Translate
Text Highlighter

Bookmark

PDF

Share

Report a problem
AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
Judges
Acts
Are you a practicing lawyer?
Enhance your digital presence and reach by creating a Casemine profile.
Upload pleading to use the new AI search
Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
Judges
Acts
Smart Summary

Factual and Procedural Background

The defendant filed a revision application against an order of the learned Munsif made under Section 11A of the Bihar Buildings (Lease, Rent & Eviction) Control Act, 1947 directing the defendant to deposit arrears and current/future rents at Rs. 45 per month.

The plaintiffs' pleaded case was that on 9.9.1969 they purchased the premises from the defendant by two registered deeds of conditional sale for a total of Rs. 1,500, took possession and leased the premises back to the defendant the same day at a monthly rent of Rs. 45. The deeds purportedly provided that if the consideration was repaid by 9.9.1971 the holding would be reconveyed to the defendant; the plaintiffs alleged payment was not made and the conditional sales became absolute. It was admitted by the plaintiffs that no rent was ever actually paid by the defendant.

The defendant's pleaded case was that the transactions were mortgages by conditional sale (i.e., mortgages) rather than absolute sales; the defendant also alleged he offered the mortgage money to the plaintiffs but they refused to accept it.

The plaintiffs instituted a suit for eviction on 9.2.1971 under Section 11(1)(d) of the Act for default in payment of rent and, on filing of the written statement by the defendant, applied under Section 11A for an order directing the defendant to deposit all arrears and current rents. The learned Munsif allowed the Section 11A petition and made tentative findings that (1) the deeds were absolute conveyances to the plaintiffs and not mortgages by conditional sale, (2) the parties stood in a landlord-tenant relationship with rent agreed at Rs. 45 per month, and (3) the defendant was liable to pay arrears and current rents at Rs. 45 per month.

Legal Issues Presented

  1. Whether, given the relationship being that of mortgagor and mortgagee, the eviction suit was maintainable and whether an order under Section 11A could be passed against the defendant.
  2. Whether, in the absence of any rent ever having been paid by the defendant (i.e., no "last paid rent"), an order under Section 11A directing deposit of rent could be made.

Arguments of the Parties

Defendant's Arguments

  • The transaction was a mortgage by conditional sale (mortgage), not an absolute sale, and therefore the suit for eviction (and any Section 11A order) was not maintainable against him on the basis of landlord-tenant law.
  • The defendant never paid any rent; consequently there was no "last paid rent" within the meaning of Section 11 and the court could not make a direction under Section 11A requiring deposit of rent month by month.

Plaintiffs' Case (as presented to the court)

