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Bhagirath Agarwal v. M/S Simplex Concrete & Piles (India) Pvt. Ltd. & Ors.

Civil Appeal · 2017 INSC 262Decided 23 Mar 2017
Civil Appeal Nos. 7544-7546 of 2008
Justice Kurian Joseph · Justice R. Banumathi

Background

The landlord-appellant was denied interest on arrears of rent by the City Civil Court at Calcutta while allowing the defaulting tenant to pay the arrears in installments in an ejectment suit. The High Court declined to interfere with this order, prompting the landlord's appeal to the Supreme Court. The tenant had defended the default by claiming the landlord had denied certain amenities, but the Trial Court had not actually granted any set-off for this.

Decision Breakdown

The Supreme Court held that Section 17(2A) of the West Bengal Premises Tenancy Act, 1956 clearly mandates that whenever payment of rent arrears is permitted in installments, the landlord must be granted interest on those arrears: this is a statutory entitlement, not a matter of judicial discretion. The Court clarified that while a tenant can claim a set-off under Section 34 for amenity-related expenses, no such set-off had actually been granted here, so it could not be used to deny interest. The appeal (C.A. Nos. 7544-7546 of 2008) was allowed, and the connected appeals (C.A. Nos. 7552-7554 of 2008) were disposed of in the same terms, with the Court making clear the appellant was entitled to interest under the Act.

Lesson Learnt

When a tenancy statute provides for interest on delayed rent payments made in installments, courts cannot waive that interest merely because the tenant raises other grievances against the landlord: such statutory entitlements are mandatory, not discretionary.

Official source (sci.gov.in)View Judgment (PDF)

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