Swarnambal and Others vs ABU and Others

Gopalan Nambiyar, J.—The question involved in this appeal is whether the 1st Respondent who is the assignee of a tenant is entitled to the right of restoration of the holding conferred by Sections 5 and 6 of Kerala Act 9 of 1967. The trial court (on the execution side) held that he was not. The lower appellate court on appeal, and a learned Single Judge of this Court in Second Appeal, held that he was. The question has been reagitated before us in this further appeal preferred with the leave of the learned Judge.

The Suit O.S. No. 211 of 1953 on the file of the Munsiff''s Court, Palghat, was for recovery of arrears of pattom by sale of the rights of the original tenant. A decree for sale followed, and, in execution, the tenancy rights were purchased in court auction by the 2nd Respondent under Ext. B-1, dated 5th November 1966. The properties were delivered to the purchaser under Ext. B-4, dated 28th November 1966. By successive devolutions the 2nd Respondent''s rights have become vested in the Appellants in this appeal. The 1st Respondent took an assignment of the rights of the original tenant under Ext. A-1, dated 19th May 1966 and applied to set aside the sale u/s 6 of Act 9 of 1967. The application was filed before the passing of Act 35 of 1969. It was this application that gave rise to the orders noted supra.

Sections 5 and 6 of Act 9 of 1967 read as follows:

Arrears of rent payable by tenants. -- Notwithstanding anything to the contrary contained in any other law, or in any contract, custom or usage, or in any judgment, decree or order of any court or Land Tribunal with effect on and from the commencement of this Act, no suit or application or other proceedings for the recovery of arrears of rent in respect of, or for damages for use and occupation of, a holding or part of a holding or a kudikidappu, accrued due before the 1st day of April, 1966, shall lie in any court or Land Tribunal, and all suits, applications, proceedings in execution of decrees or orders and other proceedings pending in courts or Land Tribunals at such commencement for recovery of such arrears of rent or damages shall be stayed.

Restoration of possession. -- (1) Notwithstanding anything to the contrary contained in any other law, or in any judgment, decree or order of any court, where any holding has been sold in execution of any decree for arrears of rent and the tenant dispossessed of the holding after the first day of April 1964 and before the commencement of the Kerala Stay of Eviction Proceedings Ordinance, 1967 (4 of 1967), such tenant shall, subject to the provisions of this section, be entitled to restoration of possession of the holding.

(2) Any person entitled to restoration of possession of his holding under Sub-section (1) may, within a period of six months from the commencement of this Act, deposit the purchase money together with interest at the rate of six per cent per annum in the court and apply to the court for setting aside the sale and for restoration of possession of his holding.

(3) The court shall, if satisfied after such summary enquiry as the court deems fit, set aside the sale and restore the applicant to possession of the holding.

(4) The court may also order the applicant to deposit in court such amount as may be specified by the court towards cost of the decree-holder or the auction purchaser and the value of improvements, if any, effected on the holding after the sale.

Explanation. -- For the purposes of this section and Section 7, the term ''holding'' includes a part of a holding.

Act 9 of 1967 came into force on 31st December 1968. Section 2 of the said Act, inter alia, provides that unless the context otherwise requires, the term ''tenant'' shall have the meaning: assigned to it in the Kerala Land Reforms Act, 1963 (Act 1 of 1964). That takes us to the definition of ''tenant'' in Section 2(57) of the Land Reforms Act. It would be unnecessary to set out this lengthy definition, progressively lengthened by several amendments and alterations. It would be enough to notice that by an amendment by Act 35 of 1969 a new Clause (a) was substituted in the definition of ''tenant'' so as to include, inter alia, an assignee.

