Rent deposits made in the landlord’s account remain subject to final adjudication where prior deposits were unchallenged.

The respondent-landlord instituted Title Suit No. 232/2015 before the Munsiff No. 1, Dibrugarh, seeking recovery of khas possession and arrear rent, alleging that the petitioner-tenant had defaulted in payment of monthly rent of ₹802 from June 2014 onwards despite notice to vacate.

The petitioner contended that rent had been regularly paid through account-payee cheques, including payments of ₹10,560 dated 24 April 2015, ₹20,000 dated 18 April 2016, and ₹52,800 dated 24 January 2020.

During the pendency of the suit, the respondent filed Petition No. 668/2020 seeking a declaration that the deposit of ₹52,800 into his bank account, allegedly without his knowledge or consent, was illegal and requesting that the amount be returned to the petitioner.

By order dated 16 November 2022, the Trial Court allowed the petition and directed the respondent either to retain or return the amount, holding that the transfer of arrear rent was a matter of compromise and that the deposit had been made without consent.

The petitioner challenged that order under Article 227 of the Constitution read with Section 151 CPC.

The Court applied Article 227 of the Constitution, under which the High Court may interfere with an order of a subordinate court where the court has exercised jurisdiction not vested in it, failed to exercise jurisdiction vested in it, or acted illegally or with material irregularity; however, Article 227 jurisdiction is supervisory and cannot be used as a second appeal for reappreciation of evidence.

Section 151 CPC preserves the inherent powers of the civil court.

The Court also considered Section 5(4) of the Assam Urban Areas Rent Control Act, 1972, under which, after institution of a suit, a tenant may be required to deposit arrears before the court; however, the Court held that the provision was not decisive because the landlord had not refused to accept rent and had previously raised no objection to deposits made into his account.

The determination of default was required to be made with reference to the tenant’s status as on the date of institution of the suit, while subsequent payments remained subject to the final adjudication of the suit.

The High Court found that the petitioner had continued depositing rent through account-payee cheques even after institution of the suit, and that the payments of ₹10,560 in 2015 and ₹20,000 in 2016 were on record and had not been specifically objected to by the respondent.

The respondent challenged only the 2020 deposit of ₹52,800, despite having admitted during cross-examination that he had received the rent payments and had not returned the money.

In these circumstances, the Court held that the deposit could not simply be characterized as an illegal payment made without consent.

Nevertheless, whether the petitioner was a defaulter remained a matter for determination in the pending title suit, primarily with reference to the position existing when the suit was filed; later payments could not conclusively determine that issue and would remain subject to the suit’s outcome.

The Trial Court’s order was therefore not wholly perverse, but required modification to preserve the parties’ rights pending final adjudication.

It directed that the amounts deposited by the petitioner into the respondent’s bank account should remain as deposited and would be subject to the final outcome of Title Suit No. 232/2015.

The question whether the petitioner was a defaulter was left open for determination by the Trial Court with reference to the relevant date and the evidence in the suit.