  • The plaintiffs alleged that two registered deeds of conditional sale dated 9.9.1969 effected a sale for Rs. 1,500 and that possession was taken and the premises were leased back to the defendant on the same date at Rs. 45 per month. The plaintiffs asserted that the condition for reconveyance (repayment by 9.9.1971) was not met and the transactions became absolute sales.
  • The plaintiffs applied under Section 11A seeking an order for deposit of arrears and current rents at the agreed rate of Rs. 45 per month.
  • It was admitted by the plaintiffs that no rent had actually been paid by the defendant.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Umeshwar Pd. Sinha v. Dwarika Pd. (A.I.R. 1944 Patna 5) Representative of the earlier Patna view that where mortgage and kirainama (lease back) are part of the same transaction, the kirainama is a device to secure interest and does not create landlord-tenant relationship. Referenced as part of the earlier Patna authorities whose view was later questioned and ultimately held to be overruled by the Supreme Court in Mathuralal v. Keshwar Bai.
Ramnarain Pasi v. Sukhi Tiwary (A.I.R. 1957 Patna 24) Another Patna decision adopting the view that kirainama as part of mortgage transaction does not create a landlord-tenant relationship. Specifically noted as one of the two Patna cases expressly overruled by the Supreme Court in Mathuralal v. Keshwar Bai.
Dr. Haji Md. Ahsanul Tauhid v. Shah Akhtar Hussain (1959 B.L.J.R. 521) Listed among earlier decisions reflecting the Patna view on mortgage + kirainama transactions. Referred to in the court's review of authorities illustrating the earlier line of decisions.
Gaya Pd. Saha v. Chitrakut Narain Sinha (A.I.R. 1960 Patna 485) Another decision in the set of earlier Patna cases treating kirainama as a device and denying landlord-tenant relationship in such situations. Referred to when surveying the historical position of Patna decisions on the issue.
Baijnath Pd. v. Babu Jang Bahadur Singh (1955 B.L.J.R. 55) Earlier authority cited in the court's review of the Patna jurisprudence. Listed among cases representing the earlier approach which the court examined before considering later authority.
Savitri Devi v. Beni Devi (A.I.R. 1968 Patna 223) Another Patna case reflecting the older view that a kirainama executed as part of the mortgage transaction did not create a separate landlord-tenant relationship. Cited as part of the corpus of earlier Patna decisions that had taken a restrictive view on maintainability of rent suits.
Shivajee Prasad Sahu v. Mananth Darsan Das (1962 B.L.J.R. 789) A two-Bench decision of the Patna High Court modifying the earlier view and holding that claims for mortgage money and arrears of rent need not form the same cause of action. Referred to as illustrating a judicial movement away from the strict earlier rule and as part of the transition in Patna jurisprudence.
Lakhi Narayan Sao v. Srimati Bhag-watl Kuer (1963 B.L.J.R. 361) Another two-Bench Patna decision pointing out that failure to sue for mortgage money in a prior rent suit would not bar later suit for mortgage money (Order 2 Rule 2 not being a bar). Noted by the court as part of the altered Patna position prior to the Supreme Court's ruling.
Mathuralal v. Keshwar Bai (1971 S.C. 310) Supreme Court decision overruling two Patna cases (including AIR 1944 Patna 5 and AIR 1957 Patna 24) and holding that a mortgagee can, during continuance of the security, sue on rent notes or lease-back documents and is not precluded from acting as landlord for purposes of eviction or recovery of rent. Held by the court to have settled the law in favour of allowing a mortgagee to sue for eviction/recovery of rent under the Bihar Buildings Act; the court relied on this decision to reject the defendant's first contention.
Lalchand v. Nenuram (I.L.R. 12 Raj. 947) Authority quoted for the proposition that courts should give effect to the terms of both documents (mortgage and lease) rather than be unduly critical, and that such lease-backs are permissible and of possible benefit to mortgagor. Quoted with approval in support of the view that where parties execute proper documents courts should give effect to them; used to reinforce the conclusion that a mortgagee can enforce lease terms.
Mahabir Ram v. Shiba Shankar Prasad (A.I.R. 1968 Patna 415) Held that in an application under Section 11A the court has to determine the rate at which the rent was last paid and the amount of rent in arrears, if any. Cited by the defendant as supporting the contention that Section 11A requires a "last paid rent" determination; the court considered this authority but concluded it does not preclude making an order under Section 11A where no payment has ever been made, because the court can determine the agreed rate of rent.

Court's Reasoning and Analysis

The court proceeded in two main stages corresponding to the two central issues raised.

1. Whether a mortgagee can be a "landlord" under the Act and maintain a suit for eviction/recovery of rent:

  • The court examined the statutory definition of "landlord" under Section 2(d) of the Act: "the person who for the time being is receiving, or is entitled to receive the rent of a building whether on own account or on behalf of another". The court noted that the definition does not require that the landlord be the proprietor or owner.
  • On that basis, the court observed that a mortgagee who is otherwise entitled to receive rent qualifies as a landlord under the Act.
  • The court reviewed earlier Patna decisions which had taken the view that where mortgage and kirainama formed part of the same transaction, the kirainama was merely a device to secure payment of interest and did not create a landlord-tenant relationship. The court recorded those authorities.
  • However, the court held that the position is settled by the Supreme Court decision in Mathuralal v. Keshwar Bai (1971 S.C. 310), which expressly overruled two Patna cases and held that a mortgagee is entitled to sue as landlord or on basis of the lease back/rent note. The Supreme Court reasoning (as quoted) accepted that a mortgagee may, during continuance of the security, sue the mortgagor on the basis of the rent note and take possession or induct another tenant to secure agreed payments.
  • Relying on Mathuralal and on the quoted view from Lalchand v. Nenuram, the court concluded that a mortgagee can sue for eviction or recovery of rent under the provisions of the Bihar Buildings Act. Thus the defendant's first contention (that the relationship being mortgagor-mortgagee barred a Section 11A order) was rejected as having no merit.

