Translate
Text Highlighter

Bookmark

PDF

Share

Report a problem
AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Judges
Acts
  • Section 11(1)(d) of the Bihar Buildings (Lease, Rent & Eviction) Control Act, 1947,
  • provisions of Section 11(1)(d) of the said Bihar Buildings Control Act.
  • Section 3 of the said Bihar Buildings Control Act.
  • Order XXII Rule 10 of the Civil Procedure Code.
  • SECTION 109 TRANSFER OF PROPERTY ACT
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
Judges
Acts
  • Section 11(1)(d) of the Bihar Buildings (Lease, Rent & Eviction) Control Act, 1947,
  • provisions of Section 11(1)(d) of the said Bihar Buildings Control Act.
  • Section 3 of the said Bihar Buildings Control Act.
  • Order XXII Rule 10 of the Civil Procedure Code.
  • SECTION 109 TRANSFER OF PROPERTY ACT
Smart Summary

Judgment Summary — P.S. Mishra, J.

Factual and Procedural Background

This appeal is by the plaintiffs against a judgment and decree of affirmance by the First Additional Subordinate Judge, Gaya, in an appeal arising from a suit for eviction of the tenants-defendants.

The property (Holding No. 63, Ward No. 3, Mohalla Purani Go-down, Kotwali Police Station, Gaya) was owned by Smt. Sharda Devi, Shanti Devi, Shaktt Devi, Shanti Devi and Binapani Devi (fully described in Schedule 'A' of the plaint). The original defendant Hari Ram was inducted as tenant in the southern portion on 1.8.1960. A registered document dated 10.8.1960 created a fixed-term tenancy at Rs. 70 per month. A further registered lease dated 13.12.1962 fixed rent at Rs. 85 per month for the period 1.12.1962 to 30.11.1967; under that document Hari Ram paid Rs. 510 as an advance adjustable at the end of tenancy.

Hari Ram continued as tenant after 30.11.1967 and paid Rs. 85 per month to the landlords; the Rs. 510 advance was neither refunded nor adjusted. On 7.12.1971 the plaintiffs purchased the premises by registered sale deed and informed Hari Ram. Thereafter, Hari Ram paid no rent to the plaintiffs; plaintiffs filed suit for eviction alleging default under Section 11(1)(d) of the Bihar Buildings (Lease, Rent & Eviction) Control Act, 1947 and also claiming personal occupation as a ground for eviction.

Hari Ram died during the suit and his heirs were substituted. Defendants contested, asserting (inter alia) that rent had been tendered or sent by money-order and rejected by the plaintiffs, that the rent enhancement from Rs. 70 to Rs. 85 in 1962 was illegal so excess paid should be adjusted, and that municipal taxes and other expenses paid by defendants entitled them to adjustment.

The trial court dismissed the suit, holding that municipal taxes paid together with the Rs. 510 advance exceeded the plaintiffs' claim of rent from December 1971 to June 1972, and that plaintiffs had no personal necessity. The appellate court affirmed. The present appeal challenges those conclusions.

Legal Issues Presented

  1. Whether the Rs. 510 advance paid by the tenant under the 13.12.1962 registered lease (which contravened Section 3 of the Bihar Buildings Control Act) could be adjusted by the defendants against rent due to the plaintiffs after the property was transferred to the plaintiffs.
  2. Whether, on transfer of the lessor's title to the plaintiffs, liabilities such as an obligation to adjust an advance payment automatically attached to the demised property and became binding on the transferee (i.e., whether the transferees acquired the corresponding liabilities as well as rights).
  3. Whether there was in fact a continuous default in payment of rent for more than two months by the defendants entitling the plaintiffs to eviction under Section 11(1)(d) of the Bihar Buildings Control Act, 1947.

Arguments of the Parties

Appellants' (Plaintiffs') Arguments

  • The Rs. 510 advance paid by the tenant was contrary to Section 3 of the Bihar Buildings Control Act and therefore illegal; the defendants cannot claim adjustment of this amount towards rent due to the plaintiffs.
  • As transferees from the lessor, the appellants derived rights but did not automatically inherit liabilities such as a pre-existing obligation to adjust the advance; liabilities do not pass unless attached to the demised premises.
  • The defendants had abandoned their contention that rent was sent by money-order and thus there was no material to show non-default; the courts below erred in finding no default.

