff-landlord  illegally increased the rent of  the suit  from Rs. 55 to Rs. 65 p.m (and not Rs. 70  pm.)  under threat of eviction and the tenant paid the rent at the  rate of  Rs. 65 per month upto the month commencing from 16th  of January,  1976 when the plaintifflandlord refused to  accept the same with effect from 16.2.1976. It was maintained  that the  defendant-tenant  had not defaulted in the  payment  of rent  as subsequent rent had been sent by money  order.   It was  also asserted that the landlord-plaintiff did not  have any  bona fide necessity for the premises.  On the  pleading of the parties, the following issues were framed: "1. Is the suit as framed maintainable? 2. Have the plaintiffs any cause of action for the suit? 3,  Has  the tenancy of the defendant  been  validly  deter. mined? 4.   Is the defendant a-defaulter? 5. Do the plaintiff require the suit promises for their bona fide use mind occupation? 6.  Is  the  defendant liable to be evicted  from  the  suit premise? 7.  Am  the plaintiffs entitled to the arrears  of  rent  as claimed? 8. To what relief or reliefs, if any. are the paintiffs  en- titled?" Issue  Nos. 1, 2 and I were decided against  the  defendant- tenant.   Issue  No.5  was decided  against  the  plaintiff- landlord  and  it was hold that he had failed to  prove  the case regarding bonafide requirement of the suit premises, Issue  No.4 and 6 were taken up together for  consideration, The Trial Court held on facts that the defendant-tenant  was a  defaulter of and was liable to be evicted from  the  suit premises. 374 Dealing  with Issue No.7, the Trial Court noticed  that  the plaintifflandlord  had  claimed  arrears of  rent  from  the defendant  from  October, 1975 to June, 1976 @  Rs.  70  per month.   It was found that originally the rent of  the  suit premises was Rs. 55 per month and that the plaintifflandlord had  after purchaing the suit premises  unlawfully  enhanced the rent of the premises from Rs. 55 to Rs. 65 per month and that the tenant continued to pay the rent @ Rs. 65 per month under threat of eviction.  The learned Trial Court  accepted the plea of the defendant-tenant that the plaintiff-landlord could  not  have  enhanced the rent for  the  suit  premises without taking recourse to the provisions of Bihar  Building (Lease, Rent and Eviction) Control Act (hereinafter the Act) and  held that rate of rent for the suit premises  shall  be deemed  to  be  Rs. 55 per month  only.   The  Trial  Court, however, found, on facts, that the defendant-tenant had  not paid   rent  to  the  plaintiff-landlord  from   the   month commencing from 16th October, 1975 upto the month commencing 16th  June, 1976 and therefore, the defendant-tenant was  in arrears of rent for 7 months calculated at Rs-55 per  month. A  decree for the arrears of rent for Rs.385, calculated  at Rs.55  per  month for 7 months, was,  therefore,  passed  in favour  of  the plaintiff-landlord and  issue  No.7  decided accordingly. As  a result the suit of the plaintiff-landlord wad  decreed in  part with proportionate costs and  the  defendant-tenant was,  directed  to  quit and vacate the  suit  premises  and deliver the vacant possession of the same to the  plaintiff- landlord  within 90 days from the date of the  decree.   The defendant-tenant was also directed to pay a sum of Rs.385 to the  plaintifflandlord, being the arreas of rent within  the aforesaid  period of 90 days Aggrieved by the  judgment  and