2. Whether Section 11A permits an order when there has been no "last paid rent":

  • The court examined Section 11A and noted that it allows a landlord in a contested suit for recovery of possession to apply for an order directing the tenant to deposit month by month "rent at the rate at which it was last paid" and that the court may determine the rate of rent to be paid month by month.
  • The court acknowledged authority (Mahabir Ram) stating that the court has to determine what was the rate of rent last paid and what amount of rent is in arrears. The defendant relied on that decision to argue that no order can be made where there has been no payment at all.
  • The court rejected the contention that Section 11A is inapplicable where no rent was ever paid. It reasoned that the "last paid rent" enquiry is relevant where the rate itself is disputed between parties (for example, landlord claims Rs. 100 and tenant disputes that). Where no payment was ever made, the court held it could determine the rate of rent agreed to between the parties (i.e., the contractual agreed rent) and that determination would furnish the basis for an order under Section 11A.
  • The court stated that construing Section 11A to permit no order where there was never any payment would defeat the purpose of the provision and disadvantage a defaulting tenant. Consequently, the court did not accept that Mahabir Ram precluded Section 11A orders in cases of non-payment from inception; instead, the court felt the provision permits the court to proceed by determining the agreed rate of rent.
  • The court then made an explicit (textual) observation that "The learned Munsif has, therefore, committed tip error of jurisdiction while giving a direction to the petitioner to deposit the rents at the rate of Rs. 45/- per month according to the rate of rent agreed by him in the Kirainama in question." (This statement appears in the opinion as written.)

Holding and Implications

Holding: Application dismissed.

Direct consequences explicitly stated in the opinion:

  • The revision application filed by the defendant is dismissed.
  • The defendant was ordered to pay costs: hearing fee of Rs. 64/- only. The opinion states "Application dismissed" and records the costs/fee.

The opinion does not explicitly state any broader precedent newly laid down by this court; rather it applies and relies upon the Supreme Court's decision in Mathuralal v. Keshwar Bai and other authorities discussed above. The opinion does not assert that it is creating a new legal precedent beyond applying existing higher-court authority.

    Fakir Ram v. Sukhdeo Sao & Another Opp. Party.

    H.L Agrawal, J.:— This application in revision by the defendant arises out of an order of the learned Munsif passed under Section 11A of the Bihar Buildings (Lease Rent & Eviction) Control Act, 1947 directing him to deposit the arrears as well as current and future rents at the rate of Rs. 45/- per month in terms of Section 11A of the Act.

    2. The questions that were raised by the defendant petitioner before the trial court as well as in this Court are these:—

    (i) The relationship between the parties being that of a mortgagor and mortgagee, the suit itself was not maintainable and therefore, no order under Section 11A should be passed against him.

    (ii) The defendant having never oaid any rent to the plaintiff-landlord there was no ‘last paid rent’ within the meaning of Section 11 and therefore, no direction in any view of the matter could be made.

    3. The relevant facts giving rise to this controversy between the parties are these:

    4. According to the plaintiffs' case, they purchased from the defendant the premises in question by two registered deeds of conditional sale dated 9.9.1969, for a total consideration of Rs. 1500/- and hiving taken possession, leased back the premises to the defendant petitioner on the same day at a monthly rental of Rs. 45/-. There was, however, no stipulation for payment of any interest in the deeds of conditional sale as found by the trial court. It was, however, stipulated therein that in case the entire consideration was repaid by 9.9.1971 the holding was to be reconvened to the defendant mortgagor by the plaintiff. The allegation of the plaintiff is that the payment hiving not made within the stipulated time, transaction of conditional sales became absolute. It is further admitted by the plaintiff that no payment of rent was ever made by the defendant.

    5. The case of the defendant petition net however, was that the transaction in question were not of conditional sales but were only of mortgage by conditional sale. He however, offered the mortgage money to the plaintiff. But they refused to accept the same.

    6. The suit was instituted on 9.2.1971 for eviction of the petitioner from the premises in question on the ground of default in making the payment of rents within the meaning of Section 11(1)(d) of the Act. On filing of the written statement by the petitioner an application under Section 11A was filed by them for an order on the petitioner to deposit all the arrears as well as current rents of the premises in question. This petition was contested by the petitioner on the grounds already indicated above.

    7. The learned Munsif has recorded the following tentative findings while allowing the petition:

    (1) The two deeds conveyed the premises in suit absolutely to the plaintiff and were not mortgages by conditional sales.

