Holding

Section 11(1)(d) can be invoked only when section 13 is attracted, and since section 13 was not applicable before the Act’s extension, earlier rent defaults cannot be a ground for eviction.

Summary

The appellant, G.D. Gupta, occupied a building in Danapur Cantonment under an invalid lease deed. The owner sued for eviction and arrears of rent, and during the pendency the Bihar Buildings (Lease, Rent and Eviction) Act, 1947 was extended to the area on 14‑02‑1970 with prospective effect. The 1974 eviction suit alleged default in rent for periods both before and after the Act’s extension. The trial court and the High Court upheld the decree on the ground of default. The Supreme Court examined whether defaults that occurred before the Act became applicable could be a ground for eviction under s.11(1)(d). It held that clause (d) is linked to s.13 of the Act, which was not applicable before the extension; therefore earlier defaults cannot support eviction. The case was remitted to the first appellate court to determine any default after the Act’s extension, and the appeal was allowed, setting aside the High Court judgment.

Issues considered

Whether a tenant's default in payment of rent that occurred before the prospective application of the Bihar Buildings (Lease, Rent and Eviction) Act, 1947 can constitute a ground for eviction under section 11(1)(d) of that Act.

Legislation cited

Bihar Buildings (Lease, Rent and Eviction) Act, 1947s. 11(1)(d), s. 13
Cantonments (Extension of Rent Control Laws) Act, 1957s. 3(2), s. 3(4)
Punjab Security of Land Tenures Act, 1953s. 9(1)
Transfer of Property Act

Subjects

evictionrent defaultprospective legislationBihar Rent Actsection 13lease deed invaliditylandlord-tenant disputeretrospective effect

Judgment

A
GHANSHYAM DAS GUPTA
v.
DEVI LAL AND OTHERS

FEBRUARY 8, 1989

B [M.H. KANIA AND LAUT MOHAN SHARMA, JJ.]

Bihar Buildings (Lease, Rent and Eviction) Act, 1947: Section
11(l)(d)-Default in payment of rent-For the period prior to the Act
made applicable to the area-Whether tenant liable to be evicted on that
ground.
c The appellant was inducted as a tenant in the building in question
under a document of lease. Since the deed was not executed in accor-
dance with the requirements of law, it remained inoperative. After the
lease period the owner instituted a suit for eviction of the appellant and
for a decree for arrears of rent. During the pendency of the suit the
D provisions of the Bihar Rent Act were extended to the area, and as such
the prayer for withdrawal of the relief for eviction was allowed with
leave to tile a fresh suit. However, decree for arrears of rent was pas-
sed. Thereafter a fresh suit was tiled. The Trial Court decreed the suit
on both the grounds of personal necessity and default in payment of
rent. On· appeal the Subordinate Judge reversed the finding on the
E question of bona fide personal necessity ;·but affirmed the decree on the
ground of default . .The High Court, on appeal maintained the decree.

The present appeal by special leave, is against the High Court's
judgment.

F On behalf of the appellant, it was contended that non-payment of~
rent (when the Bihar Rent Act was not applicable to the area) is not
relevant and so it could not be legitimately made the basis for the decree
of eviction. It was submitted on behalf of the respondent that even
independent of the Bihar Rent Act the appellant was under a duty to
regularly pay the monthly rent and for the default, he must, be
G presumed to be made liable for eviction under Section ll(l)(d) of the
Act.

Allowing this appeal,

HELD: J • .There is no manner of doubt that the Act was applied
H to the area concerned on 14.2.1970 with prospective effect. The ques-
552
G.D. GUPTA v. DEVI LAL 553

lion whether the Legislature intended to include previous default of the A
tenant in payment of rent within the grounds for eviction has to be
answered by construing the language of the relevant provisions in the
Bihar Rent Act. JSSSC-D) .