Respondents' (Defendants') Arguments

  • They denied default, asserting that when rent was offered to the husband of plaintiff no.1 he refused, thereafter rent was sent by money-order apportioning shares to the plaintiffs, but the plaintiffs refused to accept it; rent continued to be remitted by money-order.
  • They contended the initial tenancy commenced at Rs. 70 per month on 1.8.1960 and that the enhancement to Rs. 85 in December 1962 was illegal; any excess paid over Rs. 70 should be adjusted towards future rent.
  • They asserted they paid municipal taxes and incurred expenses for which they were entitled to adjustment against rent claimed by the landlords.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Jagannath Tewar… v. Dr. Gopal Prasad… (AIR 1983 Patna 50; 1983 PLJR 137) Relied upon by appellants for the maxim in pari delicto and the principle that courts will not assist illegal agreements. The court acknowledged the maxim but observed established exceptions; it treated the precedent as authority for the general rule but held it not determinative here because of exceptions and the protective object of Section 3 of the Bihar Buildings Control Act.
Ramswarup Prasad v. Budhdeo Sao (AIR 1983 Patna 266; 1983 PLJR (NOC) 22) Also relied upon for the maxim that courts will not assist parties to an illegal contract. Same treatment as above: the court accepted the general maxim but noted exceptions and did not apply the precedent to deny relief to the tenant where statutory protection of tenants applied.
Sita Ram v. Radha Rai (AIR 1968 Supreme Court 534) Stated that where a statute (such as Section 3) is enacted to protect a class (tenants), a less guilty party among parties to an illegal contract may recover or be protected; statutory prohibition operates against landlords. The court relied on this Supreme Court authority to hold that the statutory prohibition in Section 3 is for tenant protection and that a tenant may fall into an exception to the maxim in pari delicto. The precedent supported the proposition that tenants are not necessarily barred from adjustment claims by virtue of the illegality.
Rameshwar Lal v. Butto Kristo Rai (AIR 1934 Patna 653) Discussed whether payment of rent in advance to a mortgagor discharges tenant where there is notice of mortgage; viewed advance payment as a loan to landlord. The court treated this line of authority as distinguishable on the facts and not directly applicable to the transfer situation before it; it considered but did not follow the principle as determinative here.
Ram Lal Marwari v. Mahadeo Marwari (AIR 1922 Patna 339) Earlier authority quoted in Rameshwar Lal on the nature of advance rent as a loan. Referenced as antecedent authority but the court found the cases distinguishable and did not apply them to hold the transferees liable for the advance on the facts of this case.
G. Kesari chand v. T.A. Sankunni Maistry (1972 Madras Law Journal 358) Applied and quoted the principles from Rameshwar Lal and Ram Lal Marwari regarding advance payment being akin to a loan. The decision was noted by the court; it helped frame the appellants' argument but the court distinguished these authorities because of facts regarding expiry of the lease and the nature of the tenancy at the date of transfer.

Court's Reasoning and Analysis

The court proceeded by addressing the two principal contentions raised by the appellants.

