Suhra vs Abdul Shukkur and Others

J.B. Koshy, J.—The short question to be decided in this revision petition is whether a petition for eviction u/s 11(2)(b) of the Kerala Buildings (Lease and Rent Control) Act (for short the Act) can be filed by an assignee landlord alleging existence of arrears of rent which fell due prior to the assignment of the building in his favour even if the right to recover such prior arrears of rent was later assigned to him by a separate assignment deed? The present landlord got the property by Ext. A-1 dated 17th November 1989. It is the case of the Petitioners that the tenant/revision Petitioner was in arrears of rent from 1st January 1979 till the date of transfer. By Ext. A-2 dated 30th December 1989 the right to recover an amount of Rs. 3,000 as arrears of rent and interest was also transferred by the erstwhile landlord to the present landlord. Thereafter, the present landlord filed Rent Control Petition u/s 11(2) of the Act. It was found by the Rent Control Court that under Ext. A-1 the present landlord has got the right to recover future rent alone from the date of transfer. By Ext. A-2 he obtained the right to recover arrears of rent. But, that will not enable him to maintain an application u/s 11(2) of the Act 2 of 1965. By virtue of Ext. A-2 what the present landlord received is only the right to recover previous arrears of rent and that can be recovered by filing a civil suit and a petition u/s 11(2) of the Act is not maintainable. The Appellate Authority found that u/s 2(3) of the Act landlord includes a person who is entitled to receive rent of a building. In view of the assignment in his favour the present landlord is entitled to receive the rent. Therefore, he can maintain a petition u/s 11(2)(b) of the Act. It was also found that since the property itself was assigned by Ext. A-1, the right to collect arrears of rent has also been assigned by Ext. A-1 itself. Therefore, the present landlord can maintain an application u/s 11(2)(6) for evicting the tenant for arrears of rent as rent was not paid from 1979 to 1989. The Appellate Authority remanded the matter to the trial Court. The order of the Appellate Authority is challenged in this revision petition.

The property was transferred to the present landlord by Ext. A-1. In Ext. A-1 no specific mention is made regarding arrears of rent. Section 109 of the Transfer of Property Act reads as follows:

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 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 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.

In view of the proviso to the above section the transferee landlord is not entitled to arrears of rent due before the assignment. By Ext. A-2 the previous landlord has transferred his right to collect an amount of Rs. 2,640 as arrears of rent from January, 1979 onwards to the date of transfer and Rs. 360 as interest thereof. In view of Ext. A-2 the maximum the assignee landlord received was the right to recover a quantified amount or debt mentioned herein. That will not enable the present landlord to file a petition for eviction u/s 11(2) of the Act on the ground of arrears of rent. It is also contended that Ext. A-2 is invalid in view of Section 6 of the Transfer of Property Act. It is the contention of the revision Petitioner that even if Ext. A-2 is valid, what is conveyed is only the right to recover a mere debt representing arrears of rent. Recovery of such debt can be done only by filing a civil suit and Section 11(2) cannot be legally invoked.

According to the Respondents, in Thankappan Pillai v. Elsamma Joseph 1989 (2) KLT 158 this Court held that the assignee landlord can continue the Rent Control Proceedings taken u/s 11(2) of the Act for arrears of rent. It is submitted by the Respondents that in view of the above decision of this Court it is clear that the right of the assignor landlord to file a petition u/s 11(2) of the Act is also assigned along with transfer of the land and therefore, for the arrears of rent due to the previous landlord the transferee landlord can file an application u/s 11(2)(b).

It is contended by the revision Petitioner that in view of the decision of the Supreme Court in N.M. Engineer and Others Vs. Narendra Singh Virdi and Another, the decision of the learned Single Judge of this Court in Thankappan Pillai''s case 1989 (2) KLT 158 needs reconsideration. It was held in the above case by the Supreme Court that if assignment of rent is not mentioned in the transfer deed, the transferee is not entitled to get arrears of rent due before the transfer as provided under the proviso to Section 109 of the Transfer of Property Act. In Thankappan Pillai''s case reported in 1989 (2) KLT 158 facts are different as in the transfer deed itself right to collect arrears of rent was mentioned and the transfer was effected pendente lite and the assignee landlord was authorised to continue with the proceedings for eviction u/s 11(2) of the Act.

