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Cites 6 docs - [View All]
The Delhi Rent Act, 1995
The Transfer Of Property Act, 1882
Section 50 in The Delhi Rent Act, 1995
Section 8 in The Delhi Rent Act, 1995
Section 52 in The Delhi Rent Act, 1995
Citedby 2 docs
Harimohan Dutt vs C.K. Sen And Co. Ltd. on 8 April, 1949
Shivaprasad Singh vs Prayagkumari Debee And Ors. on 11 August, 1933

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Calcutta High Court
Tiloke Chand Surana And Anr. vs J.B. Beattie And Co. on 13 March, 1925
Equivalent citations: 94 Ind Cas 538
Author: L Sanderson
Bench: L Sanderson, G C Rankin

JUDGMENT

Lancelot Sanderson, C.J.

1. This is an appeal by the plaintiffs against the judgment of my learned brother Mr. Justice Page which was delivered on the 19th of May 1924.

2. The plaintiffs brought a suit against the defendant, who was sued as J. B. Beattie & Co., to recover possession of a portion of certain premises, which was occupied by the defendant. The portion in question was part of the first floor of premises Nos. 3 and 3-1, Mangoe Lane, Calcutta.

3. There was a prayer for Rs. 3,160 in respect of rent up to the 31st of August 1923.

4. There was a further prayer for damages at the rate of Rs. 600 per month from the 1st of September 1923 until delivery of vacant possession by reason of the alleged wrongful possession of the defendant after the 1st of September 1923.

5. The defence shortly stated was that the defendant had been a tenant of these premises for a long time, and that in 1920 the defendant was requested by his landlords, Messrs. Hyam and Jones, to advance money in order that such money might be applied in repairing and improving the premises generally.

6. It was alleged that it was verbally agreed that the defendant would advance Messrs. Hyam and Jones money to be spent on repairs, and that the money so advanced would be accepted as rent of the premises paid in advance and that the defendant would be entitled to remain in possession as tenant of the premises until rent of the said premises at 'the rate of Rs. 200 per month should have accrued to an amount equivalent to the rent so paid in advance.

7. It was alleged that the defendant advanced in June 1920 Rs. 7,800 that on the 20th of October 1921 he made a further advance of Rs. 1,500, and that on the 29th of December 1921 he again advanced a sum of money, this time the sum being Rs. 2,500; that the money was spent by the landlords upon repairs and improvements of the premises in accordance with the arrangement and that consequently the defendant was entitled to remain in possession up to some date in 1926.

8. The facts of this case may be stated shortly as follows: The defendant was a tenant of the portion of the premises, which I have mentioned, from about the year 1907 at a rental of Rs. 150. On the 13th of July 1914 his landlords Messrs. Hyam and Jones executed a mortgage to Mr. M. A. Sassoon and two others of the whole premises. On the 13th of January 1917, a mortgage suit was filed by Messrs. Sassoons, the mortgagees : on the 16th of March 1917 M. A. Sassoon was appointed Receiver and on the 27th July 1917 a preliminary decree was made : on the 24th of January 1919 the final decree was made and it included an order for sale.

9. It should be mentioned that on the 30th of April 1917 Messrs. Hyam and Jones had made a further mortgage of the premises to Messrs. Mackintosh Burn & Co. They had brought a suit and had obtained a decree in January 1919. They were added as parties to the suit of Messrs. Bassoons,'' and the final decree of the 24th of January 1919 dealt not only with the rights of Messrs, Sassoons, the mortgagees, but also with the rights of Messrs. Mackintosh Burn & Co., as second mortgagees.

10. The 6th of May 1920 is a material date inasmuch as the Calcutta Rent Act came into force on that date.

11. The first agreement, which was made by the defendant with his landlord, was on the 7th of June 1920; and, in respect of that, the sum of Rs. 7,800 was advanced, and a receipt was given in the following terms:

Received from J.B. Beattie, Esq., the sum of rupees seven thousand and eight hundred only in advance on account of rents of premises No. 3-1, Mangoe Lane for the purpose of making an additional room on the roof of the one storied go-down in the above premises, to be deducted out of the monthly rents payable, viz., Rs. 200 per month.

