AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
Advocates
Judges
Acts
  • Article 142 of the Constitution of India
  • the Act
  • Section 11(1)(d) of the Bihar Buildings (Lease, Rent and Eviction) Control Act
  • The Industrial Disputes Act, 1947 (Act 14 of 1947)
  • the said Act
  • Section 11(1)(c) of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1982
  • rent control statutes of other States
  • Rent Control Act
  • Article 141 of the Constitution of India
  • Section 5, Subsection 2 of the 1983 Income Tax Act
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
Advocates
Judges
Acts
  • Article 142 of the Constitution of India
  • the Act
  • Section 11(1)(d) of the Bihar Buildings (Lease, Rent and Eviction) Control Act
  • The Industrial Disputes Act, 1947 (Act 14 of 1947)
  • the said Act
  • Section 11(1)(c) of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1982
  • rent control statutes of other States
  • Rent Control Act
  • Article 141 of the Constitution of India
  • Section 5, Subsection 2 of the 1983 Income Tax Act
Smart Summary

Factual and Procedural Background

The landlord instituted a suit for eviction of the present appellants (tenants) on two grounds: (i) personal necessity and (ii) default in payment of rent as contemplated by Section 11(1)(d) of the Bihar Buildings (Lease, Rent and Eviction) Control Act. The trial court dismissed the suit. On appeal, the first appellate court decreed eviction solely on the ground of rent default. The tenants’ second appeal was also dismissed. The High Court held that mere acceptance of delayed rent did not amount to waiver of the statutory right to evict and confirmed the finding of default. Aggrieved, the tenants approached the Supreme Court by special leave.

Legal Issues Presented

  1. Whether the landlord’s acceptance of delayed rent constituted a waiver of the statutory right to seek eviction for arrears under Section 11(1)(d) of the Bihar Buildings (Lease, Rent and Eviction) Control Act.
  2. Whether the Full Bench decision of the Patna High Court in Raj Kumar Prasad v. Uchit Narain Singh, AIR 1980 Pat 242, remained good law in view of two earlier two-Judge Supreme Court decisions—Gowali Charan v. Surendra Kumar Khandani (1987 Supp SCC 578) and Satyanarain Kandu v. Hemlata (1996 PLR 110).
  3. Whether non-payment of two months’ rent, without the statutory qualifiers of “wilful” or “habitual” default, automatically triggers the landlord’s right to eviction under the Bihar Act.

Arguments of the Parties

Appellants’ (Tenants’) Arguments

  • The High Court’s view was in conflict with the Supreme Court decisions in Gowali Charan and Satyanarain Kandu; therefore, the eviction decree should be set aside.

No detailed arguments of the respondent landlord were recorded in the text.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Raj Kumar Prasad v. Uchit Narain Singh, AIR 1980 Pat 242 (FB) Correct interpretation of Section 11(1)(d) of the Bihar Act regarding arrears of rent and non-waiver by landlord. The Supreme Court affirmed that this Full Bench decision remained undisturbed and continued to represent the correct position of law.
Gowali Charan v. Surendra Kumar Khandani, 1987 Supp SCC 578 Earlier observation that payment of entire rent negated “wilful default.” Held not to lay down any binding law; expressly overruled for lack of reasoning and inconsistency with the statute.
Satyanarain Kandu v. Hemlata, 1996 PLR 110 (SC) Characterised default as “merely technical.” Overruled; Supreme Court held that a cause of action for eviction cannot be nullified on equitable grounds where the statute is mandatory.
E. Palanisamy v. Palanisamy, (2003) 1 SCC 123 Benefits of rent legislation are available only upon strict compliance with statutory duties; equitable considerations are irrelevant. Cited to emphasise mandatory nature of the tenant’s obligation to pay rent within the statutory time frame.
Shri Lakshmi Venkateshwara Enterprises (P) Ltd. v. Syeda Vajhiunnissa Begum, (1994) 2 SCC 671 Rent control statutes protect both landlords and tenants. Quoted to underline that statutory benefits extend to landlords and are enforceable.

