Report No. 70
Transfer of Lessor's Interest
94.1. Section 109, first paragraph.-
Under section 109, the rights attached to the property which arise out of possession and control of property will pass with the property, wherever the lessor transfers his interest in the property. The section is divisible into three portions represented by the first paragraph, the proviso and the last paragraph respectively. The first paragraph itself deals with two topics, namely, the transferee's rights and the transferee's liabilities. The transferee from the lessor acquires the original lessor's rights.
But a distinction is made, in the case of liabilities, in so far as, until the lessee agrees, the transferee does not become liable for the lessor's liability and the original lessor continues to be liable for the lessor's liability. The section thus makes a distinction between the lessor's rights and the lessor's liabilities. Of course, personal obligations of the lessor do not pass with the transfer.
It is to be noted that a letter of attornment is not necessary to complete the title of the transferee. However, by virtue of the proviso to section 109, the transferee is not entitled to arrears of rent due from the transfer. Moreover, if the lessee, in ignorance of the transfer, pays the rent to the lessor, the lessee is not liable to pay such rent over again to the transferee.
94.2A. Rights and liabilities.-
An important consequence of the proposition enacted in the first paragraph of the section is that for a transfer of the rights of the lessor to the transferee no notice of assignment is needed so that, as was held in a Bombay case,1 surrender of the tenancy by the lessee to the original lessor is invalid after the lessor has assigned the premises. This, in fact, is an inevitable consequence of the principle of the section that all the rights, primary as well as auxiliary, of the lessor stand transferred to the lessee, except as otherwise specifically provided by the section.2
1. Rama Chandra v. Sheikh Hussain, 3 Born LR 679.
2. 1961 ILR 2 All 554.
94.3. Section 109, second paragraph.-
When a person sells a portion of the property, the question of apportionment of the benefit of the obligation on severance arises. The rule, in general, is to be found in section 37, under which the share of each part owner to the performance of the obligation depends on the value of his share in the property. This rule, of course, is subject to the condition that the obligation can be severed and that the severance does not substantially increase the burden of the obligation. In regard to transfer of the lessor's interest in leases, section 109 contains a more specific provision.
94.4. Section 109, last paragraph.-
That there can be a partial transfer of the leased part of the premises is recognised by section 109, both in the first paragraph and in the last paragraph. The first paragraph specifically deals with a case where the single obligation to pay the rent to a particular lessor becomes divided into several obligations. The gist of the last paragraph is that the lessor, the transferee, and the lessee may, in the case of a partial transfer, determine what proportion of the premium or rent reserved by the lease shall be payable in respect of the parts so transferred to the lessor and the transferee respectively. It, however, also provides that in case they disagree, such determination can be made by the court having jurisdiction to entertain a suit for the possession of the property.
It has been held1-2 that partition is a transfer within the meaning of section 109.3 We are of the view that this interpretation should be specifically incorporated into section 199, by means of an express Explanation to be inserted for the purpose, which we recommend.
1. Banarasi Lal v. Shri Bhagwan, AIR 1955 Raj 167 (171), para. 23 (Dave, J.).
2. Skattar Singh v. Rawela, AIR 1952 J&K 18.
3. For a contrary view, see Indoji, AIR 1920 Mad 20 (case under section 53).