Good article on rights of lessor’s transferee

When tenanted property is transferred by landlord,

assignee of landlord has all the rights of landlord against tenant
Relation between transferee - landlord and tenant will be
governed by section 109 of Transfer of Property Act. Section 109
of Transfer of Property Act reads as under :
“109. Rights of lessor's transferee. - 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.
The lessor, the transferee and the lessee may determine what
proportion of the premium or rent reserved by the lease is payable
in 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.”

(1) As per section 109 of Transfer of Property Act, rights of

transferee - landlord are as follows :
In view of section 109, the assignee of the lessor has, as
against the lessee, all the rights that the lessor had, including the
right to receive the rent in terms of lease and the lessee cannot say
that he is not bound to pay the same to the assignee merely
because there is no privity of contract. Attornment is not
required.1
After the transfer of lessor's right in favour of the transferee,
all the rights and liabilities of the lessor in respect of the subsisting
tenancy devolve upon him. A fresh attornment by the lessee to the
landlord's assignee is not necessary.2
The assignee's rights, like his liabilities, commerce with the
assignment. The section expressly enacts that he cannot sue for
arrears of rent before his assignment.

(2) Proviso to Section 109 Transfer of Property Act,

The substantive part of section 109 read with proviso necessarily
indicate that arrears of rent due is one of lessor's right as to
property transferred. Right to recover arrears of rent is vested with
original owner and on transfer all his right to recover the same vest

1
Brij Bihari Prasad V. Deoki Devi AIR 1978 Pat 117.
2
Kalawati Tripathi Vs. Damayanti Devi AIR 1993 Pat 1,p. 9
in transferee. Proviso to section 109 clearly indicates that if there
is an assignment of rent due, than transferee landlord would be
entitled to recover the same from tenant as arrears of rent.
On assignment, arrears of rent do not lose their character. In
Satti Krishna Reddy Vs. Nallamilli Venkata Reddy and another
[(1982) 3 SCC 364 Hon'ble Supreme Court has held that a claim
of rent would not cease to be such when it was assigned by the
owner when he transferred his properties to another. So far as the
tenant was concerned, the amount remained payable by him to the
successor landlord as arrears of rent because that was his own
liability and it did not acquire any other character. Therefore,
when the successor landlord claimed the amount assigned to him,
his cause of action against the tenant would be for arrears of rent
because there was no other basis on which he could found his
cause of action against the tenant. Eviction proceeding can be filed
by transferee landlord against tenants on the ground of arrears of
rent.

There is no obligation on the assignee to give notice of the

assignment to the lessee, but it is desirable to do so, for if in the
absence of notice the lessee pays rent to the lessor, he will not be
liable to pay it again to the assignee.3

In a Gauhati case, rent had been paid by the tenant to the

3
Bhola Nath Vs. Supper 72 IC 86
former landlord before the landlord had transferred his rights in
the land. It was held that in view of section 109, the tenant was
not liable to pay the rent over again to the transferee landlord. 4

(3) Attornment

A fresh attornment by the lessee to the lessor's assignee, is not

necessary under TP Act. In practice, however, attornment is
generally insisted upon, as it is useful as an acknowledgement of
the tenancy. The Supreme Court has held that there is no need for
a consensual attornment. The attornment is brought about by
operation of law. It has, however, been held that attornment would
be desirable as it means the acknowledgement of relation of a
tenant to a new landlord. It also implies continuity of tenancy. 5

(4) Apportionment
Notice to the tenant is, by virtue of s 37 sufficient to convert the
single obligation to pay rent to the lessor, into a multiple
obligation to pay rent to the lessor, and the assignee of part. On
receipt of notice, the lessee is bound to pay to each the
proportionate part of the rent. The lessor, the assignee and the
lessee may make the apportionment amicably, or failing an
agreement a suit may be filed for the purpose.
Even if there was some apportionment of rent in between co-

4
Provati Devi V. Bokur Chandra Nath AIR 1981 Gauhati 52
5
Mahindra Vs.Vishwanath AIR 1997 SC 2437
landlords, such apportionment does not have the effect of
severance of the tenancy.

(5) Applicability of Section 109 of Transfer of Property Act.

1. When right, title and interest in immovable property stand
transferred by operation of law, the spirit behind Section 109 per
force would apply and successor in interest would be entitled to the
rights of the predecessor.6

2. 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.7

3. Transferee landlord can recover possession of tenanted

premises from tenant for breaches committed by him prior to
assignment of tenanted premises. Said right can be exercised by
transferee landlord whether transfer of tenanted premises was by
operation of law or by act of parties. 8

4. No attornment of tenancy is necessary in law as the above

6
Vasantkumar Radhakisan Vora Vs. The Board of Trustees of the Port of Bombay AIR 1991 SC 14.
7
Shaikh Noor Vs. G.S. Ibrahim (Dead) by Lrs. AIR 2003 SC 4163
8
Radhabai Bapurao Shelar Vs. Madhav Hiralal Shelar, Spl. Civil Appln. No. 3391 of 1975, Decided On: 05.08.1981.
Section creates a statutory attornment and the Section does not
insist that the transfer of the lessor's right can take effect only if the
tenant attorns as attornment by tenant is unnecessary to confer
validity to the transfer of lessor's right. However, the Section
protects payment of rent by the tenant to the transferor without
notice of the transfer.9

(6) Liability of tenant on transfer of tenanted premises :

After transfer of tenanted premises tenant is liable to pay rent
to transferee landlord. Tenant is also liable to pay arrears of rent
to transferee landlord if said right is transferred to transferee
landlord.

Conclusion
In conclusion we can say that on transfer of tenanted premises,
all rights including right to recover rent are transferred to
transferee landlord except right to receive rent accrued prior to
transfer of tenanted property. Said right to recover arrears of rent
can also be transferred by agreement between the parties. If right
to recover arrears of rent are transferred, transferee can recover
arrears of rent as well as file suit for eviction of tenant on ground
of non payment of arrears of rent.

9
Laxmi Narayan vs. Ram Kishan & Ors. AIR 2015 Raj 46.