NAND LAL AGARWALversusGANESH PRASAD SAH & ORS.

                     NANO LAL AGARWAL
                                                                              A
                             v.
                  GANESH PRASAD SAH & ORS.
                                                    ii;
                            AUGUST 9, 1988

           [R.S. PATHAK, CJ AND S. NATARAJAN, J.]                             B

       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 to adjustment
 towards rent arrears without exercising option for such adjustment.
                                                                              c
      A suit tiled by the respondent-landlord for eviction of the
appellant-tenant from the leased premises on grounds of (i) bona 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.                                   D

      Rejecting the contention of the appellant-tenant that a sum of
Rs.180 out of the advance of Rs.300 paid to the respondent and the
excess amonnt 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) E
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 basis of
providing additional amenities was not permissible under the Act, the
appellant could not take advantage of the situation as he bad failed to F
exercise his option under s. 8(2) of the Act to seek adjustment of the
                                                                 I
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      G
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,                                      H
                                    303
    304         SUPREME COURT REPORTS                 [1988] Supp. 2 S.C.R.

A         HELD: I. 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. [3088]
                          •
          2.1 Under sub-section (2) of Section 8 of the Bihar Buildings
B   (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 build-
c   ings for which fair rent has been determined or re-determined by the
    Controller, the same principle, in the absence of a different prescrip-
    tion 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]
D
          2.3 Therefore, 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 adjustment of the excess
    payments made by the appellant has to be in accordance with the princi-
    ple set out ins. 8(2). [3088]
E
          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 hav-
    ing opted for such adjustment and calling upon the respondent to make
    such adjustments. [309E]
F
           Sarwan Kumar Onkar Nath v. Shri Subhas Kumar Agarwal/a,
    AIR 1987 SC 2302 and Smt. Draupadi & Ors. v. Gorakhnath Gupta &
    Ors .• I1988] Suppl. SCC 571 distinguished.

          Budhwanti and Anr. v. Guiab Chand Prasad, [1987] 2 SCC 153
G   and Mohd. Sa/imuddin v. Misri Lal, [1986] 2 SCC 378
    referred to.

          CIVIL APPELLATE JURISDICTION: Civil Appeal No. 977
    of 1986.

H         From the Judgment and Order dated 30. 7. 1985 of the Patna High
                  N.L. AGARWAL v. G.P. SAH [NATARAJAN, J.l              305

     Court in Appeal from Appellate Decree No. 96 of 1982.                    A

           M.P. Jha for the Appellant.

           S.N. Jha for the Respondents.

           The Judgment of the Court was delivered by                         B

           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 C
     committed an error of law in holding that the appellant had rendered
     himself liable for eviction for non-payment of rent for the period
     1-2-1975 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 appel- D
     lant 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 flled a suit for eviction of the appellant on
      three grounds, viz. ( 1) hon.a-fide requirement of the premises for
      opening a shop (2) default in payment of reht for five months; and (3)
      wrongful conversion of the leased premises from a residential house to E
      a 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.
                                                                               F
            As regards the non-payment of rent for the period 1-2-1975
     to 30-6-1975, the appellant conceded that he paid the rent only on
     30-7-1975 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
·o   for appropriation towards the rent arrears, and secondly, the respon-
     dent had collected a sum of Rs. 70 ever.ymonth towards rent as against G
     the 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 Build-
     ings (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 H
    306         SUPREME COURT REPORTS               [1988] Supp. 2 S.C.R.

    advance of Rs.300 and hence the question of appropriating the balance
A
    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
B 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 adjust-
    ment 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 pay-
    ment can be sustained only if he had exercised his right of option under
G 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 by
    whom it was paid or at the optfon of such person it can be adjusted
    towards the arrears of rent (emphasis supplied). The view taken by the
     High Court is assailed by the appellant in this appeal.
D
           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. IO per month towards the amenities provided by
     him without the approval of the Rent Controller, he was bound to
     ad just the excess payments towards the arrears of rent and therefore
E 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 ofrent. Mr. M.P. Jha sought to draw support
F for his arguments from the decision in Sarwan Kumar Onkar Nath v.
     Shri Subhas Kumar Agarwal/a, AIR 1987 SC 2302. In that case a
     tenant's plea that a sum of Rs.140 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 pay-
     ment of the rent in January 1973 was accepted by this Court and the
G judgment of the High Court taking a contrary view was set aside. This
     Court observed that since the sum of Rs.140 had been specif;cally
     given by way of advance rent for two months, the landlord should have
     ad justed 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
 H Appeal No. 1276 of 1988 dated 30th March 1988 Smt. Draupadi & Ors.
             N.L. AGARWAL v. G.P. SAH [NATARAJAN, J.l                307

v. Gorakhnath Gupta & Ors., where the tenant's plea for adjustment
                                                                            A
of excess amounts 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        8
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-
ler. It was also urged that as the additional payment of Rs.10 was made
                                                                            c
as per a mutual agreement reached between the parties, this would be
a case where the 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        D
High Court in Guiab Chand Prasad v. Budhwanti and Anr., AIR 1985
Patna 327 and the dismissal of the appeal arising therefrom by this
Court in Budhwanti and Anr. v. Guiab Chand Prasad, [1987] 2 SCC
153.

       On a careful consideration of the contentions of the parties, we     E
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          F
provisions of the Act. In spite of this finding, the question for consi-
deration would be whether the respondent has to necessarily 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-section 2 of Sec-
tion 8 of the Act assumes significance. The sub-section inter-alia pro-     G
vides that 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 ge 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      H
    308         SUPREME COURT REPORTS               [1988) Supp. 2 S.C.R.

    by the Controller, the same principle, in the absence of a different
A
    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-
B   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
c   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.

D         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 be adjusted
    towards rent by the landlord whenever the tenant committed default in
    payment of rent. Notwithstanding this position the landlord in that
E   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
F   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 circumstances of the
    case we are satisfied that the appellant was not in arrears of two
G   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 ren.t and exonerate the tenant of the
    defualt committed by him in payment of renJ. Even the decision in
    Civil Appeal No. 1276/88 will stand confined 'to the facts. of that case
H   and it does noi lay down a ratio of general application to all cases in
             N.L. AGARWAL v. G.P. SAH !NATARAJAN. J.]                309

which a tenant seeks adjustment of excess payments towards his rent         A
arrears.

      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
                                                                            B
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          c
treatment for himself in the eviction proceedings instituted by the
respondent. The learned counsel referred to the observation in Mohd.
Salimuddin v. Misri Lal, [1986] 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 both   D
            part'ies 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       E
of the excess payment made by him towards arrears of rent without his
having opied 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 Guiab Chand
Prasad, (supra) and the decision of this Court in the appeal arising
therefrom in Budhwanti and Anr. v. Guiab Chand Prasad, (supra).             F

       In the result the appeal fails and is accordingly dismissed. There
will, however, be no order as to costs.

N.P.V.                                                Appeal dismissed.
                                                                            G