  1. On the first contention (illegality of the Rs. 510 advance under Section 3 of the Bihar Buildings Control Act), the court acknowledged the general legal maxim that a court will not assist parties to an illegal agreement (in pari delicto). The court then explained the well-known exceptions to this maxim and observed that Section 3 is a statutory prohibition enacted to protect tenants (citing Sita Ram v. Radha Rai). Because the statute protects tenants, a tenant may, in certain circumstances, be entitled to adjustment or recovery despite the illegality of the original transaction. The court concluded that the general maxim, therefore, did not automatically bar any claim by the tenants and that the tenants could fall within an exception to the maxim.
  2. On the second contention (whether liabilities attached to the demised property passed to the transferee), the court examined the effect of transfer under Section 109 of the Transfer of Property Act. The court explained that a transferee becomes subrogated to the lessor-transferor with respect to rights and liabilities as to the property transferred: rights attach automatically, but liabilities do not automatically bind the transferee unless the liability is attached to the demised property or the lessee elects to look to the transferee for discharge of obligations.
  3. Applying these principles to the facts, the court noted the following undisputed factual chronology:
    • The Rs. 510 advance was paid under the registered lease dated 13.12.1962, the lease term expired on 30.11.1967 and was not renewed.
    • After expiry, Hari Ram continued as a tenant by paying monthly rent of Rs. 85 to Sharda Devi and her sisters; this created a month-to-month tenancy independent of the written lease.
    • On 7.12.1971 the plaintiffs purchased the property; on that date there was no operative written condition that the Rs. 510 advance was to be adjusted towards future rent.
    Because the contractual condition for adjustment ceased to exist with the expiry of the registered lease and no renewal occurred, the court reasoned that there was no liability attached to the demised property at the date of transfer which could have passed to the plaintiffs. The court therefore held that the lower courts erred in granting the tenants adjustment of the Rs. 510 advance against rent owed to the plaintiffs.
  4. The court further observed that, although the respondents pleaded that they had remitted rent by money-order, they had abandoned that plea before the trial court and there was no material or pleading sufficient to establish absence of default. On the facts, the court found as a fact that there had been default in payment of rent for more than two months continuously.
  5. Based on the finding of continuous default for more than two months, the court concluded that the respondents were liable to be evicted under Section 11(1)(d) of the Bihar Buildings Control Act.
  6. Finally, the court considered (and declined) an application to substitute purchasers of two appellants under Order XXII Rule 10 CPC because the purchasers did not demonstrate willingness to prosecute the appeal in place of the named appellants, and the right of hearing of appellant no. 1 remained intact.

Holding and Implications

Holding: The appeal is allowed. The judgment and decree of the courts below are set aside in part, and the suit for eviction is decreed in favour of the plaintiffs. The decree is granted without any costs.

Implications:

  • Direct effect: The defendants (respondents) are held to have been in continuous default of rent for more than two months and are liable to eviction in accordance with Section 11(1)(d) of the Bihar Buildings (Lease, Rent & Eviction) Control Act, 1947; the eviction decree is granted to the plaintiffs.
  • On the issue of the Rs. 510 advance: although the court recognized that a tenant-party to an illegal agreement may, in some circumstances, be entitled to relief (drawing on Sita Ram v. Radha Rai and exceptions to the in-pari-delicto maxim), on the specific facts the court found the advance was not a liability attached to the demised property at the time of transfer and therefore did not bind the transferees (plaintiffs). Consequently the lower courts' allowance of adjustment of the advance against rent due to the plaintiffs was reversed.
  • Broader precedent: The opinion applies established principles (exceptions to the in-pari-delicto rule; statutory protection for tenants under Section 3; subrogation under Section 109 Transfer of Property Act) to the facts, but the judgment does not purport to announce a novel legal doctrine beyond its application to the facts. The decision's primary consequence is the eviction decree in this case; no wider change of law is stated in the opinion.

If any specific party pleading, evidence detail, or other factual minutiae are not mentioned above, that information was not available in the provided opinion and has therefore not been included.

    Smt. Kaushalya Devi And Others v. Gopal Ram And Another .

    P.S Mishra, J.:— This appeal by the plaintiffs is against a judgment and decree of affirmance by the First Additional Subordinate Judge, Gaya in an appeal arising out of a suit for eviction of the tenants-defendants. For the purposes of appreciating the questions involved in this appeal some facts are relevan to be stated.

