SHEIKH NOOR AND ANR.versusSHEIKH G.S. IBRAHIM (DEAD) BY LRS.

A                         SHEIKH NOOR AND ANR.
                                     v.
                     SHEIKH G.S. IBRAHIM (DEAD) BY LRS.

                                  AUGUST 4, 2003

B                     [R.C. LAHOTI AND ASHOK BHAN, JJ.]


           Rent Control and Eviction:

            Bombay Rents, Hotel and Lodging House Rates Control Act, 1947:
C    Municipal Council attached the property for non-payment ofproperty tax and
     auctioned it-The lady authorized to recover rent purchased the properly in
     auction-Transferred to the present landlord thereafter-Eviction Petition filed
     on the ground of default in payment of rent - Allowed by Trial Court-
     Affirmed by the appellate Court and the High Court-Legality of Auction/
D    sale-Challenge to-Assigning of rights to recover arrears of rent to
     transferee-Validity of-Held: Burden of proof was on tenants-They had
     filed a complaint before the concerned authorities as well-Jn the absence of
     any evidence/findings of the authorities setting aside the sale, it could be
     presum~d that she acquired a valid title-When transferor assigned the right
     to recover arrears in favour of transferee-landlord, he is entitled to recover
E    the same as arrears of rent-Transfer of Property Act, 1882-Section 109-
     Evidence Act.

           Words and Phrases:

           'debt due '-Meaning of in the context of Rent Control Legislation.
F
           Original owner/landlord of the suit property had migrated to
     Pakistan and authorized 'F', a lady, to collect rent on his behalf. Later,
     on failure to deposit due taxes in respect of the property, Municipal
     Council, executed a warrant of attachment and sold the disputed property
G    by public auction. 'F' purchased the said property in the auction sale and
     had transferred the same in favour of the respondent-landlord, the
     transferee and also assigned the right to recovery of arrears of rent, and
     a notice was also issued by the transferor-lady to tenants for payment of
     arrears of rent. Appellant-tenants neither recognized the respondent as
     landlord nor made payment of rent/arrears. Hence a suit for eviction on
fl                                       204
                       SHEIKH NOOR v. SHEIKH G.S. IBRAHIM                      205
     grounds of default and for bona.fide requirement was filed by the landlord A
     which was allowed by the trial Court on the ground of default holding
 ~   the respondent as owner of the property as transferee from 'F'. Eviction
     order was confirmed by the Appellate Court. Aggrieved, tenants,
     challenged the order by filing writ petitions, which were dismissed by the
     High Court. Hence the present appeals.
                                                                                      B
           It was contended for the appellants that 'F' was only collector of
     rent and not owner/landlady; that the Municipal Council could not attach
     the property in lieu of arrears of municipal taxes; that since the eviction
     sale in favour of' F' was collusive/fraudulent, she did not become the owner
     of the property and she could not convey a valid title to the transferee;
     that since the property was evacuee property, it could not be sold by the
                                                                                      c
     Municipal Council; that the sale by Municipal Council was no sale in the
     eye of law; and that arrears of rent prior to sale could not be recovered
     by the transferee as arrears of rent since they were in the nature of debt
     due.
                                                                                      D
           Dismissing the appeals, the Court

            HELD: 1.1. The burden of proof that the sale made by the Municipal
     Council in favour of' F', (a lady authorized by the original owner to collect
     rent on his behalf) was collusive, fraudulent and without observing due
     formalities, was on the appellants. It was for them to prove that she did        E
     not become the owner of the suit premises by virtue of sale certificate
     issued by the Chief Officer, Municipal Council in her favour. Though the
     appellants had challenged the auction sale conducted by the Municipal
     Council by making complaints to the Collector and also the Government
     of Maharashtra, however, there is nothing on record to show that in
                                                                                      F
     pursuance to those complaints the sale in favour of 'F' was Sl;t aside. The
     appellants had already chosen the forum for challenging the validity of
     sale in her favour and since the appellants have not stated as to what action
     has been taken by the authorities, it can be presumed that no action for
     setting aside the sale was taken by the Government as well as the Collector.
     Further, in the present proceedings appellants were not entitled to              G
     challenge the validity of the sale effected by the Chief Officer, Municipal
     Council. The appellants could have done so by filing a separate suit for
     declaration challenging the sale which they did not do. (209-B, D-EJ

            1.2. Till the auction sale held in favour of 'F' is set aside it cannot
     be said that she did not acquire a valid title to the property in dispute.       H


-l                                                                             -,
     206                    SUPREME COURT REPORTS (2003] SUPP. 2 S.C.R.

