Holding

The tenant was in arrears despite the advance rent, Section 18 was inapplicable, and the Karnataka Rent Act, 1999, does not apply retrospectively, thus the eviction under Section 21(1)(a) is justified.

Summary

The landlord filed an eviction suit under clause (a) of Section 21(1) of the Karnataka Rent Control Act, 1961, alleging that the tenant was in arrears of rent. The tenant argued that the advance rent paid at the commencement of tenancy should be adjusted against the arrears, and that Section 18, which limits advance rent to two months, barred the landlord from demanding further rent. The Court held that the proviso to Section 2(2) exempted the building (constructed in 1977) from the operation of Section 18 for the first five years, so the landlord could lawfully require advance rent. Moreover, the tenant remained obligated to pay rent month‑by‑month despite the advance rent, and the arrears were not discharged by the advance payment. The Court also rejected the contention that the Karnataka Rent Act, 1999, which offers additional tenant protection, applied retrospectively to the pending proceedings. Consequently, the Supreme Court affirmed the High Court’s finding of arrears and dismissed the appeal, granting the tenant four months to vacate after clearing arrears.

Issues considered

Whether advance rent paid by the tenant can be adjusted against alleged rent arrears to defeat eviction under Section 21(1)(a).
Whether Section 18 of the Karnataka Rent Control Act, 1961, limiting advance rent, applies to the premises within five years of building construction.
Whether the Karnataka Rent Act, 1999, applies retrospectively to eviction proceedings pending before the Supreme Court.

Legislation cited

Karnataka Rent Act, 1999s. 70
Karnataka Rent Control Act, 1961s. 18, s. 21(1)(a), s. 2(2)

Subjects

evictionrent arrearsadvance rentKarnataka Rent Control ActSection 18Section 21retrospective legislationKarnataka Rent Act 1999landlord-tenant law

Judgment

RAMINDER SINGH SETHI A
v.
D.VUAYARANGAM

APRIL 17, 2002

[R.C. LAHOTI AND B.N. AGRAWAL, JJ.] B

Karnataka Rent Control Act, 1961:

Ss.2(2), 18 and 2/(l)(a)-Tenant in arrears of rent-Suit by landlord
for eviction of tenant filed within five years of construction ofpremises-s. 18 C
prohibiting receiving of advance rent exceeding 2 month's rent-Tenant
contending that advance rent was available with landlord for atfjustment-
Held, in view ofproviso to s.2(2). up to the date offiling of suit s.18 was not
applicable to the premises and landlord was not prevented by law from securing
advance payment of rent by consent of the parties-Inspite of the landlord D
, having advance rent available with him tenant is bound to pay or tender
amount of rent falling due month by month on the date on which it is payable
•
as per law or contract-No fault can be found with findings of High Court
that tenant was in arrears and ground for eviction u/s. 2/(l)(a) was made
out-The question of additional protection to tenant confe"ed by 1999 Act or
moulding relief by reference thereto does not arise as the 1999 Act has not E
been given retrospective effect and rights of parties to litigation stand
crystallised on the date of commencement of the list-s. 70 ofthe 1999 Act does
not provide for the new Act to be applicable to appeal or Proceedings pending
y before Supreme Court-Karna/aka Rent Act, 1999-S.70.
J

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 582 of F
2000.

From the Judgment and Order dated 20.9.1999 of the Kamataka High
Court in H.R. R.P. No. 3740 of 1992.

P.R. Ramasesh, Ab hay Prakash Shahay and Amar L. V. for the Appellant. G
+· M.S. Ganesh, Ms. Nikhil Nayyar and Mrs. Urmila Sirur for the
Respondent.

The Judgment of the Court was delivered by
H
213
-'·
'

214 SUPREME COURT REPORTS [2002) 3 S.C.R.
-t.
A The landlord/respondent filed a suit for eviction of the tenant-appellant
on the ground available under clause (a) of Sub-Section (1) of Section 21 of
the Kamataka Rent Control Act, 1961 (hereinafter the "Act", for short).
Though the eviction was sought for on other grounds as well but this is the
only ground on which eviction has been ordered by the High Court, and
B therefore, we shall confine ourselves to the question of availability of this
ground for eviction.