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 10  

decree  of the Trial Court, the tenant filed a First  Appeal in  the  Court  of the  3rd  Additional  Subordinate  Judge, Jamshedpur.    The  plaintiff-landlord  also   filed   cross objections  challenging the findings on Issue  No.7  stating therein  that the Trail Court ought to have passed a  decree for  arrears of rent calculated @ Rs.70 per month and not  @ Rs.55  per  month.  The defendant-tenant, however,  did  not assail the judgment and decree of the Trial Court except  as regards  the findings relating to the default of the  tenant in payment of rent.  Before the 1st Appellate Court only the following two points were canvassed:               ’Point  No.1:  Whether  the  findings  of  the               learned lower court fixing the monthly rent of               the  suit  premises at Rs.55  is  correct  and               sustainable in the eye of law? 375               Point  No.11:  Whether  the  findings  of  the               learned court below with regard to the default               of  the  defendant appellant  is  correct  and               sustainable in the eye of law?" The  1st Appellate Court confirmed the finding of the  Trial Court to the effect that the rent lawfully payable was Rs.55 per  month  and  consequently  the  cross  objections   were dismissed.  While deciding Point No.11 (supra), it was found that  the  defendant-tenant had paid the rent @ Rs.  65  per month  and after taking into account the rents  remitted  by money-order etc, it was held that the defendant-tenant was a defaulter with effect from 16.5.1976 onwards and thus liable to be evicted. Before the 1st Appellate Court, a plea was raised on  behalf of the defendant-tenant that since the rent lawfully payable per  month as found by the courts below was only  Rs.55  per month  and  not Rs.65, as had been admittedly  paid  by  the defendant-tenant,  the excess amount paid should  have  been automatically  adjusted  in  the  future  rent  and  if   so adjusted, there could be no question of the defendant-tenant being  held  a  defaulter.  This plea was  rejected  by  1st Appellate Court on the ground that no prayer for  adjustment in writing had been made by the defendant-tenant and, there- fore,   he  could  not  be  permitted  to  claim  any   such adjustment.   The  appeal  and the  cross  objections  were, therefore,   dismissed.   The  Second  Appeal,  as   already noticed, was dismissed by the High Court in limine. In this appeal, learned counsel for the appellant-tenant has confined his submission to the question of adjustment of the excess rent received by the landlord against the arrears and it  was submitted that had the excess payment of  Rs.10  per month  made by the tenant from September 1968  to  September 1975,  amounting to Rs.840, been taken into  account  toward the  claim  of  arrears, the  plaintiff-landlord  could  not obtain  the decree of either arrears of rent or of  eviction against  the tenant.  In support of his submission,  learned counsel  has relied upon the judgment of this Court in  Mohd Salimuddin  v.  Misri  Lal  and  Anr.,  [1986]  1  SCR  622. Reliance was also placed on M/s. Sanvan Kumar Onkar Nath  v. Subhas  Kumar Agarwalla, [1987] SCC 546 Learned counsel  for the  respondent on the other hand placed reliance  upon  the judgment of the Full Bench of the Patna High Court in  Gulab Chand  Prasad v. Budhwanti and Anr., AIR 1985 Patna  327  to urge that excess rent paid by the tenant to his landlord  in pursuance  of a mutually agreed illegal  enhancement,  could not get automatically ad- 376 justed against the subsequent defaults in the payment of the monthly rent under the Act.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 10  

Before  we take up the judgments relied upon by the  learned counsel  for  the  parties for consideration,  it  would  be appropriate  to first notice some of the admitted  facts  in the case, It  is  an admitted case of the parties before us  that  the rent  of the premises was Rs.55 per month and that  the  sum had  been  raised to Rs.65 per month without  following  the provision  contained  in the Act, though, according  to  the landlord, the tenant had agreed to the increase of the  rent voluntarily,  Admittedly,  the tenant had been  in  fact  in arrears  of rent for a period of 7 months and was as such  a defaulter. In the notice under Section 106 of the Transfer to  Property Act  served by the landlord on the tenant,  determining  the tenancy the tenant had been put on notice that his  eviction was sought not only on the ground of bonafide requirement of the landlord but also on the ground that he was a  defaulter in  the payment of rent.  In response to the notice, it  was asserted  that the rent had been arbitrarily increased  from Rs.55 per month to Rs.65 per month and it was asserted  that the  tenant was not a defaulter.  However, no adjustment  of the excess payment of rent was claimed against the  arrears. In the plaint filed by the landlord, the claim of arrears of rent  amounting to Rs, 630 was specifically made and  though in  the  written  statement, the claim was  refuted  but  no adjustment  of  the  excess rent paid  was  claimed  in  the written statement either.  Before the Trial Court also,.  as it  would  appear from the judgment of the Trial  Court,  no such plea was raised. It is in this fact situation, that we shall now consider the submissions made by the learned counsel for the tenant about the  right  of the tenant to the adjustment  of  the  excess amount against subsequent arrears.               Section 4 of the Act reads thus:-               "4.   Enhancement  of  rent   of   buildings.-               Notwithstanding  anything  contained  in   any               agreement or law to the contrary, it shall not               be  lawful  for any landlord to  increase,  or               claim  any  increase  in  the  rent  which  is               payable  for the time being in respect of  any               building   except  in  accordance   with   the               provisions of this Act."  377 This  Section  which  begins with  the  non-obstante  clause declares that any agreement to’ increase the rent except  in accordance with the provisions of the Act, would not only be void  but  indeed illegal, The Section creates  an  absolute prohibition against illegal increase or enhancement of  rent except  in the manner provided by the provisions of the  Act itself and lays down that it is not even permissible for the parties  to contract themselves out of such  a  prohibition. Thus,  on  its  plain language, any  increase  or  claim  to increase  in the rent by the landlord would be unlawful  and any  agreement  to  do  so except  in  accordance  with  the provisions of the Act would not cure the illegality.  Since, the  rent payable in the instant case as has  been  admitted before  us and found by the courts below was only Rs.55  per month  and the tenant was made to pay Rs.65 per  month  from 1968  onwards after the property had been purchased  by  the plaintifflandlord under threat of eviction, it must be  held that the increase in the rent from Rs.55 per month to  Rs.65 per month was unlawful and the landlord was not entitled  to recover  anything more than Rs.55 per month by way of  rent. Considered in this light, it is manifest at the landlord had illegally  recovered  from the tenant Rs.10 per  month  more

