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Champaklal Dahyabhai Natali and ors. Vs. Saraswatiben and ors. - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtGujarat High Court
Decided On
Case NumberCivil Revn. Applns. Nos. 533 of 1969 and 492, 886 and 953 of 1970
Judge
Reported in(1977)0GLR186
ActsBombay Rents, Hotel and Lodging House Rates Control Act, 1947 - Sections 12 and 12(2); Transfer of Property Act, 1982 - Sections 109
AppellantChampaklal Dahyabhai Natali and ors.
RespondentSaraswatiben and ors.
Appellant Advocate S.N. Shelat and; S.D. Shah, Advs.,; R.D. Vyas and;
Respondent Advocate S.M. Soni and; J.R. Nanavati, Advs. and; D.D. Vyas,
Cases ReferredPunialal v. Bhagwatprasad
Excerpt:
tenancy - eviction - section 12 of bombay rents, hotel and lodging house rates control act, 1947 - whether person who purchases leased property along with arrears of rent prior to his purchase can evict tenant - section 12 requires tenant to pay rent which landlord calls upon him to pay - it includes all arrears of rent - transferee of property with arrears of rent is landlord under section 12 - transferee landlord entitled to recover possession of suit premises - in order to obtain protection tenant has to show his willingness to pay rent all times - landlord must first serve notice to tenant - then suit can be filed on ground of arrears of rent. - - person whom the right to recover arrears of rent as well as the property itself has been transferred the obvious reason is that in.....desai, j.1. the decisions of two division benches are conflicting on the issue as to whether a person who purchases the leased property along with arrears of rent prior to his purchase can evict a tenant in view of the provisions of section 12 of the bombay rents, hotel and lodging house rates control act, 1947 (hereinafter referred to as the act) and that is why the said point is referred to us. the facts in all the civil revision applications are similar and we shall state briefly the facts in civil revision application no. 533 of 1969, which are that the suit property is a part of nondh no. 817 situated in the city of surat. the leased property isused as a stable. the present owner purchased the property on august 4, 1966 from its previous owner with the right to recover the rent.....
Judgment:

Desai, J.

1. The decisions of two Division Benches are conflicting on the issue as to whether a person who purchases the leased property along with arrears of rent prior to his purchase can evict a tenant in view of the provisions of Section 12 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (hereinafter referred to as the Act) and that is why the said point is referred to us. The facts in all the civil revision applications are similar and we shall state briefly the facts in Civil Revision Application No. 533 of 1969, which are that the suit property is a part of Nondh No. 817 situated in the city of Surat. The leased property isused as a stable. The present owner purchased the property on August 4, 1966 from its previous owner with the right to recover the rent already due at the date of transfer from the defendanttenant. The rent was due from July 1, 1965, The plaintiff-landlord, therefore, gave a notice to the defendant-tenant demanding the rent due from July 1, 1965 to October 31, 1966 and claimed possession of the suit premises on the ground of arrears of rent. The rent from July 1, 1965 to July 31, 1966, that is, for 12 months was due at the time when the property was purchased from the previous owner. The rent due after the purchase by the plaintiff is only of 3 months. The tenant was in arrears of rent for more than 6 months if the arrears prior to the purchase are taken into account. The defendant-tenant neither paid the rent due in pursuance of the demand notice nor replied to the said notice. The tenant also did not file any application under Section 11 of the Act for fixing the standard rent of the suit premises. The plaintiff, therefore, filed a Regular Civil Suit No.2 of 1967 in the Court of the Civil Judge, Junior Division, Surat, for recovering the arrears of rent and possession of the suit premises, and prayed for a decree of eviction under Section 12(3) of the Act. The learned trial Judge decreed the plaintiff's suit, The defendant tenant filed Regular Civil Appeal No. 58 of 1968 in the District Court, Surat, which was also dismissed. The defendant, therefore, filed Civil Revision Application No. 533 of 1969 in this Court and because of the conflicting decisions as noted above, the learned single Judge referred -the following questions to this Court:

'Whether the rent due by a tenant to the original owner of the property retains the character of a rent if the property is sold away by the original owner i. e. the landlord to a third party with a right to recover the arrears of rent due to the vendor and enforce the default in payment thereof, so as to entitle the purchaser to serve the tenant with a notice of demand for the arrears due to the vendor under Section 12(2) of the Act and to sue the tenant on the ground of non-payment of such arrears?'.

2.The decisions of the Court on the point in issue may first be noticed. In Bai Dahiba v. Jitendra, (1971) 12 Guj LR 595, J. M. Sheth J. held that vendee of the property is a landlord as defined in Section 5(3) of the Act. The learned, Judge further held:

'A distinction can be made between a person who is only an assignee of the arrears of rent and a. person whom the right to recover arrears of rent as well as the property itself has been transferred The obvious reason is that in thelatter case, it is not only the right to recover rent, that is transferred, but on account of selling of the property, the right to get possession is also transferred ............Such a land lord has been given a right to recover possession on the ground of' non-payment of rent, The tenant is bound to pay such rent to such, a landlord when demanded, within, one month after the receipt of the, notice, as contemplated by Section 12(2), of the Act and if he does not comply with such notice, he is not entitled' claim protection under the Act.'

