Citation Codes

Equivalent Citations

citation codes

Case Number

Civil Revision No. 1134 of 1989

Judges

Ashok Bhan, J.

Acts

SECTION 13 EAST PUNJAB URBAN RENT RESTRICTION ACT 1949
SECTION 109 TRANSFER OF PROPERTY ACT 1882
Order 22 Rule 10 of the Code of Civil Procedure,
SECTION 55 TRANSFER OF PROPERTY ACT 1882

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Smart Summary

Analytical Summary of the Opinion — Ashok Bhan, J.

Factual and Procedural Background

K.K. Sikand (the original landlord) filed an ejectment petition under Section 13 of the East Punjab Urban Rent Restriction Act, 1949 for recovery of three rented rooms on the first floor of a house in Shastri Market, Kapurthala. The landlord alleged that the tenant, Ranjit Singh, had taken the three rooms on rent at Rs. 150 per month on 16.6.1980 by executing a rent note for eleven months and agreed to vacate on 15.6.1981; on failure to vacate he claimed the rent rose to Rs. 350 per month from 15.6.1981 and that the tenant had paid rent only up to 15.2.1982 and was in arrears. The landlord also alleged impairment of the premises' value and utility.

The tenant contested the petition. During the pendency of the ejectment proceedings, the original landlord sold the premises to Subash Chander (the vendee landlord), who was impleaded as a party. In his written statement the tenant raised a preliminary objection about incorrect description of the premises and asserted that the vendee landlord had no locus standi because the arrears of rent prior to the sale had not been assigned to him; the tenant further maintained the monthly rent was Rs. 150 and had never been increased to Rs. 350, and averred rent had been paid up to 15.11.1985.

During proceedings the tenant tendered Rs. 900 as rent for 15.1.1985 to 15.12.1985 (less amounts already paid by cheque), and additionally paid Rs. 150 as interest and Rs. 50 as costs as assessed by the Rent Controller.

Replication was filed; the Rent Controller framed several issues (see below). Issues No. 1, 3, 3-A and 4 were decided against the tenant and issue No. 2 was decided against the landlord-respondents. The tenant appealed; the appellate authority dismissed the appeal. Aggrieved by that dismissal, the tenant filed the present revision petition before this Court.

Legal Issues Presented

Whether the tender was valid (Issue No. 1).
Whether the respondent (tenant) had made material alterations in the demised premises diminishing its value and utility (Issue No. 2).
Whether the site plan is correct (Issue No. 3).
Whether the petition is bad for partial ejectment (Issue No. 3A).
Relief (Issue No. 4).
Whether, in the absence of an assignment of arrears of rent to the vendee landlord, the vendee could claim arrears of rent or continue with ejectment proceedings initiated by the original landlord (explicitly raised in the opinion's analysis).

Arguments of the Parties

Tenant's (Appellant's) Arguments

The tenant produced account books (Exh. RW-1/5 to RW-5/5) and bank account records plus photostat copies of bearer cheques (Exh. RW-4/2 to RW-4/6) to show payment of rent, and argued rent had been paid up to 15.11.1985.
The tenant argued the rent was Rs. 150 per month and was never increased to Rs. 350 as claimed by the original landlord; both courts below had found the rent to be Rs. 150 per month.
The tenant submitted that the vendee landlord had no locus standi to continue proceedings because the arrears of rent prior to the sale had not been assigned to him; the right to recover rent was in the nature of a debt and the right to sue had not survived in the vendee.
The tenant contended the original landlord had issued valid receipts (Exh. R-2 to R-6) and, being an Income Tax assessee, should have produced his account books to contradict the tenant's proof of payment.

Landlord/Vendee (Respondent's) Contentions

In written statement a preliminary objection was taken that the description of the rented premises was wrongly mentioned.
The vendee landlord (Subash Chander) contended he had become the owner on 23.12.1985 and impliedly continued the ejectment proceedings; it was asserted that the vendee had locus to pursue recovery.
The original landlord claimed the rent had increased to Rs. 350 per month from 15.6.1981 and that the tenant was in arrears, allegations later disbelieved by the courts below.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Madan Lal v. Harkishan Lal (Single Judge decision)	That once the property was sold by the landlord, he ceased to be a landlord and could not continue proceedings as a landlord; a decree for eviction can only be passed in favour of a landlord. Order 22 Rule 10 CPC is an enabling provision and does not revive a lost right of action by a party who ceased to have that right.	The Court relied on this principle to support the position that the original landlord, having transferred the property, could not seek eviction in his favour and that it would be futile to attempt substitution under Order 22 Rule 10 CPC to revive a right of action lost by sale.
Hari Krishan by LRs v. Smt. Krishna Mohini (Division Bench of this Court)	Held that in the absence of an assignment of arrears of rent in favour of the vendee, the buyer/transferee is not entitled to arrears of rent due before the transfer; reference made to Section 55 and Section 109 of the Transfer of Property Act, 1882 (seller entitled to rent and profits till ownership passes; transferee is not entitled to arrears unless assigned).	The Court applied this decision to conclude that, because there was no assignment of arrears of rent to the vendee, the vendee landlord could not sustain the ejectment proceedings for non-payment of arrears that accrued before the sale.