In Ram Tahal Modi Vs. Ratan Lal, the case was that during the pendency of a suit for eviction of the tenant, the Plaintiff landlord transferred the suit property to Anr. person by a registered sale deed and the trial Court allowed the transferee landlord to prosecute the suit on the ground of default committed by tenant in paying rent for the period long before the date of transfer. As per the sale deed arrears of rent was not specifically assigned by the transferor landlord to the transferee landlord. Court found that although the transferee acquires all the rights of the transferor, in view of the proviso to Section 109 of the Transfer of Property Act, the transferee ipso facto is not entitled to arrears of rent accrued before the transfer. Section 8 of the Transfer of Property Act provides that on transfer, the transferee is entitled to the rents and profits thereof accruing after the transfer. Therefore, the transferee cannot claim that as the corpus has been transferred to him, the rent accrued prior to the transfer shall also be deemed to have been transferred. If the arrear of rent accruing prior to the transfer is claimed by the transferee, he must show that that has been specifically assigned. Therefore, it was held by the Division Bench of the Patna High Court that defaults in payment of rents committed by the tenant before the transfer cannot be a ground for eviction as transferee could not get any advantage of these defaults for evicting the tenants. In the decision reported in 1989 (2) KLT 158 this decision was distinguished because in the case considered by this Court in 1989 (2) KLT 158 there was a specific transfer of arrears of rent in the transfer deed itself, whereas there is no recital in the deed of transfer regarding past rent which fell due prior to the date of transfer in the decision reported in Ram Tahal Modi Vs. Ratan Lal, Therefore, the decision reported 1989 (2) KLT 158 only applies to cases where right to collect arrears of rent is also transferred to the transferee by specific recital in the transfer deed.

Here, admittedly, in Ext. A-1 the right to collect arrears of rent was not transferred. Only by Ext. A-2 this was transferred. What was transferred by Ext. A-2 is the right to collect definite amount as arrears of rent and interest due to the previous landlord. That can be collected only by filing a civil suit and that will not entitle the transferee landlord to claim eviction of the tenant u/s 11(2)(b) of the Act. We are in respectful agreement with the decision of the Patna High Court in the decision reported in Ram Tahal Modi Vs. Ratan Lal,

Section 6(a) of the Transfer of Property Act provides that a mere right to sue cannot be transferred. Therefore, a mere right to sue for eviction u/s 11(2)(b) which has accrued to the transferor landlord prior to the assignment cannot be transferred especially when the right to collect arrears of rent was not transferred in the transfer deed and the right to collect arrears of rent if transferred later will only enable the transferee to file a civil suit if the claim is not already time barred. In this connection apart from the proviso to Section 109, Section 8 of the Transfer of Property Act is also to be considered. u/s 8 of the Transfer of Property Act, unless a different intention is expressed or necessarily implied, a transfer of property passes forthwith to the transferee all the interest which the transferor is then capable of passing in the property and in the legal incidents thereof which includes, inter alia, where the property is land, the easements annexed there to, the rents and profits thereof accruing after the transfer. Section 55 of the Transfer of Property Act also shows that the right to receive and pay rent upto the date of transfer is with the transferor and transferee as the case may be. There is no dispute that in this case when the property was transferred to the present landlord the right to receive previous rent was not transferred. The right of the present landlord transferee commenced with A-1 assignment. With regard to the prior rent, the present transferees were not owners or landlords. The default in payment of rent which occurred prior to Ext. A-1 assignment may give rise to only a cause of action or a right to sue for eviction to the transferor who was then admittedly the landlord of the tenant. The transferor has not initiated any proceedings of eviction in enforcement of such course of action or right to sue already accrued to him till he caused to be the owner of the building and the landlord of the tenant. After transfer even the transferor may have only a right to collect the amount of arrears of rent treating it as a debt since he is no more a landlord qua his erstwhile tenant and only a landlord can file a petition for eviction u/s 11 of the Act. Thus after Ext. A-1 the transferor can legally transfer only a right to collect the debt due to him from his erstwhile tenant even though it represents arrears of rent. That alone has in fact been assigned by him to the assignee landlord as per Ext. A-2. The assignee landlord can also claim only at best the right to collect the amount due as a debt and cannot claim any right to file a petition u/s 11(2) of the Act which even the transferor was not entitled to file on the date of execution of Ext. A-2. This in our view seems to be the correct legal position as far as Ext. A-2. assignment is concerned. Therefore, the present landlords cannot claim eviction on the ground of arrears of rent payable to the previous landlord. At the time when A-2 was executed the assignor had no interest on the land and building as they were already transferred. By Ext. A-2 the assignee has got only a right to file a civil suit for collecting arrears of rent. But on the basis of Ext. A-2 they cannot file an application for eviction.