    2. Smt. Sharda Devi, Shanti Devi, Shaktt Devi, Shanti Devi and Binapani Devi were the owners of the house bearing Holding No. 63 Ward No. 3 situate in Mohalla Purani Go-down within Kotwali Police Station in the District of Gaya, which has been fully described in Schedule ‘A’ of the plaint. Sharda Devi and her sisters inducted the original defendant Hari Ram as a tenant in the southern portion of the said house on 1.8.1960 A registered document was created on 10.8.1960 between them creating a fixed term tenancy at a rental of Rs. 70/- per month. Before, however, the period of tenancy under the said document could expire yet another deed of lease was created on 13.12.1962 The rental this time was settled at Rs. 85/- per month and the period of tenancy was fixed from 1.12.1962 to 30.11.1967 Hari Ram, in accordance with one of the conditions of the document executed on 13.12.1962, paid a sum of Rs. 510/- by way of advance adjustable at the end of the tenancy. Hari Ram, however, continued as a tenant even after expiry of the said lease on 30.11.1967 and paid rent at the rate of Rs. 85/- per month to the landlords. The advance amount of Rs. 510/-, however, was neither refunded nor was adjusted towards the rental of any period either before 20.11.1967 or thereafter. On 7.12.1971 the plaintiffs purchased the said premises under a registered sale deed and, accordingly, Hari Ram was informed. No rent, however, was paid by Hari Ram to the plaintiffs and since he defaulted in paying rent and incurred the liability of eviction under Section 11(1)(d) of the Bihar Buildings (Lease, Rent & Eviction) Control Act, 1947, a suit for eviction was filed on the allegation of default. The plaintiffs also alleged that they required the house in question for their own occupation and sought eviction of Hari Ram on that ground as well.

    3. Hari Ram, however, died during the pendency of the suit and his heirs were substituted in his place. The defendants contested the suit on several grounds and alleged that they had not defaulted in payment of rent, inasmuch as, when rent was offered to the husband of plaintiff no. 1 he declined to accept the same and thereafter rent was sent by moneyorder to the plaintiffs duly apportioning the rental in accordance with their respective shares, but the plaintiffs refused to accept the same. Even thereafter the defendants remitted the rent by moneyorder regularly and there has been no default by them in this regard. They further stated that as Hari Ram had been inducted as a tenant originally at a rental of Rs. 70/- per month on 1.8.1960, enhancement of rent from Rs. 70 to Rs. 85/- per month in December, 1962 was illegal and any excess paid over and above Rs. 70/- had to be adjusted towards future rent. The defendants also paid municipal taxes and met some other expenses and according to them they were entitled to the adjustment of such payment; and expenses from any amount of rent claimed from them by the landlords.

    4. The trial court dismissed the suit holding that the taxes paid by the defendants to the defendants to the municipal authorities plus the amount of Rs. 510/- paid in advance to Sharda Devi and her sisters were together in excess of the claim of rent at the rate of Rs. 85/- per month from December, 1971 to June, 1972 and thus there has been no default in payment of rent and that there has been no personal necessity to the plaintiffs for the house in question. The appellate court has also affirmed the said findings and dismissed the appeal.

    5. Learned counsel for the appellants has raised two contentions. He has first contended that the payment of advance of Rs. 510/- by the tenant to the landlord was in violation of the express prohibition prescribed under Section 3 of the said Bihar Buildings Control Act. This being an illegal contract, the defendants cannot claim adjustment of the said amount towards rent for the period they defaulted in payment of rent to the plaintiffs. In this connection he has placed reliance upon a Bench decision of this Court in the case of Jagannath Tewar… v. Dr. Gopal Prasad…. (AIR 1983 Patna 50) (:1983 PLJR 137) and the case of Ramswarup Prasad v. Budhdeo Sao (AIR 1983 Patna 266) (:1983 PLJR (NOC) 22). These cases are decided on the strength of the maxim that “in paride licto potiorest condition possidentis”. Undoubtedly it is a mxim of law, established, not for the benefit of the plaintiffs or defendants, but is founded on the principles of public policy which will not assist a plaintiff who has paid over money or handed over property in pursuance of an illegal or immoral contract to recover it back for the court will not assist an illegal transaction in any respect, and similarly will not assist the defendant who has paid over money or handed over properly in pursuance of an illegal or immoral contract to recover it back for the same reason. But the maxim that is founded on principle of public policy is not as bald as the learned counsel for the appellants wants it to be. It has got its well known exceptions. The principle that the Court will refuse to enforce an illegal agreement at the instance of a person who is himself a party to an illegality or fraud is invariably not applied to the cases falling into the following three categories:—

    (i) where the illegal purpose has not yet been substantially carried into effect before it is sought to recover money paid or goods delivered in furtherence of it;

    (ii) where the plaint in is not in pari delicto with the defendant; and

    (iii) where the plaintiff or defendant does not have to rely on the illegality to make out his claim.