Court's Reasoning and Analysis

The Court's analysis proceeded by reference to the evidentiary record and settled law on the effect of a sale of a lessor's interest on pending ejectment proceedings and recovery of pre-sale arrears:

Evidence and inference on receipt of rent: The tenant produced account books maintained in the regular course of business (Exh. RW-1/5 to RW-5/5), a copy of his bank account, and photostat copies of bearer cheques (Exh. RW-4/2 to RW-4/6). When the cheques were put to the original landlord (K.K. Sikand), he was unable to state whether he had received payment of such cheques. One cheque (Exh. RW-4/3) appeared to have been encashed by the original landlord himself; other cheques were encashed by persons, one of whom (Onkar) the original landlord admitted was his brother-in-law. The original landlord failed to produce his books of account or specifically deny receipt of payments. On this evidence the Court drew an adverse inference against the original landlord and concluded that in probability the original landlord had received the rent, including for earlier years.
Falsity of the landlord's rent-increase claim: Both Courts below had found as a fact that the monthly rent was Rs. 150, not Rs. 350 as claimed by the original landlord; the original landlord's assertion of a higher rent was disbelieved. The Court held that, given this falsification and the tenant's proof of payment, the original landlord's denial of receipt of rent could not be trusted absent his own account books.
Effect of sale on right to continue ejectment proceedings: It was common ground that arrears of rent prior to the sale had not been assigned to the vendee. The Court considered whether, in those circumstances, the vendee could claim arrears or continue with ejectment proceedings initiated by the original landlord. Relying on Madan Lal v. Harkishan Lal, the Court noted that once the seller ceased to be a landlord by sale, he could not obtain a decree for eviction and that substitution or reliance on Order 22 Rule 10 CPC cannot revive a lost right of action resulting from such a supervening event. The Court further relied on the Division Bench decision in Hari Krishan v. Krishna Mohini, which explained that absent an assignment of pre-sale arrears the transferee is not entitled to such arrears; Sections 55 and 109 of the Transfer of Property Act, 1882 were cited in that regard to show the seller is entitled to rent until ownership passes and the transferee is not entitled to arrears due before transfer unless assigned.
Conclusion on survivability of right to sue: Applying those authorities, the Court concluded that the right to sue for arrears of rent prior to the sale had not survived in Subash Chander (the vendee landlord) because there was no assignment of the arrears to him. The original landlord, having transferred the property, could not seek eviction; at most the original landlord (or his legal representatives) could pursue recovery of arrears as a debt by instituting a suit.
On the facts, the Court accepted the tenant's evidence that arrears had been paid and were received by the original landlord; coupled with the legal bar on the vendee's claim in absence of assignment, the Court found for the tenant on the relevant contention.

Holding and Implications

Core Ruling: Revision petition accepted; orders of the Courts below are set aside and the petition filed for eviction of the tenant on the ground of non-payment of arrears of rent is dismissed.

Implications

Direct effect on the parties: The ejectment petition (filed by the original/vendee landlord on the ground of non-payment of arrears) is dismissed and the tenant will not be evicted on that ground. No costs were awarded.
On the law between seller and buyer of leased premises: The Court reaffirmed that, absent an assignment of arrears of rent in favour of a vendee, the vendee/transferee is not entitled to recover arrears of rent due before the transfer or to pursue ejectment for those arrears; the seller remains entitled to rent and profits up to transfer and arrears remain with the seller unless assigned. The seller or his legal representatives may pursue arrears as a debt by a separate suit.
Precedential scope: The opinion applies existing authorities (as cited) to the facts and does not purport to lay down a novel legal principle beyond those authorities; its practical consequence is the dismissal of the eviction petition on the specific factual and procedural grounds summarized above.

Note: This summary is based exclusively on the text of the provided opinion and does not add information beyond that opinion.

