Fakiruddin Saheb and Others vs S. Ramaswami Mudaliar and Others

Natesan, J.—Plaintiffs 1, 2 and 4 to 8 are the Appellants in this appeal. They are some of the hereditary muthavallis of the Ammersha

Thaika, the other muthavallis being the Respondents in the case. The second Defendant in the suit himself also a hereditary muthavalli gave a

permanent lease Exhibit B-1 in the case in 1946 in favour of one Peer Mohideen as though he was the sole huqdar and entitled to lease the

property at his discretion. The legal representatives of the lessee assigned the lease in favour of the first Defendant and the first Defendant now

purports to be in possession. The suit was filed for recovery of possession of the suit property with future mesne profits on the basis that a

permanent lease was void and cannot bind the institution. The Courts below have upheld this contention that the permanent lease was void and the

finding is not, as it cannot be, challenged before me by the learned Counsel appearing for the 1st Defendant. While the trial Court decreed the suit

in its entirety granting future mesne profits to be determined under Order XX, Rule 12, Code of Civil Procedure, the lower appellate Court

modified the decree in favour of the first Defendant the alienee from the original lessee, and provided for his being compensated for the value of the

buildings constructed on the suit property under the lease agreement Exhibit B-1. The lease recited that the property was in a very bad condition

and that the lesse-3 should improve existing buildings and put up new ones and pay an annual rent of rupees sixty per annum to the second

Defendant and the future muthavallis. It purported to be a permanent lease. It is settled law that a lease for more than one year of property

belonging to Thaika is void unless sanction of the Kasi had been obtained.

There was no plea in the written statement filed on behalf of the first Defendant claiming relief in respect of improvements and pleading that there

were equities in his favour entitling him to equitable relief. The twentieth Defendant in the case had pleaded that he had constructed certain buildings

on the property, but it was found by the trial Court that apart from the pleading there was no evidence and the finding was not challenged. The

learned Subordinate Judge referred to the contention of the first Defendant in his written statement for relief under the City Tenants'' Protection Act

and the claim for the value of the improvements, in case he was found liable to be evicted under that Act. Purporting to follow the decision of this

Court in Alagarswami Kone Vs. T.J. Andhoni, a decree has been passed providing that the present value of the buildings constructed after the

lease Exhibit B-1 will be determined in execution and the Plaintiffs will be allowed to recover the property only on deposit of the value of the

improvements ascertained in execution. The first Defendant is made liable for mesne profits only from the date of the deposit.

Learned Counsel appearing for the Thaika contends that the lower appellate Court ought not to have in the absence of a specific plea permitted

the first Defendant to raise the plea of equitable estoppel and claim the value of improvements. Secondly, it is pointed out that that principle will not

apply to the facts of this case and it is contended further that, in any event, the direction reserving the determination of the compensation payable to

execution proceedings is tantamount to permitting the first Defendant to continue in possession endlessly, as he may not move at all in the matter

The learned Subordinate Judge has failed to appreciate that the principle of permitting compensation to a tenant who has made improvements is

based on the law of equitable estoppel which has been developed by Courts of Equity and follows the rule laid down in Ramsden v. Dyson (1865)

L.R. 1 H.L. 129. The principle is summarised in the headnote in Alagarswami Kone Vs. T.J. Andhoni, as follows:

The doctrine of ""equitable estoppel"" familiarly known as the rule in Ramsdon v. Dyson ILR (1865) H.L. 129 is outside the statutory provisions of

the Transfer of Property Act and its applicability is not excluded by Section 51 of the said Act. The foundation upon which reposes the right of

equity to intervene is either contract or the existence of some facts which the legal owner is estopped from denying.

It is clear, therefore, that the basis is estoppel and it needs no authority for the position that estoppel can bind only parties and privies. Reference

may also be made in this connection to the observations of the Judicial Committee in The Canadian Pacific Railway Co. v. The King (1931) 61

M.L.J. 958, 971 (P.C.) where it is observed:

It is a doctrine which is sometimes alluded to under the name of ""equitable estoppel"". Whether there can be any estoppel which is equitable as

distinct from legal and whether ""equitable estoppel"" is an accurate phrase, their Lordships do not pause to enquire. The foundation upon which

reposes the right of equity to intervene is either contract, or the existence of some fact which the legal owner is estopped from denying.

In this connection learned Counsel appearing for the Appellants referred also to the decision of the Judicial Committee in Beni Ram v. Kundan Lal

ILR (1899) All. 496 (P.C.). It is sufficient to refer to the head note therein which is as follows:

A lessor is not restrained by any rule of equity from bringing a suit to evict a tenant, the term of whose lease has expired, merely by reason of that

tenant''s having erected permanent structures on the land leased, such building having been within the knowledge of the lessor, and there not having

been any interference on his part to prevent it.

To raise an equitable estoppel against the lessor precluding him from suing, on the determination of the tenancy, for possession, the tenant should

show facts sufficient to justify the legal inference that the lessor has by plain implication contracted that the right of tenaocy should be changed into

a right of permanent occupancy. Acquiescence by the lessor in this case was a legal inference to be drawn from such facts as were found. The

onus of establishing sufficient cause for an equitable estoppel had not been discharged by the tenant in this instance.

It will be apparent from these citations that to grant relief on the basis of equitable estoppel not only should there be pleadings, but there should

be evidence on which foundation can be laid for raising the plea. As already, stated, there is no plea and naturally no evidence has been let in. The

learned Subordinate Judge has gone on presumptions and has overlooked that any act of the second Defendant in excess of his powers would not

bind the Thaika or trust. There is no pleading and no evidence that the trustees or muthavallis as a body made any representations or by their

acquiescence allowed the first Defendant to incur expenditure on the property. Again a religious trust like the Thaika in the present case will not be

estopped by any act or conduct of the trustees committed in breach of trust. The lower appellate Court has not considered any of these aspects.

The result, therefore, is that the relief which the learned Subordinate Judge has granted cannot stand and the second appeal has to be allowed.

However, taking into consideration the fact that the first Defendant''s predecessor had been prevailed upon by the second Defendant to take up

the lease with a view to improve and benefit the Thaika and incidentally also profit himself and as it is stated that considerable expenditure has been

incurred on the property, I consider this a fit and proper case where some time must be granted to the first Defendant to remove the buildings and

constructions he might have erected on the property. I consider this is a case where six month''s time from this day may be granted for vacating and

surrendering vacant possession. The decree of the trial Court which is restored will be modified accordingly. The parties will bear their own costs

throughout.

No leave.