Source: https://www.lawweb.in/2018/07/whether-transferee-of-tenanted-premises.html
Timestamp: 2019-04-24 14:34:28+00:00

Document:
Law Web: Whether transferee of tenanted premises can recover past arrears of rent?
Whether transferee of tenanted premises can recover past arrears of rent?
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 along 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 the 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 not transferee.
22. In view of the proviso, the appellant-assignee is not entitled to rent before the assignment. The rent is merely a debt.
N.M. Engineer Vs. Narendra Singh Virdi and Ors.
S. Mohan and N.P. Singh, JJ.
2. The appellant is the owner of a bungalow situated at Mundhva Road, Ghorpa di, Poona. On 10,11.57, the first appellant and his wife Banoobai (since deceased) leased out the said premises to respondent No. 1 under a rent note on a monthly rent of Rs. 130/-.
3. The first respondent fell into arrears of rent for the period commencing from 1.8.63 to 31.3.64. By notice dated 22.4.64, the appellant No. 1 and his wife terminated the tenancy of the first respondent and demanded arrears of rent under Section 20(2) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (hereinafter referred to as 'the Act').
4. On the expiry of the period of notice, the appellant and his wife filed a Suit No. 2267/64 for possession of the premises under Section 12(3)(a) of the Act. The respondent-tenant contested the suit. He also raised the question of standard rent and claimed for fixation of standard rent. The learned trial Judge by his order dated 26.7.65 fixed standard rent at Rs. 130/- per month and decreed the suit. On appeal by the respondent, the same was allowed by the learned District Judge by his order dated 16.4.66. Thereupon Special Civil Application No. 46 of 1967 was preferred in the High Court. That was dismissed on 6.10.70.
5. On 3.10.66, the wife of the first appellant, Banoobai, died. The first appellant in his capacity of co-owner as also the heir of his wife together with her other heirs, served a notice dated 2.5.67 calling upon the first respondent to pay arrears of rent for the period commencing from 1.11,66 to 30.4.67 within a month. The first respondent did not pay the said arrears. That necessitated the appellant to file the present suit for possession and for recovery of arrears of rent. In the said suit, the legal representatives of the deceased-Banoobai were made proforma defendants No. 2 to 5. On 8.6.67, they released all their rights title and interest in favour of appellant No. 1.
6. Pending suit, an application for amendment was taken out raising the tone of nuisance against the first respondent. The trial court decided both suits and standard rent application by its order dated 29.9.73 and held that the standard rent of the premises was Rs. 130/- per month. The suit was decreed in favour of the appellant under Section 12(3)(a) and (b) of the Act. The first respondent preferred an appeal which was dismissed. Thereafter he preferred two Special Civil Applications - one against the decree for possession and the other against the standard rent application. The learned Single Judge of the High Court heard both the matters together and dismissed the suits as not maintainable. It is und| these circumstances, the present civil appeal has come before this Court.
7. Mr. V.M. Tarkunde, learned Counsel for the appellant argues that first and foremost the point of arrears of rent in the hands of transferee becomes a debt, is not taken either in written statement filed by the respondents nor any issue was framed. Such a point cannot be decided under Article 227.
8. The first appellant is a co-owner and is entitled to give notice. Such a notice valid as laid down in Sri Ram Pasricha v. Jagannath and Ors. MANU/SC/0473/1976 : 1SCR395 , Subhendu Prosad Roy Choudhury and Ors. v. Kamala Bala Roy Choudhury and Ors. MANU/SC/0389/1978 : AIR1978SC835 . Even otherwise as Collector of rent, he is entitled to issue notice. T notice is not challenged on the ground that more rent is demanded or rent of six month was not due.
iv) No dispute regarding standard rent.
In other cases, Section 12(3)(b) is applicable. The cases covered thereunder are for arrears of rent of less than six months.
10. In opposition to this, learned Counsel for the respondent Mr. E.C. Agrawala arguments that the notice dated 2.5.67 was not valid. Firstly, on the date of the said notice, the ren for six months had not become due for payment within the meaning of Section 12(2) of the Act, therefore, Section 12(3)(a) would not apply. Secondly, the rent claimed in the notice was at the monthly rate of Rs. 130/- whereas before the date of issuance of notice Small Causes Court in Misc. Application No. 258/67 had fixed the interim rate of rent at the rate of Rs. 87/- per month. The same having been deposited, there were no arrears. Thirdly, on 8.6.67, the property was leased out in favour of the appellant and the pro for respondents had relinquished their share but in the said relinquishment deed, no assignment] much less a specific assignment of rent was made in favour of the appellant. In the absence of such an assignment, the appellant could not recover it as rent.
11. On a defective notice, the suit could not be validly maintained as laid down in Chiman Lal v. Mishrilal MANU/SC/0305/1984 . This judgment has been relied upon in recent decision of this Court reported in Chase Pvt. Ltd. v. Shanta Ram Shankar Sawant- JT 1994 (2) SC 192. Where therefore, mere close-in action is claimed under Section 19 of the Transfer of Property Act, the transferee is not entitled to arrears of rent.