    (2) In view of the agreement between the parties for leasing the premises in question on a monthly rental of Rs. 45/-, a relationship of landlord and tenant was created between them and,

    (3) Although the tenant had not made any payment they were liable to pay the arrears and current rents at the rate of Rs. 45/- per month.

    8. I shall take up now the first question raised by Mr. Katriar namely, that the relationship between the parties was that of a mortgagor and mortgagee and not that of a landlord and tenant. The expression “landlords” has been defined in the Act under Section 2(d) to mean the person who for the time being is receiving, or is entitled to receive the rent of a building whether on own account or on behalf of another”.

    9. There is nothing in the definition of the term “landlord” to suggest that the landlord must be the proprietor or owner of the building. Even if therefore, the plaintiff happens to be a mortgagee of a building and not its proprietor and otherwise entitled to receive the rent of the same, he will answer the description of a landlord as given in the Act. (See 1953 B.L.J.R 587).

    10. The contention of Mr. Katriar is based upon the one time prevailing view in this Court to which I shall refer here in after, laying down the principle that where a mortgage and the Kirainama were part of the same transaction the Kirainama being only a device for the regular payment of the interest on the amount advanced by the mortgagee, no relationship of landlord and tenant is created thereby and accordingly the suits filed for recovery of arrears of rents pure and simple were held to be non-maintainable. Some of these cases taking the above view are (1) Umeshwar Pd. Sinha v. Dwarika Pd. (A.I.R 1944 Patna 5) (2) Ramnarain Pasi… v. Sukhi Tiwary…Opposite Party. (A.I.R 1957 Patna 24). (3) Dr. Haji Md. Ahsanul Tauhid v. Shah Akhtar Hussain (1959 B.L.J.R 521), (4) Gaya Pd. Saha v. Chitrakut Narain Sinha (A.I.R 1960 Patna 485), (5) Baijnath Pd. v. Babu Jang Bahadur Singh (1955 B.L.J.R 55) and (6) Savitri Devi v. Beni Devi (A.I.R 1968 Pat. 223). Reference may also be made in this regard to two Bench decisions of this Court in the cases of (1) (7) Shivajee Prasad Sahu v. Mananth Darsan Das (1962 B.L.J.R 789) and (2) (8) Lakhi Narayan Sao v. Srimati Bhag-watl Kuer alias Shoagwati Kuer (1963 B.L.J.R 361). In these cases in slight modification of the earlier view it was held that claim for the mortgage money and arrears of rent did not form part of the same cause of action during the subsistence of the mortgage and failure to sue for the mortgage money in a previous suit for arrears of rent did not disentitle the mortgagee sue subsequently for the mortgage money; Order 2 rule 2 not being a bar to the later suit.

    11. He that as it may, apart from the fact that the court below has construed the documents as sale deeds, the point also is now completely settled by a decision of the Supreme Court in the case of (9) Mathuralal v. Keshwar Bai (1971 S.C 310) taking a contrary view and expressly overruling the two cases of this Court namely, (1) (A.I.R 1944 Patna 5) and (2) (A.I.R 1957 Patna 24) already referred to above.

    12. In this case the defendant had mortgaged his house for a sum of Rs. 3100/- with possession fixing a period of redemption by two years carrying interest at the rate of 10 annas per cent per mensem till its realisation and for the period of mortgage the tenant executed rent notes in favour of the mortgagee to pay Rs. 20 per month as rent to be credited towards interest and the principal mortgage dues, if in excess of the interest.

    13. The mortgagee however, filed a mortgage suit for the principal and interest and obtained a preliminary decree for the sale of the property, but no step was taken for making the said decree final within the period of limitation. Later on a suit for ejectment was filed on the ground of default in making payment of rent. In that situation a question arose as to whether the rent suit was maintainable and similar arguments that the rent note being a mere device was to secure the payment of interest and did not create any relationship of landlord and tenant.

    14. Repelling the Patna view the Supreme Court held:

    “In all such cases the leasing back of the property arises because of the mortgage with possession but we find ourselves unable to hold that the mortgagee does not secure himself any right under the deed of lease but must proceed on his mortgage in case the amount secured to him under the deed of lease (Sic) suit for realisation of the money due under the is not paid……If the security is good and considered to be sufficient by the mortgagee there is no reason why he should be driven to file a rent note….. If during the Continuance of the security the mortgagee wants to see the mortgagor on the basis of the rent note and take possession himself or to induct some other tenant thereby securing to himself the amount which the mortgagor had contracted to pay, there can be no legal objection to it….”

