He paid rent into court for two years. One notice from the landlord ended his tenancy.

When a Landlord Says “I’ll Take the Rent,” the Tenant’s Court Deposits Must Stop

Man Singh had been a tenant in a shop in Saharanpur, Uttar Pradesh, since 1982. His monthly rent had crept up over the years, eventually settling at a certain amount. In 1993, his landlord, Shamim Ahmad, stopped accepting the rent. So Man Singh did what the law allowed: he began depositing the rent every month in the court of the Judge, Small Causes Court, Saharanpur, under Section 30(1) of the Uttar Pradesh Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972. That deposit system worked for nearly two years. Then, in April 1995, the landlord sent a notice demanding rent at a higher rate and, crucially, expressing his willingness to accept it. Man Singh ignored the notice and kept depositing rent in court. The landlord sued for eviction on the ground of arrears of rent. The trial court ordered eviction. The tenant lost in revision before the District Judge, Saharanpur, and then in a writ petition before the Allahabad High Court. The Supreme Court of India, in a judgment authored by Justice Sudhanshu Dhulia and concurred by Justice Aniruddha Bose, dismissed the tenant’s appeal. The stakes were simple: a tenant who had been paying rent into court for years lost his tenancy because he failed to switch back to paying the landlord directly after the landlord said he was ready to accept it.

The Rent That Wasn’t Paid

The story begins in 1982, when Man Singh rented a shop in Saharanpur. The rent was initially low but was revised over time. By 1993, the agreed rent was a certain amount per month. That year, the landlord refused to accept the rent. Man Singh, following the procedure under Section 30(1) of the UP Act, began depositing the rent in the court of the Judge, Small Causes Court, Saharanpur. He did this regularly for about two years.

Then, on April 5, 1995, the landlord served a notice of demand on Man Singh. The notice demanded rent at a rate higher than the agreed amount. But it also contained a critical line: the landlord expressed his willingness to accept the rent. Man Singh did not respond to this notice. He did not tender any rent to the landlord. Instead, he continued depositing rent in the court. The landlord then filed a suit for eviction under Section 20(2)(a) of the UP Act, which allows eviction if a tenant is in arrears of rent for not less than four months and fails to pay within one month of a notice of demand.

The trial court, the Judge, Small Causes Court, Saharanpur, found that the rent was actually a higher amount than the agreed amount, and that Man Singh was in arrears. It passed a decree of eviction and recovery of rent. Man Singh filed a revision before the District Judge, Saharanpur, which was dismissed on July 31, 2003. He then filed a writ petition before the Allahabad High Court.

The High Court’s Correction

The Allahabad High Court, on February 17, 2012, did something important. It set aside the trial court’s finding that the rent was the higher amount. The High Court held that there was no evidence of any oral agreement to enhance the rent. The rent remained the agreed amount. That was a win for Man Singh. But the High Court still upheld the eviction order. Why? Because, the High Court reasoned, after the landlord’s notice of April 5, 1995, which expressed willingness to accept rent, Man Singh was obligated to tender the rent directly to the landlord. He could no longer validly deposit it in court under Section 30(1). By continuing to deposit in court, he was in default. The High Court dismissed the writ petition. Man Singh appealed to the Supreme Court.

The Tenant’s Argument: “I Deposited the Admitted Rent”

Before the Supreme Court, Man Singh’s counsel argued that the tenant had done everything correctly. He had deposited the admitted rent in court. The landlord’s notice demanded a higher rent, which the tenant disputed. The tenant relied on the Supreme Court’s decision in Ajai Agarwal and Ors. v. Har Govind Prasad Singhal and Ors. (2005) 13 SCC 145. In that case, the Court had held that a tenant who deposits the admitted rent before the first hearing date gets protection under Section 20(4) of the UP Act. The tenant does not need to deposit the enhanced or disputed rent claimed by the landlord. Man Singh’s counsel argued that the same principle should apply here: the tenant had deposited the admitted rent in court, and that should be enough to protect him from eviction.

The Landlord’s Argument: “The Notice Changed Everything”

The landlord’s counsel countered that the tenant’s reliance on Ajai Agarwal was misplaced. That case dealt with a deposit made at the first hearing under Section 20(4), which is a different situation. Here, the tenant was depositing rent in court under Section 30(1) because the landlord had earlier refused to accept it. But once the landlord served a notice expressing willingness to accept rent, the very basis for the court deposit vanished. The tenant was then required to pay the landlord directly. By continuing to deposit in court, the tenant was in arrears. The landlord relied on the Full Bench decision of the Allahabad High Court in Gokaran Singh v. Ist Additional District and Sessions Judge, Hardoi and Ors. 2000 SCC OnLine All 174, which had squarely held that a landlord’s notice of demand expressing willingness terminates the tenant’s right to deposit under Section 30(1).

The Supreme Court’s Reasoning: The Plain Language of Section 30(1)

The Supreme Court agreed with the landlord. The Court examined the text of Section 30(1) of the UP Act. The provision allows a tenant to deposit rent in court only “until the landlord in the meantime signifies by notice in writing to the tenant his willingness to accept it.” The Court held that the landlord’s notice of demand dated April 5, 1995, was precisely such a notice. It expressed the landlord’s willingness to accept rent. Once that notice was served, Man Singh’s right to deposit rent in court under Section 30(1) came to an end. He was then obligated to tender the rent directly to the landlord.

The Court distinguished Ajai Agarwal. That case dealt with a deposit made at the first hearing under Section 20(4), which is a separate provision that provides relief against eviction if the tenant deposits the admitted rent before the first hearing. That provision does not override the requirement under Section 30(1) that once the landlord expresses willingness, the tenant must pay the landlord directly. The Court followed the Full Bench decision in Gokaran Singh, which had correctly interpreted Section 30(1).

The Court also noted an important nuance. The landlord’s notice demanded rent at a higher rate than the admitted rent. The tenant could have tendered only the admitted rent to the landlord directly, without conceding the enhanced claim. The tenant could have said, “I am paying the admitted rent; the rest is disputed.” But the tenant did not do that. He simply continued depositing in court. That was fatal.

THE PLAY: When a landlord serves a notice of demand that expresses willingness to accept rent, the tenant must immediately tender the admitted rent directly to the landlord. Continuing to deposit in court under Section 30(1) after such a notice is a default that can lead to eviction.

Why This Matters in Practice

For advocates, this judgment is a crisp reminder of the mechanics of Section 30(1) of the UP Urban Buildings Act. The provision is not a permanent shield. It is a temporary mechanism that operates only while the landlord is refusing rent. Once the landlord signals willingness to accept, the shield drops. The tenant must then pay directly. For CFOs and founders who may be tenants of commercial properties in Uttar Pradesh, the lesson is practical: if your landlord has been refusing rent and you have been depositing it in court, watch for any written notice from the landlord expressing willingness to accept. The moment you receive such a notice, stop the court deposits and start paying the landlord directly. If you dispute the amount demanded, pay at least the admitted portion directly to the landlord. Do not assume that court deposits will continue to protect you.

The judgment also clarifies that the landlord’s notice need not use any magic words. A notice of demand that expresses willingness to accept rent—even if it demands a higher rate—is sufficient to terminate the tenant’s right to deposit in court. The tenant’s remedy is to tender the admitted rent directly, not to continue the court deposit.

The Bottom Line

If you are a tenant in Uttar Pradesh and your landlord has been refusing rent, you can deposit it in court under Section 30(1)—but the moment the landlord sends you a written notice saying he is willing to accept rent, you must stop depositing in court and start paying him directly, or you risk eviction for arrears.