THE HON’BLE SRI JUSTICE K.G. SHANKAR C.R.P.No.6832 of 2005 Date: 11.03.2011 Between: Mandala Venkateswara Rao … Petitioner AND Dr. Smt. Balabhadra Sujatha and another … Respondent THE HON’BLE SRI JUSTICE K.G. SHANKAR C.R.P.No.6832 of 2005 ORDER: Whether the grounds of wilful default and bona fide requirement raised by the landlord would accrue to the successor/vendee of the property from the landlord is the fundamental question in this revision. This revision arises from the orders in RCA No.5 of 2001 on the file of the Rent Control Appellate Authority-cum-Principal Senior Civil Judge, Rajahmundry. Through the impugned order, the learned Rent Control Appellate Authority confirmed the orders in RCC No.73 of 1997 on the file of the Rent Controller-cum-Junior Civil Judge, Rajahmundry. 2. The tenant laid RCC No.87 of 1995 on the file of the Rent Controller under Section 8 (5) of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act (‘Rent Control Act’ for short) against the sole respondent. Through the said case, the tenant sought for permission to deposit rent at Rs.200/- per month to the credit of the case on the ground that the landlord has refused to receive the same. The case was laid against one R. Sriharinath Reddy. Through orders in I.A.No.2531 of 2007 Dr.B. Sujatha impleaded herself as the second respondent claiming that she purchased the property from Sriharinath Reddy. Consequently, Sriharinath Reddy was re-arrayed as the first respondent while Dr. B. Sujatha was arrayed as the second respondent in RCC No.87 of 1995. 3. Dr. Sujatha in her turn laid RCC Nos.73 of 1997 and 74 of 1997 on the file of the same Court. Through RCC No.73 of 1997, she claimed that she was the landlady. She sought for eviction of the tenant on the grounds that wilful default in payment of rents, bona fide requirements of the landlady and denial of the title of the landlady by the tenant. She sought for the determination of the fair rent at Rs.1,500/-per month, through RCC No.74 of 1997. 4. The learned Rent Controller clubbed RCC Numbers 87 of 1995, 73 of 1997 and 74 of 1997 and disposed of all of them through a common order. RCC No.87 of 1995 laid by the tenant was dismissed. RCC No.73 of 1997 was allowed. The tenant was directed to vacate the premises within two months from the date of the order (The common order was passed by the learned Rent Controller on 08.01.2001). RCC N.74 of 1997 was also allowed in part fixing fair rent at Rs.800/- per month. 5. It would appear that the tenant did not choose to prefer any appeals from the orders in RCC No.87 of 1995 and 74 of 1997. RCA No.5 of 2001 was laid impugning the order in RCC No.73 of 1997 in which the tenant was directed to vacate the premises within two months. In other words, the tenant did not question the determination of the fair rent at Rs.800/- per month. The tenant also did not assail the order of the learned Rent Controller turning down the request of the tenant to permit the tenant to deposit the rent to the credit of the case. Indeed, RCC No.73 of 1997 is the crucial case out of the three cases. It is through orders in RCC No.73 of 1997 that the tenant became liable to vacate the demised premises. However, the learned Rent Control Appellate Authority dismissed RCA No.5 of 2001 arising from RCC No.73 of 1997. Hence, this revision by the tenant. 6. It may be noticed that one Akula Satyanarayana was not a petitioner or a respondent in RCC No.73 of 1997. However, he was arrayed as the second respondent in RCA No.5 of 2001, having been brought on record, through orders in I.A.No.1255 of 2002 on the file of the appellate authority under the Rent Control Act. Akula Satyanarayana, who is the second respondent, is the vendee of the premises from the landlady. Consequently, the landlady lost interest in the property. Akula Satyanarayana subrogated the landlady. He, therefore, got himself impleaded as second respondent in RCA No.5 of 2001 arising from RCC No.73 of 1997. 7. The case of the landlady is that the tenant committed wilful default from 19.02.1997 onwards, that the landlady required the premises for her bona fide requirement and that the tenant denied the title of the landlady. The learned Rent Controller allowed the case on all the three grounds. The appeal was also dismissed. 8. Sri M.S. Ramachandra Rao, learned counsel for the tenant/revision petitioner contended that so far as the landlady is concerned, the tenant did not commit wilful default and that the bona fide requirements of the original landlord through whom the landlady purchased the premises cannot accrue in favour of the landlady. His claim is that consequently the landlord also failed in establishing wilful default and bona fide requirement. The denial of the title, in fact, is merely incidental. Neither side emphasised on point of denial of title. 9. The case of the respondents is: a) The demised premises is more than 30 years old. The rent for the premises is Rs.300/- per month payable on the first of every succeeding month. Although the first respondent became the owner of the property, the revision petitioner/tenant failed to pay rent from 19.02.1997 onwards and thus committed wilful default. b) The first respondent and her husband who are practicing Doctors purchased the demised premises and appurtenant land to construct a nursing home. The first respondent issued notice to the tenant demanding the tenant to vacate the premises on the ground of wilful default. The tenant, however, did not vacate the premises. 