KSHETRAMONI SAMANTRAY MAHAPATRA Vs. SATRUGHAN MALL

JUDGEMENT

(1.) This appeal arises in execution of a rent-decree obtained by the respondent 1 against the appellant & respondents 2 to 9. The respondent 1 is the proprietor of 'Touzi No. 7204. The appellant & the respondents 2 to 9 are 'Macadams' under him in respect of a 'Mouza' included in that 'Touzi'. The decree under execution was for arrears of rent due in respect of the 'Makadami'. The 1st respondent had previously obtained another rent-decree for arrears of rent due for the years 1346 to 1348 in respect of the same 'Makadami' and put up the 'Makadami' tenure to sale in execution of that decree and purchased it himself on 26-6-43. The decree now under execution is in respect of arrears of rent due for the subsequent years 1348-1350, and the decree was obtained on 24-3-43, i.e., about three months prior to the execution sale under the earlier decree. In the present execution, the 1st respondent-landlord seeks to proceed against the personal properties of the appellant and respondents Nos. 2 to 9, the ex- 'Makadams'. The objection raised on behalf of these ex-'Makadam'-debtors is that since the 1st respondent landlord himself was the purchaser in execution sale under the prior decree, he must be taken to have purchased the tenure subject to the liability for arrears of rent due until the date of sale, and that therefore it is no longer open to him now to execute the decree, the liability in respect of which must be deemed to have been extinguished by his purchase. Both the Courts below have negatived this contention and hence this appeal. There can be no doubt that when a landlord purchases a tenure and if he thereby became liable for the arrears of rent in respect of that tenure, the liability becomes extinguished by the merger of the right and liability in the same person. This is clearly enunciated in 'Sailoja Prosad v. Gyani Das', 18 Cal LJ 29, which has ever since been followed in very many cases as laying down sound law. The point that arises therefore is whether the 1st respondent in this case has by his purchase of the tenure on 24-3-43, taken over the tenure subject to the pre-existing liability for rent, as determined by the rent-decree dated 23-4-43 and hence the liability under the decree must be deemed in law to have been extinguished.

(2.) The question as to when there are any arrears of rent outstanding at the time of an auction sale of a holding, what the effect of it is on such arrears of rent when the purchaser is a third party or the landlord himself, has come up for consideration in quite a number of cases. Where the purchaser is a stranger and the decree executed is a rent-decree in execution of which the holding itself was brought to sale, the purchaser is not at all liable for any arrears of rent prior to the date of his purchase, because under the provisions of the Orissa Tenancy Act, the rent for Which the decree was obtained was a first charge on the holding and the holding itself is put up to sale. See Sections 74 and 212 of the Orissa Tenancy Act As has been held in 'Faez Rahaman v. Ramsukh Bajpai', 21 Cal 169, in such a sale the charge In respect of the arrears of rent subsequent to the period for which the decree was obtained is transferred from the holding to the sale-proceeds. Vide also Section 223(1)(C) of the O. T. Act. It has been held however that where the existence of such arrears prior to the date of sale is notified in the sale-proclamation and the sale can be construed to have been made subject to the liability for the subsequent years, the third party purchaser though be purchases the holding itself will take the purchase subject to the liability for payment of the subsequent arrears. This has been held in

