Holding

Pre‑agreement arrears, once transformed into a consolidated debt payable by instalments under a compromise agreement, no longer constitute "arrears of rent" and cannot be tacked onto current rent arrears, so the tenant was not in arrears of rent for more than three months and could not be evicted under Section 3(1)(a).

Summary

Ram Deo, the tenant, entered into a compromise agreement on 13 June 1960 to pay Rs.600 of pre‑agreement rent arrears in monthly instalments of Rs.25 each, alongside Rs.25 of current rent. He later fell into arrears and the landlord, Umrao Singh, served a notice demanding Rs.150, of which Rs.75 represented three months' current rent and the remaining Rs.75 related to the instalment debt under the agreement. The landlord sued for damages and eviction, arguing that the entire Rs.150 constituted arrears of rent exceeding three months under Section 3(1)(a) of the U.P. (Temporary) Control of Rent and Eviction Act, 1947. The Supreme Court held that the amount covered by the compromise agreement ceased to be "arrears of rent" and became a separate consolidated debt, thus only the three months' current rent could be counted as arrears. Consequently, the tenant was not in arrears of rent for more than three months and could not be evicted on that ground. The Court allowed the appeal, set aside the High Court decree, and dismissed the suit.

Issues considered

Whether arrears of rent that have been converted into a consolidated debt payable by instalments under a compromise agreement can be counted as "arrears of rent" for the purpose of Section 3(1)(a) of the U.P. (Temporary) Control of Rent and Eviction Act, 1947.
Whether the landlord is entitled to evict the tenant on the ground of arrears of rent for more than three months in the circumstances described.
Whether Section 114 of the Transfer of Property Act is applicable to the eviction claim.

Legislation cited

Transfer of Property Acts. 114
U.P. (Temporary) Control of Rent and Eviction Act, 1947s. 3(1)(a)

Subjects

rent arrearsevictionrent controllease agreementconsolidated debtSection 3(1)(a)landlord-tenant disputeU.P. Control of Rent and Eviction Act

Judgment

RAMDEO
67

A.
I
v.
UMRAO SINGH
• November 15, 1979
(R. S. SARKARIA AND 0. CHINNAPPA REDDY, JJ.] B·
U. P. (Temporary) Control of Rent and Eviction Act 1947-Section
3(1)(•)-Scope of

In respect of arrears of rent the respondent-landlord and the appellant
who was his tenant e:D.tered into an agreement on June 13, 1960 that the tenant
would pay every month Rs. 50/- representing Rs. 25/- as arrears of rent and c
Rs. 25/~ towards the current rent. For sometime the appellant made the pay-
ments in accordance with the agreement but thereafter fell in arrears. The respon~
dent served a notice of demand upon the appellant on August 21, 1961. Even-
tually the respondent instituted a suit for damages and eviction of the appellant
from the premises.

Tho appellant pleaded that the arrears of rent due at the. date of notice were D•
Rs. 75/- only which did not exceed three months rent and that the balance of
the amount demanded represepted only past arrears covered by t)ie agreement
in reopect of which the landlord had waived his right of ejectment.

Dismissing the suit the trial court held that only three months rent was
in arrears and no ground for eviction had been made out under section 3 ( 1) (a)
of tho U.P. (Temporary) Control of Rent and Eviction Act, 1947. &.
On appeal the Civil Judge was of tho view that the rent in arrears on the
date of agreement did not lose its character as "arrears of rent" merely
because there. was ·an agreement to pay it in instalments. The High Court
affirmed the finding of the Civil Judge.

In appeal to this Court it was cont<mded Olll behalf of the appellant that out •
of Rs. 150/- due to the respondent on the date of his notice only Rs. 75/- was
E
due towards the arrears of rent for threei months preceding the notice
while the balance of Rs 75(- was a distinct liability under the agreement and
therefore, could not be treated and tacked on as arrears of rent to the rent due
for the threei months preceding the date of notice, for the purpose of section
3(1)(a) of the Act.

Allowing the appeal and accepting the appellant's contention, G

HELD : 1. The appellant was not in "arrears of rent for more than .three
months" within the meaning of section 3(l)(a) of the Act and therefore was
not liable to be evicted under the clause. [71 FJ

2. As a result of the agreement dated June 13, 1960 the pre-agreement
arrears lost their original character of "arrears of rent" and assumed the
character of a consolidated debt, which under the terms of the agreement, was
paYable by the debtor (appellant) in .monthly instalments. The agreement
..