2. Ordinarily where a tenant offers the rent which is refused by
the landlord without any justifiable reason tlie tenant is held to have B
fully performed his duty. Under the Bihar Rent Act, however, the
position is a little different. Even on the refusal by the landlord to
accept rent lawfully offered by the tenant, the tenant is under a further
duty as mentioned ins. 13(1) to remit such rent by postal money order
to the landlord. Where a bona fide doubt arises as to the person who is
entitled to receive rent the tenant is permitted by s. 13(2) to deposit the
rent in the prescribed manner. The latter part of s. ll(l)(d), quoted
c
above, deals with cases attracting s. 13. The result is that if a tenant has
made a proper offer to pay the rent and the landlord has unreasonably
refused to accept h, the tenant cannot escape the liability of eviction
under clause (d) unless he proves that he had further remitted the rent
by postal money order. This position is fully settled. If the situation is D
analysed in this light it will be seen that clause (d) can be held to apply
only where s. 13 of the Bihar Rent Act is attracted. If s. 13 cannot be
applied to a particular situation, clause (d) also would not apply, Sec·
tion 13 could not obviously be applicable before the Act was extended to
the area in question. Consequently it must be held that the default for
the earlier J>eriod cannot be the basis for a decree of eviction under s. E
ll(l)(d). l557G-H; 558A-C]
K.C. Jain v. B.S. Grewal & Ors., 11965) 2 S.C.R. 36 distin~
guished.
3. Since the question is dependent on an appraisal of the evidence
~~-led by the parties, the case should be remitted to the first appellant F
court for the decision on the question whether the. landlord has proved
the.,tenant's default in payment of rent for the period from Decem.ber
1973 to April 1974. If the Subordinate Judge comes It> the conclusion
that the tenant did default within the meaning of s. l l(l)(d) of the Act
for two months or more during this period, he would decree the suit;
otherwise the suit would be dismissed. l559B-C] G
),. CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2984
of 1983.

From th1> Judgment and Order dated 19.5.1982 of the Patna
High Court in Appellate Decree No. 275of1981. H
554 SUPREME COURT REPORTS [1989] 1 S.C.R.

Govind Mukhoty and K.N. Rai for the Appellant.
A
F.S. Nariman and Ranjit Kumar for the Respondents.

The Judgment of the Court was delivered by

8 SHARMA, J. The question which arises in this appeal by special )
leave is whether the default by a tenant in payment of rent for the
period before the Bihar Buildings (Lease, Rent and Eviction) Act,
1947 (hereinafter referred to as the Bihar Rent Act), was extended and
became applicable, can be the basis for holding him a defaulter within
the meaning of clause (d) of s. ll(lj of the Bihar Rent Act, 1947 and,
C therefore, liable to be evicted.

2. The building in question is in Danapur Cantonment area near
the town of Patna. The appellant was inducted as a tenant therein by
the owner one Janki Devi under a document of lease for a fixed
period. Since the deed was not executed in accordance with the re-
0 quirements of law it remained inoperative. After the period was over,
Janki Devi instituted a suit on 10.12.1968 for eviction of the appellant
and for a decree for arrears of rent for the period May to August 1968,
which was registered as Title Suit No. 317 of 1968. The Bihar Rent Act
was not then applicable to Danapur Cantonment. During the pen-
dency of the case on 14.2.1970 the provisions of the Bihar Rent Act
E were extended to this area. Presumably in view of the fact that the
lease deed could not be treated to be valid in the eye of law, a prayer
for withdrawal of the relief for eviction was made by the plaintiff and
was allowed with leave to file a fresh suit. A decree for arrears of rent,
however, was passed. -

F 3. The pres:nt suii was filed on 28.5.1974 for eviction of the
appellant on the grounds of bona fide personal necessity and default in
~~
payment of rent for the periods May to July, October and November
1968, December 1969 to February 1970, and December 1973 to April
1974. The trial court decreed the suit on both the grounds. On appeal
by the appellant, the learned Subordinate Judge reversed the finding
G on the question of bona fide personal necessity but affirmed the decree
on the ground of default. The High Court has by the impugned judg-
ment maintained the decree. :~
4. The appellant denied the allegation that he has defaulted in
payment of rent. The first appellate court on a consideration of the
H evidence held that the appellant did default in payment of rent for
G.D. GUPTA v. bEVI LAL [SHARMA, J.[ 555

May, June, July, October and November 1968, and December 1969 to
A
February 1970, and on that basis decreed the suit. It has been con-
tended on behalf of the appellant that non-payment of rent for the
period before 14.2.1970 (when the Bihar Rent Act was not applicable
to the Cantonment area) is not relevant, and since the rent of less than
a month in February 1970 remained unpaid after the Bihar Rent Act
was extended, it could not be legitimately made the basis for the B
decree of-eviction. The High Court agreed with the appellant that the
Bihar Rent Act did not apply to the Cantonment area with retrospec-
tive effect, but proceeding further it said that in view of the decision in
KapurChandJainv. B.S. Grewal and others, l1965]2SCR36,itmust
be held that the Act, although prospective in its application, takes into
account the default in payment of tent of the earlier period.
c
5. There is no manner of doubt that the Act was applied to the
area concerned on 14.2.1970 with prospective effect. The question
whether the ·Legislature intended to include previous default of the
tenant in payment of rent within the grounds for eviction has to be
answered by construing the language of the relevant provisions in the D
Bihar Rent Act. Although iii Kapur Chand's case (supra) a similar
dispute was raised, it is not permissible to apply the decision irrespec-
tive of the difference in lailguage of the two statutes. It is true thats. 9
of the Punjab Security of Land Tenures Act, 1953 (hereinafter refer-
red to as the Punjab Act) which was relevant in the reported case also
dealt with· the grounds for eviction of a tenant; but there was· clear E
indication in the section that the grounds for eviction included ihe
earlier default also. The -relevant portion of the section, as quoted in
the judgment, reads as follows: 1