(3.) Now, in respect of purchases of the holding by decree-holder himself, it has been held that the decree-holder must be deemed to have purchased the holding subject to all prior arrears until the date of his purchase, where he has purchased in execution of a money-decree for rent. See Lakshmi Narayan Lal v. Bhupendra Prasad', AIR (35) 1948 Pat 143. This has been so held on the ground that what he purchases at a money-decree is the right, title and interest of the defaulting tenant in the holding and such right, title and interest is necessarily subject to the charge for the subsequent arrears, of which he as the landlord must be deemed to have notice, unlike a third-party-purchaser, who may be able to plead that he had no notice of any such arrears and of the charge thereof. This distinction has been authoritatively laid down in 'Kalyani Prasad Singh v. Surendra Nath', AIR, (32) 1945 Pat 33, following 'Midnapore Zamindari Co. v. Haripada Roy', AIR (25) 1938 Cal 681. The argument of learned counsel for the appellant is that the same principle would also apply even where the decree-holder purchases the holding in execution also of a rentdecree as such. He urges that even at such a sale, the landlord must be deemed to know the existence of arrears upto the date of his purchase and he must there-lore be taken to have purchased subject to the liability for such arrears. He suggests that while so far as the third-party-auction-purchaser in execution of rent-decree is concerned, the purchase by him is free of all liability for any subsequent arrears except where such subsequent arrears have been specifically notified in the sale-proclamation and the sale is made subject to such arrears, such specific notification is not required in the case of the decreeholder- landlord himself, who must be deemed to know the existence of arrears, it has been pointed out that the view taken in AIR (10) 19231 Pat 517, that the landlord-decree-holder purchaser who purchases in execution of rent decree, even where the sale-proclamation therein specifically notifies the subsequent arrears does not take the holding subject to the liability for the prior arrears and is in that respect in a different position from the third-party-auctionpurchaser, has been impliedly overruled by the Full Bench decision 'Nripendra Nath v. Kuldip Misra', AIR (25) 1938 Pat 545. In that P.B. it has been definitely held that where in execution of a rent-decree, the holding is put up to sale, specifically mentioning in the sale-proclamation the existence of arrears of rent for the period between the date of the decree and execution-sale, the decreeholder- auction-purchaser as much as a stranger takes the holding subject to prior arrears of rent and therefore the liability for such prior arrears gets extinguished. Learned counsel for the appellant invokes this decision in 'AIR (25) 1938 Pat 545', and wants to take advantage of the further principle laid down in 'AIR (32) 1945 Pat 33, for the extension of this principle by contending that in the case of the decree-holder, it makes no difference whether the subsequent arrears are actually notified or not in the sale-proclamation because (sic) and that, he must be deemed to have notice of it. I am unable to agree with this contention. A little consideration will show that the principle enunciated in 'AIR (25) 1938 Cal 681' and 'AIR (32) 1945 Pat 33, that in the case of a purchase by a landlord, the landlord is effected with the notice Of the pre-existing arrears and is therefore in that respect in a different situation from a bona fide' third-party-purchaser without notice, cannot be extended to the case of a purchase in execution of a rent-decree as such. In the former case, whether the purchaser is a stranger or the landlord himself, what is purchased is only the right, title and interest of the judgment-debtor, the defaulting tenant, and any purchaser, therefore, takes it subject to the charge for any arrears of rent upto the date of the sale. But so far as a stranger-purchaser is concerned, he can plead that he is a 'bona fide' purchaser without notice of the existence of arrears and therefore of the charge in respect thereof. Such a plea is available to him, because it is a well-known feature of anything in the nature of a charge that a 'bona fide' purchaser without notice is not affected thereby. Vide Section 100 of the T. P. Act. Such a plea, however, is not available to the landlord-purchaser himself, because he must be deemed to have been aware of the arrears. The cases therefore in 'A I R (25) 1938 Cal 681 and AIR (32) 1945 Pat 33', are no more than an elucidation of the principle that the remedy available to the landlord in respect of any arrears is a mere charge. But totally different considerations apply where the purchase is in execution not of a rentdecree, but of a money-decree. In such a case, what is sold and purchased is the holding and not the right, title and interest of the defaulting tenant. By the very scheme of the provisions of the Orissa Tenancy Act, the holding itself is sold, not only with the right given to the purchaser to annul any pre-existing encumbrances under Section 217, but free of all liability for any pre-existing arrears of rent, as is clear from Section 223(1)(c) which provides for the payment of the pre-existing arrears of rent upto the date of the sale from out of the sale- proceeds. As has already been pointed out and as has been laid down in 21 Cal 169 the charge in respect of prior arrears under Section 74, is transferred from the holding to the sale-proceeds and this must be so whether the purchaser is a stranger or the decree-holder himself. Mere knowledge or ignorance of the auction-purchaser about the existence of the charge for subsequent arrears of rent can make no difference in this respect in the case of a rent-decree-sale as in the case of a money-decree-sale. What is required to fasten the liability for the subsequent arrears on the purchaser in execution of a rent-decree is the fact that the sale itself is made expressly subject to the charge for pre-existing arrears. Any other view would clearly impair the rights and remedies of the landholder for arrears of rent. On the contrary view, the land-holder when he becomes a purchaser in execution of a decree, would automatically lose any remedy in respect of the subsequent arrears upto the date of the sale, even where the sale-proceeds were insufficient to satisfy the subsequent arrears. Of course, in a case where the sale-proceeds are enough to enable the subsequent arrears also to be paid up, and the landlord gets such payment under Section 223(1) (C), for the subsequent arrears, obviously no further liability will continue and it may well be that any decree previously obtained for such arrears will be extinguished.