12. Part of the arrangement was that the rent was to be increased from Rs. 150 to Rs. 200.

13. On the 12th of July 1921 Messrs. Hyam and Jones created an equitable mortgage by depositing the title deeds of the premises with the plaintiffs.

14. In order to carry this out Messrs. Sassoons were paid off and the deeds were handed by them to the attorneys for the plaintiffs; and, a receipt was given by Messrs. Sassoons in the following terms:

Suit No. 27016.

M.A. Sassoon v. J.I.J. Hyam,

Received from Messrs. Hyam and Jones a cheque for Rs. 7,02,000 only, viz., Rs. 6,92,093-3 3 in full satisfaction of the plaintiff's claim for principal and interest due under the decree herein and Rs. 9,906-13-2 on account of the costs of the suit. We undertake to refund excess, if any, on adjustment of the costs of this suit.

15. On the 20th of October 1921, as I have already said, a further advance of Rs. 1,500 was made by the defendant to Hyam & Jones and on the 29th of December 1921 another sum of Rs. 2,500 was advanced. The position, therefore, up to this date was that Messrs. Sassoons had been paid off and apparently had no more interest in the premises. The plaintiffs became mortgagees by the deposit of the title deeds.

16. It appears that Messrs. Sassoons subsequently alleged that a mistake had been made in the calculation of the amount Which was due to Messrs. Bassoons, and that there was still a sum of about Rs. 25,000 due in respect of interest. In consequence thereof an application was made to the learned Judge sitting on the Original Side for the sale of the premises by Messrs. Sassoons : and, on the 5th of April 1922 an order for sale was made. The material part of the order was as follows: "It is ordered that the Registrar of this Court do sell the mortgaged premises Nos. 3. and 3-1 Mangoe Lane and No. 1 Barrettos Lane or a sufficient part thereof with liberty to the plaintiffs to bid for and purchase the same as directed by the said decree dated the twenty-fourth day of January one thousand nine hundred and nineteen for recovery of the balance of interest due to the plaintiffs under the said decree dated twenty-seventh day of July one thousand nine hundred and seventeen and it is further ordered that on payment to the plaintiffs the said sum as aforesaid the Receiver of this suit be discharged."

17. It is not for me in this appeal to express any opinion whether that order should have been made, having regard to the fact that Messrs. Sassoons had accepted the sum, which was actually paid to them in July 1921, in full satisfaction of their claim for principal and interest and had delivered up the title deeds.

18. The result, however, was that the premises were sold by the Registrar of the Court and the plaintiffs in this suit became the purchasers at that sale for one lac of rupees and the purchase was stated to be subject to a mortgage, dated the 12th day of July 1921. As far as I knew there was no such mortgage. It was, however, assumed by both parties to this appeal that the mortgage intended to be referred to was the mortgage of the plaintiffs, dated 12th July 1921.

19. Clause 15 of the conditions, upon which the sale was held, provided that the said properties were sold subject to a mortgage, dated 12th July 1921, in favour of Messrs. Telak Chand Hanotmull for Rs. 6,00,000 carrying interest at 12 per cent. per annum and the existing tenancies, quit rents, rights of way and other rights and easements if any affecting the same : and, it specifically mentioned a lease for a period of 25 years.

20. The sale was held on the 24th of March 1923, and the plaintiffs became the purchasers. Their attorneys by letter, dated. 28th March 1923, gave notice to the defend-ant of the sale and that the plaintiffs had become purchasers and they called upon the defendant not to pay rent to any person other than the plaintiffs. On the 31st May 1923 they gave notice to the defendant to quit the premises by the end of June.

21. Then the defendant set up the agreement to which I have already referred and I need not read the letters with regard to that.

22. On the 30th of July the plaintiff's attorneys gave further notice to the defendant calling upon him to quit the portion of the premises occupied by him on the 31st of August and stated that in default the defendant would be held liable for damages at the rate of Rs. 300 per month.

23. The defendant did not give up possession, and this suit was filed on the 9th of November 1923.

24. The learned Judge dismissed the plaintiff's claim altogether.

25. As I understand the learned Judge's judgment he treated the three payments which were made by the defendant in June 1920, 20th October 1921 and 29th of December 1921 as having been made in pursuance of the arrangement which was made between the defendant and his landlords on the 7th of June 1920.