10. The tenant denied the contentions of the first respondent. The tenant claimed: a) The tenant took the premises on lease from one Rokkala Parvathamma in April 1992 on a monthly rent of Rs.200/-. He has been running a medical shop in the demised premises. There are no arrears of rents from the tenant. Smt. Parvathamma, the original landlady passed away on 16.12.1994. One R. Harinadh Reddy started collecting rents thereafter, however, without passing any receipts. In 1995, Harinadh Reddy demanded for the enhancement of the rent to Rs.500/- per month. The tenant demanded receipt for the rent paid by him. Harindra Reddy, however, refused to pass receipts for the rents. b) The tenant consequently laid O.S.No.526 of 1995 on the file of the Court of IV Additional District Munsif, Rajahmundry. The tenant deposited rents to the credit of the suit till the end of December 1997. He received notice dated 22.08.1997 from the first respondent preceded by a notice dated 01.07.1997 demanding the tenant to vacate the premises. There was no default on the part of the tenant much less wilful default in payment of rents. The landlords do not require the premises for their bona fide needs. 11. The three grounds taken by the first respondent in RCC No.73 of 1997 are a) wilful default from 19.02.1997, b) bona fide requirement and c) denial of title. It may also be noticed RCC No.73 of 1997 was laid by the first respondent alone. While RCA No.5 of 2001 was pending, the second respondent came on record on the ground that he purchased the schedule premises from the first respondent. This is the crux of the case on which the learned counsel for the tenant heavily harps upon. 12. The case of the tenant is that Rokkala Sri Harinadh Reddy was the landlord. Perhaps, it is the claim of the tenant that Sri Harinadh Reddy is the son of Parvathamma from whom the tenant took the demised premises on lease and that Sri Harinadh Reddy became the owner of the property when Parvathamma died on 16.12.1994. Thus, the tenant arrayed Sri Harinadh Reddy as the respondent in RCC No.87 of 1995. The first respondent later came on record as the second respondent in RCC No.87 of 1995. She laid RCC Nos.73 of 1997 and 74 of 1997. The tenant lost all the three cases in the common order passed by the Rent Controller. 13. The tenant consequently preferred RCA No.5 of 2001 against RCC No.73 of 1997. Obviously, the appeal was laid against the first respondent only. During the pendency of the Rent Control Appeal, the second respondent allegedly purchased the demised premises and the land appurtenant thereto from the first respondent. Consequently, he came on record as the second respondent. When the tenant lost the Rent Control Appeal and preferred the present revision, he arrayed both the respondents in the Rent Control Appeal as the respondents. As already pointed out, the plea of denial of title has not been seriously contested by either side. There is no evidence that when the first respondent purchased the property, the original landlord, i.e., Rokkala Sri Harinadh Reddy informed the tenant that he sold the property to the first respondent. If the first respondent issued notice to the tenant claiming title to the same and if the first tenant denied the title of the first respondent, it cannot be considered as denial of the title of the landlord/landlady by the tenant so as to order the eviction of the tenant. Still later the second respondent purchased the property from the first respondent. Again, there is no evidence that the second respondent informed the tenant that he purchased the property from the first respondent and that he has become the owner of the schedule property. If the tenant denied the title of the second respondent, it cannot be considered to be a ground to order the eviction of the tenant. 14. Sri T.V.S. Prabhakar Rao, learned counsel for the second respondent contended that the sale deed attorned the tenancy in favour of the second respondent and that the attornment was recited in the very first page of the sale deed. The sale deed in favour of the second respondent admittedly recites that the second respondent shall take care of O.S.No.53 of 1998 on the file of the I Additional District Munsif’s Court, Rajahmundry and RCA Nos.5 of 2001 and 6 of 2001 at his cost. It is the contention of the learned counsel for the second respondent that the tenant was not entitled to deny the title of the second respondent. It may be noticed that attornment of tenancy is made by the tenant whereas the assignment is by the landlord. The attornment of the tenancy cannot be made by the first respondent in favour of the second respondent. As already pointed out, in any event, there is no serious contest from either side regarding the ground of denial of title of landlord by tenant for the eviction of the tenant. 15. The learned counsel for the second respondent contended that the tenant committed wilful default, that the second respondent required the premises for his bona fide requirement and that the tenant is, therefore, liable to vacate the schedule premises. The tenant, on the other hand, contended that the second respondent cannot raise the bona fide requirement of the second respondent as a ground for the eviction of the tenant. 16. Indeed, the first respondent laid the Rent Control Case inter alia, raising the plea of bona fide requirement. However, during the pendency of the appeal, the first respondent sold away the property to the second respondent. It is true that in the Rent Control Case, the learned Rent Controller held that the requirement of the first respondent was bona fide. However, when admittedly the first respondent sold away the property, her bona fide requirement automatically ceases. Once, the first respondent is not the landlady, the question of her requiring of the premises for her bona fide purposes does not arise. 