Counsel for the tenant relied upon the decision of the Division Bench ruling in Parameswaran Nambudiri v. Kalyani 1974 KLT 67 to which one of us was a party. There it was held that an application for restoration of possession u/s 6 of Act 9 of 1967 which was pending when Act 35 of 1969 came into force should be dealt with under Act 9 of 1967, unaffected by the provisions of Act 35 of 1969. This was in view of the language of Clause (3) of the transitory provision, Section 108, which, after its amendment by Act 25 of 1971, provided that pending proceedings shall be disposed of in accordance with the provisions of the principal Act as amended by this Act." By the definition, the ''principal Act'' meant Act 1 of 1964, and ''this Act'' referred only to Act 25 of 1971. The Division Bench further ruled, in agreement with an unreported decision of Krishnamoorthy Iyer, J. in C.R. Nos. 1090 and 1091 of 1972 that an application u/s 6 of Act 9 of 1967, which was pending on the date of the commencement of Act 35 of 1969 was liable to be dealt with under the provisions of the earlier Act, untrammelled by the provisions of the later one. Therefore, the application in this case is liable to be dealt with under the provisions of Act 9 of 1967. Being so, the amendment effected to Section 2, Clause 57 cannot apply to the application for restoration. The question therefore whether the assignee is entitled to maintain an application for restoration in this case must be decided without resort to the amended provisions.

Counsel for the Appellants attempted an argument that the 1st Respondent who took an assignment of the holding under Ext. A-1 was not liable for arrears of pattom prior to the date of his assignment, and as the Appellant''s purchase under Ext. B-1 was subsequent to Ext. A-1, it cannot be said that the "holding had been sold in its execution of any decree for arrears of rent" against the 2nd Respondent, which, according to counsel, is required by Section 6 of the Act. The provision in Ext. A-1 is that the assignee may pay future pattom. It was also stressed that despite the purchase on 19th May 1966 the 1st Respondent had not chosen to implead himself in the proceedings before the sale on 3rd October 1966 which was confirmed on 5 h November 1966. Reliance was placed on the decision in Thresia v. Kochakkan 1974 KLT 19 rendered by a Division Bench, to which one of us was a party. The two conditions to attract Section 6 of Act 9 of 1967 are sale of any holding in execution of a decree for arrears of rent; and dispossession of the tenant from the holding after 1st April 1964 and before commencement of Act 9 of 1967. We shall assume that the dispossession must be of the tenant whose holding has been sold in execution of the decree for arrears of rent. That would stand satisfied in this case, if the ''tenant'' would include also his assignee, which we shall presently consider.

It was argued that once the sale took place with the original tenant on the party array, all rights of the tenant are extinguished and the assignee, the 1st Respondent, would have no right whatsoever. But the assignment was prior to the sale. The 1st Respondent may be an assignee pendente lite, but that would only mean that what was purchased was subject to the final result of the litigation. His right, if he had any, under Act 9 of 1967, would remain unaffected.

The question squarely to be faced therefore is whether the assignee of a tenant is a tenant or not. Reliance was placed by counsel for the Appellants on Subramania Iyer v. George 1966 KLT 28 at 29 Lakshminarayana Shetty v. Andunni Beary 1971 KLT 822 Varkey v. Sankaran 1965 KLT 519 and Kunhiraman and Anr. v. Chemmarathi 1966 K.L.J. 452. In 1966 KLT 28, a Division Bench, of which one of us was a member, held that the right conferred by Section 11(2) of the Agriculturists Debt Relief Act, 1958, to recover possession of the mortgaged property before the expiry of the period of the mortgage, on payment of one-half of the mortgage amount and certain other conditions, is confined to the executant of the mortgage and does not extend to his heirs, legal representatives and assigns. The decision was rested on the special provisions of the statute which were rather exhaustively surveyed, and from which sufficient indication was available that the term ''mortgagor'' had to be understood in a narrow and restrictive sense. In 1971 KLT 822 (4) the question that arose was whether the assignee of a lease in respect of, what is generally referred to as a ''commercial site'', is entitled to claim fixity of tenure conferred by Section 106(1) of the Kerala Land Reforms Act. Section 106(1) at the relevant time, before its amendment by Act 35 of 1969, stood thus:

106.(1). Notwithstanding anything contained in this Act, or in any other law, or any contract or order or decree of court, where, on any land leased for commercial or industrial purpose, the lessee has constructed buildings for such commercial or industrial purpose before the 18th December 1957, he shall not be liable to be evicted from such land, but shall be liable to pay rent under the contract of tenancy. Such rent shall be liable to be varied every twelve years on the motion of the lessor or the lessee in such manner as may be prescribed.