A After acquiring a valid title in property she had an absolute right to
     transfer the property in favour of any person she liked. The sale effected
     by her in favour of the respondent was also not challenged. Nothing has
     been brought on record to show that the sale effected by her in favour of
     the respondents suffered from any infirmity. Hence, the transfer made by
B    the Chief Officer, Municipal Council was a valid transaction and
     consequently the sale made by her in favour of the respondent was also a
     valid transfer of property. (209-F-HJ

          1.3. In the absence of any pleadings to the effect that the property
     had become an evacuee property or proof thereof, it cannot be held that
C    the property was an evacuee property which could not be attached and
     sold for the recovery of arrears of municipal taxes due towards the
     property. (210-BJ

        1.4. A transferee is not entitled to recover the arrears as rent for
  the property on transfer unless the right to recover the arrears is also
D transferred. If right to recover the arrears is assigned, then the transferee/
  landlord can recover those arrears as rent and if not paid maintain a
  petition for eviction under the rent laws for those arrears as well. Since
  in the instant case, there was an assignment of right to recover the arrears
  in favour of the respondent transferee he was entitled to recover the same
  as arrears of rent. If that period is taken into consideration then the tenant/
E appellants were certainly in arrears of rent for more than six months and
  became liable to be evicted from the premises in dispute on the ground of
  default. (214-D-FJ

             Ramchander Narsey & Co. v. Wamanrao Shenoy VJ. (SC) 70(69) and
p     Satti Krishna Reddy v. Nal/amilli Venkata Reddy and Anr., (1982) 3 SCC 364;
    · Girdharila/ (dead) by Lrs. v. Hukam Singh and Ors., AIR (1977) SC 129 and
      N.M Engineer and Ors. v. Narendera Singh Virdi and Anr., AIR (1995) SC
     448, relied on.

          Ram Prakash Ghai v. Karam Chand, AIR (1963) All. 47; Champak Lal
G    Dahyabhai Natali and Ors. v. Saraswatiben and Ors., AIR (1977) Guj.48;
     and Pratap Muktassa Tak v. Vishnu Giopal Pathak, (1997) Born. R.C. 416,
     approved.

              CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5485-86 of
      1993.
H
             SHEIKH NOOR v. SHEIKH G.S. IBRAHIM [BHAN, J.]                  207

     From the Judgment and Order dated 29.6.1993 of the Mumbai High                A
Court in W.P. No. 2550 and 2567 of 1992.

      Altemeish Rein and K.K. Gupta for the Appellants.

     Vijay Kumar, Tripurari Ray and Vishwajit Singh for the Respondent
No. 2.                                                                             B
     Imtiaz Ahmed, Ms. Naghma Imtiaz and V.N Raghupathy for the
Respondent No. I.

      The Judgment of the Court was delivered by

      BHAN, J. Being aggrieved by the order of eviction passed by the trial
                                                                                   c
court which was duly confirmed by the first appellate court, and later in the
High Court the tenant/appellants (hereinafter referred to as 'the appellants')
have filed these appeals. The court below have disposed of proceedings by
a common order as the facts and the point of law involved in both the cases
are the same. Both the appeals are being disposed of by a common order.            D
       Shortly stated the facts are: House No. 2690 on City Survey No. 1900
of Buhsawal are the demised premises. One Mr. Mohammad Yahya was the
owner. He let out the property to the appellants in the year 1946. After
partition Mohammad Yahya migrated to Pakistan in the year 1947. He came            E
to India in the year 1957 and collected the arrears of rent. For future he
directed the tenants that the rent be paid to Fatimabi. Appellants accepted the
arrangement and started paying the rent to Fatimabi. Municipal taxes which
were required to be paid by the tenants were not paid in respect of the said
house and a warrant of attachment was issued by the Municipal Council,
Bhusawal. In execution of that warrant the house in dispute was ordered to         F
be sold by the public auction. Fatimabi purchased the house in dispute in
auction. Sale in her favour was confirmed. On 15th April, 1976 she transferred
her ownership rights in favour of respondent Sheikh Ghasu Sheikh Ibrahim
(Since deceased) represented by Lrs. (hereinafter refereed to as 'the
respondent'). On 16.4.1976 Fatimabi addressed a communication to the
appellants informing them that she had transferred her rights in the property      G
in favour of the respondent and directed the tenants to pay the arrears of rent
due prior to the date of transfer as well as future rent to the respondent. This
letter of attomment was received by the appellants. Respondent-landlord
thereafter issued a notice to the tenants calling upon them to pay the rent due
for the tenemenis in their occupation. Appellants refused to recognise the         H
    208                     SU_PREME COURT REPORTS (2003] SUPP. 2 S.C.R.

