Bapurao and Others vs Nirmalaben

A.B. Chaudhari, J.—The Appellants are the original defendants who filed the instant appeal against the Judgment and Decree dated 3rd May, 1985 passed by 20th Joint Civil Judge [Junior Division], Nagpur, in Regular Civil Suit No. 1092 of 1978 and confirmed by Fourth Additional District Judge, Nagpur, vide Judgment and Decree dated 3rd September, 1994 passed in Regular Civil Appeal No. 660 of 1985, by which a decree for eviction of the appellants from the suit tenanted premises was made.

FACTS;

Respondent-plaintiff, Nirmalaben, filed a suit in respect of the suit premises, stating that she had purchased Portion No. 5, House No. 179/0-8, Ward No. 15, Nagpur, by registered Sale-Deed dated 9th January, 1969 from Mrs. Perin wife of late Meharaji Fouzdar, the sole beneficiary under Mrs. Perin Meharaji Fouzdar Trust, Nagpur, and was placed in vacant possession of the property, while the remaining portion of the property, which is the suit property, was in occupation of the tenants, namely the appellants, who carried on the business under the name and style Shriram Engineering Works on monthly rent of Rs. 25/- per month. A registered notice was served on the defendants to pay rent with effect from 1st July, 1969, but the rent was not paid. The plaintiff filed Civil Suit No. 1492 of 1974 in the Small Cause Court for recovery of arrears of rent for the period from 1st July, 1969 to 30th July, 1974. In the Written Statement filed by the defendants in that suit, the title of the plaintiff to the suit property was denied by the appellants-defendants and, therefore, she withdrew the suit and issued a notice of forfeiture of tenancy on 2nd September, 1978, which was served on the appellants-defendants on 7th September, 1978. The defendants replied the notice and thereafter the respondent-plaintiff filed a suit on the basis of title, for possession, on principal ground of forfeiture of tenancy within the meaning of Section 111 (g) of the Transfer of Property Act, 1882.

The defendants filed Written Statement and admitted occupation of the suit property as tenants. The defendants contended that the property belonged to Perin Meharaji Fouzdar Trust, and was leased out to defendants, which was of permanent nature. No permission from the Rent Controller was obtained by the plaintiff and, therefore, the suit was not maintainable. In addition, it was stated by them that there was an advertisement in the newspaper regarding sale of the suit property by auction on 13th September, 1966 and other dates. They were present during auction, and were also bidders, but somehow the bidding was stopped. They then stated that the Trust-Deed dated 25th September, 1961 was executed by Meharaji, and Smt. Perin was the sole beneficiary and as per the Trust-Deed, they did not have any right to sell the property. Relying on Clause 5 of the Trust-Deed, it was stated that the surviving trustees had no right to sell the property. Such a sale in favour of plaintiff was not a valid sale. The sale to the plaintiff was, thus, made secretly and there was no cause of action for the plaintiff and the suit should be dismissed.

In the trial, evidence was led and documents were also proved. The Trial Judge framed the issue about forfeiture of tenancy, inter alia, within the meaning of Section 111 (g) of the Transfer of Property Act, and held that the appellants-defendants had forfeited the tenancy by denying the title of the plaintiff and, therefore, the decree for eviction was required to be passed against the appellants. Accordingly, a decree was passed for eviction.

Appellants-defendants filed an appeal before the Lower Appellate Court, which was also dismissed, confirming the finding regarding forfeiture of tenancy. Hence this Second Appeal.

In support of the appeal, learned counsel for the appellants invited my attention to the order made by this Court at the time of admission on 10th March, 1995, and submitted that the real question, which falls for consideration of this Court, is as to whether mere denial of a derivative title of the respondent-plaintiff would amount to forfeiture of tenancy within the meaning of Section 111 (g) of the Transfer of Property Act? He, therefore, argued that if it is held that mere denial of a derivative title does not amount to forfeiture of tenancy, the suit filed by the respondent-plaintiff-landlord was not maintainable in the absence of permission from the Rent Controller, as required by the provisions of C.P. & Berar Letting of Houses & Rent Control Order, 1949, and, therefore, the suit was liable to be dismissed. According to him, both the courts below did not address the issue legally, correctly and properly and fell into error, and decreed the suit. The counsel for the appellants cited the following decisions:-

