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Prem Govindram Sajnani Vs. H.M. Methwani - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtGujarat High Court
Decided On
Case NumberCivil Revn. Appln. No. 618 of 1968
Judge
Reported inAIR1974Guj140; (1973)GLR952
ActsBombay Rents, Hotels and Lodging House Rates Control Act, 1947 - Sections 12
AppellantPrem Govindram Sajnani
RespondentH.M. Methwani
Appellant Advocate K.N. Mankad, Adv.
Respondent Advocate Y.S. Mankad, Adv.
Cases ReferredKanto M. Mullick v. Jyotish Chandra Mukherji. Undoubtedly
Excerpt:
.....if original landlord transfers arrears of rent due from tenant - arrears lose their character as rent - arrears need not be tendered to landlord or deposited in court by tenant to save himself from eviction under provisions of section 12. - - here sheri mankad has relied upon the above referred calcutta decision of air1960cal378 ,wherein it is held that a claim for arrears of rent loses the character of rent as soon as it is assigned and that the cause of action for recovery of arrears of rent is completely satisfied as soon as the assignor receives the consideration for which he sells, the arrears of rent and what the assignee purchases is not the cause of action for recovery of arrears of rent, but the right of the as signor to recover those arrears. mankad, who appeared on..........6 (e) of the act, which says that a mere right to sue can-not be transferred. the above referred claim decisions also show that when a to arrears of rent is transferred along with the possession of the property, it a transfer of cannot be considered as mere right to sue. these decisions, therefore, establish that when a claim to arrears of rent is transferred along with accommodation and includes the agent, at the property, out of which this claim arises, it is 'a valid transfer of an actionable claim as contemplated by section 103, of the transfer of property act.29. now the question is whether when a claim for arrears of rent is transferred, the said claim still retains the character of a claim for rent in the hands of the transferee. answer to this question is provided by the above.....
Judgment:
ORDER

1. This revision application arises out of the eviction suit filed by the opponent-plaintiff against the petitioner defendant in the Court of Civil Judge, Junior Division, Gandhi ham, where the said suit was registered as Civil Suit No. 88/66. The opponent-plaintiff has claimed the eviction on two grounds, namely, (I) bona fide and reasonable personal requirement of the suit premises and (2) non-payment of rent for more than 6 months. The trial court decreed the opponent's suit on both these grounds and the same decree has been confirmed by the Appellate Court in Appeal No. 35/67 of the court of District Judge, Ketch at Buhl.

2 to 4. * * * *

5. So far as arrears of rent are concerned, the facts are that the petitioner was in arrears of rent from 1-4-65 to 30-6-66 amounting to Rs. 225/- at the rate of Res. 15/- per month. He was, therefore, given a notice to pay up the rent with demand to quit. This notice is dated 27-6-66 and the same is found at Ex. 22. The petitioner-tenant contended in reply to this notice demanding arrears of rent, that he had spent Rs. 337.52 for necessary repairs and, therefore, was entitled to set off this amount, against the rent in arrears.

6. The learned Judges of both the lower courts have found that according to Section 23 of the Rent Act, the petitioner-tenant was not entitled to deduct or recover any amount on account of repairs, which exceeded 1/4th of the rent payable by the tenant for the whole year, excluding 1/4th of the proportionate taxes in respect of premises Payable to the local authority concerned for that year, Under these circumstances, the lower courts found that the Petitioner-tenant was in arrears of rent for more than six months and was liable to be evicted even for that reason.

7. So far as this question of arrears of rent is concerned, a point of law , which was at time of hearing of this revision application on behalf of the petitioner-tenant by his learned Advocate Sheri K. N. Mankad, was that the petitioner was originally a tenant of Sandhog Resettlement Corporation Ltd., Adieu (hereinafter referred to as the 'Corporation') and till 6th June, 1966 he was liable to pay the rent to that Corporation. But since that Corporation assigned its rights to collect rent in arrears in favor of the opponent-plaintiff on 6th June, 1966, the rent in arrears till that date ceased to carry the character of rent and became an actionable claim and, therefore, provisions of Section 12 of the Rent Act did not apply to the amount of rent, which was in arrears till 6th June, 1966. For this proposition Sheri Mankad has put reliance on the decision given by a Division Bench of Calcutta High Court in Daya Devil v. Chapala Devil : AIR1960Cal378 .