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The Division Bench, following the judgment of Madhavan Nair, J. in Kunhiraman and Anr. v. Chemmarathi 1971 KLT 87 held that on the wording of the sub-section it was only the person to whom the lease was granted for commercial or industrial purpose, and who, had constructed a building for that purpose that can claim the benefit of Sub-section (1), and that the transferee was not entitled to the said privilege. The Division Bench emphasised the words in the sub-section rendering the tenant liable to pay rent under the contract of tenancy, and observed that the liability of the assignee arose by virtue of privity of estate and not by virtue of privity of contract, and therefore the sub-section was not attracted. These special considerations based on the language of Section 106(1) cannot govern the position with respect to the question whether the assignee of a tenant can be regarded as a tenant himself. The decision of Velu Pillai, J. in 1965 KLT 519 was with respect to the assignee of a mortgagor under the provisions of the Agriculturists Debt Relief Act, 1958. That was followed by the Division Bench in 1966 KLT 28. It seems to us that the cases dealing with the assignee of a tenant of a commercial site must stand on a special footing by reason of the provisions of Section 3(1)(iii). Such leases are exempted from the provisions relating to fixity of tenure. In Govinda Pillai''s case (7), a Full Bench of this Court, dealing with the validity of Section 106 of the Act observed:

The scheme of the main Act also appears to have been to exempt leases of lands or of buildings, or of both, specifically granted for industrial or commercial purposes from the purview of Chapter II which provides for fixity of tenure, resumption of land, fixation of fair rent, purchase of landlord''s rights, etc. [See Section 3. Having done this, to confer fixity of tenure by Section 106 in respect of such very leases exempted by Section 3(3) seems virtually to nullify the exemption. The policy underlying Act 1 of 1957, Act 4 of 1961, and Act 7 of 1963 which preceded the main Act has been to exclude leases of land for industrial and commercial purposes from the purview of their operation. Going still further back, we find that the Madras Act 33 of 1951 which amended the Malabar Tenancy Act 14 of 1930 for the Malabar area of this State enacted that here shall be no fixity of tenure in respect of lands used for commercial purposes. The same was the policy of the Cochin Verumpattomdars Act, 1118 (for the Cochin area of this State), Section 3(d) of which exempted leases for industrial and commercial purposes and Sub-section (f) of which exempted leases of lands within the municipalities, subject to the proviso that the provision would not apply to lands within the municipality fit for paddy cultivation. The legislative policy being thus clear, the legislative history of Section 106 suggests that that incongruous provision was inserted in Act 4 of 1961 by Section 78 at the last moment, by way of afterthought as it were, with no manner of investigation or examination or discussion and with no disclosure as to what interests it was designed to further. And it was copied in Act 1 of 1964 and re-enacted therein by Act 35 of 1969 without examination.

In view of these considerations we think that the decisions regarding an assignee of a commercial site are inapplicable. Section 50 of the Land Reforms Act provides that "subject to the provisions of this Act, all rights which a tenant has in his holding shall be heritable and alienable". Sections 48 and 49 provide for cases of apportionment of rent on severance of interest of the landlord or tenant and to notice to the landlord and intermediary when the interest in the holding of the tenant is acquired. These again give sufficient indication that a tenant''s interests are assignable. In Krishnan Nair v. Abdu 1964 KLT 94 a Full Bench of this Court observed:

The general principle is -- and Section 146 of the CPC embodies this principle -- that a statute or other law conferring rights and imposing liabilities must be deemed to apply to representatives also unless the rights and liabilities are personal. The question then is whether, under the terms of Section 11-A, the right is personal to the granter. We think it is. (para 17)

This conclusion was rested on the words of Section 11-A of the Agriculturists Debt Relief Act which referred to "the person who granted the Melpattom". The Full Bench found it difficult to read into these words, "or his heirs, legal representatives or assigns". There was also the further difficulty to hold that the assignee would be included in Section 11-A as it might result in holding that an assignee would be entitled to the benefit even if he was not an agriculturist. The special considerations noticed by the Full Bench do not obtain here. On the contrary the indications available from Sections 48 to 50 appear to us to fall within the general principle stated by the Full Bench, and embodied in Section 146 of the Civil Procedure Code. We therefore hold that the expression ''tenant'' for purposes of an application for restoration u/s 6 of Act 9 of 1967 includes an assignee. The application in the instant case was therefore rightly held to be maintainable and was properly allowed. In agreement with the learned Judge, we dismiss this appeal with costs.