[a] Munisami Naidu Vs. C. Ranganathan, ,

[b] Somti Parkash Lakshmi Narain Songhi Vs. Natha Baga and Another, ,

[c] Rukmini Vithu Vs. Rayaji Dattatraya Pai, ,

[d] Nirvikar Gupta Vs. Ram Kumar ,

[e] Smt. Bhagwati Devi Vs. Surendrajit Singh and Others, ,

[f] Salla Edu Musalman Vs. Jainab Bi [AIR 1953 Nagpur 353 (Vol. 40, C.N. 151)] ,

[g] Ishwar Singh and Others Vs. Sawaru Singh and Others, ,

[h] J.J. Lal Pvt. Ltd. and Others Vs. M.R. Murali and Another, ,

[i] Stanley Parker Jones Vs. Bansraj Laltaprasad Mishra, ,

[j] Janki Vashdeo Bhojwani and Another Vs. Indusind Bank Ltd. and Others, , and

[k] Mohd. Ilyas and Another Vs. Mohd. Adil and Others, .

Per contra, learned Adv. Mr. S.V. Purohit for the respondent-landlady supported the impugned judgments and decree and submitted that in the earlier Small Cause Suit filed by the respondent-plaintiff for recovery of arrears of rent, the appellants had clearly denied the title of the plaintiff to the suit property. Denial of title of the suit property by the appellants-defendants, who were the tenants of the earlier landlord-Trust, clearly amounted to forfeiture of tenancy and, therefore, the decree of eviction was rightly passed. Mr. Purohit also argued that the Fouzdar Trust once having transferred the title of the suit property in favour of respondent-plaintiff, it clearly became a third person within the meaning of Section 111 (g) of the Transfer of Property Act, which prerequisite was also satisfied in the instant case for finding out the forfeiture of tenancy. He, therefore, submitted that the decree passed by the Trial Judge and confirmed by the Lower Appellate Court being concurrent in nature, cannot be disturbed in the second appellate jurisdiction of this Court.

I have perused the order made by this Court on 10th March, 1985 at the time of admission, by which three Substantial Questions of Law were framed. I have heard learned counsel for the rival parties on number of dates. I have perused the impugned Judgments, so also the reason recorded by the Courts below for passing the impugned decree.

It is true that the courts below, on facts, have decided some other question. But then, according to me, following are the only three questions which are Substantial Questions of Law which are required to be dealt with, addressed and answered:-

[1] Whether mere denial of a derivative title of the plaintiff bona fide by the defendants amounted to forfeiture of tenancy within the meaning of Section 111 (g) of the Transfer of Property Act? ... No.

[2] Whether the original landlord/owner, i.e., Fouzdar Trust, of the appellant, after sale of the suit property to the plaintiff could be called third person for the purposes of Section 111 (g) of the Transfer of Property Act? ... No.

[3] Whether the suit for possession decreed by the courts below against the appellants-tenants consequently without seeking permission of the Rent Controller to determine the tenancy of the defendants was maintainable?... No.

[4] What order? ... Second Appeal is allowed. Suit filed by the respondent-plaintiff is dismissed with no order as to costs.

It is not in dispute that the tenanted property original belonged to Fouzdar Trust. It is also not in dispute that the appellant no. 2, Shriram Engineering Works, run by the Appellant No. 1, was inducted as a tenant by the said Trust on the terms and conditions agreed between them. It is further not in dispute that the respondent-plaintiff, Nirmalaben, purchased the suit property in which appellants-defendants have been occupying the premises as tenants. It is not in dispute that the respondent-plaintiff had given a notice of attornment of tenancy to the appellant, that the respondent Nirmalaben became owner of the suit property by purchasing the same from the Trust under the sale-deed. It is, therefore, very easy for me to conclude on the above said admitted facts that the respondent-plaintiff, Nirmalaben, held a derivative title qua the appellants-defendants in respect of the suit property occupied by the appellants-defendants. Once having held on facts that the respondent-plaintiff, Nirmalaben, held a derivative title qua the appellants-defendants-tenants, the legal position set out by the Supreme Court from time to time comes into play, namely that mere denial of a derivative title would not ipso facto or automatically result into forfeiture of tenancy contemplated by Section 111 (g) of the Transfer of Property Act. Rule of estoppel under Section 116 of the Evidence Act is restricted to the denial at the commencement of tenancy. Therefore, applicability of Section 116 of the Evidence Act is ruled out. Another aspect is that if denial of title by a tenant is not bona fide, then alone the inference about forfeiture of tenancy by tenancy be drawn. The Supreme Court in para 18 of its judgment in the case of J.J. Lal Pvt. Ltd. and Others Vs. M.R. Murali and Another, stated thus:-