26. With great respect to the learned Judge, in my judgment, the evidence does not support that finding : and, it appears to me that the case must be considered upon the basis that there was a fresh arrangement made in respect of each of these payments.

27. It is necessary, therefore, to see whether there is any difference in the rights of the parties as regards these three payments.

28. I propose in the first place to deal with the payment of Rs. 7,800 and the arrangement which was made in respect of it in June 1920.

29. In my opinion the evidence shows that the defendant advanced Rs. 7,800 to his landlords, Messrs. Hyam and Jones, undoubtedly for the purpose of repair and improvement of the premises, and the agreement was that the money was to be re-paid by the landlords giving the defendant credit for the monthly rents as they became due at the rate of Rs. 200 per month. It was an implied term that the defendant should remain in possession of the premises until the whole amount was re-paid in this manner, unless the landlords re-paid in a lump sum or otherwise. That being the arrangement, the advance of Rs. 7,800 would cover the rents which were payable for 39 months at the rate of Rs. 200 a month, and would cover a period from June 1920 to the end of August 1923.

30. I agree with the learned Judge's conclusion that the plaintiffs cannot recover any rents in respect of the period up to the end of August 1923. I agree with the learned Judge's finding that Messrs. Sassoons and the Receiver Mr. M. A. Sassoon knew about the arrangement which was made between the defendant and Messrs. Hyam and Jones in June 1920 and assented to it. In my judgment the money, which was advanced by the defendant, was in fact spent on repairs of the premises, as has been found by the learned Judge.

31. In those circumstances, in my opinion, neither Messrs. Hyam and Jones nor Messrs. Sassoons nor the Receiver could have claimed rent from the defendant for the period up to the 31st of August 1923.

32. The plaintiffs became mortgagees by paying off Messrs. Sassoons and taking a deposit of the title-deeds from Messrs. Hyam and Jones on the 11th July 1921 which was after the arrangement made between the defendant and Messrs. Hyam and Jones and, I am at a loss to understand how the plaintiffs could be in a better position than Messrs. Hyam and Jones or Messrs. Sassoons or the Receiver.

33. In my judgment the learned Judge was right in his conclusion as to this part of the case.

34. The learned Counsel for the appellants argued that the arrangement which was made between the defendant and his land-. lords was of no effect as against the plaintiffs by reason of the provisions of Section 52 of the Transfer of Property Act.

35. Even if the plaintiffs could be said to be parties who would have any right under any decree or order which might be made by the Court in the mortgage suit instituted by Messrs. Sassoons upon which I express no opinion, I am of opinion that this point is of no avail to the plaintiffs by reason of the fact that the mortgagees, who were plaintiffs in the suit, and the Receiver were both aware of the arrangement which was made by the defendant with the landlords and had assented to such an arrangement and the plaintiffs cannot be in a better position than Messrs. Sassoona or the Receiver.

36. The learned 'Counsel further relied upon the limitation of the Receiver's powers as to dealing with the property.

37. I do not think it necessary to examine in detail what were the powers of the Receiver, because I am of opinion that, even if the Receiver had no power to sanction the arrangement which was made between the defendant and his landlords, the Court would not allow him to repudiate the transaction after the transaction had been carried through, and after he, the Receiver and the mortgagees had taken advantage of the transaction and the money had been advanced and spent in the improvement of the premises which were the mortgagees' security. I think there is no substance in that point.

38. The last point to which it is necessary for me to refer in this connection is the argument of the learned Counsel who appeared for the appellants, that there was no proof that the arrangement which was made in June 1920 between the defendant and Mr. Hyam was made with the authority of Mr. Jones, the other landlord.

39. The issue was, "Was there an agreement between the defendant and Messrs. Hyam and Jones as alleged in the written statement?"

40. As I understand the learned Judge's judgment, and on reference to the evidence, the contest was upon the question whether the arrangement alleged by the defendant had been made. There was no suggestion at the trial that Mr. Hyam was not acting with the authority of his co-lessor: further I do not find the point specifically taken in the memorandum of appeal. In these circumstances and having regard to the nature of the arrangement, which to my mind was a perfectly proper arrangement, the result of which was for the benefit and advantage of the landlords and an improvement of their property, I have no doubt that Mr. Hyam in making the arrangement of June 1920, -Was acting with the authority of Mr. Jones. For these reasons, I agree, with the learned Judge's conclusion that the plaintiffs cannot recover rent in respect of these premises for any period prior to 31st August 1923.