8 to 22. * * * *

23. Sheri K. N. Mankad, is how ever, found to be on stronger ground on his next contention as regards this question, His contention is that the rent in arrears was assigned by the Corporation to the Plaintiff only on 6th June, 1966. Therefore, the rent from 1-4-65 to 31-5-66 i.e. the rent for 14 months ceased to carry the character of rent the moment it was assigned by the Corporation to the plaintiff for a valuable consideration. According to Sheri Mankad, if this rent in arrears ceased, to carry with it the character of rent, it became purely an action able claim and, therefore, no payment or tender thereof was required to be made ,as contemplated by Section 12 of the Rent Act. Here Sheri Mankad has relied upon the above referred Calcutta decision of : AIR1960Cal378 , wherein it is held that a claim for arrears of rent loses the character of rent as soon as it is assigned and that the cause of action for recovery of arrears of rent is completely satisfied as soon as the assignor receives the consideration for which he sells, the arrears of rent and what the assignee purchases is not the cause of action for recovery of arrears of rent, but the right of the as signor to recover those arrears. This right of assignor being a property, it is transferable under the main provisions of Section 6 of the Transfer of Property Act and it is not hit by any of the clauses which appear in that section.

24. If the above contention of Sheri Mankad is accepted, then it follows that the arrears of rent, which were assigned by the Corporation to the plaintiff, ceased to bear the character of rent and were converted into an actionable claim to recover a particular debt and, therefore, the provisions of Section 12 of the Rent Act , which refer only 'rent' would have no application to the facts of the case.

25. Shri Y. S. Mankad, who appeared on behalf of the opponent plaintiff, however, contended that the Calcutta decision of : AIR1960Cal378 (supra) is not only not applicable to the facts of the case but the same does not lay down a good law in view of the decision' given by a Division Bench of Allahabad High Court in Ram Prakash Ghai v. Karam Chand : AIR1963All47 . As will be clear from the discussion which follows, this Allahabad decision has taken undoubtedly a view which is contrary to the view taken by the Calcutta High Court in Daya Debi's case : AIR1960Cal378 .

26. In view of these conflicting decisions, it is necessary to go into a detailed consideration of the question involved in this point.

27. The Transfer of Property Act contains three relevant provisions which have good deal of bearing on this question. They are Sections 103, 3 and 6 Section 103 of this Act contemplates transfer of actionable claims and says that a transfer of such claims shall be effected only by execution of an instrument in writing signed by the transferor or his duly authorised agent. Sub-section (2) thereof further provides that transferee of an actionable claim may upon execution of the instrument of , transfer, sue or institute proceedings for the same in his own name without obtaining the transferor's consent to the said suit or proceeding, and without making him a party thereto. The section does not define the expression 'actionable claim' but this definition is found in Section 3 of the Act, which says that 'actionable claim 'means 'a claim to any debt, other than' a debt secured by mortgage of immoveable property or by hypothecation or to pledge of moveable proper, or beneficial interest in moveable property not in the possession, either actual or constructive, of the claimant, which the Civil Courts recognise as affording grounds for relief, whether such debt or beneficial interest be existent, accruing, is, conditional or contingent. In short, this able definition excludes from its scope the debts, which are secured by mortgage or hypothecation. All other debts are therefore covered by this definition and can be considered as actionable claims. Now the landlord's right to recover the arrears of rent from his tenant is nothing but a right to recover a debt due to him. Such a right is, therefore, an actionable claim as held in various decisions including the decision given by the High Court of Bombay in Shankarappa Kotrabasappa Harpanhalli v .Khatumbi Jamaluddinsab AIR 1932 Bom 478. Other decisions are Kameshwar v. Reknath AIR 1923 Pat 165, Survanarayan v. Venkayya AIR 1923 Mad 177, Madhabilata v. Butto Kristo Roy AIR 1944 Pat 129 and Ganga raju v. Gopala Krishnamurthi AIR 1957 Andh Pra 190 (FB).