What amounts to denial of title, and whether such denial is bona fide or not are the questions to be determined in the facts and circumstances of each case. As a general rule the vulnerability of denial of title by the tenant shall be tested by reference to rule of estoppel contained in Section 116 of the evidence Act which estopped the tenant from denying the tile of the landlord at the commencement of the tenancy and the estoppel continues to operate so long as the tenant does not surrender possession over the tenancy premises to the landlord who inducted him in possession. The tenant is not estopped from denying the tile of the landlord if it comes to an end subsequent to the creation of the tenancy nor is he estopped from questioning the derivative title of a transferee of his landlord. However, the rule of estoppel contained in Section 116 of the Evidence Act is not exhaustive. To operate against the tenant as providing as ground for eviction under Section 10 of the Act a mere denial of the title of the landlord is not enough, such denial has to be not bona fide. Not bona fide would mean absence of good faith or non genuineness of the tenants plea. If denial of title by the tenant is an outcome of good faith or honesty or sincerity, and is intended only to project the facts without any intention of causing any harm to the landlord it may not be not bona fide. Therefore, to answer the question whether an assertion of denial of landlords title by the tenant was bona fide or not, all the surrounding circumstances under which the assertion was made shall have to be seen. The counter highlights the factum and contents of notice by the Municipal Corporation served on the tenant, reproduced in the earlier part of this judgment and the reaction of tenants to the threat coupled with temptation held out by Corporation. This notice by Municipal Corporation states that tenants having informed the Municipal Corporation that they were in possession of the premises that they had agreed to pay to the Corporation the lease amount which was presumably in arrears on account of non payment by their landlords (i.e.. the respondents), that the Municipal Corporation threatened the tenancy premises being subjected to public auction if the arrears were not cleared. This notice is by reference to letter dated 26-3-1993 sent by the tenants to the Municipal Corporation which is not available on record. The landlords on whom lay the burden of proving availability of the ground of eviction took no steps for the production of this letter. The contents of the letter would have provided vital evidence relating to the nature and manner of denial of title by the tenants and the bona fides of denial could have been inferred. The High Court in its judgment has made a reference to a series of attempts to deprive the landlords of their lawful rights by tenants. The High Court appears to have taken into consideration some other documents referable to some other litigation between the parties which documents, in our opinion, could not have been taken into consideration unless tendered in evidence and brought on record consistently with procedural law governing trial of civil cases. There is yet another error committed by the High Court. So far as the additional counter and contents of the notice by Municipal Corporation to the tenants are concerned we do not think that a case of denial of title is made out. In any case it cannot be considered to be not bona fide. The tenants have stated that the ultimate owners of the property were the Municipal Corporation and they had agreed their willingness to pay rent to the Municipal Corporation under threat of eviction solely for the purpose of protecting their own possession over the premises. They have neither disowned the title of their own landlords at the inception of the tenancy nor have set up any title in themselves nor attorned in favour of the Municipal Corporation by voluntarily entering into direct tenancy with the Municipal Corporation by passing their own landlords. We are therefore, clearly of the opinion that no case of eviction on the ground of tenants denial of landlords title not bona fide is made out.