41. The position, however, to my mind is different as regards the payments which were made by the defendant on the 20th of October and the 29th of December 1921.

42. The arrangement as to these payments according to the evidence is said to have been similar to that which governed the previous payment in June 1920.

43. But as I have already said, it seems to me that the evidence shows that the arrangements of the 20th of October 1921 and of the 29th of December 1921 must be regarded as being separate from the previous arrangement of June 1920. These two arrangements were made after the mortgage to the plaintiffs. That being so, the rule which was referred to by Lord Justice, Swinfen Eady in Ashburton v. Nocton (1915) 1 Ch. 274 at p. 291 : 84 L.J.Ch. 193 : 111 L.T. 895 : 59 S.J. 145 : 31 T.L.R. 122, is applicable.

44. The learned Lord Justice stated the rule as follows- "If the arrangement between mortgagor and tenant for pre-payment of rent, or for setting off future rent against money due from the tenant to the mortgagor, be made subsequent to the date of the mortgage, such arrangement will be treated as a collateral bargain between those parties and not binding upon the mortgagee."

45. Therefore, unless it can be shown that the plaintiffs assented to the above-mentioned arrangements between the defendant and the mortgagors, I am of opinion that the plaintiffs are not bound by them. There is no evidence to show that the plaintiffs consented to the arrangements; and, in my judgment, in October and December 1921 Messrs. Hyam and Jones were not in a position to give more than their personal undertaking to set off the sums which would become due in respect of the monthly rents against the advances which the defendants made so long as they were in a position so to do. They were not able to bind the plaintiffs, the mortgagees, or to deprive the mortgagees of any of their rights, which would include the right to give notice to the defendant to pay the rent to them and on failure by the defendant to pay the rent to determine the tenancy.

46. It was alleged that Mr. Hyam did not inform the defendant of the mortgage which had been created in favour of the plaintiffs. Even if that be so, although one may sympathise with the defendant, it does not affect the plaintiffs' rights.

47. The learned Counsel for the defendant based part of his argument upon the Calcutta Rent Act and urged that his client was safeguarded by reason of the provisions thereof.

48. In my opinion the Calcutta Rent Act is not sufficient to release the defendant from his liability for the reasons that the rent after August 1923 had not been paid by the defendant to the persons to whom it was due, namely, the plaintiffs.

49. There are two other points to which it is necessary for me to refer. The learned Counsel for the defendant relied upon the doctrine of merger. He referred to the fact that the plaintiffs had purchased the property at the sale which was held under the order of the Court in March 1923 and he relied upon the conditions of sale in Clause 15, to which I have already referred.

50. He urged that the plaintiffs were affected with notice of the defendant's tenancy: and for the doctrine of merger, he relied upon the case of Toulmin v. Steere (1817) 3 Mer. 210 : 36 13. E. 81 : 17 R.R. 67 and of Smith v. Phillips (1837) 1 Keen 694 : 6 L.J.Ch. 253 : 48 E.R. 474 : 14 R.R. 138.

51. I am of opinion that the doctrine of merger is not available to the defendant.

52. It was held in the case of Gokoldas Gopaldas v. Purantnal Premsukh Das 10 C. 1036 : 11 I.A. 126 : 8 Ind. Jur. 396 : 4 Sar. P.C.J. 543 : 5 Ind. Dec. (N.S.) 692 (P.C.) that the doctrine of Toulmin v. Steere (1817) 3 Mer. 210 : 36 13. E. 81 : 17 R.R. 67 is not applicable to Indian transactions, except as the law of justice, equity and good conscience.

53. Sir Richard Couch, in giving the judgment of the Judicial Committee stated as follows: "The doctrine of Toulmin v. Steere (1817) 3 Mer. 210 : 36 13. E. 81 : 17 R.R. 67 is not applicable to Indian transactions, except as the law of justice, equity and good conscience. And if it rested on any broad intelligible principle of justice it might properly be so applied. But it rests on no such principle. If it did it could not be excluded or defeated by declarations of intention or formal devices of conveyancers, whereas it is so defeated every day, When an estate is burdened by a succession of mortgages, and the owner of an ulterior interest pays off an earlier mortgage, it is a matter of course 1o have it assigned to a trustee for his benefit as against intermediate mortgagees to whom he is not personally liable.

