N.K. Muthu Kumara Mudaliar and Sons vs Rajesh Exports Limited

V. Jagannathan, J.—All these appeals are preferred by the Defendants in the respective suits i.e., O.S. Nos. 17503/2006, 17471/2006 and 17426/2006. All the said suits filed by the Plaintiff, who is common, for ejectment of the respective Defendants, came to be decreed and the Defendants are also directed to pay damages at the rate fixed by the trial court and they were directed to band over vacant possession of their respective schedule premises which are shop premises situated in Mohan Building, Chickapete, Bangalore. Therefore, these appeals are also disposed of by this common judgment as the arguments addressed by the learned Counsel for the Appellants also being one and the same.

The facts which are common to all these appeals arc trial, the Respondent-Plaintiff herein purchased Mohan Building, which comprised of 43 shop premises, and the said purchase was under a public auction held by the Income Tax Department on 8.3.2004 and the sale deed in favour of the Plaintiff was executed on 9.2.2005 as per Ex.P-5. Thereafter, the Defendants, who are the Appellants in the present appeals, and other tenants of Mohan Building questioned the auction sale before this Court in W.P. No. 12450/2004 (Ex.P-3) and the writ petition was dismissed and the writ appeal filed in W.A. No. 3494/2005 (Ex.P-4) was also dismissed as withdrawn following a memo filed jointly by the parties thereto.

After all these events, the Respondent-Plaintiff issued notice of termination of tenancy and after the expiry of the period required to be given as per law, the Plaintiff filed the suits before the trial court for ejectment of the respective Defendants. It was also contended in the plaint that the Defendants had not paid arrears of rent and, therefore, a prayer for arrears of rent as well as damages was also included.

The Defendants, who are the Appellants herein, took up the stand that there existed no landlord-tenant relationship between the Plaintiff and the Defendants and there is no arrears of rent payable and further, the Plaintiff had agreed to sell the respective shop premises to the respective Defendants but., that was not to be, as the Plaintiff had not come forward to finalise the terms of contract. The Defendants, however, arc ready to vacate the premises in case the Plaintiff furnishes details of construction of the new building in view of the M.O.U. agreed to between the parties. It was also contended in the written statement that the suits are also not maintainable.

The aforesaid pleadings of the parties in substance led the trial court to frame the following issues:

i) Does Plaintiff proves that it is absolute owner of the suit schedule property?

ii) Does Plaintiff further proves that the termination of tenancy is in accordance with law?

iii) Whether the Plaintiff is entitled for arrears of rentals claimed in the plaint?

iv) Whether Plaintiff is entitled for damages from the date of termination of tenancy till the date of ejectment of Defendant from the schedule property?

v) What decree or order?

The aforesaid issues-1 and 2 were answered in the affirmative and issue-3 was answered partly in the affirmative in respect of the Plaintiff''s entitlement of arrears of rentals as claimed in the plaint and issue-4 was answered in the affirmative and these findings were based on the appreciation of evidence let in before the trial court by the parties inasmuch as, on behalf of the Plaintiff, P.W.1 was examined and ten documents were marked and on the Defendants'' side, D.W.1 was examined and five documents were marked in evidence. Based on the findings so recorded, the learned trial judge decreed the suits of the Plaintiff and directed the Appellants herein to hand over vacant possession of the suit premises to the Respondent-Plaintiff within three months and to pay damages of Rs. 500/- per month from 1.11.2005 till handing over of the vacant possession of the schedule premises. It is this judgment of the trial court that is called in question by the aforesaid Appellants.

I have heard learned Counsel Shri C.S. Prasanna Kumar for the Appellant in R.F.A. No. 1538/2010 and learned Counsel Shri V. Anand for the Appellants in the other two appeals. I have also heard Shri G.S. Kannur for the Respondent in all these appeals and perused the records of this case.

Learned Counsel Shri Prasanna Kumar for the Appellant put forward the following contentions, to contend that the trial court ought to have dismissed the suit of the Plaintiff. The first of the contentions urged by him is that, the Defendant does not dispute the fact of he being the tenant earlier and also does not dispute the fact of the Plaintiff being the owner of the schedule premises. However, it is his argument that soon after the issuance of notice by the Income Tax Department under the Public Premises (Eviction of Unauthorised Occupants) Act, the status of the Defendant no longer was that of a tenant, but it was one of unauthorised occupant. As such, after coming into force of the Karnataka Rent Act, the Defendant became a protected tenant. Therefore, the suit itself was not maintainable on these grounds.