"9(1) Notwithstanding anything contained in any
other law for the time being ih force·, no land-owner· shall F
·be·competent to eject a tenai:trexceptwhen such tenant:
' ,,
(i) is a tenant on the area reserved· under this Act ·or is a
tenant of a small land-owner; or
: I },

(ii) fails to pay rent regularly without sufficient cause; or G

(iii) is in arrears of rent at the commencement of this Act;
or
............................... -. .................... .
H
556 SUPREME COURT REPORTS [1989] 1 S.C.R.
A Explanation-For the purposes of clause (iii), a ten-
ant shall be deemed to be in arrears of rent at the comm-
encement of this Act, only if the payment of arrears is not
made by the tenant within a period of two months from the
date of notice of the execution of decree or order, directing
B him to pay such arrears of rent."

It will be seen that clause (iii) in unambiguous terms refers to the )
arrears of rent for the period before the commencement of the Punjab
Act. Dr. Y.S. Chitale, learned counsel for the landlord-Respondent,
contended that the judgment of this Court rested on the interpretation
of clause (ii) of s. 9(1) of the Punjab Act which did not contain any
c words similar to those in clause (iii). Strongly relying on the following
observation:

"In our opinion, the conduct of the tenant prior to the
coming into force of the new section can be taken into
D account. No doubt a statute must be applied prospectively.
But a statute is not applied retrospectively because a part
of the requisite for its action is drawn from a moment of
time prior to its passing. The clause in question makes a
particular conduct the ground for an application for
eviction."
E
It was urged that the Bihar Act contained similar provisions and the
ratio in Kapur Chand's case is fully applicable. In view of vital differ-
ence in 'the language of the two Acts, we do not find ourselves in a •
position to accept the argument.

F 6. Having regard to the scheme of the Punjab Act and the (
language used therein specially the words mentioned in clause (iii) of -'/-ii'
s. 9(1) it is apparent that the Act took into consideration the earlier '
default in payment of rent within the grounds for eviction. There was
no dispute in Kapur Chand's case about the construction of the
section. The point which was raised before this Court was whether the
G past conduct of the tenant could be legitimately taken into account by
the statute which was prospective in application. And this point was
answered in favour of the landlord. In the case before us the appellant
is not contending that the past conduct of a tenant cannot be taken into :""-
account by the Legislature if it so intends. The question is whether
such an intention can be spelled out from s. ll(l)(d) of the Bihar Rent
H Act which reads as follows:
G.D. GUPTA v. DEVI LAL [SHARMA, J.J 557

"11. Eviction of tenants. (1) Notwithstanding anything
A
contained in any contract or law to the contrary but subject
to the provisions of the Industrial Disputes Act, 1947 and
to those of section 12, where a tenant is in possession of any
building, he shall not be liable to eviction therefrom except
in execution of a decree passed by the Court on one or
more of the following grounds: B

(a) ........................................ ~ .. .

. . . . . . . . . . . •'• ................................. .
(d) where the amount of two months' rent·lawfully
payable by the tenant and due from· him is in arrears c
by not having been paid within the time fixed by con-
tract or, in the absence of such contract, by the last
day of the month next following that for which the
rent is payable or by not having been validly remitted
or deposited in accordance with section 13;" D

7. Dr. Chitale has streneously contended that even independent
of the Bihar Rent Act the tenant-appellant was under a duty to regu-
~ larly pay the monthly rent by the corresponding succeeding month,
under the provisions of the Transfer of Property Act, and if he
defaulted in due performance of his duty he .must be presumed-to be E
made liable for eviction by the Legislature while enacting s.ll(l)(d).
He emphasised that clause (d) was not saddling the tenant with a new
duty which was not there earlier. The Act intends to deprive the erring
\ tenant negligent in payment of rent from its· benefits and there is,
'lj..~f-- therefore, no reason to hold that his earlier conduct is not to be taken
' into account. The argument does not .appear to be sound inasmuch as F
it ignores the following words towards the end of clause (d), quoted
above, which appear to us to be very illumiaating:

" ... or by not having been validly remitted or deposited in
accordance with section 13;"
G
8. Ordinarily where a tenant offers the rent which is refu-
sed by the landlord without any justifiable reason the tenant is held
to have fully performed his duty. Under the Bihar Rent Act,,however,
the position is a little different. Even on the refusal by the landlord to
accept rent lawfully offered by the tenant, the tenant is under a further
duty as mentioned ins. 13(1) to remit such rent by postal money order H
558 SUPREME COURT REPORTS [1989] 1 S.C.R.

to the landlord. Where a bona fide doubt arises as to the person who is
A
entitled to receive rent the tenant is permitted by s. 13(2) to deposit
the rent in the prescribed manner. The latter part of s. ll(l)(d),
quoted above, deals with cases attracting s. 13. The result is that if a
tenant has made a proper offer to pay the rent and the landlord has
unreasonably refused to accept it, the tenant cannot escape the liabi-
B lity of eviction under clause (d) unless he proves that he had further
remitted the rent by postal money order. This position is fully settled.
If the situation is analysed in this light it will be seen that clause (d) can
be held to apply only wheres. 13 of the Bihar Rent Act is attracted. If
s. 13 cannot be applied to a particular situation, clause (d) also would
not apply. S. 13 could not obviously be applicable before the Act was
extended to the area in question. Consequently it must be held that the
c default for the earlier period cannot be the basis for a decree of evic-
tion under s. ll(l)(d).

9. Mr. F.S. Nariman, who also argued on behalf of the respon-
dent, feebly suggested that the extension of the Bihar Rent Act to the
D Cantonment area may be held to be applicable with retrospective
effect in view of sub-sections (2) and (4) of s. 3 of the Cantonments
(Extension of Rent Control Laws) Act, 1957. Dr. Chitale also referred
to the observation in paragraph 8 of the judgment in Smt. Sant Kaur
and another v. Ganesh Chaudhary, AIR 1949 Patna 137 on the ques- ~
tion of retrospectivity. We do not find any merit in the argument. The
E language of the Bihar Rent Act is clear and does not admit any doubt
about its prospective nature. So far as 's. 3 of the Cantonments Act is
concerned, sub-section (2) merely permits the Central Government to "'
extend .any rent enactment from an earlier date subject to certain
limitations, and sub-section (4) is irrelevant in the present context as
its scope is limited to dealing with orders and decrees passed before ~, .
F the extension of a rent law to a Cantonment area. When this was - (-Jf
pointed out to Mr. Nariman, he did not further pursue with his argu-
ment, and Dr. Chitale in express terms conceded that the Bihar Rent
Act could not be interpreted to have been extended to the Canton-
ment area with retrospective effect. In that view, we need not detain
ourselves further on this point.
G
10. Mr. Nariman lastly urged that the appellant also defaulted in
payment of rent for December 1973 to April 1974, a period of five
months, after the Act was applied to the cantonment area, and the
impugned decree, therefore, should not be disturbed. On behalf of the
appellant it was suggested that in view of the finding in paragraph 12 of
H the judgment of the first appellate court it should be presumed that the
G.D. GUPTA v. DEVI LAL [SHARMA, J.] 559

respondents' case of default for the subsequent period ·was rejected. A
We have been taken through the judgments of the first appellate court
and the High Court and we find that the controversy with respect to
the alleged default for the later period has been left undetermined.
Since the question is dependent on an appraisal of the evidence led by
the parties, we are oCthe view that the case should be remitted to the B
first appellate court for the decision on the question whether the
plaintiff-landlord has proved the defendenHenant's default in payment
of rent for the period December 1973 to April 1974. If the learned
Subordinate Judge comes to the conclusion that the tenant did default
within the meaning of s. ll(l)(d) of the Bihar Buildings (Lease, Rent
and Eviction) Act, 1947 for two months or more during this period, he
would decree the suit; otherwise the suit would be dismissed. C

11. In- the result, the appeal is allowed, the judgments of the
High Court and the first appellate court are set aside and the case is
remitted to the first appellate court for fresh decision in the light of the
observations made above. The costs shall follow the final result in the D
suit.

G.N. Appeal allowed.