    15. In the 15th paragraph of the judgment it is further observed that if during the continuance of the security the mortgagee wants to sue the mortgagor on the basis of the rent note and take possession himself or to induct some other tenant thereby securing himself the amount which the mortgagor had contented to pay there can be no legal objection to it. It also quoted with approval the following view of the Rajasthan High Court in the case of (10) Lalchand v. Nenuram (I.L.R 12 Raj. 947):

    “Whether the two documents represent one transaction or two different transactions, a court of law should be anxious to give effect to the terms in both the documents instead of being unduly critical about them….. It is in the interest of the mortgagor that the property is leased out to him as he can better look after it. There is nothing objectionable in this, nor is there any statutory prohibition for such transactions. Now if the parties do this by executing proper documents, it is the duty of the Court of law to give effect to them.”

    16. On a review of the Judicial authorities I hold that in such a case a mortgagee is entitled to sue, for eviction or recovery of rent qua-landlord, the mortgagor under the provisions of the Bihar Buildings (Lease, Rent & Eviction) Control Act. The first contention raised by Sri Katriar has therefore, got no merit and must be rejected.

    17. I shall now take up the second contention that in the absence of any rent having been last paid no order could be made under Section 11A by the Court.

    18. Section 11A prescribes that in a contested suit for recovery of possession of any building the landlord may make an application at any stage of the suit for an order, to deposit month by month “rent at the rate at which it was last paid” and the court after giving opportunity to the parties to be heard may make an order for deposit of rent at such rate as may be deter mined by it month by month.

    19. This provision therefore, clearly lays down that the court making an order under Section 11A has to determine the rate of rent to be paid by the tenant. The landlord however, has to state in his application as to what was the rate at which the rent was last paid to him. In the instant case, however, according to the plaintiff's case no rent ever paid. The defendant petitioner having executed an agreement of lease to pay the rent at the rate of Rs. 45/- per month did not make any payment. In this case therefore there is no rent which was “last paid” by the tenant the landlord then could only inform the court the rate of which was agreed to between the parties. It can, therefore, in the circumstances, be said that a court is powerless or in other words, cannot make any order under. Section 11A. The sheet anchor of Mr. Katriar is the decision in the case of (11) Mahabir Ram v. Shiba Shankar Prasad (A.I.R 1968 Patna 415) where it was observed that:—

    “In an application for ejectment of tenant under Section 11A of the Bihar Buildings (Lease, Rent & Eviction) Control Act (3 of 1947) the Court has to determine act to what was the rate of rent last paid and as to what amount of rent is in arrears, if any.”

    20. In my opinion this decision cannot be an authority for a proposition that in a case where there has been never any payment the default being committed from the very inception of tenancy and therefore, there is ho rent last paid by a tenant to a landlord, no order under Section 11A can be passed. The expression “last paid rent” and the enquiry to be made in that regard, as observed in the above decisions, in my view is called for only in a case where the question arises between the parties as to the rate of rent itself. For example, where a landlord says that the rate of rent was Rs. 100/- and the tenant challenges the same, in that event the court will determine under this provision the rate of rent, at which the tenant had made the last payment. The right to determine the rate of rent has been given to the Court under this situation. I do not, therefore, agree with the contention that in a case where no payment has been made, no order itself could be made under this provision. Such a construction of this section will go against the very intention of the provision itself and will give undue disadvantage to a more erring tenant. In such a case, the Court holding the enquiry under Section 11A would proceed to enquire as to what was the agreed rate of rent payable for the premises in question. Once this question was determined that would furnish the basis of an order under the section. The learned Munsif has, therefore, committed tip error of jurisdiction while giving a direction to the petitioner to deposit the rents at the rate of Rs. 45/- per month according to the rate of rent agreed by him in the Kirainama in question.

    21. Having answered both the questions raised by Mr. Kairiar, against him this application must fall and is accordingly dismissed with costs. Hearing fee Rs. 64/- only.

    Application dismissed.

    Use AI to get other relevant cases.

    Comments

    Fakir Ram v. Sukhdeo Sao & Another Opp. Party.
    (Aug 16, 1975)