Hiralal and Another vs Sudhanshu Mohan Bose

Agarwala, J.—This is an application by the transferees of a part of an occupancy holding, and arises in the following circumstances: In 1934, the petitioners purchased a portion of an occupancy holding. In 1987, the landlord sued the original tenant for arrears of rent and obtained a decree. The petitioners were made parties to the proceedings in execution of that decree in which the decree-holder attempted to sell the moveable property both of the original judgment-debtor and also of the petitioners. The petitioners objected and their objection was upheld. Against the order upholding the objection the decree-holders appealed and the decision of the Court below was reversed with the result that the moveables of the petitioners have now been held liable to be taken in execution of the decree obtained against the original judgment-debtor to which the petitioners were not parties. Their liability depends upon the construction of certain Sections of the Tenancy Act, relating to the transfer of the whole or a part of an occupancy holding. Under the Act of 1913, a transferee of an occupancy holding or a portion of it could obtain registration of the transfer by payment of the transfer fee to the landlord.

In cases where the landlord was not prepared to accept the fee and recognise the transfer, the transferee could obtain registration by depositing the foe with the Collector who was then required to give notice to the landlord and hear him should he desire to oppose registration of the transfer. In considering whether the landlord should be compelled to recognise the transfer the Collector was required to consider, among other circumstances, whether there were any arrears of rent due in respect of the holding. He was not, however, prohibited from compelling the landlord to recognise a transfer merely because arrears wore due in respect of the holding.

In the case of a transfer which had been recognised by the landlord, either voluntarily or under compulsion, the portion of the holding which was the subject-matter of the transfer could not be sold in execution of a decree obtained against the transferor only. In the case of an unrecognised transfer the transferee could not object to the sale of a holding in execution of a decree obtained against the original tenant. Section 31 of the Act of 1913 has now boon repealed by the Amending Act of 1938 and in its place are a number of other Sections designed to enlarge the right of a holder of an occupancy tenancy to transfer the whole or a part of his holding and to safeguard the rights of the transferee. Section 30A which has been inserted by the Amending Act declares that occupancy holdings shall be transferable without the landlord''s consent and without the payment of any fee to the landlord, and further declares that such a transfer shall carry with it the occupancy right in the holding i and all the rights appurtenant thereto.

The new Section 31 which has replaced the former Section 31 provides for the manner in which, transfers are to be made and notice given to the landlord. Except in the case of sales in execution of a decree or certificate, transfers are required to be made by a registered instrument. Following this is another new section, namely, Section 31A, which provides that in the case of a transfer of a portion or share in a holding which is not defined by metes and bounds the transferee and the persons possessing an interest in the remainder of the holding shall be considered as joint tenants, that is to say, they are jointly liable for the rent of the holding to the landlord. But by Sub-section (2), it is provided that in the case of a transfer of a portion of the holding where the portion is defined by metes and bounds, the rent is to be distributed in the manner set forth in the notice referred to in Section 81.

Now these three sections, namely 30A, 31 and 31A, refer to transfer made after the Amending Act of 1938 came into operation. By Section 31B the Amending Act made provision for cases in which, although transfers had been made prior to 1938, the landlord''s recognition had not been obtained in the manner i required by Section 31 of the Act of 1913. By Sub-section (i), it was provided that in such cases the landlord is entitled to recover from the transferee the fees which were lawfully payable by him at the time of the transfer, and declare that a transferee, prior to the Act, should not be liable to ejectment on the ground that the landlord had not given his consent to the transfer. The right which the landlord had before the amendment to sell the holding, although it or part of it had been transferred, in a suit against the original tenant and thus, to eject the transferee, was barred, although the landlord''s right to recover the fee that he was entitled to at the date of the transfer was safeguarded provided that he took steps to recover it within three years from the date when the Amending Act came into force or from the date on which he first had knowledge of the transfer. By Sub-section (2) of Section 31B, it was provided that where a person who had taken a transfer before the amendment has given notice of the transfer by registered post, the landlord should not be entitled to sell the holding or any portion of it in satisfaction of the decree for rent without making the transferee a party to the proceedings in execution of the decree. The effect of these two sub-sections of Section 31B is that the right which the landlord formely had of affecting the interest of a transferee of a holding or a portion of the occupancy holding in a proceeding to which the transferee was not a party has been cut down. The mere fact that the landlord has not consented to the decree does not give him a right to eject the transferee. If the transferee has given notice of the transfer by registered post, the holding cannot be sold without making the transferee a party to the execution proceedings in which it is sought to sell the holding. There is nothing in either of these two sub-sections which can be construed as rendering a person who has taken a transfer of an occupancy holding or a part thereof prior to the amendment personally liable in a suit under a decree for arrears of rent obtained against transferor.

It is contended, however, that the effect of the explanation to Sub-section (2) is to render such a transferee liable to be proceeded against personally. That explanation provides:

Notwithstanding anything contained in this Act or in the Code of Civil Procedure, in the case of a transfer of a holding or a portion or a share thereof, whether before or after the decree, the transferee may be brought on the record in the proceedings in execution, either in substitution of or in addition to the judgment-debtor, and such transferee shall, when so added or substituted, be treated as a judgment-debtor for all purposes in the said proceedings.

This, it is contended connotes a personal liability even in respect of rent which accrued due before the transfer and which had been decreed in a suit to which the transferee was not a party. As I have already indicated, there is nothing in the positive enactments of the amending Act in any way extending the liability of a person whose transfer took place prior to the amendments and, in my view, the explanation to Sub-section (2) of Section 31B, cannot be construed to impose on such a transferee a liability which did not exist prior to the amendments. What the portion of the explanation relied on means is that, although, previously, the interest of a transferee would pass to a purchaser in execution of a decree against the transferor alone, now, provided the transferee has given notice to the landlord, it will pass only if the transferee has been brought on to the record. No personal liability is imposed on the transferee. In this view of the matter, the decision of the Court below was wrong.

This application must be allowed with costs in this Court and the Court below, and the decision of the trial Court reinstated; hearing fee one gold mohur.