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Ranjit Singh v. K.K Sikand And Another

Ashok Bhan, J.:— Present revision petition filed by Ranjit Singh, tenant (hereinafter referred to as ‘the tenant’) arises out of the following facts:—

2. K.K Sikand, landlord (hereinafter referred to as ‘the original landlord’) filed a petition under Section 13 of the East Punjab Urban Rent Restriction Act, 1949 (hereinafter referred to as ‘the Act’) for the ejectment of the tenant from the rented portion of the house consisting of three rooms on the first floor situated in Shastri Market, Kapurthala on the ground that the tenant took three rooms on the first floor of the building on rent without terrace at the rate of Rs. 150/- per month on 16.6.1980 by executing a rent note for 11 months and agreed to vacate the premises on 15.6.1981; that on the failure of the tenant to vacate the premises on the stipulated date, he was liable to pay the rent at the rate of Rs. 350/- per month from 15.6.1981 onwards and that the tenant had paid rent only upto 15.2.1982 and was in arrears of rent till the filing of the ejectment petition. It was also pleaded that the tenant had also impaired the value and utility of the tenanted premises. Ejectment petition was contested by the tenant. During the pendency of the ejectment petition, the original landlord sold the premises in dispute to Subash Chander hereinafter referred to as ‘the vendee landlord’ and on his application, he was impleaded as a party along with the original landlord.

3. In the written statement filed, a preliminary objection was taken that the description of the rented premises has been wrongly mentioned. On merits, it was alleged that the vendee landlord had no locus standi to file the petition for ejectment as he had become the owner of the property in dispute on 23.12.1985 and that he had no right to continue the proceedings for recovery of the rent as the rent had not been assigned by the original landlord in his favour. It was averred that the rate of rent was Rs. 150/- per month and the same had never been increased to Rs. 350/- per month as claimed by the original landlord; that the original landlord had been receiving the rent regularly; sometimes through cheques and sometimes in cash at the rate of Rs. 150/- per month, that the rent had been paid upto 15.11.1985 as detailed in para 3 of the written reply and that the vendee landlord had claimed rent by filing another ejectment petition upto 22.10.1986 During the course of hearing before the Rent Controller, tenant appeared in the Court and tendered a sum of Rs. 900/- as rent at the rate of Rs. 150/- per month w.e.f 15.1.1985 to 15.12.1985 less the amount paid by cheques during these months. In addition to this, the tenant also paid an amount of Rs. 150/- as interest and Rs. 50/- as costs, as assessed by the Rent Controller.

4. In response to the written statement filed, replication was filed. On the pleadings of the parties, the following issues were framed:—

“1. Whether the tender was not valid? OPA

2. Whether the respondent has made material alterations in the demised premises diminishing thereby its value and utility? OPA.

3. Whether the site plan is not correct? OPR.

3A. Whether the petition is bad for partial ejectment? OPR.

4. Relief.

5. Issues No. 1, 3, 3-A and 4 were decided against the tenant whereas issue No. 2 was decided against the landlord-respondents. Tenant, aggrieved against the order passed by the Rent Controller preferred an appeal which also stands dismissed by the appellate authority, aggrieved against which, the present revision petition has been filed.

6. Arguments have been addressed before me only on issue No. 2. Counsel for the tenant argued that the tenant had paid the rent upto 15.11.1985 which stands proved from the copy of the accounts Exh. RW-5/2 to Exh. RW-5/5, pertaining to the years 1983–1984 and 1984–1985 maintained by the tenant and that the original landlord had issued valid receipts Exh. R-2 to Exh. R-6. That, the original landlord, although an Income Tax assessee, failed to produce his account books to show that he had not received the rent, that the right to recover the rent was in the nature of a debt and the right to sue did not survive in the vendee landlord as the right to recover the rent had not been assigned to him; that both the Courts below have recorded a finding that the plea taken by the landlord that the rate of rent was Rs. 350/- per month as against Rs. 150/- claimed by the tenant, was false; and once the landlord was disbelieved on this ground, then his petition was liable to be dismissed on this short ground.

7. Counsel for the parties have been heard at length.

8. Tenant had produced his account book duly maintained in the regular course of business, Exh. RW 1/5 to Exh. RW-5/5, coupled with the copy of his Bank Account in the Indian Bank and the photostat copies of the cheques Exh. RW-4/2 to Exh. RW-4/6. Cheques Exh. RW-4/2 to Exh. RW-4/6 were put to the original landlord K.K Sikand, AW-1 and he stated that he can not say as to whether he had received payment of such cheques or not. One of these cheques Exh. RW-4/3 is purported to have been encashed by K.K Sikand, the original landlord himself, whereas the three other cheques were encashed by M.S Walia, Onkar and one Joti. The original landlord admitted in his statement that Onkar is his brother in law. No doubt, cheques Exh. RW-4/2 to Exh. RW-4/6 are bearer cheques but as the original landlord failed to produce his books of accounts and specifically deny the receipt of the payment of such cheques, an inference has to be drawn against him. Cheque Exh. RW-4/3 pertains to March 1985. In these circumstances, it can be assumed that the original landlord had been receiving the rent for the earlier two years as well. No doubt, the bearer cheques could be encashed by any other person but in all probability, from the evidence, it can be inferred in this particular case that the original landlord had himself encashed the cheques and received the payment.