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 10  

than  what was lawfully due to him.  The question,  however, which  arises  for our consideration is whether  the  excess rent  paid  by  the  tenant,  on  account  of  the  unlawful enhancement,  could  be automatically adjusted  against  the subsequent defaults in payment of the monthly rent? The  Act  does  not  contain  any  provision  for  automatic adjustment of the excess rent.  As already noticed,  neither in reply to the notice under Section 106 of the Transfer  of Property  Act  nor in the written statement or  through  any other writing was the adjustment of excess rent towards  the arrears claimed by the tenant from the landlord.  There also was  no agreement between the parties at any point  of  time for adjustment of the excess rent illegally paid toward  the rent falling due subsequently. In Mohd Salimuddin v. Misri Lal and Anr., (supra), the facts were  that the tenant had advanced a sum of Rs.2,000 to  the landlord  in  order to secure the tenancy  by  an  agreement which  specifically provided that the loan amount  could  be adjusted  against the rent which accured subsequently.   The landlord filed a suit against the tenant for eviction on the ground  of  arrears  of rent.   The  lower  Appellate  Court dimissed the suit holding that the tenant was not in arrears of rent since the amount 378 advanced by the tenant as loan as per the agreement could be adjusted against the rent and the said amount was sufficient to cover the landlord’s claim of arrears.  The High Court in the  Second Appeal filed by the landlord however  set  aside the  judgment  of the 1st Appellate Court holding  that  the loan  advanced  by  the tenant being  in  violation  of  the provisions  contained in Section 3 of the Act could  not  be adjusted  and  that the tenant was in arrears  of  rent  and therefore  liable  to be evicted.  On an appeal  by  special leave this Court noticed the following admitted facts:               "(1) The tenant had advanced a sum of  Rs.2000               under an agreement which inter alia  contained               a  stipulation that the loan amount was to  be               adjusted against the rent which accured.               (2)  The amount so advanced by the tenant  was               sufficient  to cover the landlord’s  claim  of               arrears.               (3)   If  the  loan  amount  was   accordingly               adjusted  towards the rent which accrued,  the               tenant was not in arrears of rent. This Court did not agree with the High Court that since  the loan  advanced  by  the  tenant  was  in  violation  of  the prohibition  contained  in  Section 3 of the  Rent  Ac,  the tenant  was  not entitled to claim adjustment  of  the  loan amount   against  rent  which  had   accrued   subsequently. Allowing  the appeal the Court rejected the  application  of doctrine  of  pari  delicto  to the facts  of  the  case  by observing:               The  doctrine of pari delicto is not  designed               to reward the ’wrong-doer’, or to penalize the               ’wronged’,   by  denying  to  the  victim   of               exploitation access to justice.  The  doctrine               is attracted only when none of the parties  is               a  victim of such exploitation and  both  par-               ties  have voluntarily and by their free  will               joined hands to flout the law for their mutual               gain.   Such  being  the  position  the   said               doctrine embodying the rule that a party to  a               transaction  prohibited by law cannot  enforce               his  claim in a Court of law is not  attracted               in a situation like the present........"