3. In Prem Govindrain Sajnani v. H. M. Methwani, : AIR1974Guj140 , T. U. Mehta, J. took the view that a purchaser of'' a property and arrears of rent is a landlord as per the extended meaning of landlord defined in Section 5(3) of the Act and such a purchaser cannot be considered as landlord for the purpose of Section 12 of the Act. For this conclusion the learned Judge relied upon the decision of the Full Bench in Nanalal Girdharlal v. Gulamnabi Jamalbhai, 13 Gu.1 LR 880 = (AIR 1973 Gui 131). The learned Judge further held that the purchaser of the property and arrears of rent was not the landlord at the time when the accrued rent fell due and, therefore, he could not take advantage of the provisions- of Section 12' of the Act on the ground that the tenant had not paid the rent in spite of the notice. The right to recover arrears of' rent was an actionable claim in the hands of the purchaser of the right and lost the character of rent and observed:

'It cannot be gainsaid that the word 'landlord' connotes the existence of a relationship of a landlord and a; tenant. Therefore, when a particular amount is found due as rent, it is: necessarily postulated that the person from whom that amount is found due is a tenant and the person to whom it is found due is his landlord with regard to the amount in question. Therefore, when we say that a particular amount remains due as rent, we by necessary implication impute the character of landlord and tenant to the creditor and the debtor, so far as the amount due is concerned, and if that is so, in order to determine the character of the liability, it is always necessary to consider the status of the debtor and the creditor. If this status is not found to be that of a landlord and a tenant, then the character of liability, which can be attributed to that amount, cannot be that of rent. it becomes purely a liability to pay a particular amount but that amount would necessarily lose its character of rent.'

4. It may be noted that both the learned Judges considered the case of the Calcutta High Court in Daya Devi v. Chapala Debi, : AIR1960Cal378 . J. M. Sheth J. distinguished the case on the ground that the definition of the landlord given in the West Bengal Premises Tenancy Act, 1956 was different than that given in Section 5(3) of the Act and the decision therein was given in view of the special provisions of Section 17 of the West Bengal Premises Tenancy Act. T. U. Mehta J. relied upon this case for his conclusion that the right to recover arrears of rent prior to the transfer assumed the character of an actionable claim and on the purchase thereof the cause of action for recovery of arrears was completely satisfied as soon as the assignor received the consideration for which he sold the arrears of rent.

5. J B. Mehta J. by his judgment, D/- 28-11-1973 in Civil Revn. Application No. 859 of 1970 (Guj) had to deal with the case in which initially the property subject to lease was transferred to the plaintiff purchaser by Ex. 40 but the vendor kept with him the right to recover arrears of rent prior to the said transfer. The original owner after lapse of 7 1/2 years assigned his right to recover arrears of rent to the purchaser of the property. The learned Judge, it appears, came to the conclusion that there was no valid assignment -of this liability. The learned Judge also considered that even if there was a legal assignment, the purchaser of the arrears of rent was merely a rent collector as the vendor was. The transferee of the arrears of rent could not claim higher right than the transferor himself had and observed:

'If the landlord had in the registered document, Ex. 40 transferred this right of recovery of arrears of past rent, the purchaser would have been entitled by reason of devolution of title also to the specific right of recovery of past rent. That right would have been acquired when the original vendor had not become rent collector but was the landlord who could transfer that right to that purchaser. In that event, the purchaser would have been entitled to enforce that right by eviction by giving a statutory notice under Section 12(2). Once that opportunity is lost, because the vendor reserved all right in his favour, the vendor became only a rent collector and it is that limited capacity of the rent collector which can be transferred by assign merit of actionable claim Ex. 33, dated May 6, 1966, to the present plaintiff.'

6. In Civil Revision Application No. 1576 of 1972 which was decided on 31-3-1975 and 1-4-1975 by the Division Bench consisting of J. B. Mehta and S. N. Patel JJ. the facts were that the Premises were purchased by the plaintiff with arrears of rent and he flied a suit to recover possession on the basis of arrears of rent which also included the arrears of rent prior to the transfer. The Court observed:

'The 'landlord' referred to in the said Sections 12 and 13 is not 'landlord' as defined in Section 5(3), but a landlord who is entitled to possession of the premises on determination of the tenancy under the ordinary law of Landlord and Tenant. It is the privity of estate which also entitles the landlord under the general law to terminate the tenancy and not mere privity of contract. Therefore, it is the landlord's transferree, assignee or heir, who has interest in the property, who is also entitled under the general law of landlord to terminate the tenancy even by taking advantage of previous default and who is entitled to continue the proceedings of eviction and take advantage even of the eviction decree because the landlord's interest is a transferable and heritable interest. Such a transferee of the landlord's interest who is also transferee of arrears of rent is not only included specifically in Section 5(3), but as per the Full Bench decision, even in the context of Section 12 and Section 13(1) it is that- landlord alone who could give the statutory notice under Section 12(2) and could terminate the tenancy by taking advantage of the default even before the assignment and could continue the proceedings of eviction or execute the eviction decree. Therefore, as per the Full Bench decision, the legal position is well settled and in the present case transferees plaintiffs- were entitled to give notice under Section 12(2) claiming the past arrears and they could terminate the tenancy and file eviction suit on the basis of past arrears . ...... ..........The character of that rent never changed merely because the landlord's interest was transferred or it passed by succession to the heirs. Therefore, in the context of Section 12 and Section 13(1) if the tenant wanted to claim any protection by availing of various concessions provided under the Rent Act, he had to pay up all the rent in arrears including the arrears which accrued due in the time of the original vendor landlord.'

