High CourtDivision BenchAppeal disposed of in favour of the appellant; ...

BHAGIRATH AGARWAL v. M/S. SIMPLEX CONCRETE & PILES (I) PVT. LTD. & ORS.

Case / Petition Number:Civil Appeal Nos. 7544-7546 of 2008
Neutral Citation:[2017] 3 S.C.R. 698

Case Details & Bench

Court
High Court
Hon'ble Judges
  • Kurian Joseph, J.
  • R. Banumathi, J.
Judgment Date
2017-03-23
Court Decision / Holding
Appeal allowed. The appellant landlords shall be entitled to interest on arrears when payment is allowed in installments under Section 17(2A) of the West Bengal Premises Tenancy Act, 1956. No costs. The connected Civil Appeals (CA Nos. 7552-7554/2008) were disposed of in light of this order.
Final Disposition
Appeal disposed of in favour of the appellant; landlord entitled to interest; no costs

Parties to the Case

Appellants / Petitioners

  • BHAGIRATH AGARWAL

Respondents

  • M/S. SIMPLEX CONCRETE & PILES (I) PVT. LTD. & ORS.

Legal Representation & Advocates

Counsels for Petitioners

  • • S.B. Upadhyay
  • • Pawan Upadhyay
  • • Mrs. Anish Upadhyay
  • • P. Mishra
  • • Nishan Kumar
  • • Ms. Sharmila Upadhyay
  • • Syed Ali
  • • Ahmad
  • • Syed Tanweer Ahmad
  • • S.S. Bandyopadhyay
  • • Mohan Pandey
  • • Ms. Daisy Hannah
  • • Shekhar Kumar

Case Synopsis & Summary

This Supreme Court judgment concerns arrears of rent under the West Bengal Premises Tenancy Act, 1956 and the entitlement to interest when rent arrears are permitted to be paid in installments. The appellant-landlord challenged an order of the City Civil Court directing the tenant to pay arrears in installments, with subsequent default but without any interest on arrears. The High Court dismissed the landlord’s challenge, and the matter reached the Supreme Court. The core issue is whether, under Section 17(2A) (and allied subsection 17(2A)(b)) of the Act, there is a statutory obligation to pay interest on arrears when payment is allowed in installments, and whether any offset for amenities (as contemplated by Section 34) can affect such interest. The Court held that the statutory text is explicit: whenever payment of rent including arrears is allowed in installments, the beneficiary must be granted interest on the arrears, calculated from the date the amount became payable to the date of the order, at the rate specified in Section 17(1). This is a statutory right and entitlement of the landlord, irrespective of any justification offered for non-payment. The judgment clarifies that this is not discretionary relief and that, when installments are permitted, the interest must be paid. The Court allowed the appeal, held the appellant entitled to interest, and disposed of the connected appeals with no costs. It also clarifies the limited role of set-off under Section 34.

Provisions of Law Cited

West Bengal Premises Tenancy Act, 1956, Section 17(2A)West Bengal Premises Tenancy Act, 1956, Section 34

Submissions & Arguments

Contentions of Appellants / Petitioners

The appellant-landlord contends that where the statute provides for payment of rent including arrears in installments, it is mandatory that interest be added on the defaulted amount. The statutory text in Section 17(2A) contemplates that, once installments are permitted, the tenant or the beneficiary must pay interest on the arrears at the rate prescribed in Section 17(1). The landlord argues that, under Section 34, a set-off may be available only in limited circumstances (e.g., when the landlord has not provided amenities and the tenant has incurred expenditures). However, according to the appellant, such set-off does not negate the statutory entitlement to interest where installments are allowed. The trial court’s order directing installment payments without interest is alleged to be contrary to statutory rights, and the High Court’s refusal to interfere was challenged.

Contentions of Respondents

The respondents argued that the landlord’s conduct in denying amenities could provide grounds for justification of non-payment or for reducing or denying interest. They claimed possible set-off under Section 34 for expenses incurred in furnishing amenities, or at least a discretionary approach by the Court in balancing equities in a default scenario. The respondents asserted that the trial court’s order and the High Court’s decision should stand given equity and the landlord’s conduct, and that interest need not be awarded in such circumstances.

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Extracted Judgment Text

Exact text extracted from official judgment records.