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 10  

Consequently,  the  judgment and decree passed by  the  High Court was set  379 aside  and that of the 1st Appellate Court  restored.   This Judgment,  has  no application to the facts of  the  present case  as  leaving aside everything else,  the  agreement  by which  the sum of Rs.2,000 had been advanced, by the  tenant to  the  landlord to secure the  tenancy,  had  specifically provided that the loan amount could be adjusted against  the rent  which  may accure subsequently.  It  would  have  been perpetuating immorality if the landlord after taking loan of Rs.   2,000  with  the  clear  stipulation   regarding   its adjustment  against arrears falling due subsequently was  to rely  on  the  illegal nature of the  transaction  and  deny adjustment.   There  is  not even a demand,  much  less  any agreement,  between  the  parties in the  present  case  for adjustment  of  the  excess amount of  rent  illegally  paid towards the rent accruing subsequently. In  M/s  Sarwan Kumar Onkar Nath v. Subhas  Kumar  Agarwalla (supra), the facts were as follows: The appellant was a lessee of the building belonging to  the respondent on a monthly rent of Rs.70. At the time of taking the  premises  on rent, he paid in advance two  months  rent i.e.  Rs.140. The appellant paid rent  regularly  thereafter but did not pay rent for the months of September and October 1972.   Taking advantage of the non-payment of the  rent  in respect  of  the said two  months,  the  respondent-landlord filed  a petition for eviction against the  appellant-tenant contending  that the appellant being a defaulter in  payment of rent for two months had become liable to be evicted  from the  premises in quention under clause (d) of Section  11(1) of  the Bihar Buildings (Lease, Rent and  Eviction)  Control Act,  1947.   The tenant pleaded inter alia in  his  written statement that from the time of inception of the tenany,  he had paid the respondent a sum of Rs.140 as advance rent with an understanding that the amount of advance could be set off against  the  rent whenever necessary or required  and  that since  under Section 3 of the Act it was not lawful for  the landlord to claim to receive, in consideration of the grant, renewal  or continuance of the tenancy of any building,  any amount by way of advance or premium the appellant could  not be  considered  to  be  a  defaulter  in  payment  of  rent. Agreeing  with  the  plea of the  tenant,  the  Trial  Court dismised  the  suit  and the appeal filed  by  the  landlord before  the Additional Subordinate Judge also  failed.   The landlord  filed a Second Appeal before the High Court.   The High Court on facts found that the tenant had failed to  pay the  rent for the months of September and October 1972.   It accepted the plea of the tenant that he 380 had paid the sum of Rs.140 as rent in advance but set  aside the  concurrent judgments of the Courts below on the  ground that  since  the tenant had neither..orally nor  in  writing informed  the  landlord that he was exercising  the  option, under  the agreement, to adjust the amount paid  in  advance towards the rent due for the months of September and October 1972  he  could not get the benefit of that amount  paid  to save  himself from eviction.  This Court allowed the  appeal and  held that the tenant was, in view of the  advance  paid and  the  agreement between the parties, not in  arrears  of rent  and  setting  aside the judgment  of  the  High  Court restored that of the Trial Court which had been affirmed  by the 1st Appellate Court. This  Court took notice of the fact that though the  receipt under  which  the advance rent of Rs.140 had been  paid  did