That is the extant legal position. Viewed in the light of the above dictum of the Supreme Court, I proceed to record my finding on the above aspect. In response to the suit, namely Civil Suit No. 1492 of 1974 that was filed by the plaintiff, Nirmalaben, in the Court of Small Causes, Nagpur, the appellants-defendants denied her title in paras 8 to 13 of Additional Submissions, which read as follows:-

That the plaintiff has no title or interest whatsoever in the suit property. The suit property belonged to Shrimati Parih Meherji Foujdar Trust. The property originally belonged to the landlord and Mining proprietor Shri Meherji Firozshah Foujdar. The said Meherji executed a Trust deed on 25-9-1961. Shrimati parin Meherji Foujdar was the sole beneficiary under the said Trust. Shri Meherji Foujdar and Shri C.H.S. Naidu were the Trustees. The settlor Shri Meherji Foujdar ceased to have any interest in the trust property after creation of the trust with effect from 25-9-1961. The trustees had right to manage the trust property by letting out the property collecting rents, making repairs, paying taxes and doing all such acts as may be necessary for effective management of the trust property.

That all the income of the property save such deductions as the trustees may choose to make on account of reserve fund or depreciation fund was to be paid to the sole beneficiary periodically.

That the trustees or the beneficiary had no right to sell away the trust property under the trust deed dated 25-9-1961. After the death or resignation of any of the trustees the surviving trustee was authorized to act as trustee.

That the settlor Shri Meherji Foujdar died in the year 1968. In the issue of the Marathi daily Tarun Bharat dated 21-12-1969 at page 6 in column 7 an advertisement was published under the signature of the Auctioneer L.S. Jinturkar & Company of Sitabuldi, Nagpur to the effect that a portion of the plot No. 98-8 near Parsi Agyari measuring about 3,000 sq.ft., was to be sold by auction on 23-12-1969 at 10 a.m.

That on 23-12-1969 at 10 A.M., the auctioneer started the auction of the site. Bidders started bidding on the open rear portion of the side. Shri Haribhau Shinde, Shri Tukaram Mahajan, Shri Sakharkar, and others were among the bidders. The trustee Shri C.H. Naidu was also present. In the meanwhile Shri Maganlal Pachmatia the husband of the plaintiff and his brothers came on the spot. They took aside the auctioneer Shri Jinturkar and Shri C.H. Naidu and after talking for a short while Shri Jinturkar adjourned the auction and declared that next date of the auction shall be published.

However, the next date of auction was never published.

That it is learnt that the whole property situated by the side of the parsi Agyari on Empress mill Road belonging to Shrimati Parim Meherji Foujdar Trust, is illegally transferred in pieces in favour of the members of Shri Maganlal Panchmatia, the husband of the plaintiff. It is submitted that any transfer of any of the above said trust property including the suit property in favour of the plaintiff or other members of the panchmatia family is totally void. The plaintiff as well as the other transferees have acquired no right title or interest in the trust property including the suit property. The property continues to be the trust property.

After the aforesaid denial of title by the appellants-defendants, application [Exh. 108] in the said Civil Suit No. 1492 of 1974 was filed by the respondent-plaintiff. Para 2 of the said application reads thus:-

That the defendants have filed written statement on denying the relationship of landlord and tenant. The defendant have also denied the title of the plaintiff.

Thus, the said suit stood withdrawn by her. Thereafter, the respondent-plaintiff filed the instant suit directly for possession without obtaining permission from the Rent Controller, on the ground that there was forfeiture of tenancy within the meaning of Section 111 (g) of the Transfer of Property Act and, therefore, she was entitled to file a civil suit for eviction without obtaining any such permission from the Rent Controller. In the plaint of the instant suit, the respondent-plaintiff accordingly made averments and the appellants-defendants denied the averments regarding title in the same manner as was done in the earlier suit which has been quoted above. Perusal of the pleadings aforesaid about denial of title by the appellants-defendants clearly shows that the appellants-defendants, who were the tenants inducted by the original owner-Trust, did not deny title of the original owner, but denied the title of the present respondent-plaintiff, Nirmalaben, who was a derivative title holder qua the appellants-defendants. It is clear from reading of defendants pleadings that they are repeatedly saying that Fouzdar Trust still is the owner and they are still the tenants of the Fouzdar Trust and not the respondent-plaintiff for which they have given certain reasons which are not much relevant. At any rate, the reasons are that Clause 5 of the Trust-Deed did not empower the trustees to effect sale of the suit property to anybody and that the auction in which property was purchased by the respondent-plaintiff, Nirmalaben, was not legal and proper. These pleadings, in my opinion, cannot be said to be denial of title not bona fide. On the contrary, to my mind, these pleadings clearly show that the defendants always wanted to recognize their original owner Fouzdar Trust as their landlord and not the respondent-plaintiff. The reasons given by them for denying the title, if viewed in the proper perspective, cannot be said to be not bona fide. Therefore, in my opinion, a mere denial of title of a derivative title holder by the appellants-defendants would not amount to forfeiture of tenancy within the meaning of Section 111 (g) of the Transfer of Property Act. Hence I answer Question No. 1 in negative.