In India the art of conveyancing has been and is of a very simple character. Their Lordships cannot find that a formal transfer of a mortgage is ever made, or an intention to keep it alive ever formally expressed. To apply to such a practice the doctrine of Touhnin v. Steere (1817) 3 Mer. 210 : 36 13. E. 81 : 17 R.R. 67 seems to them likely, not to promote justice and equity, but to lead to confusion, to multiplication of documents, to useless technicalities, to expense, and to litigation.

54. I agree with the learned Counsel's argument to this extent that the plaintiffs, when they bought the premises, did receive notice of the defendant's tenancy and were thereby put upon enquiry and they must betaken to have had knowledge of the actual facts.

55. Now, what were the facts of which they would have become aware upon enquiry?

56. Messrs. Hyam and Jones had made arrangements with the defendant in October and December 1921, by which the above-mentioned sums were advanced by the defendant, and they had entered into a collateral bargain by which they had made themselves personally liable to set off the monthly rents as they became due against the sums which had been advanced, and so to re-pay them. The plaintiffs would have found that these arrangements were made after the date of the plaintiffs' mortgage and that they, the plaintiffs, were not bound by them; consequently, in my judgment, neither of the above-mentioned points, upon which the learned Counsel relied, are sufficient to release the defendant from his liability.

57. In my judgment, the plaintiffs cannot recover any rent for any period prior to the end of August 1923. But the plaintiffs are entitled to possession of the premises and to recover mesne profits after the 31st of August 1923.

58. The result is that the plaintiffs' claim for rent for the period up to the 31st of August 1923 is dismissed; the plaintiffs are entitled to a decree for Rs. 200 for rent for the month of September 1923, and they are entitled to a decree for mesne profits from the 1st of October 1923 until the date of delivery of possession at the rate of Rs. 210 (two hundred and ten) per month, which we consider to be a fair rate to be paid for the occupation of the premises. The possession of the premises must be vacated by the defendant on or before the expiry of three months from to-day.

59. We have considered the question of costs: and, having regard to the peculiar features of this case, we have come to the conclusion that each party should pay its own, costs not only of the appeal but also of the trial. It is not necessary to mention all the reasons which have weighed with us: it is sufficient to say that the plaintiffs have failed with regard to a substantial part of their claim in which they persisted even in the Court of Appeal.

Rankin, J.

60. I agree.

61. As regards the arrangements which were made in October of 1921 and December of 1921, which were after the mortgage by deposit to the appellants, had been made by Hyam and Jones on the 12th of July 1921 upon the terms of the registered deed of that date--the position is controlled entirely by Section 8 and Section 50 of the Transfer of Property Act. The principle to be applied in the case of a mortgage of tenanted land is that the mortgage operates as a grant of the reversion expectant on the determination of the term. In India a mortgage by deposit has the same effect as a "legal mortgage." By Section 8 accordingly, when this mortgage by deposit was entered into in July 1921, there passed to the mortgagees, namely, the appellants, the rents and profits accruing after the transfer. The result is that the tenant in such a case has only the protection of Section 50 of the Transfer of Property Act, which is the equivalent in India of the old Statute of Queen Anne which was canvassed in De Nicols v. Saunders (1870) 5 C.P. 589 : 39 L.J.C.P. 297 : 22 L.T. 661 : 18 W.R. 1106 and, the principle of that case applies where the arrangement in question has taken place subsequent to the mortgage. In order to get the benefit of the protection of Section 50 the tenant must pay rent as rent, and must not pay rent in advance which, in these circumstances, is a mere loan to the mortgagor. I entirely agree that the evidence does not admit for a moment of these two subsequent arrangements of October and December 1921 being regarded as the carrying out of a previous arrangement entered into in June 1920, and I respectfully differ from the learned Judge in so far as he has not differentiated between the first of the three arrangements and the others.