28. The third relevant provision is contained in Section 6 (e) of the Act, which says that a mere right to sue can-not be transferred. The above referred claim decisions also show that when a to arrears of rent is transferred along with the possession of the property, it a transfer of cannot be considered as mere right to sue. These decisions, therefore, establish that when a claim to arrears of rent is transferred along with accommodation and includes the agent, at the property, out of which this claim arises, it is 'a valid transfer of an actionable claim as contemplated by Section 103, of the Transfer of Property Act.

29. Now the question is whether when a claim for arrears of rent is transferred, the said claim still retains the character of a claim for rent in the hands of the transferee. Answer to this question is provided by the above referred Calcutta decision given in Daya Debi's case in the negative. The ratio of that decision is that cause of action for recovery of -arrears of rent is completely satisfied as soon as the assignor receives the consideration for which he sells the arrears of rent and what the assignee purchases is not the cause of action for recovery of arrears of rent, but the right of the assignor to recover those arrears. This right being a property, it becomes transferable as such. According to this decision, therefore, a claim to arrears of rent ceases to be a claim for rent and is converted into an actionable claim as defined by Section 3 of the Transfer of Property Act. A view contrary to this decision is taken by the Allahabad High Court as stated in : AIR1963All47 . A similar view is also taken by judge of Calcutta High Court in an earlier case of Kanto Mohan Mallik v. Jyotish Chandra Mukherji ILR (1945) 2 Cal 591 : (AIR 1949 Cal 571). The question which of these two views is preferable.

30. The above referred decision of the Allahabad High Court shows that the learned Judges therein considered the provisions of Section 3 (1) (a) of the U. P. (Temporary) Control of Rent and Eviction Act (3 of 1947), which provided that a tenant is liable to be evicted if he has 'willfully failed to make payment to the landlord of any arrears of rent with in one month of the service upon him of a notice of demand from the landlord' That was a case in which arrears of rent were assigned in favour of the new land lord. Therefore, an argument was advanced before the court that demand the erred Section 3 (1) (a) of the U. P. Act was required to be made by a landlord for the rent due to himself and, therefore, a- transferee of the arrears of rent was not the landlord within the meaning of Section 3 (1) (a) of the U. P. Act, because, the arrears of rent, which were transferred to him, were not due to him but were due to the previous land lord. This argument was rejected by the court having regard to the definition of the word 'landlord' given in U. P. Act. That definition says that a landlord means ' a person to whom rent is payable by a tenant in respect of any accommodation and includes the agent attorney, heir or assignee of the landlord and a tenant in relation to his sub-tenant'. Relying upon this definition, the High Court found-that even an assignee or a transferee of the original landlord was a 'landlord' within the meaning of observations of the Allahabad decision in the above cannot be said that the rent in arrears was not due to a landlord. It is thus obvious that this decision proceeds on the presumption that the artificial definition of landlord given in the concerned Act would also govern the provisions as regards the eviction. In fact the artificial definition of the word 'landlord' giver) in Section 5 (3) of our Rent Act was projected into the provisions of Section 12 of our Rent Act by a single Judge decision -of this court in Bai Dahiba v. Jitendra Kanaialal Parikh (1971) 12 Guj LR 595. Now this decision can no more be regarded as good law in view of the Full Bench decision given in Nanalal Girdharlal v. Gulamnabi Jamalbhai : AIR1973Guj131 . In this Full Bench decision this court has considered how far the artificial definition of the word 'landlord' given in Section 5 (3) of the Rent Act can be useful for interpreting Section 12 of the Rent Act. The Full Bench considered the question what would be the meaning in which the word 'landlord' is used in the relevant provisions of the Rent Act. It considered whether it was used in ordinary sense in which it is understood in the general law of the landlord and the tenant or whether it is used in the extended sense given in Section 5 (3) of the Rent Act. It then proceeded to consider the various provisions contained in Section 12 of the Rent Act and came to the conclusion that the subject and context in which the word ' landlord' is used in Section 12 of the Rent Act clearly indicates that this word means the landlord who would, but for the injunction contained in Section 12, be entitled to recover possession of the premises. The court also expressed an opinion that the artificial definition of the word 'landlord' given in Section 5 (3) of the Rent Act , cannot be inducted into Section 12. If this is so, we must proceed on the footing that the word, which is found used in Section 12 of our Rent Act, would not include the persons who were not landlords according to the meaning attributed to that term under the general law of landlord and tenant at the time when the rent had accrued due. In other words, if the opponent plaintiff was not the landlord at the time when the accrued rent fell due, then he cannot take advantage of the provisions of Section 12 on the ground that the petitioner-tenant has not paid that rent to him even though called upon to do so by a regular notice. In my opinion, therefore, the very basis of the Allahabad decision on which the reliance is placed by Shri Y. S. Mankad, is taken away by the above referred Full Bench decision of this Court.