[2017) 3 S.C.R. 698 . A ## BHAGIRATH AGARWAL v. M/S. SIMPLEX CONCRETE & PILES (I) PVT. LTD. & ORS. _y_ (Civil Appeal Nos. 7544-7546 of2008) B . MARCH 23, 2017 ## [KURIAN JOSEPH AND R. BANUMATHI, JJ.] c D E _FVest Bengal Premises Tenancy Act, 1956_ - _ss.17(2A), 34_ - _Denial_ 1~[ _interest for arrears of rent to be paid in installment_ - _Propriety of_ - _Default in payment of rent by respondent-tenant_ - _Ejectment suit by appellanl-landlord_ - _City civil court directed respondent-tenant to pay arrears of rent in installments, howeve1; without any interest thereon_ - _Challenge by appellant in High Court, rejected_ - _On appeal, held: The statutory provision is very clear_ - _Whenever payment of rent including arrears is permitted to be paid in instal/Juents, the statute contemplates 'that the beneficiary shall be granted interest_ - _Thus, once the rent including the arrears is permitted to be paid in i11stall111ents, there is no discretion available with the Court to deny interest_ - _It is the statutory right and entitle111ent of the landlord to get interest_ - _This is irrespective of the iustification or expla11atio1t, if any, available ,for the nonpayment_ - _Appella111 shall be entitled to interest._ ## Disposing of the appeals, the Court F G H HELD: 1.1 The statutory provision of Section 17(2A) of the West Bengal Premises Tenancy Act, 1956 is very clear. Whenever payment of rent including arrears is permitted to be paid in installments, the Statute contemplates that the beneficiary shall be granted interest. This is irrespective of the justification or explanation, if any, available for the non-payment. No doubt, under Section 34 of the Act in case the landlord has refused to provide the amenities and in case the tenant spent money for p~oviding the amenities, the said amount, subject to the conditions therein, can be set off. Though, there is such a case set np by the tenant, yet no set off has been granted by the Trial Court, and the tenant was permitted to pay the dues in installments. Once the arrears arc -l1ermitted to be paid in installments, there is no discretion available with the Court to deny interest. It is not a 698 BHAGIRATH AGARWAL v. M/S. SIMPLEX CONCRETE & 699 PILES (I) PVT. LTD. discretionary relief; it is the statutory right and entitlement of A the landlord to get interest. Th~ appellant sh~ll be entitled to interest. [Para 6] · [700-F-H; 701-A] CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 75447546 of2008. From the Judgment and Order dated 29.11.2007 of the High Court at Calcutta in C. 0. No. 2503 of2006 with C. 0. No. 3811 of2006 with C. A. N. No. 7802 of2006 B ## WITH C. A. Nos. 7552-7554 of2008. c S.B. Upadhyay, Sr. Adv., Pawan Upadhyay, Mrs. Anish Upadhyay, P. Mishra, Nishan Kumar, Ms. Sharmila Upadhyay, Syed Ali,Ahmad, Syed Tanweer Ahmad, S.S. Bandyopadhyay, Mohan Pandey, Ms. Daisy Hannah, Shekhar Kumar, Adv.s. for the appearing parties. The Judgment of the Court was delivered by D ## KURIAN, J. C. A. Nos. 7544-7546/2008 I. The appellant is aggrieved since he has been denied interest for the arrears of rent vide order dated 22.05.2006 passed by the City Civil Court at Calcutta in the Ejectment Suit No. 717 of I 992. To the extent relevant, the order reads as follows:- E ·, "That the petitions filed by the defendant under Section I 7(2) and I 7(2A)(b) of the West Bengal Premises.Tenancy Act are allowed on contest without any cost. The petition filed- by the defendant for abatement of rent is dismissed on contest. The defendant is a defaulter in payment of rent since November, 1990@Rs.l 9,000/-permonth. Thus the total defaulting period· is 186 months i.e. since November, 1990 to April, 2006. Thus . the total amount ofrent payable by the defendant is Rs.I 9,000/x 186 = Rs.35,34,000/-. From the submission of the Id, Lawyer it is available that the defendant already paid Rs.5 lakhs as per order of the Hon'ble Court. So the due amount is Rs.35,34,000/- Rs.6,00,000/- = Rs.29,34,000/-. The defendant is directed to · pay the above said arrear rents by ten monthly installments @ RSJ,00,000/- per installment along \\'.ith current rent. The last installment wil1 be Rs.2,34,000/-. Each installment is to be paid F G H 700 SUPREME COURT REPORTS [2017] 3 S.C.R. A within the last working day of each m'onth. The first installment is to be paid by 30[1] h June, 2006." 2. Since the appellant was denied interest, the matter was pursued before the High Court. However, the High Court declined to interfere with the order passed.by the City Civil CoU1t and hence this appeal. B c D 3. It is not in dispute that the respondent/tenant was permitted to pay the arrears of rent in installments. No doubt, there was a defence taken by the respondent that the default in payment of the arrears of rent was on account of the conduct of the appellant/landlord in denying amenities. Yet the City Civil Court has directed the'respondent/tenant to pay the arrears of rent in installments and there was no appeal at the instance of the respondent/tenant. 4. The view_ adopted by the City Civil Court seems to be that there is a discretion vest in the Court and in exercise of that discretion, taking note of the conduct of the landlord, the City Civil Comt thought.it fit to deny interest and permitted payment of only the defaulted arrears. 5. We are afraid, the view cannot be sustained. Section I 7(2A) of the West Bengal Premises Tenancy Act, 1956 reads as follows:- E F G "Provided that where payment is permitted by installments, such sum shall include all amounts calculated at the rate of rent for the period of default including the period subsequent thereto upto the end of the month previous to that in which the order under this sub-section is to be made with interest on any such amount calculated at the rate specified in sub-section ( 1) from the date when such amount was payable upto the date of such order." 6. The statutory provision is very clear. Whenever payment of rent including arrears is permitted to be paid in installments, the.Statute contemplates that the beneficiary shall be granted interest. This is irrespective of the justification or explanation, if any, available for the non-payment. No doubt,_ under Section 34 in case the landlord has refused to provide the \lmenities and in case the landlord spent money for providing the amenities, the said amount, subjecttotl1e conditions therein, can be set off. Though, there is such a case set up by the tenant, yet no set off has been granted ,by the Trial Court, and the tenant was permitted to pay th<ulues in installments. Once the arrears are permitted to bj!'.paid in installments, there is no discretion available with the Court to deny interest. H . 701 BHAGIRATH AGARWAL v. M/S. SIMPLEX CONCRETE & PILES (I) PVT. LTD. [KURIAN, J.J, It is not a discretionary relief; it is the statutory right and entitlement.of A the landlord to get interest. 7. Therefore, this appeal is allowed. It is made clear that the appellant shall be entitled to interest under the West Bengal Premises Tenancy Act, 1956. No costs. C.A. Nos. 7552-7554/2008 B 8. In view of the order passed in C.A. Nos. 7544-7546/2008; these appeals are disposed of. No costs. Divya Pandey Appeals disposed of. ·-' -0