http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 6  

PETITIONER: N.M.ENGINEER

       Vs.

RESPONDENT: NARENDRA SINGH VIRDI

DATE OF JUDGMENT18/07/1994

BENCH: MOHAN, S. (J) BENCH: MOHAN, S. (J) SINGH N.P. (J)

CITATION:  1995 AIR  448            1994 SCC  (5) 261  JT 1994 (5)   454        1994 SCALE  (3)246

ACT:

HEADNOTE:

JUDGMENT: The Judgment of the Court was delivered by MOHAN,  J.-  The brief facts leading to this appeal  are  as under. 2.   The  appellant is the owner of a bungalow  situated  at Mundhva  Road, Ghorpadi, Poona.  On 10- 11- 1957, the  first appellant and his wife Banoobai (since deceased) leased  out the  said  premises to Respondent I under a rent note  on  a monthly rent of Rs 130. 3.   The first respondent fell into arrears of rent for  the period  commencing  from 1-8-1963 to 31-3-1964.   By  notice dated  22-4-1964,  Appellant I and his wife  terminated  the tenancy of the first respondent and demanded arrears of rent under  Section 20(2) of the Bombay Rents, Hotel and  Lodging House  Rates Control Act, 1947 (hereinafter referred  to  as the Act’). 4.   On  the expiry of the period of notice,  the  appellant and his wife filed a Suit No. 2267/64 for possession of  the premises under Section 12(3)(a) of the Act.  The respondent- tenant  contested the suit.  He also raised the question  of standard  rent  and claimed for fixation of  standard  rent. The  learned trial Judge by his order dated  26-7-1965,fixed standard rent at Rs 130 per month and decreed the suit.   On appeal  by  the  respondent, the same  was  allowed  by  the learned  District  Judge  by  his  order  dated   16-4-1966. Thereupon  Special  Civil  Application No. 46  of  1967  was preferred  in the High Court.  That was dismissed  on  6-10- 1970. 5.   On   3-10-1966,  the  wife  of  the  first   appellant, Banoobai, died.  The first appellant in his capacity of  co- owner  as also the heir of his wife together with her  other heirs, served a notice dated 2-5-1967 calling upon the first respondent to pay arrears of rent for the period  commencing from  1-  11- 1966 to 30-4-1967 within a month.   The  first respondent did not pay the said 263

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 6  

arrears.   That  necessitated  the  appellant  to  file  the present  suit for possession and for recovery of arrears  of rent.   In the said suit, the legal representatives  of  the deceased Banoobai were made pro forma defendants 2 to 5.  On 8-6-1967, they released all their rights, title and interest in favour of Appellant 1. 6.   Pending  suit, an application for amendment  was  taken out   raising  the  tone  of  nuisance  against  the   first respondent.  The trial court decided both suits and standard rent application by its order dated 29-9-1973 and held  that the standard rent of the premises was Rs 130 per month.  The suit  was decreed in favour of the appellant  under  Section 12(3)(a) and (b) of the Act.  The first respondent preferred an appeal which was dismissed.  Thereafter he preferred  two special  civil  applications  one against  the  decree  for possession   and  the  other  against  the   standard   rent application.   The  learned Single Judge of the  High  Court heard  both the matters together and dismissed the suits  as not  maintainable.   It is under  these  circumstances,  the present civil appeal has come before this Court. 7.   Mr  V.M.  Tarkunde, learned counsel for  the  appellant argues that first and foremost the point of arrears of  rent in  the  hands of transferee becomes a debt,  is  not  taken either in written statement filed by the respondents nor any issue  was  framed.  Such a point cannot  be  decided  under Article 227. 8.   The  first appellant is a co-owner and is  entitled  to give notice.  Such a notice is valid as laid down in Sri Ram Pasricha v. Jagannathl and Subhendu Prosad Roy Choudhury  v. Kamala Bala Roy Choudhury2.  Even otherwise as collector  of rent,  he  is entitled to issue notice.  The notice  is  not challenged on the ground that more rent is demanded or  rent of six months was not due. 9.   Section  12(3)(a) of Rent Act operates on  a  different footing and applies only in following case:               (i)   When the arrears of rent are more than 6               months;               (ii)  Rent is payable by month of month;               (iii) Notice served on the tenant;               (iv)  No dispute regarding standard rent. In  other cases, Section 12(3)(b) is applicable.  The  cases covered thereunder are for arrears of rent of less than  six months. 10.  In   opposition  to  this,  learned  counsel  for   the respondent Mr E.C. Agrawala   argues  that the notice  dated 2-5-1967 was, not valid.  Firstly, on the date of the   said notice,  the  rent  for six months had not  become  due  for payment  within  the meaning of Section 12(2)  of  the  Act, therefore, Section 12(3)(a) would not apply.  Secondly,  the rent claimed in the notice was at the monthly rate of Rs 130 whereas  before the date of issuance of notice, Small  Cause Court in Miscellaneous Application No. 258/67 had fixed  the interim  rate of rent at the rate of Rs 87 per  month.   The same having been deposited, 1   (1976) 4 SCC 184: (1977) 1 SCR 395 2 (1978) 2 SCC 89 264 there  were no arrears.  Thirdly, on 8-6-1967, the  property was leased out in favour of the appellant and the pro  forma respondents  had  relinquished their share but in  the  said relinquishment  deed,  no assignment much  less  a  specific assignment of rent was made in favour of the appellant.   In the  absence of such an assignment, the appellant could  not recover it as rent. 11.  On  a defective notice, the suit could not  be  validly

