- Bookmark
- Share
- CaseIQ
N.K. Kame, Marhatal, Jabalpur v. Biharilal, Marhatal, Jabalpur
Judgment Summary — Dixit C.J.
Factual and Procedural Background
This revision petition challenged an order of the Civil Judge, Second Class, Jabalpur rejecting the plaintiff-applicant's prayer under section 13(6) of the Madhya Pradesh Accommodation Control Act, 1961 to strike out the defence of the non-applicant (tenant). The matter came before the court on a reference by Bhave J.
Material facts stated in the opinion:
- By a sale deed dated 7 February 1966 the petitioner purchased a house in Jabalpur from Virendra Saxena and two women for Rs. 20,000.
- At the time of sale the non-applicant was occupying the house as a tenant of the vendors.
- The sale deed assigned to the purchaser (petitioner) the arrears of rent due to the vendors up to the date of sale.
- After purchase, the petitioner sued for ejectment and recovery of arrears of rent, claiming arrears both for the period after purchase and the pre-sale arrears assigned by the vendors.
- The non-applicant deposited in court only the arrears of rent accruing from the date of the sale deed (i.e., post-purchase arrears).
- The petitioner moved under section 13(6) of the Madhya Pradesh Accommodation Control Act to strike out the defence for failure to deposit the assigned pre-sale arrears; the trial court rejected that prayer, accepting the tenant's contention that he was not bound to deposit amounts owed to the vendors.
Legal Issues Presented
- Whether, under section 13(1) read with section 13(6) of the Madhya Pradesh Accommodation Control Act, 1961, a person sued as a tenant is required to deposit in court arrears of rent which were due to the vendor before transfer but assigned by the vendor to the purchaser who now sues for eviction and recovery.
- Whether assignment of pre-transfer arrears of rent to a purchaser changes the character of those arrears so that they can be treated as rent payable to the assignee (and hence subject to deposit under the landlord-tenant deposit provisions).
Arguments of the Parties
Petitioner's (Plaintiff) Arguments
- The petitioner contended that the tenant should have deposited, under section 13 of the Act, the arrears of rent assigned to the petitioner by the sale deed (i.e., pre-transfer arrears assigned by the vendor).
- The petitioner relied on an interpretation of section 13(1) that the deposit requirement refers to amounts representing defaults in payment of rent (and thus would include assigned arrears), and advanced authorities (as part of the broader argument) to support that view.
Non-Applicant's (Tenant) Arguments
- The tenant's position, accepted by the trial court, was that he was not bound under section 13 to deposit amounts which he owed to the vendors (i.e., arrears due before the transfer) even if those amounts had been assigned to the purchaser.
- The tenant deposited only the arrears accruing from the date of sale (post-purchase arrears), indicating the contention that liability to pay rent to the purchaser commences only after the purchase and not for pre-transfer arrears.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Daya Debi v. Chapala Debi, AIR 1960 Cal. 378 | The Calcutta Division Bench held that in proceedings under section 17(1) of the West Bengal Premises Tenancy Act (analogous to section 13(1) of the M.P. Act) the tenant was not required to deposit arrears of rent transferred by the landlord to the transferee-plaintiff. | The court cited this decision as supportive of the view that assigned pre-transfer arrears need not be deposited under section 13(1) of the M.P. Act. |
| Ram Prakash v. Karam Chand, AIR 1963 All. 47 | Division Bench of the Allahabad High Court held that the transferee who purchased arrears of rent could demand them and that such liability retained the character of arrears of rent; it emphasized a definition of "landlord" which included assignee. | The court treated this decision as contrary to its conclusion and distinguished it on the ground that the Madhya Pradesh Act's definition of "landlord" (section 2(b)) does not include an assignee; even if it did, section 109 Transfer of Property Act prevents treating pre-transfer arrears as part of the reversion for purposes of tenant liability. |
| Babu Bhai v. Bhagwandas, 1966 MPLJ Note No. 30 = 1966 JLJ 75 (Shiv Dayal J.) | The view expressed was that arrears of rent, when assigned by the vendor to the purchaser, assume the character of a "debt" and cannot be recovered as arrears of rent by the assignee. | The court endorsed this view, stating that it is correct and applicable to the present case. |
| Bachhar lal v. Ram Asrey, 1960 All.L.J. 147 | A single-judge decision in the Allahabad High Court which was later overruled by the Division Bench (see Ram Prakash). | The court noted that the Division Bench in Ram Prakash overruled this single-judge decision; the citation is used to reflect the contrasting authorities in the Allahabad High Court. |
Court's Reasoning and Analysis
The court's analysis proceeded in a logical sequence grounded in statutory language and the Transfer of Property Act:
- Interpretation of section 13(1) of the Madhya Pradesh Accommodation Control Act:
Section 13(1) speaks of a tenant depositing in the court "an amount calculated at the rate of rent at which it was paid for the period for which the tenant may have made default."