A   respondent as their landlord and pay the rent. Thereafter, the respondent filed
    separate suits seeking eviction against the appellants on the grounds (i) that
    appellants were defaulters as they had failed to pay rent for due for more
    than six moriths and (ii) that the respondent required the house bona fide for .
    his· personal occupation.

B          After service of notice appellants entered appearance. They did not
    seriously dispute the fact that they were in arrears of rent as had been stated
    by the respondent. They denied the title of the respondent and the relationship
    of landlord and tenant with him. They also challenged the sale deed executed
    by Fatimabi in his favour. They also stated that the transfer by the Municipal
C   Council of the. property in dispute to Fatimabi was no sale in the eye of law
    being illegal. According to them Fatimabi got the house transferred in her
    favour fraudulently. That Fatimabi was entitled to receive rent only. They did
    not recognise her as owner of the said house. They challenged the title of the
    respondent and refused to accept him as owner of the house till he got his
    title decided from a competent court having jurisdiction.
D
          On these pleadings several issues were framed. Trial Court held that
    the respondent had become the owner of the suit premises being transferee
    from Fatimabi. The ground of bona fide or personal occupation was declined.
    The appellants were found to be in arrears of rent for more than six months
    and consequently were ordered to be evicted. This order of the trial court was
E   confirmed in appeal. Writ petitions filed by the appellants in the High Court
    challenging the said orders were also dismissed.

          Learned Counsel appearing for the appellants vehemently argued that
    Fatimabi was neither landlord nor the owner of the property. She was only
F   a renf collector on behalf of the original owner. The transfer of property in
    her favour by the Municipal Council was illegal as Municipal Council could
    neither attach nor sell property for arrears of municipal taxes. The sale was
    collusive and fraudulent. Only Rs. l ,000 were paid as sale consideration
    whereas the price of the house was much more. Adding corollary to the said
    argument, counsel for the appellants further argued that since Fatmabi did
G   not become the owner of the property, the sale made by her in favour of the
    respondent was no sale in the eye of law. Fati.mabi did not have a valid title
    to the property and therefore she could not convey the same to any other
    person. Another suspicious circumstance pointed out by the counsel for the
    appellants was that after obtaining· the sale certificate from the Municipal
H                                                   a
    Council. Bhusawal, Fatimabi sold the house in great hurry on the same day
                 SHEIKH NOOR v. SHEIKH G.S. IBRAHIM [BHAN, J.]             209
    to the respondent who is her near relation.                                  A
            We do not find any force in this submission. Appellants are estopped
     from disputing the relationship of landlord and tenant between them and
     Fatimabi. They had attorned to her in the year 1957 according to their own
    admission and had been making payment of the rent to her as per directions
    of the original owner. The burden of proof that the sale made by the Munjcipal B
    Council in favour of Fatimabi was collusive, fraudulent and without observing
    due formalities was on the appellants. It was for them to prove that Fatimabi
     did not become the owner of the suit house by virtue of sale certificate i~sued
     by the Chief Officer, Municipal Council, Bhusawal in her favour. Either with
     reference to the facts on record or with reference to any provision of the C
     statute it has not been shown to us that the Municipal Council coulq not
    attach or sell the suit property for arrears of municipal taxes due on the said
     property. Further, it has not been proved by any evid.ence whatsoever that
    due formalities for holding auction sale were not observed. From the evidence,
    it appears that the appellants had challenged the auction sale conducted by
    the Municipal Council, Bhusawal by making complaints to the Collector, D
    Jalgaon and also the Government of Maharashtra. Nothing has been brdught
    on record to show that in pursuance to those complaints the sale in favour of
    Fatimabi was set aside. In our opinion, the appellants had already chosen the
    forum for challenging the validity of sale in favour of Fatimabi and since the
    appellants have not stated as to what action has been taken by the said E
    authorities, it can be presumed that no action for setting aside the sale was
    taken by the government as well as the Collector. In the instant proceedings
    the appellants were not entitled to challenge the validity of the sale effected
    by the Chief Officer. Municipal Council, Bhusawal. The appellants cpuld
    have done so by filing a separate suit for declaration challenging the sale
    which they did not do. Till the auction sale held in favour of Fatimabi is set F
    aside it cannot be said that Fatimabi did not acquire a valid title to' the
    property in dispute. After acquiring a valid title in property Fatimabi had an
    absolute right to transfer the property in favour of any person she liked. The
    sale effected by her in favour of the respondent was also not challenged.
    Nothing has been brought on record to show that the sale effected by Fatimabi
.
I
    in favour of the respondents suffered from any infirmity. Accordingly it is G
    held that the transfer made by the Chief Officer, Municipal Council, Bhus~wal
    was a valid transaction and consequently the sale made by Fatimabi in favour
    of the respondent was also a valid transfer of property in favour of, the
    respondent.
                                                                                 H
    210                      SUPREME COURT REPORTS [2003] SUPP. 2 S.C.R.