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 6  

maintained  as  laid down in Chimanlal v.  Mishrilal.   This judgment  has been relied upon in a recent decision of  this Court  reported  in  Chase Bright Steel  Ltd.  v.  Shantaram Shankar  Sawant4.  Where therefore, mere chose-in action  is claimed  under Section 109 of the Transfer of Property  Act, the transferee is not entitled to arrears of rent. 12.  The  appellant having failed in his case under  Section 12(3)(a),  cannot seek to rely on Section  12(3)(b).   Under Section  12(3)(a), there was a dispute about the  amount  of rent.  There were no arrears for six months outstanding  and there is no negligence on the part of the  respondent-tenant in  making the payment thereof.  The notice is bad  on  that account.   The notice referred to under Section 12(3)(b)  is entirely  different.  Thus, no exception could be  taken  to the impugned judgment. 13.  We now proceed to consider the respective  submissions. We appreciate the arguments of Mr Tarkunde that the  arrears of  rent  in the hands of transferee becomes  debt  was  not taken   either  in  the  written  statement  filed  by   the respondent  nor  was any issue framed by the  courts  below. Therefore,  under  Article 227, such a point  could  not  be raised.   It  is  purely a question of law  arising  on  the admitted  facts  and hence under Article 227  such  a  point could  validly be raised.  The cases cited in  the  judgment have no application. In India Pipe Fitting Co. v.  Fakruddin M.A. Baker5, it was held:.(SCC pp. 589-90, paras 7-8)               "It is possible that another court may be able               to  take  a different view of  the  matter  by               appreciating  the  evidence  in  a   different               manner,  if it determinedly chooses to do  so.               ’However,  with respect to the  learned  Judge               (Vaidya,   J.)  that  will  not   be   justice               administered according to law to which  courts               are committed notwithstanding dissertation, in               season and out of season, about philosophies.               We  are clearly of the opinion that there  was               no justification for interference in this case               with  the  conclusions of facts  by  the  High               Court  under Article 227 of the  Constitution.               We  are  also unable to agree  with  the  High               Court that there was anything so grossly wrong               and    unjust   or   shocking   the    court’s               ’conscience’ that it was absolutely  necessary               in the interest of justice for the High  Court               to   step   in  under  Article  227   of   the               Constitution.  Counsel for both sides took  us               through the reasonings given by the High Court               as  well  as by the courts below  and  we  are               unable to hold that the High Court was at  all               correct in exercising its               3     (1985) 1 SCC 14: (1985) 2 SCR 39               4     (1994) 4 SCC 89: JT (1994) 2 SC 192               5   (1977) 4 SCC 587 : (1978) 1 SCR 797               265               powers  under Article 227 of the  Constitution               to interfere with the decisions of the  courts               below.    In  our  opinion,  the  High   Court               arrogated  to itself the powers of a court  of               appeal,  which  it did not possess  under  the               law,  and has exceeded its jurisdiction  under               Article 227 of the Constitution." So,  as we have observed above, it is purely a  question  of law. 14.  Now we come to the validity of the notice.  That  takes us to Section 12, the material part is as under:

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 6  

             "12.  (2) No suit for recovery  of  possession               shall  be  instituted by  a  landlord  against               tenant  on  the ground of non-payment  of  the               standard  rent  or  permitted  increases  due,               until  the expiration of one month next  after               notice  in  writing  of  the  demand  of   the               standard rent or permitted increases has  been               served upon the tenant in the manner  provided               in  Section  106 of the Transfer  of  Property               Act, 1882.               12.   (3)(a) Where the rent is payable by  the               month  and there is no dispute  regarding  the               amount   of   standard   rent   or   permitted               increases,  if such rent or increases  are  in               arrears for a period of six months or more and               the  tenant neglects to make  payment  thereof               until  the  expiration of the  period  of  one               month after notice referred to in  sub-section               (2),  the  Court  shall  pass  a  decree   for               eviction  in  any such suit  for  recovery  of               possession.               (b)   In   any  other  case,  no  decree   for               eviction shall be passed in any such suit  if,               on the first day of hearing of the suit or  on               or  before  such other date as the  Court  may               fix,  the tenant pays or tenders in Court  the               standard rent and permitted increases then due               and  thereafter continues to pay or tender  in               Court   regularly  such  rent  and   permitted               increases till the   suit  is finally  decided               and also pays costs of the suit as directed by               the   Court." 15.  For  the  institution of the suit, a  valid  notice  is necessary.  This Court had occasion to deal with the aspects in Chimanlal v. Mishrilal3.  This Court held as under:  (SCC p. 18, para 8)               "The  notice referred to in  Section  12(1)(a)               must be a notice demanding the rental  arrears               in  respect of accommodation actually  let  to               the tenant.  It must be a notice (a) demanding               the   arrears  of  rent  in  respect  of   the               accommodation  let to the tenant and  (b)  the               arrears  of rent must be  legally  recoverable               from the tenant.  There can be no admission by               a  tenant that arrears of rent are due  unless               they  relate to the accommodation let to  him.               A  valid  notice  demanding  arrears  of  rent               relatable  to  the accommodation  let  to  the               tenant  from which he is sought to be  evicted               is a vital ingredient of the conditions  which               govern  the maintainability of the  suit,  for               unless a valid demand is made no complaint can               be   laid  of  non-compliance  with  it,   and               consequently  no  suit for  ejectment  of  the               tenant  in respect of the  accommodation  will               lie on that ground." 266 16.  Therefore, we now proceed to consider whether the  suit notice is a valid one.  The notice is dated 2-5-1967.  On 8- 6-1967,  a lease deed came to be executed in favour  of  the appellant by the pro forma defendants.  The suit came to  be filed  on  14-6-1967.  The question is  whether  the  notice conforms  to Section 12(3)(a).  A notice claims rent at  the rate  of Rs 130.  In fact, the rent had been fixed as Rs  87 on  22-4-1967.   The rent fixed by the court had  been  duly

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 6  

deposited  by the respondent covering all the arrears.   The rent  claimed in the notice was Rs 800 (including Rs  20  as notice charge). 17.  In  the  light  of the above,  the  question  would  be whether notice is in conformity with Section 12(3)(a).  This section consists of the following:               (i)   The  rent  is payable by the  month  and               there  is no dispute regarding the  amount  of               standard rent or permitted increases;               (ii) If such rent or increases are in  arrears               for a period of six months or more;               (iii) If the tenant neglects to make payment. If all these conditions are satisfied, a decree for eviction could be passed. 18.  In  this  case, no doubt, the rent is  payable  by  the month  but there is a dispute as to the amount  of  standard rent.   As  seen  above, on  24-4-1967  (sic  22-4-1967)  in Miscellaneous Application No. 258/67, the Small Cause  Court had fixed the interim rent at the rate of Rs 87 as per order dated   24-4-1967  (sic  22-4-1967).   The  same  had   been deposited by the tenant and therefore there were no  arrears outstanding. 19.  That  being so, it cannot be said that the  tenant  had neglected  to  pay the rent.  Then again as on the  date  of notice,  there  were no arrears of rent  outstanding  for  a period of six months or more.  What is important to be noted is that the lease deed was executed on 8-6-1967 in favour of the   appellant.   In  that  lease  deed,  nowhere  is   any assignment of rent.  Section 109 of the Transfer of Property Act reads as under:               "If the lessor transfers the property  leased,               or  any  part  thereof, or  any  part  of  his               interest  therein,  the  transferee,  in   the               absence  of a contract to the contrary,  shall               possess all the rights, and, if the lessee  so               elects,  be subject to all the liabilities  of               the   lessor  as  to  the  property  or   part               transferred so long as he is the owner of  it;               but  the lessor shall not, by reason  only  of               such  transfer, cease 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 rent due before  the  transfer,               and that, if the lessee, not having reason  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." In  view  of  the proviso,  the  appellant-assignee  is  not entitled to rent before the assignment.  The rent is  merely a  debt.   In this connection, it would be useful  to  quote para 7 of the plaint filed by the appellant.  It reads: 267 "7. Defendants 2 to 5 have released all their rights,  title and  interest in the suit bungalow in their capacity as  her legal  representatives of the deceased Banoobai N.  Engineer wife  of  the plaintiff on 8-6-1967 by  a  registered  lease deed.  It is therefore not necessary to implied them as  co- plaintiffs  in the suit.  They have however been  joined  as pro  forma  defendants in this suit in order  to  avoid  any objections  on the part of the defendants that the  suit  is bad for non-joinder of necessary parties." 20.  Therefore,  whatever might have been due prior to  deed

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 6  

of  lease  dated 8-6-1967, could not constitute  arrears  of rent.   It  was mere actionable claim.  That being  so,  the notice   does  not  satisfy  the  requirements  of   Section 12(3)(a), more so in this case, as stated above, the arrears at the rate of Rs 87 had been deposited.  It is not open  to the appellant to call upon Section 12(3)(b). 21.  For  the foregoing reasons, we hold that  no  exception could  be taken to the impugned judgment.  The civil  appeal is dismissed.  However, there shall be no order as to costs.      270