The court read this provision as directed to defaults in payment that occur after the commencement of the landlord-tenant relationship between the person suing (plaintiff) and the person sued (defendant/tenant). Section 13 presupposes a subsisting relationship of landlord and tenant between the plaintiff and defendant at the time the suit is instituted; thus "default" refers to non-payment of rent after that relationship has commenced.
- Timing of the landlord-tenant relationship:
When a purchaser buys property that is in occupation by a tenant, the relationship of landlord and tenant between the purchaser and the occupier commences only after the purchase. Therefore, the tenant becomes liable to pay rent to the purchaser only from that point onward; pre-purchase arrears were not owed to the purchaser as rent prior to the transfer.
- Effect of assignment and section 109, Transfer of Property Act, 1882:
Section 109 T.P. Act makes clear that arrears of rent due before a transfer are not part of the reversion and, although capable of assignment, remain a mere debt or cause of action. The assignee's right to recover such assigned arrears arises from the contract of assignment, not from any transfer of the reversion. Assignment does not alter the character of the obligation vis-à-vis the tenant; payment by the tenant to the assignee does not transform the pre-transfer arrears into rent due to the assignee for periods prior to the transfer.
- Application of the above to the deposit requirement:
On this basis the court concluded that section 13(1) does not require a tenant to deposit arrears of rent that were due before the transfer and only assigned to the purchaser. The conclusion is the same whether the assignment occurred contemporaneously with the sale or at a later time.
- Treatment of contrary authority:
The court acknowledged conflicting authorities. It agreed with the view expressed by Shiv Dayal J. in Babu Bhai v. Bhagwandas and the Calcutta Division Bench in Daya Debi v. Chapala Debi, which support non-requirement of deposit for assigned pre-transfer arrears. The Allahabad Division Bench decision in Ram Prakash v. Karam Chand was noted as contrary, but the court distinguished it on the basis that the definition of "landlord" under the Uttar Pradesh Act (which included assignees) differs from the definition in the Madhya Pradesh Act (section 2(b)), which does not include an assignee; and, further, section 109 prevents treating assigned pre-transfer arrears as part of the reversion to render the tenant liable to deposit them as rent.
Holding and Implications
Holding:
Petition dismissed.
The court's dispositive ruling was that the non-applicant (tenant) was not required to deposit under section 13(1) of the Madhya Pradesh Accommodation Control Act the amount of arrears of rent which had been due to the vendor prior to the transfer and assigned to the purchaser. Consequently, the Civil Judge's order rejecting the applicant's prayer to strike out the tenant's defence was correct and upheld.
Direct implications for the parties:
- The petition challenging the trial court's refusal to strike out the defence is dismissed.
- The parties were directed to bear their own costs.
Broader implications:
The opinion rests on statutory interpretation (section 13(1) of the M.P. Act and section 109 of the Transfer of Property Act) and on existing judicial authorities; it does not purport to lay down any new principle of law beyond its application to the facts of the case.
Dixit C.J.:-
This revision petition against an order of the Civil Judge, Second Class, Jabalpur, rejecting the plaintiff-applicant's prayer for striking out, under section 13 (6) of the Madhya Pradesh Accommodation Control Act, 1961 (hereinafter called the Act), the defence of the non-applicant, has come up before us on a reference by our learned brother Bhave J., before whom it was first placed for hearing.