68 SUPREME COURT REPORTS (1980] 2 S.C.R.

""' brought into being a new cause of action and created a liability against the
tenant, indep<ndent and distinct from that founded on the rent note or the lease
of the premises. The· arrears of three· instalments. due under. the agreemen~ ·
had ceased to be "arrears of rent" and could not be tacked on tOt the rent due
for three months preceding the date of notice, for the purpose of the section.
[71 A-Bl ·'
•
·s CIVIL APPELLATE JuRJsorcnoN :. Civil Appeal No. 2601 of 1969.
Appeal by Special Leave1 from the Judgment dated 21-8-1969 of
the Allahabad High Court in Second Appeal No. 2693/6~.
W. S. Barlingay and R. C. Kohli for the Appellant.
S. L. Aneja and K. L. Taneja for the Respondent.
·C
The Judgment of the Court was delivered by
SARKARIA, J. This appeal by special leave is directed against a
judgment, dated August 21. 1969, of the High Court of Allahabad,
affirming on second appeal the judgment of the Civil Judge, Dehra
D Dun. It arises out of these facts :
Umrao Singh, respqndent herein, who died during the pendency
of proceedings in this Court and is substituted by his legal representa-
tives, instituted a suit on Septeml••r 26, 1961 against Ram Deo, appelc
larit herein, for damages and '\)!' eviction from House No. 122B, f
Choharpur, District Dehm Dun. Umrao Singh was the landlord of the
'E suit premises. Ram Deo was occupying the premises at a monthly rent
of Rs. 25.
On June 13, 1960, a sum of Rs. 600 wa~ due to the respondent
from the appellant as arrears of rent and an agreement was execnted
between the parties on that date, according to which, the tenant had to
pay Rs. 50 every month to the respondent, to wit Rs. 25 toward~
liquidation of the compounded ar.rears of rent, and Rs. 25 per month
towards the current rent falling due. The appellant fell in arrears
again. Thereupon, the respondent served a notice of demand upon
the plaintiff on August 21, 1961, requiring him to pay Rs. 380 as
the arrears of rent (Rs. 5 being balance due from the period April 10,
G 1960 to May 9, 1960 and Rs. 370 for the period from May 10. 1960
to August 9, 1961) within one month from the receipt of the notice.
The tenant-appellant pleaded that the parties had acted upon the
said agreement dated June 12, 1960, and on settlement of accounts
in April 1961, a sum of Rs. 305 was alleged to be due to the respon-
'H dent. Thereafter the appellant made another payment of Rs. 50 to •
the respondent on June 6, 1961. On September 27. 1961 appellant
tendered to the respondent a sum of Rs. 200. The respondent did not
RAM DEO v. UMRAO SINGH ( Sarkaria, J.) 69

accept this tender, and instead, instituted the suit for damage& and
eviction of the appellant from the said premises.
The tenant further pleaded that the arrears of rent due at the date
of notice was Rs. 75 only which did not exceed three months' rent,
that the rest oti the amount (Rs.. 75) demanded represented only past
arrears covered by the agreement in respect of which the landlord had
• waived his right of ejectment~
The trial court held that from Ex. A-2, it was clear that only
three months' rent was in arrears and therefore, no ground for eviction
had been made ont under Section 3(a) of the U.P. (Temporary)
Control of Rent and Eviction Act No. III of 1947 (hereinafter referred
to as the Act) . With this reasoning, the trial court dismissed the
c
respondent's petition for eviction.
On appeal, the Additional Civil Judge, Dehra Dun, by his judg-
ment dated May 29, 1963, reversed the, finding of the Munsif and
held that thei rent which was in arrears upto June! 13, 1960 and· which
was the subject-matter of the agreement of that date, did not lose its
character as "ar.rears of rent" merely because there was an agreement
to pay the same in instalments. On these premises, he allowed the
appeal and directed eviction of the tenant.
The tenant carried a further appeal to the High Court. The High
Court affirmed the finding of the Civil Judge and dismissed the appeal.
E
Hence this appeal by the tenant.
Dr. Barlingay, learned counsel for the appellant has advanced two
contentions. First, that out of the amount of Rs. 150 due to the
respondent at the date of the notice, Rs. 75 was due under the agree-
ment dated June 12, 1960, and that amount could not be treated as·
arrears, of rent and tacked on to three months current rent in
arrears, for the purpose of chmse (a) of Section 3 ( {) of the Act. It
is argued that the liability to pay the past amount of Rs. 75 arises
out of the aforesaid agreement which furnished an independent cause
of action different from that founded on the rent note or the lease of
the premises. Second, that Section 114 of the Transfer of Property
Act will be applicable to the sitnation because this is a matter on G
which the Rent Act is silent. Since the tenant has cleared all the arrears
of ren~ on the first hearing of the suit, he could not be evicted in view
of the provisions contained in Section 114 of the Transfer of Property
Act.