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 10  

state  that the amount received ’was liable to  be  adjusted towards  the arrear of rent only on the appellant  informing the respondent orally or in writing that such adjustment  is to be made" but it construed the plea set out in the written statement  to  adjust the advance towards the  rent  due  as amounting  to an assertion as contemplated by the  agreement and  therefore  it  was held that the tenant  could  not  be treated as a defaulter.  Sarwan Kumar’s case also is not  an authority  for the proposition of "automatic adjustment"  as canvassed  by learned counsel for the appellant because  the construction  placed by this Court on the written  statement in Sarwan Kumar’s case was to the effect that the tenant had sought  adjustment of the advance paid against the rent  for two months.  That judgment also, therefore, does not advance the case of the appellant. On  the other hand, the opinion expressed by the Full  Bench of  the Patna High Court in Gulab Chand Prasad v.  Budhwanti and  Anr., which has received the seal of approval  of  this Court in Budhwanti and Anr. v. Gulab Chand Prasad,’[1987]  2 SCC  153  fully  supports the case  of  the  landlord.   The precise  question  which was considered by  the  Patna  High Court was:               "Whether the excess rent paid by the tenant to               his landlord, consequent upon a mutual (though               illegal)   enhancement   of  rent   would   be               automatically adjusted against all  subsequent               defaults  in  payment  of  monthly  rent   for               purposes  of  Ss.  4, 5 and 11  of  the  Bihar               Buildings  (Lease, Rent and Eviction)  Control               Act, 1947  381 After  a  detailed discussion and reference to a  catena  of authorities,  the answer to the above question was  rendered in the negative and it was held that the excess rent paid by the   tenant  in  pursuance  of  mutually   agreed   illegal enchancement   thereof   by  the  parties   does   not   get automatically  adjusted against the subsequent  defaults  in the payment of the monthly rent under the Act and even under the  general  law  such  an  automatic  adjustment  is   not countenanced. The  Madras  High Court in Nune Panduranga  Rao  v.  Divvala Gopala  Rao,  AIR  1952 (Madras)  827  while  construings  a somewhat similar provision contained in Section 7(2) of  the Madras Buildings (Lease and Rent) Control Act held:               "Under the express provisions of this  section               if  the  tenant has not paid or  tendered  the               rent  due  by him within the  time  prescribed               therein  he  is  liable to  be  evicted.   The               section  does not compel a landlord to  adjust               the  excess amounts in his hands  towards  any               arrears  of rent if the said amounts were  not               paid  by  the tenant towards the rent  of  any               particular month.  It is true that on the date               when  a  tenant authorities  the  landlord  to               adjust  the amounts with him towards the  rent               of  any particular month or months the  amount               will be deemed to have been paid on that  date               towards  rent.   But till that  adjustment  is               made  and the amount is so  appropriated,  any               amounts  in  excess of the rent due  with  the               landlord   will  only  be  payments  made   in               suspense.  The facs that such excess came into               the  hands  of the landlord by reason  of  the               Rent  Controller’s order fixing the fair  rent               does  not really affect the question.   I  am,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 10  

             therefore, of opinion that the amount not paid               towards  rent of any particular month and  the               amount  not agreed to be adjusted towards  any               rent  of a particular month is not Payment  of               rent within the meaning of S.7(2) of the Act." (Emphasis supplied) We are in broad agreement with the view of the Full Bench of the  Patna  High  Court and the Madras  High  Court  on  the question  of ’automatic adjustment’ and hold that  a  tenant cannot save himself from the consequences of eviction  under the Act on the ground of default in the payment 382 of rent by claiming automatic adjustment of any excess  rent paid  consequent  upon mutual enhancement of rent,  even  if illegal unless there is an agreement between the parties for such  an  adjustment.  The tenant may also in a  given  case seek  adjustment  of  the excess rent in the  hands  of  the landlord  against  the arrears by  specifically  asking  the landlord for such an adjustment before filing of the suit or in  response to the notice to quit and even in  the  written statement by way of set off within the period of  limitation and by following the procedure for claiming such a set  off, while  resisting  the claim for eviction on  the  ground  of default  in payment of arrears of rent but be  cannot  claim ’automatic adjustment’. Thus,  in the facts and circumstances of this case, we  find that the 1st Appellate Court was fully justified in  holding that  the tenant could not get any automatic  adjustment  of the  excess  rent paid against the subsequent  defaults  and since  the tenant had been found on admitted facts to be  in default  in  the  payment of rent,  his  eviction  was  well merited.   The  judgment of the High  Court  dismissing  the second  appeal,  directed against  concurrent  findings,  in limine,  does  not call for any interference.   This  appeal consequently fails and is dismissed but without any order as to costs. The  appellant, however, is given time till 31st May,  1993, to yield vacant possession to the landlord subject to filing of the usual undertaking within three weeks from today. V.P.R.                                  Appeal dismissed. 383