    6. The less guilty party may be able to recover money pud on property transferred even under illegal contract if the contract is of a kind made illegal by statute in the interest of a particular class of persons of whom the party concerned is one. This law has been candidly stated in the case of Sita Ram v. Radha Rai (AIR 1968 Supreme Court 534) by the Supreme Court. Section 3 of the said Bihar Buildings Control Act says that “it shall not be lawful for any person to claim or receive, in consideration of the grant, renewal, or continuance of a tenancy of any building, the payment of any premium, salami, fine or any other like sum in addition to the rent, or the payment or any sum exceeding one month's rent of such building as rent in advance.” Obviously it is a law made for the protection of the interest of the tenants and operates as a prohibition against the landlords. A landlord receiving money in advance towards future rent from a tenant, commits a wrong but a tenant, although a party to the illegal agreement may not be denied the claim of adjustment of the advance rent paid by him, lest denial of his claim may not amount to a premium upon the recalcitrance of the landlord. In my considered view this case is evidently one which shall fall in the exception and escape the maxim as tenants in the instant case are not pari delicto with the landlords.

    7. Learned counsel for the appellants has next contended that the appellants being transferees from the lessor have derived all the rights against the lessee, but as far as liabilities are concerned, assuming that Rs. 510/- paid in advance to the transferors was to be adjusted in future rent they do not automatically become liable to the lessee for those liabilities. The test, according to him, will be to find out if the liabilities are attached to the demised premises or not. If they are not attached to the demised premises on the general equitable principle that a man cannot assign his obligations, the transferor could not deliver his own liabilities to them. Advance of Rs. 510/- was a loan which could/can be realised by the lessee from the transferor. In support of this proposition he has placed reliance upon a Division Bench judgment of this Court in the case of Rameshwar Lal v. Butto Kristo Rai* (AIR 1934 Patna 653). Mohammad Noor, J. (as he then was) with whom Agarwala, J. (as he then was) concurred considered the question whether a mortgagee could demand from tenant rent paid in advance to the mortgagor and held that in case of usufructuary mortgage payment of rent to the mortgagor-landlord in advance, does not discharge a tenant who had notice of the mortgage before rent was due. He also observed that a voluntary payment of rent in advance is merely a loan to the tenant by the landlord. In recording the said opinion, Mohmmad Noor, J. followed an earlier judgment of this Court in the case of Ram Lal Marwari v. Mahadeo Marwari (AIR 1922 Patna 339). He quoted with approval a passage from Woodfall, Edn. 21 at pages ??? that “payment of rent to the mortgagor without notice of the mortgage is valid, but a voluntary payment of rent in advance is not within this rule, so as to discharge a tenant who had notice of the mortgage before the rent was due, for a voluntary payment of rent in advance is merely a loan by the tenant to the landlord. However a pay mem is a payment of rent when the rent falls due, and becomes irrecoverable by the mortgagee so far as it is made in respect of rent due before the notice.” Learned counsel for the appellants has further supported his argument by a judgment of M.M Ismail, J. of the Madras High Court in the case of G. Kesari chand v. T.A Sankunni Maistry (1972 Madras Law Journal 358) in which the principles laid down in the cases of Rameshwar Lal (Supra) and Ram Lal Marwari (Supra) have been quoted with approval. On the facts of this case, this contention is more or less academic. But since the learned counsel has raised it, I propose to record my views.