12. The appellant having failed in his case under Section 12(3)(a), cannot seek to rely on Section 12(3)(b). Under Section 12(3)(a), there was a dispute about the amount of rent. There were no arrears for six months outstanding and there is no negligence on the part of the respondent-tenant in making the payment thereof. The notice is bad on that account. The notice referred to under Section 12(3)(b) is entirely different. Thus, no exception could be taken to the impugned judgment.
It is possible that another court may be able to take a different view of the matter by appreciating the evidence in a different manner, if it determinedly chooses to do so. However, with respect to the learned Judge (Vaidya, J.) that will not be justice administered according to law to which courts are committed notwithstanding dissertation, in season and out of season, about philosophies. We are clearly of the opinion that there was no justification for interference in this case with the conclusions of facts by the High Court under Article 227 of the Constitution. We are also unable to agree with the High Court that there was anything so grossly wrong and unjust or shocking the court's "conscience" that it was absolutely necessary in the interest of justice for the High Court to step in under Article 227 of the Constitution. Counsel for both sides took us through the reasonings given by the High Court as well as by the courts below and we are unable to hold that the High Court was at all correct in exercising its powers under Article 227 of the Constitution to interfere with the decisions of the courts below. In our opinion, the High Court arrogated to itself the powers of a court of appeal, which it did not possess under the law, and has exceeded" its jurisdiction under Article 227 of the Constitution."
14. So, as we have observed above, it is purely a question of law.
Section 12(2) No suit for recovery of possession shall be instituted by a landlord against tenant on the ground of non-payment of the standard rent or permitted increases due, until the expiration of one month next after notice in writing of the demand of the standard rent or permitted increases has been served upon the tenant in the manner provided in Section 106 of the Transfer of Property Act, 1882.
12(3)(a) - Where the rent is payable by the month and there is no dispute regarding the amount of standard rent or permitted increases, if such rent or increases are in arrears for a period of six months or more and the tenant neglects to make payment thereof until the expiration of the period of one month after notice referred to in Sub-section (2), the Court shall pass a decree for eviction in any such suit for recovery of possession.
(b) In any other case, no degree for eviction shall be passed in any such suit if on the first day of hearing of the suit or on or before such other date as the Court may fix, the tenant pays or tenders in Court the standard rent and permitted increases then due and thereafter continues to pay or tender in Court regularly such rent and permitted increase till the suit is finally decided and also pays costs of the suit as directed by the Court.
The notice referred to in Section 12(1)(a) must be a notice demanding the rental arrears in respect of accommodation actually let to the tenant. It must be a notice (a) demanding the arrears of rent in respect of the accommodation let to the tenant and (b) the arrears of rent must be legally recoverable from the tenant. There can be no admission by a tenant that arrears of rent are due unless they relate to the accommodation let to him. A valid notice demanding arrears of rent relatable to the accommodation let to the tenant from which he is sought to be evicted is a vital ingredient of the conditions which govern the maintainability of the suit, for unless a valid demand is made no complaint can be laid of non-compliance with it, and consequently no suit for ejectment of the tenant in respect of the accommodation will lie on that ground."
17. Therefore, we now proceed to consider whether the suit notice is a valid one. The notice is dated 2.5.67. On 8.6.67, a lease deed came to be executed in favour of appellant by the proforma defendants. The suit came to be filed on 14.6.67. The question is whether the notice confirms to Section 12(3)(a). A notice claims rent at the rate of Rs. 130/-. In fact, the rent had been fixed as Rs. 87/- on 22.4.67. The rent fixed by the Court had been duly deposited by the respondent, covering all the arrears. The rent claimed the notice was Rs. 800/- (including Rs. 20/- as notice charge).
iii) If the tenant neglects to make payment.
19. If all these conditions are satisfied, a decree for eviction could be passed.
20. In this case, no doubt, the rent is payable by the month but there is a dispute as to the amount of standard rent. As seen above, on 24.4.67 in Misc. Application No. 258/67, the Small Causes Court had fixed the interim rent at the rate of Rs. 87/- as per order dated 24.4.67. The same had been deposited by the tenant and therefore there were no arrears outstanding.
7. Defendant No. 2 to 5 have released all their rights, title and interest in the suit bungalow in their capacity as her legal representatives of the deceased Banoobai N. Engineer wife of the plaintiff on 8.6.67 by a registered lease deed. It is therefore not necessary to implead them as co-plaintiff in the Suit. They have however been joined as proforma defendants in this suit in order to avoid any objections on the part of the defendants that the suit is bad for non-joinder of necessary parties.
23. Therefore, whatever might have been due prior to deed of lease dated 8.6.67, could not constitute arrears of rent. It was mere actionable claim. That being so, the notice does not satisfy the requirements of Section 12(3)(a), more so in this case, as stated above, the arrears at the rate of Rs. 87/- had been deposited. It is not open to the appellant to call upon Section 12(3)(b).
24. For the foregoing reasons, we hold that no exception could be taken to the impugned judgment. The civil appeal is dismissed. However, there shall be no order as to costs.

References: Application No. 46
 v. 
 v. 
 Application No. 258
 v. 
 v. 
 Application No. 258