A         Learned counsel for the appellants then argued that since Mohammad
    Yahya had left for Pakistan the property became evacuee property which
    could not be attached or sold by the Chief Officer of the Municipal Council,
    Bhusawal in the auction sale. This plea is being raised for the first time in
    this Court. Fact that the property was an evacuee property and declared as
B   such has not been brought on record. In the absence of any pleadings to the
    effects that the property had become an evacuee property or proof thereof it
    cannot be held that the property was an evacuee property which could not be
    attached and sold for the recovery of arrears of municipal taxes due towards
    the property.

C          Lastly it was contended by the counsel for the appellants that arrears
    of rent prior to the sale in favour of the respondent could not be recovered
    as arrears of rent. That arrears prior to the transfer in favour of the respondent
    were in the nature of a 'debt due'. If the period Prior to the sale in favour of
    the respondent . is excluded then the rent due would be for less than six
    months.

          Under the Bombay Rents, Hotel and Lodging House Rates Control Act,
    1947, (hereafter referred to as "the Act") the tenant becomes liable to be
    evicted on the ground of arrears of rent, only, if, he is in arrears of rent for
    more than six months on the date of filing the suit. In order to substantiate
    the plea that rent due from the tenant prior to the date of the transfer in
E   favour of the transferee/landlord was not rent but a debt due, learned counsel
    for the appellants placed reliance on a single Judge judgment of the Bombay
    High Court in Vinayak Mahadeo Nirgurn v. Sadanand Shantararn Bandekar~
    [ 1981] 2 SCR 55 I, in which it has been held that the transferee/landlord was
    not entitled to recover the rent due prior to the date of transfer of property
F   in his favour as arrears of rent and seek eviction under the Act on that
    ground. The same would be a debt due and recovered by filing a separate
    suit.

           Plea that arrears prior to transfer could not be recovered as arrears of
    rent, the same being a "debt due" was not raised by the appellants either in
G   their pleadings or before any of the courts below~ Rather the appellants
    accepted them to be arrears of rent due and proceeded accordingly. This plea
    is being raised for the first time before us. Normally, such a plea would not
    be allowed to be raised for the first time but since the counsel insisted that
    it is a question of law and goes to the root of the matter he was permitted
    to argue the same. Before we go to the question of law factual aspect of the
             SHEIKH NOOR v. SHEIKH G.S. IBRAHIM [BHAN, J.]                  211