17. The second respondent, therefore, stepped into shoes of the first respondent as the vendee of the property because the appellant claimed that he required the premises for his bona fide needs. The second respondent laid I.A.No.683 of 2004 in RCA No.5 of 2001 to amend the Rent Control Case to include his bona fide requirement as a ground. I.A.No.683 of 2004 was allowed. The second respondent thus raised the additional plea of his own bona fide requirement. 18. Unfortunately, through orders in I.A.No.753 of 2004, dated 21.04.2004, the learned Rent Control Appellate Authority directed the trial Court to determine the bona fide requirement of the second respondent. This is unfortunate because the learned Rent Control Appellate Authority did not remand the appeal. He merely directed the Rent Controller to record evidence regarding the bona fide requirement of the second respondent, record a finding and transmit the same to the Rent Control Appellate Authority. Sri M.S. Ramachandra Rao, learned counsel for the tenant deprecated this practice of the appellate Court. His poser is that the tenant lost a chance to put forth his claim in the appeal on the finding of the learned Rent Controller regarding the bona fide requirement of the second respondent. 19. Be that as it may, it is the case of the second respondent that he required the premises for his bona fide needs. The second respondent purchased the property in 2001. The Rent Control Case was laid in 1997. By then, the second respondent was not the landlord of the premises. Indeed, the first respondent was found to require the premises for her bona fide needs. However, she lost the chance to make a claim for her bona fide needs as she sold away the property to the second respondent. 20. Thus, the first respondent is not entitled to raise the plea of bona fide requirement as she is not the owner of the property now. The plea of the second respondent that he required the premises for his bona fide needs arose not when the Rent Controller Case was laid, about four years thereafter, during the pendency of the appeal, when the second respondent purchased the premises. I agree with the contention of the learned counsel for the tenant that the bona requirement of the second respondent is an entirely new cause of action for RCC No.73 of 1997. The second respondent was not in the picture at all by the date of the Rent Control Case. This is the question of law raised by the learned counsel for the tenant. 21. His contention is that perhaps the second respondent’s requirement is a bona fide requirement and that the second respondent, however, is not entitled to raise the same on the ground that the second respondent could not have raised this plea in the litigation at the commencement of the case, as the second respondent had no cause of action at that time. The situation appears as if the tenant has been approbating and reprobating at one and the same time. Apparently, the tenant is contending that the first respondent is not entitled to take the plea of the bona fide requirement and that the second respondent is also not entitled to take the plea of bona fide requirement. However, the law is that no one can approbate and reprobate at one and the same against the same party. In the present case, the tenant is resisting the claim of the first and the second respondent regarding the plea of bona fide requirement for on different reasons. So far as the first respondent is concerned, the case of the tenant is that as the first respondent has already sold away the property to the second respondent, the first respondent is no more entitled to take the plea of bona fide requirement. The tenant further contended that so far as the second respondent is concerned, the second respondent had no cause of action by the date of Rent Control Case, and that the plea of the second respondent, therefore, is liable to be rejected in a revision arising from RCC No.73 of 1997. I agree with the contention of the learned counsel for the tenant that the tenant is entitled to take these pleas against the respondents 1 and 2. I also agree with the contention of the learned counsel for the tenant that the plea of bona fide requirement is not available either to the first respondent or to the second respondent in the circumstances of the case. The Rent Control Case to the extent of the plea of bona fide requirement is liable to be rejected. I have already held that the plea of denial of the title of the landlord has not seriously been contested by either side. Even other wise, the plea deserves to be rejected as not established since the landlords have failed to show that the tenant was informed about the transfer of title of the property and failed to establish that the tenant wilfully denied the title of the landlord so as to direct the eviction of the tenant. 22. The other plea taken by the first respondent and continued by the second respondent in the revision as well as in the appeal is wilful default for payment of rents. The learned counsel for the tenant contended that the tenant continued to pay rent regularly and that there was no wilful default. He further urged that the plea of wilful default does not endure to the second respondent. 23. It may be recalled that the first respondent claimed that the tenant committed default in payment of rents with effect from 19.02.1997. The plea of the first respondent is quite confusing. It is the case of the landlady (the first respondent) and her predecessors-in- title that the rent for each month was payable on the first of the next month. If so, it is for the first respondent to explain how the default was committed with effect from 19.02.1997 instead of 01.02.1997 or 01.03.1997. On the other hand, it is the case of the tenant that he had paid rent till the end of December, 1997 to the first respondent in RCC No.87 of 1995 and started depositing the same into Court thereafter. The learned Rent Controller held that the tenant committed wilful default in payment of rents. The learned Rent Control Appellate Authority confirmed the finding of the learned Rent Controller. 