• In reply, Mr. Aneja submits that the pre-agreement arrears of rent
did not lose their original character as arrears cJ. rent, merely because
B
tlte landlord had agreed to allow the ·tenant to clear them in instal-
70 SUPREME COURT REPORTS [1980] 2 S.C.R.

ments. It is emphasised that what was intended to be an accommoda-
tion could not be turned into a handicap for the landlord. It is argued
that since on the date of the demand notice served upon the appellant,
the latter was admittedly liable to pay Rs. 150; Rs. 75 towards tl1e
rent of 3 months prior to August 12, 1961 and Rs. i5 towards the •
rent of three months preceding the demand notice, he was in arrears,
.B of rent for a period of "mOirn than three months" within the meaning
of clause (a) of Section 3 of the Act, and, as such, was liable to be •
evicted.
W6 will now deal with the first contention canvassed by Dr.
Barlingay.
c The material part of Section 3 of the Act reads as follows :
"3 ( 1). Subject to any order passed under sub-section ( 3)
no suit shall, without the permission of the District Magis-
trate, be filed in :my civil court against a tenant for his
eviction from any accommodation, except on one or mare of
the following grounds : - '
(a) That the tenant is in arrears of rent for more than
three months and has failed to pay the same to the
landlord within one month of the service upon him
of a notice of demand. f
:E (b) to (g) .................................... "
In order to make out a ground for ·eviction under clause (a) of
Section 3 (1;, the landlcrd must establish three facts : (i) that the
tenant is in arrears of rent; (ii) that such arrears are of rent for more
than three months; and (iii) the tenant has failed to pay the same to
the landlord within one month of the service upon him of a notice of
demand. If any one of these factual ingredients is not established, no
order of eviction can be passed under this Clause. In the present
case, there is no dispute that at· the date of the notice, the tenant owed
an amount of Rs. 150 to the landlord, out of which Rs. 75 represented
tlrree months' rent preceding the notice. There is also no dispute that •
G ttle balance of Rs. 75 due from the tenant related to the period prior
to the agreement, dated June 12, 1960, and under the agreement, the
tenant was bound to pay the same in three monthly instalments, which
he had, in breach of the agreement, failed to pay. Controversy centres
round the question, whether this balance of Rs. 75 could also be
treated as "arrears of rent" and tacked on to the anears of rent
:H relating to the three months preceding the notice for the purpose of •
clause (a) of Section 3(1) of the Act. In our opinion, the answer ta
this question must be in the negative. As a result of the aforesaid
I

RAM DEO v. UMRAO SINGH (Sarkaria, !.} 71

agreement, the pre-agreement arrears lost their original character a~
"arrears of rent" and assumed the ,character of a consolidated debt
A
I
f

which; under the terms of the agreement, was payable by the debtor
(appellant) in monthly instalments. the agreement had in respect of
the past arrears, brought into being a new cause of action and created
a liability against the tenant, independent and distinct from that founded
- on the rent note or the lease of the premises. Consequently if the B
appellant, in breach of the agreement, defaulted to pay any instalment,
' the remedy of the respondent (creditor) would be to file a suit for
the recovery of the amount due on the basis of the agreement, dated
June 12, 1960. Thus, the arrears of three instalments due under the
agreement had ceased to be "arrears of rent" and could not be tacked
on to the arrears of three months rent d~e at the date of the notice,
c
for the purposes of clause (a) of Sectio,n 3 (I).
The proposition can be tested by taking an example. Supposing,
the appellant had defaulted to pay four monthly instalments of Rs. 25
each in accordance with the aforesaid a1j1'eement, but had regularly paid
the rent as it fell due every month for the post-agreement period. Will D
the respondent in such a situatiO!n be entitled to sue for the eviction
of the tenant on the ground that he has committed four successive
breathe~ and Clefaults under the said. agreement ? The answer is an ·
·obvious 'No'. The respondent's remedy in such a situation, will only
\ he to sue for the recovery of the amounts due on the· foo;t of the
E
oaforesaid agreement.
In the light of the above discussion the conclusion is inescapable,
that for the purposes of clause (a) of Section 3 ( 1) the appellant was
in arrears of rent for thre.e months, only. In other words, he was
not in "arrears of rent for mo.re than three months" within the meaning
-of clause (a), and, as such, was not liable to be evicted under that F
.clause. The High Court and the first appellate court were in error in
holding t0 the contrary.
In the view we take, it is not necessary to deal with the second
·contention canvassed by Dr. Barlingay.
' G
In the result, we allow this appeal, set aside' the decree of the
High Court and dismiss the respondent's suit. In the circumstances
of the case however, we leave the partie~ to pay and Qea:r their own
costs in this Court.

H
P.B.R. · · · ~ppeal allowed.