The Division Bench followed the decisions in Ram Prakash v. Karam Chand, : AIR1963All47 and in Nainsukhdas V. Asstt. Collector, Vizianagaram, : AIR1966AP272 . The Court distinguished the decision in Sm. Daya Debi, : AIR1960Cal378 (supra) as being rendered on the interpretation of the provisions of the West Bengal Premises Tenancy Act, 1956.

7. The point in issue again came for decision in Civil Revn. Appln. No. 1489 of 1973 before the Division Bench consisting of M. P. Thakkar and A. N. Surti JJ., who by their judgment D/-7-5-1976 (Gui)* accepted the ratio of T. U. Mehta J. in Prem. Govindram, AIR 1974 Gui 140 (supra) as laying down correct law on the point and held that the decision of J. M. Seth J. in Bai Dahiba's case did not lay down a correct law on the point in issue.The decision of the Division Bench consisting of J. B. Mehta and S. N. Patel JJ. in Civil Revn. Appln. No. 1576 of 1972 was not brought to the notice of the Court. Hence the conflict of decisions and the reference to this Court.

8. The answer to the question raised before us depends materially on the interpretation of Section 109 of the Transfer of Propepty Act which provides the rights of the lessor's transferee. So far relevant Section 109 of the Transfer of Property Act is as follows:--

'109. If the lessor transfers the property leased, or any part thereof, or any part of his interest therein, the transferee, in the absence of a contract to the contrary, shall possess all the rights and, if the lessee so elects, be subject to all the liabilities of the lessor as to the property or part transferred so long as he is the owner of it; but the lessor shall not, by reason only of such transfer, cease to be subject to any of the liabilities imposed upon him by the lease, unless the lessee elects to treat the transferee as the person liable to him;

Provided that the transferee is not entitled to arrears of rent due before the transfer, and that, if lessee not having reason to believe that such transfer has been made, pays rent to the lessor, the lessee shall not be liable to pay such rent over again to the transferee.

The lessor, the transferee and the lessee may determine what proportion of the premium or rent reserved by the lease is payable in respect of the part so transferred, and in case they disagree, such determination may be made by any Court having jurisdiction to entertain a suit for the possession of the property leased.'

The section provides what shall ordinarily be the rights of lessor's transferee as the provisions thereof are subject to a contract to the contrary between the lessor and transferee. Ordinarily on a transfer of the property by the lessor, his transferee shall possess all the lessor's rights as to the property but the transferee is not entitled automatically by virtue of transferer to arrears of rent due before the transfer. The substantive part of Section 109 of the Transfer of Property Act read with the proviso necessarily indicates that arreas of rent due before a transfer is one of the lessor's rights as to the property transferred. While the lessee is in possession of the property, undoubtedly, the covenant to pay Fent which issues out of the property is a covenant which runs with the land. The words used in S. 109 of the Transfer of Property Act are 'all rights ..........as to the property' and the expression is comprehensive. The arrears of rent due prior to the transfer is 'a right as to property' within the meaning of Section 109 of the Transfer of Property Act, The proviso to Section 109 does not prohibit the lessor from transferring the arrears of rent to his transferee.

The proviso also speaks about the liability of a tenant in respect of arrears of rent clue prior to the transfer and provides that if the lessee having any reason to believe that there is transfer of arrears of rent due prior to the transfer, pays the same to the transferee he shall not again be liable to the lessor for the same. Rent due prior to the transfer is treated by this section as arrears of rent and the liability of the lessee is also defined. When the lessor transfers the entire interest in the property including arrears of rent due prior to the transfer, which is as aforesaid a right 'as to the ,property' the assignee also obtains the right to such arrears of rent it being a right relating to property. On such a transfer what vests in the transferee is all the rights of the lessor relating to the property transferred and this includes the right in respect of arrears of rent due prior to the transfer. Now if the tenant is in arrears of rent, he is termed as a defaulter and the default consists of non-payment of rent which became due. The tenant is said to have. committed breach of the term of tenancy by reason of non-payment of the due rent. Incase of monthly lease non-payment of rent by the tenant to the landlord gives right to two causes of action; the first is that the landlord can sue to recover rent due and the second is that the landlord can sue to recover possession, on terminating the lease, if the contract of lease requires a notice of termination. It is at the discretion of the lessor to take advantage of both the causes of actions or either of them. Therefore, when all the rights of lessor are transferred there vest in the transferee both the causes of action in view of Section 109 of the Transfer of Property Act. In effect the trans-1 feree is put in the same position as the lessor-transferor so far as the property transferred is concerned. The consequence is that the transferee landlord can exercise all the rights as to property transferred as the lessor transferor could have done prior to the transfer. The right of the lessor transferor to evict a tenant for non-payment of rent due prior to the transfer because of the assignment vests in the transferee and he can claim possession of the! leased property from the tenant who is in arrears of rent prior to the transfer.