matter may be stated as under:                                                      A
      The sale deed executed by Ftimabi in favour of the respondent has. not
been produced on record to show as to whether there was an assignment of
the arrears of rent or not. But this may not detain us as Fatimabi in her
communication addresses to the appellants had specifically stated that she
had transferred the property in favour of the respondent along with the arrears B
of rent due. That the appellants should attom to the new landlord and start
paying rent to him. It was specifically mentioned that transferee/landlord
would be entitled to recover the arrears of rent due from them to the previous
landlord. Similarly in the notice sent by the respondent/landlord it 'Vas
specifically stated that he is entitled to recover the arrears of rent due prior C
to the date transfer of the property in his favour and asked the appellants to
tender the rent due which they did not comply with. These facts are not
disputed by the appellants. Based on this the first appellate court as final
court of fact found that landlord/transferee was entitled to recover the arrears
of rent prior to the date of transfer of the property in his favour. From this
it can easily be inferred that Fatimabi had assigned the arrears of rent due to D
her in favour of the transferee/landlord. This finding of fact cannot be allowed
to be disputed by the appellants who have failed to join any issue thereon by
raising necessary plea in their pleadings.

    · Seetion I 09 of the Transfer of Property Act reads:
                                                                                    E
       "I 09. Right of lessor's transferee. - If the lessor transfers the property
       leased, or any part thereof, or any part of his interest there:n, thy
       transferee, in the absence of a contract to the contrary, shall possess
       all the rights, and, if the lessee show elects, be subject to all the
       liabilities of the lessor as to the property or part transferred so long F
       as he is the owner of it; but the lessor shall not, by reason only of
       such transfer ceased to be subject to any of the liabilities imposed
       upon him by the lease, unless the lessee elects to treat the transferee .
       as the person liable to him:

            Provided that the transferee is not entitled to arrears of the rent
        due before the transfer, and that, if the lessee, not having reason to
                                                                                    G
        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.

           The lessor, the transferee and the lessee may determine what
        proportion of the premium or rent reserved by the lease is payable in       H
    212                      SUPREME COURT REPORTS [2003] SUPP. 2 S.C.R.

A           respect of the part so transferred, and, in case they disagree such
            determination may be made by any court having jurisdiction to
            entertain a suit for the possession of the property leased."

           The substantive part of the Section 109 of the Transfer of Property Act
    read with proviso necessarily indicates that the arrears of rent due is one of
B   lessor's right as to the property transferred. Right to recover the arrears of
    rerit vested with the original owner and on transfer of all his rights the same
    vests in the transferee as per provisions of Section l 09 of the Transfer of
    Property Act. Proviso to . section l 09 clearly indicates that if there is an
    assignment of rent due then the transferee/landlord would be entitled to recover
C   the same from the tenant as arrears of rent.

          lu Ramchander Narsey & Co. v. Wamanrao Shenoy, UJ (SC) 70(69),
    this Court approved the judgment of the High Court of Bombay in ordering
    ejectment of a tenant inter alia, on the ground that the tenant had failed to
    pay to the transfer landlord arrears of rent including the arrears prior to the
D   transfer of the property in his favour. Incidentally the provisions of the statute
    considered in that case and in the present case are the same. This Court
    noticed the ratio of the judgment of the Calcutta High Court in Smt. Daya
    Debi v. Chap/a Debi, AIR (1960) Cal.,378 wherein it was held that the
    assignment of arrears of rent ceased to be rent, they because debt in law and
    therefore there was no question of paying the same or tendering them in
E   Court for payment to the landlord in eviction proceedings. This Court did not
    go into the correctness or otherwise of the said view. The contention raised
    by the counsel for the tenant was not accepted although.the view expressed
    by the Calcutta High Court was not specifically disapproved.

F         The judgment of the Calcutta High Court in Smt. Daya Debi's case
    (supra) was taken note of in a subsequent judgment by this Court in Satti
    Krishna Reddy v. Ncillamilli Venkata Reddy and Anr., [1982] 3 SCC 364. It
    was held that the view expressed in Smt. Daya Debi's, case (supra) was not
    correct. It was held that arrears of rent assigned to the transferee landlord do
    not lose their character and become an actionable claim and eviction
G   proceedings can be maintained by the successor landlord on the ground of
    arrears of rent. It was held:

            "I do not see any reason to interfere with the order passed by the
            High Court, But there is one point to which I must refer, and that .
            arises out of a decision of the Calcutta High Court in Daya Debi v.
H           Chapa/a Debi. That decision has taken the view that when a claim for
             SHEIKH NOOR v. SHEIKH G.S. IBRAHIM [BHAN, J.)                   213
       arrears of rent is assigned by A to B, it loses the character of a olaim A
       for rent as soon as it is assigned and it becomes merely an actionable
       claim. This view is, of course, not shared by most of the other High
       Courts and even the Calcutta High Court itself in other decisions has
       not accepted this view. It does appear to me that this view is' not
       correct because it is difficult to see how a claim for arrears of rent
       ceases to be such when it is assigned by the owner when the transfers B
       his properties to another. So far as the tenant is concerned, the amount
       remains payable by him to the successor landlord as arrears of rent
       because that is his own liability and it does not acquire any other
       character. And. so also when the successor landlord claims the amount
       assigned to him his cause of action against the tenant would be for C
       arrears of rent because there is no other basis on which he found his
       cause of action against the tenant. There is, therefore, no doubt that
       in the present case the 1st respondent who was the assignee of the
       claim for arrears of rent from the predecessor landlady was entitled
       to recover the arrears of rent from the petitioner and the arrears of
       rent were due from the petitioner to the 1st respondent at the d~te D
       when the application was made before the Rent Controller by the I st
       respondent for an order of eviction against the petitioner. The special
       leave petition is accordingly rejected.... "

      In Girdharilal (dead) by LRs. v. Hukam Singh and Ors., AIR (1977).             E
SC 129, the point as to whether the transfer is entitled to the rent due before
the transfer of the property in his favour was considered. Interpretation put
by the Rajasthan High Court of provisio to Section 109 of the Transf1:r Qf
property Act, to the effect that usually the transferee is not entitled to the
arrears unless there is a contract to the contrary was approved. It there was
an assignment of arrears then certainly the transferee landlord could maintain       F
the petition for eviction on the ground of arrears of rent including the arrear~
due prior to the transfer in favour. It was held:

"An objection based upon the proviso to Section 109 of the Transfer of
Property Act was, we think rightly, disposed of by the High Court as follows;        G
            "The next objection is that under the proviso to Section l 09 of
        the Transfer of Property Act the transferee is not entitled to arrears
        of rent due before the transfer. In our opinion he ordinarily not so'
        entitled unless there is a contract to the· contrary. There was an express
        contract to the contrary contained in the compromise petition which          H
    214                      SUPREME COURT REPORTS (2003] SUPP. 2 S.C.R.

A            was incorporated in the compromise decree passed by the Court."

          In N.M Engineer and Ors. v. Narendera Singh Vtrdi and Anr., AIR
    (1995) SC 448, this Court again held that in the absence of any assignment
    of the rent in favour of the transferee the assignee is not entitled to the rent
    due before the assignment. Negatively it means that ifthere was an assignment
B   of the arrears then the same could be recovered as arrears of rent by the
    subsequent transferee landlord.

          Similar is the view taken by a Division Bench of the Allahabab High
    Court in Ram Prakash Ghai v. Karam Chand, AIR (1963) All. 47, Full
    Bench in Champak Lal Dahyabhai Natali and Ors. v. Saraswatiben and Ors.,
C   AIR (1977) Guj. 48 and in single Judge Bench Pratap Muktassa Tak v.
    Vishnu Giopal Pathak, (1997) Born. R.C. 416. We are not referring to what
    has been held in these decisions as they are in confirmity with the decisions
    of this Court referred to above.

D         In view of the cases referred to above, in our opinion, the correct
   position of law is that a transferee is not entitled to recover the arrears as rent
   for the property on transfer unless the right to recover the arrears is also
   transferred. If right to recover the arrears is assigned, then the transferee/
   landlord can recover those arrears as rent and if not paid maintain a petition
   for evictiOn under the rent laws for those arrears as well. Since in this case
E we have found that there was an assignment of right to recover the· arrears
   in favour of the respondent transferee he was entitled to recover.the same as
   arrears of rent. If that period is taken into consideration then the tenant/
   appellants were certainly in arrears of rent for more than six months and
   became liable to be evicted from the premises in dispute on the ground of
   default on their part in payment of rent for more than six months on the date
F" of filing the suit.

         For the reasons stated above we do not find any merit in these appeals
    and dismiss the same. Parties shall bear their own costs in this court.

G S.K.S.                                                         Appeals dismissed.