As to Question No. 2 : This question posits an interesting facet. Section 111 (g) of the Transfer of Property Act and the relevant Clause reads thus:-

Determination of lease.-A lease of immovable property determines-

(g) by forfeiture; that is to say, (1) in case the lessee breaks an express condition which provides that, on breach thereof, the lessor may re-enter or (2) in case the lessee renounces his character as such by setting up a title in a third person or by claiming title in himself; or (3) the lessee is adjudicated an insolvent and the lease provides that the lessor may re-enter on the happening of such event; and in any of these cases the lessor or his transferee gives notice in writing to the lessee of his intention to determine the lease;

From perusal of the above provision of Section 111 (g), following ingredients for propagating the case of forfeiture of tenancy are essential :-

[a] The lessee renounces his character by setting up title in a third person.

[b] By claiming title in himself.

The question here is whether the appellants-defendants, by stating that Fouzdar Trust, who was admittedly the original landlord/owner of the suit property, could be termed as a third person ? The second part, namely by claiming title in himself, is not relevant in the instant case, because the defendants never claimed title in themselves, but they set up the title of the suit property held by them in their original landlord Fouzdar Trust. Therefore, the question is whether the original owner, who sold the suit property to the respondent-plaintiff, could be called a third person while renouncing his character as a lessee? The Law Lexicon defines the Third person thus:-

Third person. The words third person include all who are not parties to the obligation or transaction concerning which the phrase is used.

The submission made by learned Adv. Mr. Purohit for the respondent-plaintiff that once having disposed of the suit property in favour of the respondent-plaintiff, the Fouzdar Trust, i.e., the original owner, did not have any connection, whatsoever, with the suit property held by the appellants-defendants and, therefore, the original landlord could be called a third person, in my opinion, is a hard proposition to accept. In the light of the meaning of the third person as above and in the light of dictionary meaning of third party provided in Blacks Law Dictionary, namely A person who is not a party to a lawsuit, agreement, or other transaction but who is usu. somehow implicated in it; someone other than the principal parties.-Also termed outside party; third person, merely because the original landlord sold the suit property to the respondent-plaintiff, it cannot become a third person for the purpose of the aforesaid provision. Therefore, there is a requirement that the lessee should renounce character by setting up title in third person or claim unto himself. In the instant case, since I have held that defendants original landlord cannot be said to be a third person and they did not claim title in themselves, ingredients of Clause (g) of Section 111 are not satisfied. Consequently, I must hold that the defendants did not forfeit tenancy within the meaning of Section 111 (g) of the Transfer of Property Act. Thus, I am inclined to hold that the appellants did not set up a title in any third person as contended by Mr. Purohit. I, therefore, answer Question No. 2 in the negative.

As to Question No. 3 : The answer to this question is very simple and must be answered in negative. It is an admitted fact that the provisions of C.P. & Berar Letting of Houses & Rent Control Order, 1949 were applicable to the City of Nagpur, in the instant case when the suit was filed and no suit could be filed without obtaining permission from the Rent Controller for determining tenancy of the appellants who were admittedly the tenants, upon attornment, of the respondent-plaintiff, Smt. Nirmalaben. Hence I answer this question in negative.

To sum up, the following result must follow:-

ORDER

[a] Second Appeal No. 424 of 1994 is allowed without any order as to costs.

[b] The impugned Judgment and Decree dated 3rd May, 1985 passed by 20th Joint Civil Judge [Junior Division], Nagpur, in Regular Civil Suit No. 1092 of 1978 as well as the impugned Judgment and Decree dated 3rd September, 1994 passed by Fourth Additional District Judge, Nagpur, in Regular Civil Appeal No. 660 of 1985 are set aside.

[c] Regular Civil Suit No. 1092 of 1978 stands dismissed with no order as to costs.