9. But it may happen that the lessor may transfer all his rights as to the property transferred except arrears of rent due prior to the transfer; the lessor transferor may retain the said right to himself or separately assign to another person or to the very transferee to whom the property is transferred soon thereafter or after lapse of some time. The assignment of arrears of rent due prior to the transfer, apart from the property, is not a mere right to sue and hence outside the scope of Section 6(b) of the Transfer of Property Act. In such a case the lessor or a transferee to whom arrears of rent is transferred retains or acquires no right or interest in the property transferred but has only a right to arrears of rent which is a personal liability. The case of an assignee of arrears of rent simpliciter stands on the same footing as the lessee's personal liability to pay rent after he transfers his rights either with the consent of the lessor or otherwise in accordance with the terms of the lease, Then the cause of action for recovery of possession which vested in the lessor - it is possible to contend to have been waived by the lessor and the transferee cannot, therefore, take an advantage of the said cause of action. It is also open to the transferee to whom the property is transferred except the arrears of rent to contend that as the right to recover possession - which is a right as to the property transferred - vests in him, he has a right to recover possession of the leased property from the tenant on the ground of arrears of rent because to take any other view would result in giving the tenant an immunity from eviction even though the rent due remains unpaid and the said default continues. It is not necessary for us to decide this point as it does not arise in this case. The facts of the instant case are that by the same transaction of sale all the rights of the lessor transferor as to property including his right to arrears of rent as well as possession vest in one person. Thus such a transferee can take advantage of defaults committed by the tenant in payment of rent due prior to the transfer. We can with benefit examine a case where a lessor dies leaving the property leased and arrears of rent, His heir will step in the shoes of the deceased lessor and can take benefit of the arrears of rent 'prior to the death of the lessor and file a suit for eviction. This is the position in law and there is no dispute about it. How does then a transferee of all rights as to property including arrears of rent due prior to the transfer by the lessor to the transferee stand on a different footing? In our opinion such a !transferee stands in the same position as an heir of the deceased lessor as what is transferred to him all rights of the lessor as to the ,transferred property. In one case ]rights as to property are transferred by death; in the other case the same are transferred by the act of the parties inter vivos. Furthermore a lessor transfers the leased property to the transferee and prior to the date of transfer the lessee had in contravention of the terms of the monthly tenancy sublet the property so that in the lessor there vested a right to recover possession of the demised property as the lessee had sublet the property in contravention of the terms of the tenancy. This breach of the term of subletting was committed prior to the transfer and it existed at the date of the transfer. Can then on a transfer by the lessor his transferee take an advantage of his breach and ask for possession from the lessee? The answer to the question is in the affirmative and this is so because the right to recover possession of the demised property as a result, of such subletting is a right to the property which vests in the transferee u/s. 109 of the Transfer of Property Act. The question, therefore, need be looked not from the point of the character of the rent due prior to the transfer but must be viewed from the angle of the right to take possession of the property which arises because the tenant then remains in arrears of rent. Such right originally vested in the lessor and on transfer of all his rights, the same vests in his transferee as per the provisions of Section 109 of the Transfer of Property Act. For these reasons the transferee of the lessor can take advantage of arrears of rent due prior to the transfer and demand a decree of eviction on the ground of arrears of rent.

10. In our opinion this being the position in law we turn to the decided cases. In Vishveshvar Wighneshvar v. Mahableshvar Subha, AIR 1918 Bom 79 a mulgeni lease was executed on November 30, 1896 and the lessee transferred by sale his right as a lessee to defendant No. 2 in December 1908. The Plaintiff purchased the lessor's right on December 17, 1911 and taking advantage of the breach of condition, namely, unlawful subletting, after giving notice of forfeiture, claimed possession of the demised premises. Both the Courts decreed the suit of Ahe plaintiff and in Second Appeal a contention was raised that the ,plaintiff as a transferee could not 'take advantage of the breach of conditions of the lease which took place -prior to the assignment in his favour Justice Lallubhai Shah held as tinder:

'As regards the first point it seems to me that under Section 109, T. P. Act, the transferee, in the absence of a contract to the contrary, would possess all the rights of the lessor, and under Section 111 Clause (g), 'the lease would determine by for feiture resulting from the breach of express condition on the part of 'the tenant, the transferee from the ,landlord having shown his intention to determine the lease by notice. In the present case there is no -doubt about the condition and the breach of that condition and there ,can be no doubt under the terms of the assignment in favour of the plaintiff that he was to have the same rights as his vendors for the purpose of enforcing forfeiture against defendant 2, It is needless -to refer to certain English cases -which were cited by the learned pleader for the appellant, as under 'the provisions of the Transfer of Property Act it is so clear that they would have no application to the present case, In connection with this point it is urged that under Section 6 T. P. Act, the mere right ,of re-entry for breach of a condition ,subsequent cannot be transferred by any one except the owner of property affected thereby.In the present case it is quite clear that what is transferred is not a mere right of re-entry, but the whole of the land lord's interest in the land, and the -transfer is not in favour of anyone except the owner of the property affected thereby. It follows therefore Ahat there has been a forfeiture of the mulgeni lease in this case and that the plaintiff is entitled to enforce the forfeiture.'

Against this decision there was a letters patent appeal which was heard by Beaman and Heaton JJ. BeamanJ. held that there was unlawful subletting but no forfeiture of tenancy had resulted at the date of the transfer because the previous owner had not given a notice to determine the lease under Section 111(g)of the Transfer of Property Act. The consequence was that there was at the date of the transfer in existence an inchoate right and this inchoate right did not vest in the transferee on the transfer by the original owner. The question determined by Justice Beaman does not arise before us as we are concerned with a monthly tenancy to which Section III (g) of the Transfer of Property Act does not apply. Thus the decision of Justice Beaman does not run counter to what we have said. Justice Heaton agreed with Justice Shah in his construction of Section 109 of the Transfer of Property Act. Thus the decisions rendered by Justice Shah and Justice Heaton in this case supports the construction which we have placed hereinbefore on the provisions of Section 109 of the Transfer of Property Act.