9. The original landlord had claimed the rent at the rate of Rs. 350/- per month whereas the case of the tenant was that the rent per month was Rs. 150/-. Both the courts below have found, as a fact, that the rent was Rs. 150/- per month. The original landlord stands falsified regarding the rate of rent and under these circumstances, much reliance cannot be placed upon his statement that he did not received the rent especially when the tenant had produced his books accounts and the original landlord failed to produce his books of accounts.

10. It is an admitted case between the parties that the rent due for the period prior to the sale has not been assigned to the vendee landlord. In the absence of assignment of the arrears of rent in favour of the vendee landlord, the question arises as to whether in the absence of assignment of arrears of rent, the vendee landlord could either claim arrears of rent or continue with the proceedings for ejectment initiated by the original landlord. In this case, the original landlord had sold the premises during the pendency of the ejectment proceedings. Having ceased to be a landlord, he was not entitled to a decree for eviction in his favour. A learned Single Judge of this Court in Madan Lal v. Harkishan Lal,1 under somewhat similar circumstances, held as under:

“Moment, the property was sold by Harkishan Lal to Nanak Chand and his sons, he ceased to be a landlord. Therefore, he could not continue the proceedings as a landlord. A decree for eviction could only be passed by a Rent Controller in favour of a landlord. Harkishan Lal having ceased to be a landlord was not entitled to such a decree, nor the Tribunal could pass such a decree in his favour. In this view of the matter, it was futile to have recourse to Order 22 Rule 10 of the Code of Civil Procedure, which is an enabling provision and which is not a provision, which, in any manner, confers a right of action on party who has lost that right of action by some supervening event.”

11. Right to recover the rent in the absence of assignment of such rent of the vendee was considered by a Division Bench of this Court in Hari Krishan by LRs v. Smt. Krishna Mohini of Ludhiana,2 and it was held that in the absence of assignment of arrears of rent in favour of the vendee, the tenant cannot be ejected for non payment of such arrears. It was observed as under:—

“After hearing learned counsel for the parties, and going through the case law cited at the bar we are of the considered view that in the present case there was no assignment of arrears of rent in favour of the vendee. The above said sale deed is silent in this regard. Section 55 of the Transfer of Property Act, 1882, which deals with the rights and liabilities of buyer and seller provides inter aha that the seller is entitled “to the rent and profits of the property till the ownership thereof passes to the buyer.” This is in the absence of a contract to the contrary. Thus it is evident that there being no contract to the contrary the seller is entitled to the rent and profits of the property till the ownership thereof passes to the buyer. As observed earlier, in the sale deed there is nothing cited as regards the arrears of rent or there is no specific assignment of the said arrear if any, in favour of the vendee. Reference may also be made to Section 109 of the Transfer of Property Act, 1882 which provides rights of lessor's transferee. It has been clearly provided therein that “provided that the transferee is not entitled to arrears of rent due before the transfer, and that, if the lessee, not having reasons 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.”

12. Thus, from the discussion above, I am satisfied that the right to sue had not survived in Subhash Chander, vendee landlord, to recover the rent or seek ejectment of the tenant as the right to recover the arrears of rent prior to the sale in his favour had not been assigned to him. The original landlord having transferred the property cannot seek ejectment of the tenant. At the most, he had the right to recover the rent but the same could be done by filing a suit and the right to sue regarding arrears of rent would survive either in him or his Legal Representatives. On facts, I am satisfied that the tenant had paid the arrears of rent which had been duly received by the original landlord.

13. For the reason stated above, this revision petition is accepted. Orders of the Courts below are set aside and the petition filed for eviction of the tenant on the ground of non payment of arrears of rent is dismissed. No costs.

R.M.S

Petition accepted.

Ranjit Singh v. K.K Sikand And Another

Analytical Summary of the Opinion — Ashok Bhan, J.

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Tenant's (Appellant's) Arguments

Landlord/Vendee (Respondent's) Contentions

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Implications

Ranjit Singh v. K.K Sikand And Another

Comments