Court's Reasoning and Analysis

1. Section 11(1)(d) of the Bihar Act employs the phrase “is in arrears” and omits qualifiers such as “wilful” or “habitual.” Therefore, once two months’ rent remains unpaid, a statutory cause of action for eviction accrues.

2. The obligation to pay rent within the time fixed by contract—or, absent such contract, by the last day of the succeeding month—is a statutory mandate. Strict compliance is required; equitable considerations are irrelevant (E. Palanisamy principle).

3. Acceptance of delayed rent does not amount to waiver because the statutory right arises upon default and cannot be contractually or impliedly extinguished unless the statute so provides.

4. The Court analysed the nature of statutory directions: while time-limits on private individuals are ordinarily mandatory, those on public functionaries are generally directory unless otherwise stated. Accordingly, the tenant’s time-bound duty to pay rent is mandatory.

5. The two earlier Supreme Court decisions relied upon by the tenants (Gowali Charan and Satyanarain Kandu) did not lay down binding precedent. They lacked reasoning and, in the latter, appeared to exercise Article 142 powers. Both were overruled.

6. Consequently, the Full Bench judgment in Raj Kumar Prasad remains authoritative, and the High Court’s decision, which applied it, is correct.

Holding and Implications

HOLDING: The appeal is dismissed.

Implications: The eviction decree in favour of the landlord stands affirmed. The Supreme Court clarifies that under Section 11(1)(d) of the Bihar Buildings (Lease, Rent and Eviction) Control Act, mere arrears of two months’ rent, regardless of the landlord’s subsequent acceptance of payment, entitle the landlord to seek eviction. The decision overrules two earlier inconsistent two-Judge Bench rulings, thereby strengthening the mandatory interpretation of rent-payment obligations and reinforcing that equitable considerations cannot override statutory default provisions. No new costs were imposed.

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    Balwant Singh And Others v. Anand Kumar Sharma And Others

    Khare, C.J— The appellants herein are the tenants. The landlord brought a suit for eviction of the tenant, inter alia on the ground of personal necessity as well as for default in payment of rent. The trial court dismissed the suit. However, the first appellate court allowed the appeal of the landlord and thus the suit on the ground of default was decreed. The second appeal, by the tenants, was dismissed. The High Court held that mere acceptance of delayed rent by the landlord did not amount to waiver of the right which was accrued to him under the Act and also the tenant has committed default in payment of the rent. It is against the said judgment, the tenants preferred the present appeal by means of a special leave petition.

    2. When the matter came up before a Bench of this Court, the Bench was of the view that the case may require consideration of the correctness of the view taken by a Full Bench of the Patna High Court in Raj Kumar Prasad v. Uchit Narain Singh AIR 1980 Pat 242, 1980 Pat LJR 195 (FB) in view of two decisions of this Court in Gowali Charan v. Surendra Kumar Khandani 1987 Supp SCC 578 and Satyanarain Kandu v. Hemlata 1996 PLR 110 (SC) both by two-Judge Benches and as such has referred the matter to a Bench of three learned Judges. It is in this way, this matter has come up before us. Learned counsel for the appellant urged that the view taken by the High Court is in conflict with the two decisions of this Court and therefore the judgment under challenge deserved to be set aside. We do not find any merit in the argument for the reasons stated hereinafter.

    3. Section 11(1)(d) of the Bihar Buildings (Lease, Rent and Eviction) Control Act reads thus:

    “11. Eviction of tenants.—(1) Notwithstanding anything contained in any contract or law to the contrary but subject to the provisions of the Industrial Disputes Act, 1947 (Act 14 of 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:
    (a)-(c)***
    (d) where the amount of two months' rent lawfully payable by the tenant and due from him is in arrears by not having been paid within the time fixed by contract 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;”

    4. The provisions of the said Act would clearly show that unlike rent control statutes of other States, the expression “wilful default” or “habitual default” has not been used therein. The words are “is in arrears”. In the event rent for two months is not paid, a cause of action arises. The statute mandates that the rent should be paid within the time fixed by the contract and in absence thereof by the last date of the month next following. The obligation on the part of the tenant to pay rent in the manner laid down under the Act, being a statutory one, he must comply therewith strictly. The statute, therefore, in other words, prescribes the period within which the rent must be rendered to the landlord by a tenant. When the statute lays down the period during which the rent is required to be paid or deposited, the same is required to be complied with.