11. In Manikkam Pillai v. Rathnasami Nadar, AIR 1919 Mad 1186, the property leased on monthly basis was transferred by the lessor to the plaintiff and the plaintif, gave notice of eviction. The question arose whether the plaintiff could give notice of eviction and the Court observed:

'It was also argued that the rights referred to in Section 109 are the rights mentioned in Section 108 and no more. But the words used are 'all the rights' and the expression is very comprehensive. There does not seem to be any reason why the words should be held not to include the right to recover possession by terminating the tenancy of a previous lessee by giving the necessary notice to quit. That is one of the rights of the lessor 'as to the property' transferred. Prima facie a person entitled to possession should have the right to reduce the property into possession. To hold in favour of the appellant's argument will lead to the anomaly of having to hold that a transferee of the property leased could not give notice and terminate the lease, though under Section 109 he becomes entitled to be paid the rent due from the date of his transfer by the lessee. The right of attornment necessarily carries with it the right to eject if the tenant is liable to be ejected.'

The ratio of this decision is that when the property transferred is subject to lease the transferee of the lessor gets all the rights of the lessor including the right to evict.

12. The Madras High Court in Somsundara v. Madras Provincial Co-operative Marketing Society Ltd., : AIR1950Mad711 took the view that illegal subletting which took place prior to the transfer could be availed of by the transferee to evict the tenant and this view is accepted by the Punjab High Court in Pritarn Singh v. Raja Ram, AIR 1964 Punj 363. The Allahabad High Court in Ram Prakash v. Karam Chand, : AIR1963All47 also took the same view. Justice Ekbote of the Andhra Pradesh High Court following the decision of the Madras High Court in Satyanarayan v. Sindhu Bai Sharma, : AIR1965AP81 observed as under:

'In this regard Secs. 8 and 109 of the Transfer of Property Act must also be borne in mind. These provisions particularly Section 109 provides that if the lessor transfers the property leased, the transferee shall possess all the rights as to the property so long as he is the owner of it. Thus where the entire property is transferred, the transferee can sue to eject the tenant on the basis that the tenancy has terminated or on the basis of a forfeiture or breach of condition which is a quality annexed to the estate.'

The same Judge followed this decision in Firm of Nainsukhdas Baldeodas v. Asstt. Collector, Vizianagaram : AIR1966AP272 . Lodha J. of Rajasthan High Court in Naraindas v. Rajendra Singh, 1972 Ren C J 607 (Raj) referred to various decisions of the High Courts on this point and upheld the contention that the transferee of the lessor can take advantage of arrears of rent prior to the date of the transfer for the purpose of evicting the tenant.

13. The facts in Sm. Daya, Debi's case : AIR1960Cal378 (supra) are that Harimati who was the landlord of the property rented to, the defendant-tenant, the suit premises and then created a trust appointing 2 trustees, who transferred the suit property by sale deed dated September 27, 1957 to Chapala Debi. By another document the arrears of rent from July 1, 1956 to September 27, 1957 were also assigned to Chapala Debi and proceedings for eviction on the basis of rent prior to, the transfer and subsequently to it were undertaken by her. The High Court held that (1) that a claim of arrears of rent lost the character of rent as soon as it was assigned; (2). that the cause of action for recovery of arrears of rent was completely satisfied as soon as the assignor received the consideration for which he sold the arrears of rent; (3) that what the assignee of the right purchased was not the cause of action for recovery of arrears of rent but the actionable right of the assignor to recover these arrears of rent and (4) the Court also held that under Section 17 of the West Bengal Premises Tenancy Act, 1956, the bligation on the tenant was only to pay rent to the previous landlord and not the assignee landlord. This decision was referred to by the Supreme Court in Ramchander Narsey & Co. v. Wamanrao Shenoy, 1969 UJ (SC~ 333 but was distinguished on the ground that the suit in the case before the Supreme Court was instituted by the very landlord to whom the arrears of rent were due and who had transferred the, property pendina the suit. TheCalcutta High Court in Daya Debi's case (supra) did not notice that non-payment of rent prior to the transfer also gave rise to a right in the lessor to evict a monthly tenant and this right by virtue of the transfer vested in the transferee landlord. Now by virtue of a transfer of the leased property the lessee's liability arising out of non-payment of rent prior to the transfer does not ipso facto come to, an end merely because the transferee pays consideration for the transfer of arrears of rent. When all the rights of a lessor are transferred to the lessor's transferee, such transferee is substituted in the place of the lessor in respect of all the rights as to the property. It may also be noted in Daya Debi's case the leased property and the arrears of rent were transferred by separate and different documents and the date when the right to arrears of rent was transferred is not available from the facts given in the judgment. The Court relied upon the Full Bench decision in Hari Lal Sinha v. Tripura Charan Roy, (1913) ILR 40 Cal 650, in which the question of arrears of rent prior to transfer being an actionable claim was conceded because the suit was only to recover the arrears. Further this case took a contrary view on the very legal issue than what was taken by the Calcutta High Court previously in Manmath Nath v. Sasanka Mohan, (1955) 96 Cal LJ 53, Basumati Devi v. Sasanka, (1957) 61 Cal WN 909 and Kanto M. Mullick v. Jyotish Chandra Mukherjee, AIR 1949 Cal 571 and the aforesaid decisions were not at all taken notice of by the Court. Therefore, with all respects, we are unable to accept the broad proposition of law laid down in Sm. Daya Debi's case : AIR1960Cal378 (supra). In Rameshwar Chand V. Sadhan Chandra Dey, : AIR1971Cal383 the question at issue did arise but the learned Judge decided the case only on the basis of the provisions of Section 2 (d) and Section 24 of the West Bengal Premises Tenancy Act, and held that the right to possession was waived. This judgment, therefore, is not at all of any assistance.