The decision reported in 1989 (2) KLT 158 is not applicable to the facts of this case as in that case transfer was after filing of the petition for eviction and during its pendency and in the transfer deed itself there was a specific recital regarding transfer of the right to collect arrears of rent which fell due prior to the date of transfer. As regards the submission that in the light of the recent decision of the Supreme Court in N.M. Engineer and Others Vs. Narendra Singh Virdi and Another, the decision in 1989 (2) KLT 158 requires reconsideration, we find that for deciding this case it may not be absolutely necessary to reconsider the correctness of the said decision since we have already found that the said decision to be distinguishable on facts for more than one reason. However, we would like to observe that the correctness and sustainability of some of the reasonings contained in the said decision may require reconsideration as submitted by the learned Counsel appearing for the Petitioner. We are specifically observing so because we should not be understood to have approved the correctness of the reasonings in that decision. For, we find that while sitting single as vacation Judge Bhagwati, J. (as he then was) in (1982) 3 SCC 364 has held that when a claim for arrears of rent is assigned it will not loose its character and will not become a mere actionable claim. Speaking for a Division Bench, Mohan J. has in N.M. Engineer and Others Vs. Narendra Singh Virdi and Another, held that rent due prior to transfer can be treated merely as "actionable claim". We find that the English decision in Sharpe v. Kay (1841) 8 M. and W. 379 supports the view taken by Mohan, J. in Engineers'' case. Similarly we find that the reliance placed by the learned Single Judge in Thankappan Pillai''s case 1989 (2) KLT 158 on the Division Bench decision in Ram Prakash Ghai Vs. Karam Chand and Another, cannot be fully approved as the definition of the word ''landlord'' in the U.P. (Temporary) Control of Rent and Eviction Act with reference to which the said decision was rendered includes assignee of the landlord specifically unlike in oar case. The concluding sentence in the judgment of the Division Bench in that case which we are quoting below would make the position clear that it was mainly for that decision the Bench has disagreed with the view taken by a learned Single Judge of that Court itself in Bachanlal v. Ram Asrey 1960 All. L.J. 147.

In view of the definition of the word ''landlord'' contained in this Act (U.P. Act) the transferee of the house who has purchased the arrears of rent also can make a demand and the amount of liability will not lose its character as arrears of rent.

Moreover it would also appear from the statement of facts of the case that that was also a case where the right to recover the arrears of rent was also transferred with the ownership of the house. With the above observations we would leave the matter there. In this case as held b" the Supreme Court in the decision reported in N.M. Engineer and Others Vs. Narendra Singh Virdi and Another, the present assignee landlord is not entitled to collect rent for the period before the date of Ext. A-1 transfer deed because of the proviso to Section 109 of the Transfer of Property Act and there is no specific transfer of the right to collect rent for the previous period in Ext. A-1 transfer deed. That right was transferred by Ext. A-2 only and not along with the building. But mere right to collect arrears of rent which was payable to the previous landlord by a subsequent deed (Ext. A-2) cannot be considered as a ground to file an application u/s 11(2)(b), when A-1. transfer deed is silent about the assignment of previous rent due to the transferor.

In the above circumstances, we are of the opinion that the view taken by the Rent Control Appellate Authority that present landlord can claim eviction u/s 11(2)(b) of Act 2 of 1965 on the ground of arrears of rent payable to the transferor in the facts and circumstances of the case is incorrect. The Rent Control Court has correctly considered the position. Therefore, we set aside the judgment of the Appellate Authority and restore the order of the Rent Control Court.

The Civil Revision Petition is therefore, allowed. In the circumstances of the case there will be no order as to costs.