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PETITIONER: NAND LAL AGARWAL

       Vs.

RESPONDENT: GANESH PRASAD SAH & ORS.

DATE OF JUDGMENT09/08/1988

BENCH: NATRAJAN, S. (J) BENCH: NATRAJAN, S. (J) PATHAK, R.S. (CJ)

CITATION:  1988 AIR 1821            1988 SCR  Supl. (2) 303  1988 SCC  (4) 215        JT 1988 (3)   402  1988 SCALE  (2)387

ACT:     Bihar 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.

HEADNOTE:     A suit filed by the respondent-landlord for eviction  of the appellant-tenant from the leased premises on grounds  of (i)  buna fide requirement, (ii) default in payment of  rent for five months, and (iii) wrongful use of leased  premises, was  decreed by the trial court and the appellate  court  on first two grounds.     Rejecting 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 rent arrears.     The  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.     Dismissing the appeal, this Court,                                                   PG NO 303                                                   PG NO 304     HELD; 1. Without the tenant calling upon the landlord to

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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]     2.1  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]     2.2 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]     2.3 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). [308B]     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. [1988] Suppl. SCC 571 distinguished.     Budhwanti  and Anr. v. Gulub Chand Prasad [1987] 2  .SCC 153  and  Mohd Salimuddin  v. Misri Lal, [1986]  2  SCC  378 referred to.

JUDGMENT:     CIVIL.  APPELLATE JURISDlCTION: Civil Appeal No. 977  of 1986.     From the Judgment and Order dated 30.7.1985 of the Patna High Court in Appeal from Appellate Decree No. 96 of 1982.                                                   PG NO 305     M.P. Jha for the Appellant.     S.N. Jha for the Respondents.     The 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.     The  facts are not in dispute and are briefly as  under. The  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. (1) bona-fide requirement of the premises for opening a

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shop (2) default in payment of rent for five months; and (3) wrongful   conversion   of  the  leased  premises   from   a residential house to  grocery shop. The 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.     As 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.     It  was 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

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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.     Controverting 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. [1987] 2 SCC 153.     On  a  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. It is in that context the legislative prescription contained in   sub-scction  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

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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  eviction. The  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.     We  do  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: decision 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.                                                   PG NO 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 bythe respondent. The learned counsel referred  to  the observation in Mohd. Salimuddin  v.  Misri Lal, [19861 2 SCC 378 in the following terms:     "The doctrine ("in pari delicto") is attracted only when none  of  the parties is a victim of such  exploitation  and

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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 c,f 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  therefrom  in Budhwanti and Anr. v. Gulab Chand Prasad. (supra).     In  the  result  the appeal  fails  and  is  accordingly dismissed. Therewill, however, be no order as to costs. N.P.V.                          Appeal dismissed.