14. T. U. Mehta J. and the Division Bench consisting of M. P. Thakkar and A. N. Surti JJ. followed the decision in Sm. Daya Debi's case : AIR1960Cal378 (supra) in coming to the conclusion that non-payment of rent prior to the transfer could not be taken advantage of by the transferee to evict the tenant on the ground of non-payment of such arrears of rent and for the reasons already given and with due respect, this decision cannot be accepted as laying down a correct proposition of law. We concur with the proposition of law laid down on the point in issue by the Division Bench, consisting of J. B. Mehta and S. N. Patel JJ. in Civi ' I Revn. Appln. No. 1576 of 1972 (Guj) (supra).

15. This brings us to the next question whether a transferee landlord is prohibited by Section 12 of' the Act from evicting his tenant on the basis of the arrears of rent prior to the transfer. The view taken by T. U. Mehta J. in the case of Prem Govindram (supra) which was adopted as unquestionable by the Division Bench consisting of M. P, Thakkar and A. N. Surti JJ. in Civil Revn. Appln. No. 1489 of 1973 (Guj) (supra) was that the statutory definition of the word 'landlord' given, in Section 5(3) of the Act could not be inducted in Section 12 of the Act and as a transferee of such arrears of rent and property was not the landlord at the time when the accrued rent fell due, he could not take advantage of Section 12 of the Act on the ground that the tenant had not paid rent to him even though he was called upon to do so by a, regular notice. In taking this view the learned Judges relied upon the Full Bench decision of this Court in Nanalal Girdharlal's case : AIR1973Guj131 (supra). Now the word 'landlord' is defined in Section 5(3) of the Act as under:

''landlord' means any person who is for the time being, receiving, or entitled to receive, rent in respect of any premises whether on his own, account or on account, or on behalf, or for the benefit of any other person or as a trustee, guardian, or* receiver for any other person or who would so receive the rent or be entitled to receive the rent if the premises were let to a tenant; and includes any person not being a tenant who from time to time derives title under a landlord; and further includes in respect of his sub-tenant a tenant who has sub-let any premises.'

In Nanalal's case (supra) the Pull Bench was considering the case, wherein the property was leased by all the trustees and the question arose whether a co-trustee alone who was collecting rent on behalf of other trustees could file a suit of eviction as the landlord of the premises in view of the definition of the word given in Section 5(3) of the Act, The co-trustee in such a case was merely a rent collector and stood in the same position as a rent farmer. The Full Bench after analysing the various clauses of Section 12 of the Act in the light of legislative intent held:

'It will, therefore, be seen that none of the provisions in Section 12 -confers any new right to recover possession of the premises on a 'landlord' and it is, therefore, not -possible to read the word 'landlord in the different provisions of Section 12 as including the categories of persons artificially included within the meaning of that term as defined in Section 5 sub-section (3). These provisions refer to a 'landlord' who but for the restrictions imposed by them, would be entitled to recover possession of the premises and that would clearly be a 'landlord' under the general law of landlord and tenant.' The Full Bench also examined the provisions of Section 13 of the Act and finally held: 'We are, therefore, of the view 'that the extended meaning of the word 'landlord' given in the definition in Section 5 sub-section (3) cannot be projected into Section 12 and Section 13 sub-section (1). The land lord referred to in Section 12 and Section 13 sub-section (1) is not a .landlord as defined in Section 5 sub section (3) but a landlord who is entitled to possession of the premises on determination of the tenancy under the ordinary law of landlord and tenant. A co-owner receiving rent on behalf of himself and the other co-owners or a rent-farmer or a rent-collector is, therefore, not entitled to recover possession of the premises let to a tenant on the strength of the artificial definition of 'landlord' in Section 5 sub-section (3).'

