SARWAN KUMAR ONKAR NATH versus SUBHAS KUMAR AGARWALLA

Citation: [1988] 1 S.C.R. 414 · Decided: 09-10-1987 · Supreme Court of India · Bench: E.S. VENKATARAMIAH · Disposal: Appeal(s) allowed

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Judgment (excerpt)

A 
B 
SARWAN KUMAR ONKAR NATH 
v. 
SUBHAS KUMAR AGARWALLA 
OCTOBER 9, 1987 
[E.S. VENKATARAMIAH, K.N. SINGH 
AND S. RANGANATHAN, JJ.] 
Bihar Building (Lease, Rent and Eviction) Control Act, 1947-S. 
11( l)(d)-Eviction of tenant for default in payment of rent-In the 
absence of any agreement to the contrary, tenant can claim set off 
C against advance payment of rent accepted by landlord in violation of s. 3 
of the Act and the Court cannot order eviction by invoking the doctrine 
of in pari delicto. 
When the appellant did not pay rent for September and October, 
1972, the respondent filed a petition for its eviction from the premises in 
D question under s. U(l)(d) of the Bihar Building (Lease, Rent and Evic-
tion) Act, 1947 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's defence was that it had paid two months' rent in advance at 
the inception of the tenancy with an understanding that it could be set 
off against the rent whenever necessary or required and, further, that 
E since under s. 3 of the Act it was not lawful for the landlord to have 
received any snm exceeding one month's rent in advance, it could not be 
considered as a defaulter in payment of rent for purposes of s. ll(l)(d) 
as, at least one month's rent which had been paid in excess of what was 
permitted under s. 3 was liable to be adjusted towards the arrears. The 
Trial Court dismissed the suit, and his appeal against the same having 
f 
been rejected by the Additional Subordinate Judge, the respondent 
approached the High Court by a Second Appeal. Although it accepted 
the plea that the appellant had paid two months' rent in advance at the 
inception of the tenancy, the High Court arrived at the finding that the 
appellant had failed to pay the rent for the months of September and 
October, 1972, on the ground that the appellant had not requested the 
G 
respondent to adjust it towards the rent due for the aforesaid two 
months. Observing that the rule of in pari delicto did not help the 
appellant in this case, the High Court set aside the concurrent judg-
ments of the two courts below and directed eviction. 
H 
Allowing the appeal by special leave, 
414 
"' 
i· 
• 
SARWAN KUMAR v. S.K. AGARWALLA 
415 
HELD: The appellant could not be treated as a defaulter who had A 
failed to pay rent for two months. [418E) 
(i) The High Court approached the entire case in a technical 
fashion. The respondent was not entitled to receive more than one 
month's rent by way of advance. Yet, the respondent had received in B 
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 inform· 
ing 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 C 
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. D 
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. [418A-D) 
(ii) The High Court was also wrong in coming to the conclusion E 
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. [418El 
Mohd. Salimuddin v. Misri Lal & Anr., [1986) 1 S.C.R. 622, 
relied on. 
Guiab Chand Prasad v. Budwanti & Anr., A.I.R. 1985 Pat. 327, 
referred to. 
Budhwanti & Anr. v. Guiab Chand Prasad., 11987 l 1 Scale 501, 
F 
distinguished. 
G 
CIVIL APPELDATE JURISDICTION: Civil Appeal No. 2607 
of 1987. 
· 
From the Judgment and Order dated 6.1.1986 of the Patna High 
Court in Appeal Decree No. 75 of 1978. 
H 
• 
416 
SUPREME COURT REPORTS 
[1988] I s.c.R. 
A 
Avadh Behari and Y.K. Jain for the Appellant. 
)( · 
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