The High Court has found that on the date of initiation of proceedings,
the tenant~appellant was in arrears of rent ·which he neither paid nor tendered
•
.,,.
within two months of the date of service of notice on him demanding payment
C of the arrears ofrent. However, it has also been found that the tenant-appellant
had paid some amount by way of advance rent at the time of creation of
tenancy. The details of the arrears and the advance rent are not relevant;
suffice it to say if the amount of advance rent is adjusted against the amount
of arrears found due and payable by the tenant then he is not in arrears. On
the other hand, if the amount of advance rent is not available for adjustment
D then the tenant is in arrears. Another relevant fact which is not in controversy
is that the building wherein the tenancy premises are situated was constructed
. in the year 1977 when the tenant was inducted into the tenancy premises. The
period of default in payment of rent is referable to the years 1978 to 1980.
The eviction proceedings were commenced in the year 1982 when the period
E of 5 years from the date of construction of the building had not expired.

According to Section 18 of the Act, the landlord is prohibited from
receiving 'by way of advance rent any amount exceeding two months rent.
Proviso to sub-Section (2) of Section 2 provides that Part III of the Act which
consists of Section 14 to 18 (both inclusive) shall not apply to a building
F constructed after the 1st day of August, 1957 for a period of 5 years from the
date of construction of such building. Thus up to the date of the filing of the
suit, undisputedly Section 18 was not applicable to the building wherein the
tenancy premises are situated.

Every tenant is obliged to pay or tender rent to the landlord within 15
G days of the month to which the rent relates. The purpose of advance rent is
to protect the landlord from the unscrupulous tenant who may run into arrears
and vacate the premises and comfortably walk away with arrears. The advance _
rent is available for adjustment or is liable to be refunded at the time of
vacating of the premises except where the law or the contract between the
H parties provides to the contrary. We have already noticed that the provisions
RAMINDER SINGH SETHI v. D. VIJAYARANGAM 215
..,. of the Act do not apply to the premises and, therefore, the landlord was not A
prevented by law from securing advance payment of rent by consent of the
parties. It is not the case of the tenant that the contract between the parties
provides for adjustment of rent no sooner it fell into arrears from out of the
amount of advance rent. In short, the tenant-appellant was not absolved of his
obligation to pay the rent due month by month in spite of an amount of
B
advance rent being available with the landlord. The High Court has rightly
discarded the submission made on behalf of the tenant-appellant that the
,. landlord while serving the notice of demand on the tenant should have himself
~ allowed an adjustment of the amount of the advance rent against the arrears
and should have confined his demand only to such amount in arrears as
'. exceeded the amount of advance rent or should have waited till the amount c
of rent in arrears had accumulated to exceed the amount of advance rent. In
spite of the landlord having the amount of advance rent available with him
the tenant is bound to pay or tender the amount of rent falling due month by
month on the date on which it is payable as per law or contract.
D
For the foregoing reasons, we are of the opinion that no fault can be
found with the fmding arrived at by the High Court that the tenant was in
, arrears and the ground for eviction under Section 2l(l){a) of the Act was
• made out.

It was further submitted by the learned counsel for the appellant that E
during the pendency of this appeal the Karnataka Rent Act, 1999 has come
into force with effect from 27th December, 2001 which gives additional
protection to the tenant and as the proceedings for eviction are still pending
and have not achieved fmality the benefit of additional protection conferred
by the new Act should be extended to the tenant-appellant and this Court
.,,, should refuse to pass a decree for eviction unless the ground for eviction
F
under the new Act is made out. We do not find any merit in the submission
so made. The new Act has not been given retrospective effect. Ordinarily, the
rights of the parties to litigation stand crystalised on the date of the
commencement of lis. Section 70 of the new Act which speaks of Repeal and
Savings and which also makes provision for the new Act being applicable to G
certain cases and proceedings, does not speak of the new Act being applicable
to the appeal or proceedings pending before the Supreme Court. The question
..,... of testing the availability of any ground for eviction by reference to the
provisions of new Act or moulding the relief by reference thereto does not
arise. H
A
I

216 SUPREME COURT REPORTS (2002) 3 S.C.R.

·A The appeal is held devoid of any merit and is dismissed. However, the
tenant-appellant is allowed four months' time for vacating the suit premises
subject to his clearing all the arrears of rent up-to-date within a pe~iod of four
weeks and filling usual undertaking within th~ same time to hand over vacant
and peaceful possession of the premises to the landlord-respondent on the
B expiry of the said period of four months.

R.P. Appeal dismissed.