16. It must be noticed that the Full Bench was only concerned with the rent-collector or rent-farmer and held that such persons could not file a suit for possession even though they were defined as landlord in Section 5('a) of the Act. The Court held that the context of Sections 12 and 13 did not permit the application of extended definition of the word 'landlord' in Section 5(3) of the Act to the provisions of the said section. The Full Bench laid down that Section 12 of the Act applied to a landlord who is other wise entitled to recover possession of the premises, that is entitled to recover possession of the prermises under the ordinary law. Now a lessor's transferee of the leased property due to privity of the estate is under the ordinary law entitled to file a suit for possession in the same manner in which an heir of a deceased lessor is entitled to do. A fortiori a transferee of lessor's interes to whom also the arrears of rent prior to the transfer are assigned can file a suit under ordinary law for possession, even though he is included within the definition of Section 5(3) of the Act because obviously his inclusion in the extended definition is by way of abundant caution. Merely because he is so included in the extended definition of 'landlord' under Section 5(3) of the Act, the right of such a person which arises due to privity of estate - is not abrogated but on the contrary is emphasised. This is the view also taken by the Division Bench consisting of J. B. Mehta and S. N. Patel JJ. in Civil Revn. Appln.No. 1576 of 1972 and in our opinion rightly. T. U. Mehta Jin Prern Govindrarn's case(AIR1974 Guj 140) (supra)and M.P. Thakkar and A. N. Surti JJ. in Civil Revn. Appln. No.1489 of 1973 (Reported in 1976 Ren CJ 562 (GUJ) have not properly appreciated the ratio of the decision of the Full Bench in Nanalal's case (AIR 1973 Gui 131) (supra) and, therefore, the aforesaid decisions with respect, do not lay down a correct proposition of law on the point. The said Division Bench was also not correct in observing that in view of the Full Bench decision a reference should not have been made to them. This approach, again with respect, is not called for. Human ingenuity has no limits. One cannot be rigid as to what should be the correct interpretation of the law and to take such a Testricted view must necessarily result in putting an end to the development of law which on the other hand is desired to be progressive.

17.There is another angle from which the case was argued by Mr. J. R. Nanavati. The argument was that a landlord of monthly tenancy can put an end to the tenancy by determining the same on giving a 'notice to quit. On determination of the tenancy such a landlord can under the ordinary law file against his tenant, a suit for possession of the demised property. The provisions of Section 12 of the Act restrict this right of the landlord to recover possession and in order that a tenant can claim benefit of the provisions of Section 12 of the Act he must fulfil all the necessary conditions of Section 12 of the Act. Further it is obligatory on the tenant in such a said to show his readiness and willingness to pay the rent do which he can indicate by paying all the appears of rent including the arrears prior to the transfer irrespective of the fact that they were due to the previous landlord as per the provision of Section 12 of the Act. Mr. Nanavati contended that the right to recover possession which ordinarily vests in the landlord on deterrnination of the lease is restricted by the provisions of Sections 12(1); 12(2) and 12(3)(b) of the Act and the restrictions have to be construed strictly. The question, argued Mr. Nanavati, is not whether the landlord is not entitled to benefit of his assignment but whether the tenant in spite of arrears of rent remains 'protected or not under the provisions of the Act. In support of this argument reliance is placed on the decision in Ismail Dada Bhamani v.Bai vIekhabai, AIR1944 Bom 181 wherein a monthly tenant sublet the property and thus committed a breach of the tenancy. The tenancy was terminated by a notice and it was contended in the suit that the platntiff-purchaser of the suit premises subsequent to the breach was not entitled to the benefit of the breach as it took place before the plaintiff became the owner. The provisions of the Bombay Rent Restrict on Act, 1939 governed the case and Section 11 thereof provided that no order of recovery of possession of any premises shall be made so long as the tenant paid or was ready and willing to pay rent to the full extent allowable by the said Act and performed the other conditions of the tenancy. Kania J. (as he then was) held that the tenant when sued had to show that he was one who 'performed the conditions of tenancy' within the meaning of Section 11 of the said Act. If the covenant of any kind was broken by him he could show that it was agreed to be waived in which case the Court would consider whether there was no breach. To the argument that the purchaser could not take advantage of the unlawful subletting prior to his purchase, the learned Judge replied:

'In my opinion that is not the point at all. As owner, the plaintiff is entitled under the ordinary law to file the suit, The defendant resists the claim because of Section 11, of Rent Restriction Act of 1939. if so, he has to show that he fulfills the necessary conditions. As already pointed out, because the words in Section 11 are in the present tense, as held in 25 Bom LR 345 = (AIR 1923 Bom 387) it is obligatory on the tenant when brought to Court to show that he occupied the status of a 'tenant' fulfilling the condition-, of that section, and if he fails to do so, it is no answer that the breach was in the predecessor's time, The result, therefore, is that, although the premises are such as to invite the application of Section 11, the tenant does not belong to the class to which the section applies.'

18. The Calcutta High Court in Kanto M. Mullick v. Jyotish Ch. Mukherjee, AIR 1949, Cal 571, had to interpret clause 4 of the Calcutta House Rent Control Order, 1943 which provided:

'No tenant shall be entitled to the benefit of this paragraph in respect of any house unless he pays the rent due by him in respect of such house to the full extent allowable by this Order by the 15th day of the month next following that for which the rent is payable.' In this case the tenant did not pay rent on due dates and the owner to whom the property was allotted subsequent to the non-payment of rent filed a suit for ejectment. The question was whether such a plaintiff was entitled to avail himself of the failure to pay rent by the tenant at the time when the plaintif was not the owner and the Court held:

'The next question is whether the plaintiff is entitled to avail himself of the defendant's default in regard to the payment of rent at ') time prior to that when the plaintiff became the landlord. Again, one midst, refer to the wording of sub clause (4). This provides that no tenant is entitled to the benefit of the paragraph unless he pays the rent due by him in respect of such house. The benefit he is to receive is also in respect of such house. It does not provide that the landlord for the time being alone is entitled to recover possession if rent is unpaid. The definition of 'landlord' in clause 2 of the Order is as follows:

'Landlord means any person who is fop the time being receiving or entitled to receive rent in respect of any house.' It is manifest that default by a tenant is not limited in its effect and to be available only to a person who, at the time of the default, was the landlord. It is clear that for a tenant to be able to avail himself of the benefit of the Order in respect of a house the occupancy of which he desires to retain there must be at all times fulfilment of all the conditions of the tenancy, including payment of rent at the time prescribed in the order.'