The second of the contentions urged is that the notice was issued by the department in the year 1991 and the Plaintiff purchased the suit premises along with other premises which are part of Mohan Building under auction in the year 2005 as per Ex.P-5. Therefore, between these two periods, more than 12 years had elapsed and, as such, the right of the Plaintiff''s vendor i.e., the Income Tax Department, got extinguished by virtue of Section 27 of the Limitation Act. Even on this ground, the trial court could not have decreed the suit of the Plaintiff. Merely because the Defendant and other tenants took up the stand before this Court in the writ petition that they are the tenants, such an admission by them will not take away the legal character of the status of the Defendant inasmuch as there can be no estoppel against law.

The next argument put forward is that, there is suppression of fact by the Plaintiff because, the Plaintiff did not mention about the M.O.U. entered into between the Plaintiff and the tenants as well as the compromise suggested before this Court by the Plaintiff on the basis of which a joint memo was filed. It is his argument that the terms of the M.O.U. will have to be construed as part and parcel of the covenants of lease and had the trial court been informed about the M.O.U. by the Plaintiff, the court would have moulded the relief because, on one hand, the Plaintiff sought for the ejectment of the Defendant from the schedule premises but on the other, the Plaintiff came forward and entered into a M.O.U. tinder which the Plaintiff was to enter into an agreement with each one of the tenants. As such, there is suppression of material facts and, therefore, for this reason also, the suits of the Plaintiff ought to have been dismissed.

The fourth of the contentions put forward by the Seamed counsel for the Appellant is that, the judgment of the trial court had become non-est because, the trial court had fixed the rent at Rs. 200/- per month and consequently, the trial court should have transferred the case to the Small Causes Court, which alone had the jurisdiction in view of the Full Bench decision of this Court in the case of Abdul Wajid Vs. A.S. Onkarappa, .

On the basis of the aforesaid contentions put forward, learned Counsel Shri Prasanna Kumar sought for setting aside of the judgment of the trial court and dismissing the Plaintiff''s suit by allowing the appeal preferred by the Defendant.

Learned Counsel Shri Anand for the other Appellants adopted the aforesaid arguments of Shri Prasanna Kumar and added further one more ground. The ground that is added by him is that, in respect of the M.O.U., there was a resolution passed by the company and in the said resolution, nothing was stated about filing of the suits for ejectment. As such, there was no proper authorization to file the suits for ejectment and the Appellants, pursuant to the M.O.U., also had a draft plan brought out and were hoping for the M.O.U. to be put into action. But, that was not to be. Therefore, the learned Counsel, by urging the aforesaid additional ground in addition to what has been referred to by learned Counsel Shri Prasanna Kumar, sought for the appeals being allowed by setting aside the trial court''s judgments and dismissing the suits of the Plaintiff.

Learned Counsel Shri G.S. Kannur for the Respondent-Plaintiff, repelling the aforesaid contentions put forward by the learned Counsel for the Appellants out the outset, submitted that, when the suits were filed by the Plaintiff, the trial court had the necessary jurisdiction or the inherent jurisdiction to entertain the suits and merely because the trial court had fixed the rent at a particular sum, that itself will not give scope to contend that the suits ought to have been referred to the Small Causes Court In addition, it is submitted that, when there is a dispute over the ownership, such an issue could not have been agitated before the Small Causes Court and thirdly, no contention was taken before the trial court by the Defendants nor was there any issue framed or finding recorded in respect of lack of jurisdiction.

As regards the contention concerning fraud is concerned, the submission made by learned Counsel Shri Kannur is that, the M.O.U. had not taken any concrete shape and, as per the terms of the M.O.U. separate agreements had to be entered into with each of the tenants and no such agreement also had taken place and M.O.U. itself was not a concrete contract as something more was to be done under the said M.O.U. Therefore, the question of the Plaintiff suppressing any material fact does not arise particularly when the suits are filed for ejecting of the Defendants.