24. However, the entire scenario has changed now. The first respondent is no more the landlord. It is the second respondent who has taken over the premises. 25. The learned counsel for the tenant contended that the second respondent has not purchased the right to receive the rents prior to the date of the purchase by the second respondent and that the second respondent, therefore, cannot contend that the tenant committed wilful default. The learned counsel for the tenant submitted that the second respondent purchased the property from the first respondent and that the sale deed inter alia obligates the second respondent to contest O.S.No.53 of 1998 on the file of the I Additional District Munsif’s Court, Rajahmundry and RCAs 5 of 2001 and 6 of 2001 before the Rent Control Appellate Authority, Rajahmundry at his own costs. His main point is that the sale deed did not assign the rights of the first respondent to the second respondent so far as the right of the first respondent to collect rents from the tenant is concerned. In view of the absence of such an assignment, the learned counsel for the tenant contended that the second respondent who is the present landlord is not entitled to receive past rents and that the second respondent, therefore, is not entitled to seek the eviction of the tenant on the ground of wilful default. I wholly agree with the contention of the learned counsel for the petitioner that the sale deed did not specifically assign the rights of the first respondent, to collect rents from the tenant to the second respondent. The second respondent consequently could not seek for the eviction of the tenant on the ground of wilful default in the payment of rents till the second respondent purchased the property. Assuming that the tenant has not paid rents to the second respondent, after the second respondent purchased the schedule property, a new cause of action arose. The second respondent cannot continue the lis in RCC No.73 of 1995 and seek for the eviction of the tenant on the ground of wilful default by the tenant in so far as the second respondent is concerned. 26. This situation does not hold good so far as the wilful default by the tenant against the first respondent is concerned. So far as the first respondent is concerned, it is the case of the first respondent that the tenant committed wilful default. The trial Court and the appellate Court held that the claim of the landlord/first respondent has been proved. The question of law that arises for consideration is whether the contention can be urged now where the first respondent already sold away the property and does not hold title over the same. It is the claim of the learned counsel for the tenant that once the landlord alienated her title to the second respondent, the landlady cannot seek for the eviction of the tenant. Her only relief would in such an event, according to the learned counsel for the tenant is to seek for the payment of arrears of rent through a suit. Thus, it is the contention of the learned counsel for the tenant that the first respondent who lost title to the property is not entitled to raise the plea of wilful default and that the second respondent had no cause of action regarding the wilful default by the date of the Rent Control Case and consequently cannot raise the same now. In other words, the learned counsel for the tenant once again contended that the two respondents are not entitled to raise the pleas of wilful default and the claim of the respondents that the tenant committed wilful default is liable to be dismissed in limini without going into the question whether the tenant committed wilful default or otherwise. 27. The learned counsel for the tenant placed reliance upon N.M. Engineer v. Narendra Singh Virdi[1]. Section 12 (3) (a) of the Bombay Rents, Hotel and Lodging House Rates Control Act defining “arrears of rent” came up for consideration before the Supreme Court in that case. One of the co-owner, who owned the property, assigned a release deed of all his rights, title and interest in the property in favour of his co-owner. The release deed, however, did not refer to the assignment of rent in the release deed. The Supreme Court held that the assignee co-owner was not entitled to receive rents, which accrue prior to the date of assignment in view of the absence of recitals relating to the assignment of the rents in the assignment deed. The Supreme Court considered that the rents arising prior to the date of assignment could not constitute arrears of rent and that it would be merely be an actionable claim. The claim of the assignee, consequently, was rejected by the Supreme Court. 28. It is the case of the learned counsel for the tenant that in the present case also, the landlady (first respondent) did not assign the past rents to the new landlord (the second respondent) through the sale deed. The last para of page 2 of the sale deed reads that the second respondent shall resolve the dispute in the courts in the suit and in the Rent Control Appeals at his own costs. 29. Contending that there was no assignment of rents till the date of the purchase of the property by the second respondent, the learned counsel for the tenant submits that the second respondent is not entitled to receive the rents and that therefore, there was no wilful default. The right of the second respondent to collect rents and the wilful default committed by the tenant are different issues. The right to receive rents indeed is an actionable claim. However, there was wilful default in payment of rents to the first respondent and her predecessors-in-title. This is