19. Rajasthan Premises (Contv6l of Rent and Eviction) Act, 1950 defines landlord and this definition is almost similar to the definition of the word landlord given in Section 5(3) of the Act,. Section 13 thereof, so far relevant, provides:

'Notwithstanding anything contained in any law or contract, no Court shall pass any decree,or make any order in favour of a landlord, whether in execution of a decree or ,otherwise evicting the tenant so long as he is ready and willing to pay rent therefor to the full extent allowable by the Act, unless it is satisfied:

(a) that the tenant has neither paid nor tendered the amount of rent due from him for six months.' Lodha J. in interpreting the aforesaid provisions observed as under: 'A plain reading of Section 13(1)(a) goes to show that no tenant is entitled to the protection unless he pays the rent due from him at the time prescribed in the Act. It does not provide that the landlord for the time being alone is entitled to recover possession if the rent is not paid. The definition of 'landlord' as extracted above makes the position abundantly clear. It lays down that 'landlord' means any person who for the time being is receiving or is entitled to receive the rent of any premises. Reading both the provisions together it is manifest that in order to be able to grant protect-ion to the tenant against ejectment, the Court must be satisfied that the tenant had paid the amount of rent which was due from him, as contemplated by Section 13(1)(a). It is not a question of transfer of benefit of default by the previous landlord to his successor but of the tenant claiming protection under Act.'

The same view was taken Chandrasen v. Murarilal, .

20. Now under the Transfer of Property Act, a landlord is entitled to possession of the demised property on termination of a monthly lease. In order to restrict the right of the landlord to recover possession in view of the scarcity of the accommodation the Act has beer, enacted. The provisions of Section 12 of the Act have also been enacted for that purpose and the said provisions give protection to the teriant and do not confer a new right on the landlord which he does not possess under the ordinary law of the landlord and tenant. It is not a section which to use the words of the Supreme Court in Punialal v. Bhagwatprasad, : [1963]3SCR312 , creates 1a new right in the landlord to evict the tenant where the tenant does not pay rent', vide the full Bench decision in Nanalal's case (supra). As we have held that under the ordinary law a transferee of the lessor's right can take advantage of the arrears of rent prior to the transfer the question in issue can 'be answered as per aforesaid statement of law enunciated in the above cases, viz. that the tenant must establish his readiness and willingness to pay the entire rent due if he wants the benefit of the provisions of the Act. The provisions of Section 12 of the Act are not identical in all respects to the provisions of the sections the Courts were considering in the cases cited herein before. The provisions of Section 12 of the Act are to some extent different inas-much as they give more opportunities to the tenant to avoid a decree ,of eviction. Section 12(1) of the Act requires tenant's readiness and willingness to pay rent. Section 12(2) requires the tenant to pay the rent which the landlord calls upon him to pay and this includes all the arrears of rent. If the dispute regarding the standard rent is raised, a tenant is under an obligation to pay the rent as per the provisions of Section 12(b) in order to avoid a decree of eviction. That being so the principle of law laid down in those cases is applicable to the tenant seeking protection of the Act. A transferee of the property with arrears of rent as pointed out earlier is ,a landlord under Section 12 of the Act. In the instant case the tenancy ,of the tenant is legally terminated and under the ordinary law, the -transferee landlord is entitled to recover possession of the suit premises. In order to obtain protection under the Act the tenant has to show his readiness and willingness to pay rent or to pay rent as per the provisions of Section 12 of the Act. There is nothing to indicate that the tenant's default in payment of rent prior to the transfer is available only to a landlord who at the time of the default was the landlord, the tenant must be at all times ready and willing to fulfil all his conditions of tenancy including the payment of rent as per the provisions of Section 12 of the Act. The provisions of Section 12 of the Act only limit the right of the landlord to recover possession and supply opportunities to the tenant to make good his default of non-payment of arrears of rent at the stages and in the manner provided under Sections 12(1), 12(2) and 12(3)(a) of the Act. We take this view of law only because under the ordinary law of landlord and tenant a transferee can take benefit of arrears of rent prior to the transfer on assignment to him. If such is not the position in ordinary law, the question will necessarily arise that to construe Section 12 of the Act to lay down an obligation on the tenant to pay arrears of rent due prior to the transfer to the transferee will correspondingly impose a right on the landlord to recover possession which he had not under the ordinary law. The intention of the legislature in enacting Section 12 of the Act is not to create a new liability in a tenant which did not exist in the common law but to protect him from the liability which falls upon him because of the liberal provisions of that law.

21. For the aforesaid reasons our answer to point referred is that the question about the character of arrears of rent prior to the transfer is besides the point in the case of a suit to recover possession on the ground of such arrears of rent and the purchaser of the lessor's property with a right to reever arrears due to the vendor is entitled to serve the tenant with a notice of demand under Section 12(2) of the Act and to sue the tenant on the ground of non-payment of such arrears of rent.

22. The civil revision applications are accordingly remanded for disposal according to law. There shall be no order as to costs of this reference.

23. Reference answered accordingly.


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