2. The material facts are that by a sale deed dated the 7th February 1966 the petitioner purchased a house situated in Jabalpur from one Virendra Saxena and two ladies for a consideration of Rs. 20,000. At the time of the purchase, the non-applicant was living in the house as a tenant of the vendors. By the sale deed, the arrears of rent due to the vendors upto the date of the sale were also assigned to the petitioner. After purchasing the property, the applicant filed a suit for ejectment of the non-applicant from the house and for recovery of arrears of rent from him. The "arrears of rent", which the plaintiff claims to recover, are not only those which he says became due to him after the purchase of the property, but also those which became due to the vendors before the sale of the property and which had been assigned to him by the sale deed dated the 7th February 1966. The non-applicant-tenant deposited only the arrears of rent due from him from the date of the sale deed. Thereupon the petitioner moved the trial Court under section 13 (6) of the Act for striking out the defence. This prayer was reiected by the learned Civil Judge accepting the contention of the tenant that he was not bound to deposit under section 13 of the Act that amount which he owned to the ve lors as rent.
3. The learned single Judge making the reference was inclined to think that the tenant should have deposited the rent amount assigned to the petitioner by the sale deed dated the 7th February 1966. According to him, section 13 (1) of the Act inter alia spoke of the deposit in the Court for payment to the landlord the amount of rent "for the period for which the tenant may have made default" and did not use the expression "arrears of rent"; that the rent amount, if not paid on the due date, no doubt becomes a "debt" owed to the landlord and it can be assigned by him; that when there is an assignment of this debt, what is transferred to the assignee is the right to recover the debt, but the character of the debt is not changed; it remains after the assignment, as before the assignment, an amount representing arrears of rent vis-a-vis the tenant; and that, therefore, when there is an assignment by the vendor of the arrears of rent, the tenant is bound to deposit, under section 13 of the Act, the assigned amount. The learned single Judge thought that the matter should be decided by a larger Bench rather than by him sitting singly, as on the question of the character of rent amount after its assignment by an owner of the property to the purchaser while selling the property the Calcutta and Allahabad High Courts have expressed different views in Daya Debi v. Chapala Debi, AIR 1960 Cal. 378 and Ram Prakash v. Karam Chand, AIR 1963 All. 47 and the view he was inclined to take did not accord with some observations made by Shiv Dayal J. in Babu Bhai v. Bhagwandas, 1966 M P L J Note No. 30=1960 J L J 75.
4. In our judgment, on the language of section 13 (1) of the Act, there can be no doubt that a person sued as a tenant is not required to deposit the amount representing arrears of rent due to the vendor that might have been assigned by him to the purchaser suing the tenant for eviction. Section 13 comes into operation when a suit or proceeding is instituted by the landlord on any of the grounds mentioned in section 12. In such a suit, the person suing claims that he is the landlord and alleges that the defendant is his tenant. The suit is thus founded on the allegation of a subsisting relationship of landlord and tenant. Where a person purchases a property and if at the time of the purchase the property is in occupation of a tenant, then the relationship of landlord and tenant between the purchaser and the person in occupation of the property commences after the purchase and not before it. It is after the sale of the property that the person in occupation of the property as a tenant becomes liable to pay rent to the purchaser. If these principles are borne in mind, then the expression "the tenant shall........deposit in the Court to pay to the landlord an amount calculated at the rate of rent at which it was paid for the period for which the tenant may have made default", occurring in section 13 (1) of the Act, clearly refers to the deposit of that amount of rent prior to the institution of the suit but after the commencement of the alleged relationship of landlord and tenant which the tenant may have defaulted in payment. The use of the words "landlord" and "tenant" and the expression "at the rate of rent" in section 13 (1) clearly points to the fact that the first part of section 13 (1) requires that the person used as a tenant has committed a default in the payment of rent prior to the institution of the suit to the person suing and claiming to be his landlord. Section 13 pre-supposes that when a suit or proceeding is instituted on any of the grounds referred to in section 12 of the Act, the relationship of landlord and tenant as between the plaintiff and defendant is subsisting. Therefore, the default spoken of by section 13 can only refer to the default in the payment of rent after the commencement of the relationship of landlord and tenant between the parties. Section 13 clearly does not deal with the deposit of that amount which the defendant sued as a tenant owed to others and failed to pay. section 109 of the Transfer of Property Act, 1882, makes it very clear that the transferee is not entitled to arrears of rent due before the transfer; such a rent amount is no part of the reversion. It can be assigned by the vendor-landlord. But it is a mere debt, and a mere 'cause in action'. Even after assignment, it does not become part of the reversion so as to make the lessee liable to pay the assigned amount as rent to the transferee. The transferee becomes entitled to recover the assigned amount not by virtue of the transfer of the property, but by virtue of the contract of assignment. The origin of "such a debt" no doubt lies in the non-payment of rent by the tenant to the landlord who was then entitled to get it; the character of this origin is not altered by assignment so far as the tenant liable to pay the debt is concerned. But that does not mean that when the amount is paid by the tenant to the assignee, he paid it because that amount was due as rent to the assignee. In our view, section 13 (1) does not require the tenant to deposit the arrears of rent due before the transfer if they are assigned by the vendor-landlord to the purchaser of the property. It makes no difference to this position whether the assignment of the arrears of rent is contemporaneous with the sale of the property or subsequent to it.