As regards the other contentions put forward by the Appellants'' counsel, the submission made is that, the Defendants have not denied the ownership of the premises by the Plaintiff and by challenging the auction that was held by the Income Tax Department before this Court in the writ petition and failed to succeed in that and also having taken the stand that the Defendants are the tenants under the Plaintiff, it would not be permissible for the Appellants now to contend that they are the unauthorized occupants by virtue of the notice issued by the Income Tax Department under the Public Premises (Eviction of Unauthorized Occupants) Act.

As regards the argument concerning there being no resolution passed by the company for filing of the suits for ejectment, it is submitted by learned Counsel Shri Kannur for the Respondent that no such pleading was there before the trial court nor was there any issue framed by the trial court. Therefore, such a contention cannot be permitted to be taken before this Court. It is his further submission that the decision of the Full Bench referred to by the Appellant''s counsel Shri Prasanna Kumar has no application to the present cases. Moreover, each one of the suit schedule premises is more than 14 square meters and even for this reason also, the suits could not have been tried by the Small Causes Court particularly in the light of the Defendants'' disputing the ownership of the Plaintiff. The learned Counsel for the Respondent also relied on a decision in the case of B.S. Malleshappa v. Koratagigere B. Shivalingappa, reported in AIR 2001 Kar 384, in support of the aforesaid submissions.

In the light of the aforesaid contentions put forward and the decisions cited, the point for consideration is whether the trial court was justified in decreeing the suits of the Plaintiff.

As far as the first contention put forward by learned Counsel Shri Prasanna Kumar for the Appellant is concerned, it is his stand that the Appellant, though was a tenant under Sri Vidyavathi kapoor Trust and later under the Income Tax Department when the property was taken over by the department by virtue of the notice of termination issued by the department, the Appellant having continued to stay in possession of the suit premises has rendered the Appellant''s status as one of an unauthorised occupant. In other words, the status changed from that of a tenant to a protected tenant and finally to the position of an unauthorised occupant, and the notice issued by the department stands to testify the position of the Appellant. As more than twelve years had elapsed from the date of notice i.e., 1991, and as the present Plaintiff purchased the property under auction in the year 2005 as per Ex.P-5, even by virtue of Article 66 of the Limitation Act, the right of the Income Tax Department got extinguished by virtue of Section 27 of the Limitation Act as well.

As far as the aforesaid contention raised is concerned, it is not in dispute that the Appellants, who are the tenants at the first instance, continued to occupy the premises despite issuance of notice by the Income Tax Department. But, nevertheless, the Appellants, at no point of time, took up the stand that pursuant to operation of Section 27 of the Limitation Act, consequent to the right of the Income Tax Department having got extinguished, the Appellants have become the owners of the suit schedule premises. The learned Counsel for the Appellants did not contend that the Appellants claimed right over the suit premises on the ground of adverse possession. Once the adverse possession ground is not canvassed, it goes to show that the Appellants never considered themselves as owners of the respective suit premises. This fact is further reinforced by the conduct of the Appellants themselves as they challenged the auction that was held by the Income Tax Department before this Court in the writ petition referred to earlier i.e., Ex.P-3, and, therefore, it was not the case of the Appellants that they are the owners of the respective suit premises by virtue of Section 27 of the Limitation Act.

That apart, the sale deed executed by the Income Tax Department in favour of the present Plaintiff, which is also produced at Ex.P-5, further mentions in the sale deed itself that the tenants were required to attorn the tenancy to the Plaintiff who became the owner of the entire Mohan Building which consisted of 43 shops. The sale deed in favour of the Plaintiff was also not called in question by the Appellants in any proceeding till this day Therefore, the argument that the Appellants get their right pursuant to the operation of Section 27 of the Limitation Act has to be rejected.