31. Shri Y. S. Mankad also placed reliance upon the following observations of the Allahabad decision of in the above referred case of : AIR1963All47 :

'The contention of the learned counsel for the appellant that the arrears of rent which were due to the previous landlord were not arrears of rent in the hands of the plaintiff, does not stand to reason. So far as the defaulting tenant is concerned, it was an arrear of rent due against him. Whether that arrear of rent was now payable to the plaintiff or to his predecessor-in-title is wholly immaterial.

Every arrear of rent is also a debt and it is transferable as a debt. But that does not mean that the character of the liability changes because of its having been transferred from one hand to another. The method of transfer cannot change the nature of the liability.'

Relying upon these observations, Shri. Y. S. Mankad, contended that even if it is believed that the word 'landlord' appearing in Section 12 should not necessarily be interpreted as defined in Section 5 (3) of the Rent Act, the fact remains that so far as the petitioner-tenant is concerned, his debt carried with it the character of rent in arrears.

32. With due respect to the learned Judges of the Allahabad High Court, who have decided the above referred case of Ram Prakash Ghai v. Karam Chand, I find myself unable to accept the reasoning adopted by them in the above quoted portion of their judgment. 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. Under the circumstances, I do not find it possible to accept the reasoning which has guided the learned Judges of the Allahabad High Court in the above quoted observations. In my view, the reasoning adopted by the Calcutta High Court in Daya Debi's case is acceptable and, therefore, the same should be followed;

33. My attention was drawn by the learned advocates of the parties to an unreported decision of the Supreme Court in Ranichander Narsey & Co. v. Wamanrao V. Shenoy, Civil Appeal No. 361 of 1966 decided on 13-3-1969 : (reported in AIR 1969 NSC 72). In this decision their Lordships of the Supreme Court have referred to the Calcutta decision of AIR 1960 Cal 378 (supra) and ILR (1945) 2 Cal 591 : (AIR 1949 Cal 571) (supra). But since the facts of that case were different, the Supreme Court has not expressed its opinion on the disputed question and has kept the present point res integra. The facts relevant of the Supreme Court case were that the first respondent of the appeal before the Supreme Court was the owner of the suit premises -and the appellant was the tenant of the said premises. The first respondent's case was that the appellant-tenant defaulted in payment of rent from the year 1950. He, therefore, served the appellant-tenant with a notice to quit on 12th December, 1955. One of the grounds on which the ejectment of the tenant was sought was his failure to pay the rent due for more than six months. The tenant in his reply to this notice raised a contention as regards the standard rent. However, he did not file any application for fixation of standard rent till April 18, 1958. Thereafter the suit was filed by the first respondent on 4th August, 1958. During the pendency of the suit the first respondent sold away the suit premises to his wife who was arrayed as respondent No. 2 and was, therefore, impleaded as such in the suit. One of the questions which arose before the Supreme Court was whether the second respondent i.e. the transferee-landlord was not entitled to take advantage of the default in payment of rent to the transferor-landlord. Dealing with this point, the Supreme Court has observed as under:

'It was urged on behalf of the appellant that in view of the assignment by the lst respondent in favour of the 2nd respondent, no decree for possession could have been passed in favour of the second respondent. The argument in this regard proceeded thus: As soon as there was an assignment of the arrears of rent , those arrears ceased to be rent, they became debt in law and therefore there was no question of paying the same or tendering them in court as required by Section 12 (3) (b). Hence no decree for ejectment could have been passed. In support of this contention reliance was placed on the decision of Calcutta High Court in Sm. Daya Debi v. Chapala Debi. We are unable to accept this contention. In the case referred to above the assignment of the rent had taken place prior to the institution of the suit. Under that circumstance the Calcutta High Court opined that at the time of the institution of the suit there were no arrears of rent. It is not necessary for our present purpose to consider the correctness of that decision. Suffice it to say that on the facts of this case, the rule laid down in that case is not apposite. Herein admittedly on the date the suit was institute', there was a valid cause of action for evicting the appellant. , What the court has to consider in every case is where the suit was validly instituted. If a suit is validly instituted a decree must necessarily follow, unless the law prescribes otherwise. Undoubtedly the present suit is based on a valid cause of action. Therefore all that we have to see is whether any subsequent event has happened necessitating the denial of the relief asked for. Paying or tendering the money under Section 12 (3) (b) is merely a concession granted to the tenant. He may avail of that concession or he may not avail of it. If he avails of that concession then the relief of ejectment asked for will not be granted though the landlord will ordinarily be entitled to the costs of the suit. There is no denying the fact that at the time the suit was instituted, the 1st respondent was the 'landlord', as defined in the Act and at the time the decree came to be made, the 2nd plaintiff was the 'landlord'. The deed of assignment has not been printed. Therefore, we do not know its terms. We have to proceed on the basis that the 1st respondent had assigned -all his rights, title and interest in the suit premises to the 2nd plaintiff. We must assume that in particular he had also assigned his right in the decree that may be passed in the suit. Learned counsel for the respondents referred to us in this connection the decision of the Calcutta High Court in Kanto M. Mullick v. Jyotish Chandra Mukherji. Undoubtedly that decision supports the contention of the respondent but it is not necessary for us to rest our decision on the basis of the rule laid down in that case.'

These observations make it clear that Daya Debi's case is distinguished by the Supreme Court on the ground that in that case the assignment of rent had taken place prior to the institution of the suit , and therefore, the Calcutta High Court in Daya Debi's case opined that at the time of the institution of the suit. there was no arrears of rent. However, in the case dealt with by the Supreme Court on the day on which the suit was instituted, there was a valid cause of action and the assignment of rent in arrears was made after the suit was instituted. Distinguishing the Daya Debi's case in this manner, the Supreme Court has not found it necessary to consider the correctness of that decision. Thus, this decision of the Supreme Court is not found in any manner helpful for deciding the facts of the present case.

34. I am therefore of the opinion that when the original landlord transfers the arrears of rent due to him from his tenant to someone else, the assignee does not become landlord with reference -to these arrears and the arrears lose their character as rent and, therefore, these arrears need not be tendered or paid to the landlord or deposited in court by the tenant to save himself from eviction under the provisions of Section 12 of the Rent Act.

35. In this view of the matter, the petitioner-tenant cannot be said to have been in arrears of rent for more than 6 months and if that is so, decree for eviction cannot be passed against him on the ground that he is not ready and willing to pay the rent in arrears for six or more than six months.

36. In view of the above discussion, this revision application should be, allowed, the same is allowed and the decree passed by the lower court is set aside. The opponent-plaintiff's suit stands dismissed. In view of the fact that the dispute between the parties involves points of law, there shall be no order as to costs.

37. Application allowed.


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