5. The view taken by Shiv Dayal J. in Babu Bhai v. Bhagwandas, 1966 M PLJ Note No. 30=1966 JL J 75 that arrears of rent due to the vendor when assigned by him to the purchaser assume the character of "debt" and cannot be recovered as arrears of rent by the assignee is correct. In that case, the arrears of rent were assigned to the purchaser of the property not at the time of the sale, but subsequently. But, as we have pointed out earlier, it makes no difference whatsoever whether the assignment of the arrears of rent is made at the time of the sale of the property or afterwards. A Division Bench of the Calcutta High Court in Daya Debi v. Chapla Debi, A I R 1960 Cal. 378 has also expressed the view that in a proceeding under section 17 of the West Bengal Premises Tenancy Act, 1956, by the assignee from the landlord of the premises along with arrears of rent, the tenant is not required to deposit under section 17 (1) of that Act the arrears of rent which were transferred by the landlord in favour of the transferee-plaintiff. Section 17 (1) of the Bengal Act is substantially analogous to section 13 (1) of the Madhya Pradesh Accommodation Control Act, 1961.
6. The decision of the Allahabad High Court in Earn Prakash v. Karam Chand, AIR 1963 All. 47 is no doubt contrary to the view taken by us. In that case, a Division Bench of the Allahabad High Court, overruling a decision of a single Judge of that Court reported in Bachhar lal v. Ram Asrey, 1960 All.L.J. 147 has held that in view of the definition of the word "landlord" contained in the Uttar Pradesh (Temporary) Control of Rent and Eviction Act, 1947, 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, and that section 109 of the Transfer of Property Act, 1882, does not prohibit the transfer of claim for arrears of rent in favour of the transferee of the property. In reaching that conclusion, the learned Judges of the Allahabad High Court laid all emphasis on the definition of the word "landlord", as given in the Uttar Pradesh Act, as "including as assignee of the landlord". The decision of the Allahabad High Court is not helpful here for the simple reason that the definition of "landlord" given in section 2 (b) of the Madhya Pradesh Accommodation Control Act, 1961, does not include an assignee of the landlord. Again, even if the word "landlord" had been defined as including an assignee of the landlord, that would not have made the assignee the landlord in relation to the person occupying the accommodation as a tenant for the period before the assignment. The assignee cannot, in view of section 109 of the Transfer of Property Act, or on any principle, be regarded as landlord before the assignment so as to entitle him to claim or recover the arrears of rent due to the vendor and assigned by him. It is no doubt true that section 109 of the Transfer of Property Act does not prohibit the transfer of claim for arrears of rent in favour of the transferee of the property. But from this it does not follow that after assignment it becomes part of the reversion so as to make the lessee liable to pay the assigned amount as rent to the transferee.
7. For all these reasons, our conclusion is that non-applicant-tenant was not required to deposit under section 13 (1) of the Madhya Pradesh Accommodation Control Act, 1961, the amount of arrears of rent due to the vendor that was assigned to the applicant when he purchased the property in question. The learned Civil Judge was, therefore, right in rejecting the applicant's prayer for striking out the non-applicant's defence. This petition is, therefore, dismissed. In the circumstances of the case, we leave the parties to bear their own costs.
Petition dismissed.
Alert