    5. Recently, in E. Palanisamy v. Palanisamy (2003) 1 SCC 123 a Division Bench of this Court observed:

    “The rent legislation is normally intended for the benefit of the tenants. At the same time, it is well settled that the benefits conferred on the tenants through the relevant statutes can be enjoyed only on the basis of strict compliance with the statutory provisions. Equitable consideration has no place in such matters.”

    6. It is also pertinent to note that the Rent Control Act is not only a beneficial enactment for the tenant but also for the benefit of the landlord. [See Shri Lakshmi Venkateshwara Enterprises (P) Ltd. v. Syeda Vajhiunnissa Begum (1994) 2 SCC 671.]

    7. Yet there is another aspect of the matter which cannot be lost sight of. It is a well-settled principle that if a thing is required to be done by a private person within a specified time, the same would ordinarily be mandatory but when a public functionary is required to perform a public function within a time-frame, the same will be held to be directory unless the consequences therefor are specified. In Sutherland's Statutory Construction, 3rd Edn., Vol. 3, at p. 107, it is pointed out that a statutory direction to private individuals should generally be considered as mandatory and that the rule is just the opposite to that which obtains with respect to public officers. Again, at p. 109, it is pointed out that often the question as to whether a mandatory or directory construction should be given to a statutory provision may be determined by an expression in the statute itself of the result that shall follow non-compliance with the provision. At p. 111 it is stated as follows:

    “As a corollary of the rule outlined above, the fact that no consequences of non-compliance are stated in the statute, has been considered as a factor tending towards a directory construction. But this is only an element to be considered, and is by no means conclusive.”

    8. It is in the aforementioned backdrop the decisions of this Court relied upon by Mr Upadhyay are required to be considered.

    9. In Gowali Charan v. Surendra Kumar Khandani 1987 Supp SCC 578 this Court did not lay down any law within the meaning of Article 141 of the Constitution of India. The judgment does not contain any reason. It does not set out any fact nor did it take notice of any precedent. It is difficult to ascertain as to on what grounds this Court observed:

    “Having regard to the fact that the entire rent for the period in question from January-February 1967 to January-February 1968 had been paid to the plaintiff, we do not think that the High Court was justified in holding that the plea of wilful default has been established entitling the plaintiff to a decree for eviction under Section 11(1)(c) of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1982.”

    10. This decision in our opinion does not lay down the correct law and must be overruled.

    11. In Satyanarain Kandu v. Hemlata 1996 PLR 110 (SC) this Court passed an order presumably in exercise of its jurisdiction under Article 142 of the Constitution of India. In that case, it was categorically held that the default had taken place but the same was held to be merely a technical one. If a cause of action arose for the landlord to file a suit for eviction against the tenant, such a cause of action cannot be held to be non-existent only because, in the opinion of this Court, the default was a technical one. The said decision also does not lay down the correct view of the law and must be overruled.

    12. We, therefore, are of the opinion that the High Court has rightly held that by reason of the said two decisions the Full Bench decision of the High Court cannot be said to have been overruled.

    13. In CA No. 5077 of 1998, which we have decided today, we have held that where a statute empowers the court to extend time or further time when a tenant fails to deposit rent within the stipulated time, only in such cases, the court possesses power to extend time and in no other cases.

    14. For the aforesaid reasons, the appeal is dismissed. However, there shall be no orders as to costs.

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    Balwant Singh And Others v. Anand Kumar Sharma And Others
    (Dec 28, 2003)