62. The only argument which to my mind requires examination in support of the claim of the respondent to stand as against the appellants, upon the later arrangements, is the argument urged before us that although the appellants, had their mortgage of the 12th of July 1921 stood by itself, would not have been bound by the arrangements of October and December 1921, nevertheless when they came to take as auction-purchasers in March 1923 the equity of redemption subject to their own mortgage, they became unable to set up as against the respondent the rights which they had under their mortgage of July 1921. That, as has been pointed out, is the doctrine of merger and the cases which were relied upon before us, the cases of Smith v. Phillips (1837) 1 Keen 694 : 6 L.J.Ch. 253 : 48 E.R. 474 : 14 R.R. 138 and Morrogh v. Alleyne (1873) Ir.R. 7 Eq. 487 are mere illustrations of the doctrine of merger laid down in the case of Toulmin v. Steere (1817) 3 Mer. 210 : 36 E.R. 81 : 17 R.R. 67, an authority which has been much buffeted by modern decisions both in India and in England. I see myself no principle in saying in this case that the appellants' position as against the respondents' was made worse by the circumstance that they paid one lac of rupees and bought in the equity of redemption in addition to their subsisting mortgage. It remains, therefore, to consider the rights of the parties as regards the transaction which was entered into on the 7th of June 1920.

63. Now, the facts as to this transaction are not very satisfactorily presented in the evidence. The evidence of Mr. Beattie is that the roof of the premises--and I understand he is speaking not only of his own part of the premises--was in a bad condition, that it was leaky, that it required repairs and that the premises otherwise were bad and required repairs. Mr. Hyam's evidence is the same and there is no cross-examination of either witness tending to show that that version of the facts was in any way incorrect. It is quite true that when one scrutinizes the receipt, dated the 7th of June 1920, one finds that the advance is said to be for the purpose of "making an additional room on the roof of the one-storied godown in the above premises." When the plaintiffs' witness Mr. Shorsbree was in the witness-box he was cross-examined on the basis that a part of the premises was to be constructed out of the advance. However, that may be, the defendant and Hyam both go into the witness-box, they are not asked anything to throw doubt upon the story that the property as a whole was out of repair and that the purpose of that advance was to enable repairs to be made. The learned Judge has accepted that view: and, in the circumstances, it is quite impossible for this Court to accept any suggestion to the contrary.

64. The position, therefore, was this: A mortgage with the Sassoons had been made in 1914. In a suit which was solely between the Sassoons and Hyam and Jones and which had begun on the 13th of January 1917, one of the Sassoons had been appointed Receiver so far back as the 16th of March 1917. A later mortgage had been given to Mackintosh Burn, Ltd., in April 1917, and notwithstanding that a preliminary decree had been passed in the Sassoons' suit on the 27th of July 1917, not till 1918 did Mackintosh Burn, Ltd., bring a suit at all. The final decree for sale on the 24th of January 1919 was made in the Sassoons' suit to which Mackintosh Burn, Ltd., were added as parties in order that the rights of all persons might be worked out in each other's presence. It appears that Mr. Hyam was acting really as manager for the Receiver; so he says. At all events, the Receiver was allowing him to make out the rent bills, to endorse them to him and the Receiver's peon collected the rent. The Receiver and' Hyam were managing this property for a period of over three years; and we must take it that the time came when the property required to be repaired. At that time it so happened that Mr. Beattie was in this position, at all events, as regards the main part of the premises, that under the Calcutta Rent Act, he had, so long as he would keep the covenants, fixity of tenure, and, in these circumstances, the Receiver and Hyam knowing that they could not eject the defendant or claim more rent, and being in need of money got the necessary money for repairs by getting him to pay rent in advance. It was a substantial amount of Rs. 7,800. I do not regard that as if the Receiver was wrongly making a lease for three years. It is a mere arrangement whereby Hyam and the Receiver too, in order to get the advance, undertook, so long as Mr. Beattie kept the covenants, that they would not attempt to give him notice to quit at all 'events unless they paid off the balance. That may or may not be an arrangement within the competency of a Receiver, but it was done with the consent of the Sassoon. mortgagees. It was done at a time when, as the learned Judge found, Mr. Beattie had not been informed about Messrs. Sassoons' mortgage. To my mind it was an entirely unreasonable arrangement. I do not that it was contrary to the Receiver's duty. But if it was, I do not understand why we are to suppose that the consent of Mackintosh Burn & Co. was lacking to a perfectly good and very beneficial agreement to which they have never objected.