    8. All the aforesaid three cases are distinguishable. Under Section 109 of the Transfer of Property Act, once the lessor transfers the property leased the transferee of the property practically becomes subrogated to the position of the lessor transferor in respect of the rights and liabilities as to the property so transferred. As far as the rights are concerned they are automatically transferred to the transferee and by virtue of the transfer of the demised premises, the transferee becomes entitled to exercise his rights against the lessee in the absence of a contract to the contrary. As far as the liabilities are concerned, the transferee does not automatically become liable to the lessee for those liabilities unless the lessee himself chooses to look to the transferee for the discharge of those obligations.

    9. In the case in hand, however, Sharda Devi and her sisters bound themselves by a condition of an agreement under which they accepted the advance payment of Rs. 510/- from the tenants. If this was an obligation attached to the demised property the obligation to re-pay the amount by the lessor by adjusting the same towards rent stood transferred to the plaintiffs. Position, however, shall be different if the adjustment of the amount of rent paid in advance is not a condition of the lease.

    10. Learned counsel for the appellants has, however, pointed out that admittedly the advance of Rs. 510/- was paid as a condition of tenancy under registered deed dated 13.12.1962 The said lease expired on 30.11.1967 Admittedly there has been no renewal of the lease. According to the defendants, Hari Ram continued as a tenant even after the expiry of the period of lease by paying monthly rental of Rs. 85/- to Sharda Devi and her sisters. Learned counsel appearing for the respondents has not disputed these facts. It is obvious, therefore, that the contract under which Rs. 510/- was paid by Hari Ram to Sharda Devi and her sisters ceased to exist after 30.11.1967 and along with it the condition that the advance of Rs. 510/- would be adjusted towards future rent. With the payment of rent per month at the rate of Rs. 85/- evidently a new relationship came to exist between the appellants transferor and their tenants. This month to month tenancy was independent of any written agreement or contract and it existed on the day plaintiffs-appellants purchased the property in question from Sharda Devi and her sisters, that is to say, 7.12.71 It is obvious that on the date the appellants purchased the property there was no existing conditition of adjustment of Rs. 510/- paid in advance towards future rent. This being the position there was no condition attached to the demised property which could follow it and go as a liability to the transferee-appellants. Learned counsel appearing for the respondents has fairly conceded that it will not be possible to suggest that on the date of purchase, the adjustment of advance paid by the tenant to the landlords was a condition attached to the property. It is obvious, therefore, that the courts below have committed error of law in granting the tenants adjustment of the said amount of Rs. 510/- towards future rent and erred in holding that there is no default in payment of rent.

    11. Although it has been suggested by the respondents in their pleadings that they had sent rent by money-order to the plaintiffs but the learned counsel for the appellants has pointed out that they gave up their case in this regard before the trial court. There is no material or pleading on behalf of the respondents upon which it can be held that there has been no default in the payment of rent.

    12. Since I have found as a fact that there has been default in the payment of rent for more than two months continuously, I have to hold that the respondents are liable to be evicted in accordance with the provisions of Section 11(1)(d) of the said Bihar Buildings Control Act. During the pendency of the appeal an application had been filed on behalf of Krishna Mohini Devi and Dinesh Chandra etc. stating that they have purchased shares of appellant nos. 2 and 3, namely, Smt. Sumitra Devi and Smt. Anpurna Devi on 4.3.1983 The have prayed the they should be substituted in place of appellant nos. 2 and 3 under Order XXII Rule 10 of the Civil Procedure Code. Lamed counsel appearing for them however, is not in a position to state that the appellant nos. 2 and 3 have left taking any interest in the appeal and his clients alone are interested in pursuing it. It is not possible, therefore, to grant leave to these persons to continue the appeal after deleting the name appellant nos. 2 and 3. Learned counsel appearing for them, however, has shown no interest in prosecuting the appeal instead he has pointed out that these purchasers do not want to prosecute the appeal. It is not possible to deny to the appellants the legal right of hearing particularly to the appellant no. 1 whose interests in the property are still intact.

    13. In the result this appeal is allowed, the judgment and decree of the Court below are set aside and the suit for eviction only is decreed but, on the facts and in the circumstances of the care, without any cost.

    Use AI to get other relevant cases.

    Comments

    Smt. Kaushalya Devi And Others v. Gopal Ram And Another .
    (Feb 7, 1984)