SARWAN KUMAR ONKAR NATH Vs. SUBHAS KUMAR AGARWALLA

JUDGEMENT

(1.) The appellant is a firm carrying on business at Jharia. It took on lease a room bearing No. 1in a building belonging to the respondent on a monthly rent of Rs. 70/- on 7-11-1960 and paid in advance two months rent, i.e., Rs, 140/-. The appellant paid rents regularly but did not pay the 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 filed a petition for eviction against the appellant contending that the appellant had become liable to be evicted from the premises in question under clause (d) of sub-section (1) of section 11 of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947 (hereinafter referred to as 'the Act') which provided that on failure to pay two months' rent a tenant was liable to be evicted from the premises taken on lease. The appellant pleaded inter alia in his written statement that at the time of the inception of the tenancy it 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 S. 3 of the Act it was not lawful for a landlord to claim or receive, in consideration of the grant, renewal or continuance of a tenancy of any building, the payment of any premium, salami, fine or any other like sum in addition to the rent or payment of any sum exceeding one month's rent of such building as rent, in advance, the appellant could not be considered as a defaulter in payment of rent for purposes of clause (d) of S. 11(1) of the Act as at least one month's rent which had been paid in excess of what was permitted under S. 3 of the Act was liable to be adjusted towards the arrears. The appellant, therefore, contended that in any view of the matter it could not be treated as a defaulter liable to be ejected from the premises. Agreeing with the pleas of the appellant the trial court dismissed the suit and the appeal filed by the respondent before the Additional Subordinate Judge, Dhanbad against the judgment of the trial Court was also dismissed. The respondent filed a second appeal before the High Court against the judgment of the Additional Subordinate Judge. The High Court found that the rent for the appellant had failed to pay the rent for the months of September and October, 1972 although it accepted the plea of the appellant that he had paid the sum of Rs. 140/- as rent in advance on the ground that the appellant had not requested the respondent to adjust the rent which he had paid in advance towards the rent due for the months of September and October, 1972. The relevant part of the judgment of the High Court reads thus:

(2.) It is unfortunate that the High Court has approached the entire case in a technical fashion. It is not disputed that the respondent was not entitled to receive more than one month's rent by way of advance. Yet, the respondent had received in advance the rent for two months. The receipt under which the said advance was received does not state that the amount received was liable to be adjusted towards the arrears of rent only on the appellant informing the respondent orally or in writing that such adjustment is to be made. In the written statement, however, the appellant pleaded that the amount paid by way of advance could be set off by way of rent whenever necessary or required. This is not a case where there was any agreement to the effect that such adjustment could be made only on the tenant asking the landlord to make such adjustment. Nor is this a case where the tenant was liable to the landlord on any other account. The only transaction between them was the lease in question and the amount in question had been paid as rent in advance. There was also no agreement that the amount was liable to be adjusted at the termination of the lease. It was, therefore, open to the respondent to appropriate the said sum towards the arrears even without any option being exercised as regards such adjustment by the appellant. The High Court erred in observing that the appellant had not asserted in its written statement that it may be allowed to adjust the advance amount towards the rent due for the months of September and October, 1972. In substance the plea set out in para 9 of the written statement amounts to such an assertion. In any case the appellant could not be treated as a defaulter who had failed to pay rent for two months. The High Court was also wrong in coming to the conclusion that the appellant could not rely on the provisions of S. 3 of the Act on the ground that if the parties were in pari delicto the court would not come to the rescue of either.

(3.) In Mohd. Salimuddin v. Misri Lal, (1986) 1 SCR 622 this Court has held that where in a suit by landlord for eviction of tenant it was found that the tenant, in order to secure the tenancy advanced certain amount to the landlord (although in violation of prohibition to do so as embodied in S. 3 of the Act) under an agreement containing a stipulation that the loan amount was to be adjusted against the rent which accrued, and the amount so advanced was sufficient to cover the landlord's claim of arrears of rent for the relevant period, it could not be said that the tenant was not entitled to claim adjustment of the loan amount so advanced against the rent which accrued subsequently, simply because the loan advanced was in violation of the prohibition contained in the Act. Accordingly, this Court held that as the tenant was not in arrears of rent after the adjustment of loan amount towards the rent, he was not liable to be evicted from the premises in question. This Court further observed that the doctrine of in pari delicto was not attracted to such a situation. The principle enunciated in the above case is equally applicable to the case before us.