65. We have to consider whether it binds the equitable mortgagees of the 12th of July 1921.

66. Now, it seems to me that the cases of Green v. Rheinberg (1911) 104 L.T. 149 and Ashburton v. Norton (1915) 1 Ch. 274 at p. 291 : 84 L.J.Ch. 193 : 111 L.T. 895 : 59 S.J. 145 : 31 T.L.R. 122 show that such an arrangement will in equity bind a person taking a transfer of the reversion, unless he can show that he purchased for value without notice. This no doubt is an advance upon the Common Law stand point of Cook v. Guerra (1872) 7 C.P. 132 : 41 L.J.C.P. 89 : 26 L.T. 97 : 20 W.R. 367.

67. In this case there was a tenant upon the property and his open possession is notice not only of the immediate terms of his tenancy but of collateral agreements as well, in the absence of all enquiry by the transferees.

68. Under the doctrine, therefore, illustrated by Daniels v. Davison (1809) 16 Ves. Jun. 249 : 33 E.R. 978 : 10 R.R. 171., the mortgagees in this case, who made no enquiry, are not entitled to say that they were purchasers for value without notice. Therefore, the transfer of the reversion 'to them by the equitable mortgage of the 12th of July 1921 is not a transfer free from the rights of the respondent under the arrangement of the 7th of June 1920.

69. In these circumstances the learned Counsel for the appellant says that in view of fact that he in March 1923 became the auction-purchaser of the property subject to his own mortgage as has been already detailed, he can obtain a better right and a right to override the arrangement of June 1920 by the doctrine of lis pendents. I do not understand him to argue that he could obtain a better right than Messrs. Sassoons, the mortgagees, by the doctrine of subrogation, but he says that as he ultimately became the auction-purchaser he obtained a better right by the doctrine of lis pendens. To my mind, that doctrine has no application to this case, not because I am prepared to hold that an auction-purchaser is necessarily outsides. 52 of the Transfer of Property Act, but because it seems to me that where the Court is by its Receiver managing property for a series of years in a mortgage suit the person who takes the property after that management cannot under this section go back and rip up such transactions of the Receiver and question their formal propriety. The doctrine is intended to prevent one party to a suit making an assignment inconsistent with the right which may be established in the suit and which might require a further party to be impleaded in order to make effectual the Court's decree.

70. I think that the arrangement is one which binds the appellant.

71. The respondent being prima facie monthly tenant, was given on 30th July 1923 a month's notice to leave after August 1923, and it is for him to show what this arrangement of June 1920 was, and to show that it prevented the owners of the reversion from giving him a valid notice to quit as they purported to do.

72. The arrangement was on the 7th of June 1920. There is no evidence or suggestion that the rent of the respondent was payable monthly in advance. The arrangement was according to the written document simply this: "For the purpose of making an additional room on the roof of the one-storied godown in the above premises, to be deducted out of the monthly rents payable, viz., Rs. 200 per month." I have no doubt that the intention was that on the 1st of July the rent for June should be taken to be Rs. 200 and Rs. 200 should be cancelled accordingly. The learned Judge taking, rather at the foot of the letter, two passages in the evidence appears to have thought that the arrangement was that the rent should be increased only as and when the repairs were finished. That, I think, is not the meaning of the receipt: and, so far as I can gather, the computation of the defendant in para. 5 of the written statement was not based upon anything of the sort. There is no evidence as to when the repairs were finished; and the burden lies entirely upon the defendant. In para. 5 of the written statement the computation is made as if the increased rent first applied to the month of July 1920, that is to say, the rent payable on the 1st of August, assuming it to be payable in arrear in respect of July 1920.

73. In my judgment, the evidence does not show that: and I think, therefore, that there was a good notice to quit determining the respondent's status as a monthly tenant, Thereafter his right to continue in occupation rested solely on the Rent Act. The writ was issued on the 7th of November at a time when the rent for September had not been paid to the proper person, and, as the tenant had no further right to notice, there is no answer to the suit under the Calcutta Rent Act as a matter of ejectment. He cannot, however, be charged more than Rs. 200 for September 1923.