As far as the contention that the status of the Appellants has become that of unauthorised occupants is concerned, the said stand of the Appellants Themselves is sufficient to hold that the suits tiled by the Plaintiff for ejectment is maintainable and the question of the suits to be instituted before the Small Causes Court, therefore, does not arise. This is the position in law as has been laid down by this Court in the case of Bangalore Printing & Publishing Co. Ltd. v. Soukar T. Premnath, reported in ILR 2004 Kar 1998. The court held in the said case that, if the tenant does not vacate the premises even after termination of the lease u/s 111, the status will not continue to be that of a tenant which is otherwise the case of a tenant governed by the provisions of the Rent Act and in such circumstances, the right of the lessor is only to file a suit for possession and to recover the premises by approaching the ordinary civil courts and not the rent courts.

As far as the reliance placed by the learned Counsel for the Appellants on the judgment of a Full Bench of this Court in the case of Abdul Wajid, supra, is concerned, in the said case, the Full Bench considered the ratio laid down in Sarojamma Vs. K.M. Venkatesh, ) with regard to the interpretation on Clause (b) of Article 4 of Schedule to Karnataka Small Causes Courts Act and the Full Bench held that the Courts of Small Causes have jurisdiction to take cognizance of not only a bare suit for ejectment but also a suit for ejectment with a prayer for recovery of mesne profits or damages, in respect of the premises to which Karnataka Rent Act is not applicable.

In the aforesaid decision of the Full Bench, it is also held thus at paragraph-112:

The Court of Small Causes is also a Court conferred with jurisdiction to try disputes of civil nature but with a limited jurisdiction in the sense, within the limits of pecuniary jurisdiction and within the limits of a specified nature of suits apart from those excluded from its purview in terms of Section 8 of the KSCC Act, is a court created for the purpose of convenience and expediency as it becomes obvious on a perusal of the provisions of the Act relating to its jurisdiction, that the Court of Small Causes is enabled to by only suits of simple nature, where complications are minimal and where disputes regarding title are not involved and such suits are also tried in an expedient manner and attains finality quickly by avoidance of an appeal provision.;

Therefore, it is clear that, while the Court of Small Causes is also a court conferred with jurisdiction to try disputes of civil nature, having regard to the pecuniary jurisdiction and the limits of specified nature of suits apart from those which are excluded from the purview of the Small Causes Court by virtue of Section 8 of the Karnataka Small Causes Courts Act, the purpose behind the establishment of the Courts of Small Causes, therefore, is to enable the Court of Small Causes to try only suits of simple nature where complications are minimal and where disputes regarding title are not involved.

The case on hand is not one which falls within the category of cases referred to above by the Full Bench and it is not a case of simple nature as could be seen from the stand taken by the respective parties in their pleadings. The Appellants, in their written statements, have denied the jural relationship between them and the Respondent-Plaintiff and further, they have also referred to the agreement entered into between them and the Plaintiff and reference is also made to the memo filed by the parties before this Court during pendency of the writ appeal and, therefore, the contentions raised in the written statements by the Appellants in the face of the stand taken by the Plaintiff goes to indicate that the case before the trial court was not a simple one, where the Appellants admit that they are the tenants and recognizes the Respondent as the landlord.

As the issues raised by the trial court for consideration also go to indicate that the suits that are filed and the controversy involved between the parties being a complicated one and the learned Counsel for the Appellant Shri Prasanna Kumar also raising the ground of the agreement entered into between the parties by virtue of the memo filed before this Court in the writ petition also should have been taken as one of the covenants of lease, all these issues, therefore, could not have been thrashed out by the Small Clauses Court as the matter is not a simple one nor the complications can be said to be minimal. Under these circumstances, the question of the trial court being not empowered or competent to deal with the suits does not arise.

The Appellants have taken up inconsistent stand as could be seen from the nature of the defence taken in the written statements and the submission that is made before this Court by learned Counsel Shri Prasanna Kumar for the Appellant. In one breath it is argued that the ownership of the Plaintiff is not disputed and in another breath it is contended that the Appellants are unauthorised occupants and by referring to the memo to be considered as forming part of the covenants of lease, the impression that the Appellants are the tenants is also pat forward and apart from all these inconsistencies, there is also the submission made that the Appellants have paid certain amount to the Respondent-Plaintiff pursuant to the M.O.U. entered into between Mohan Building Tenants Association and the Plaintiff and this also goes to show that the Appellants'' stand is not consistent one and they themselves are not very sure as to what is their status. Such being the complicated issues involved, the Court of Small Causes certainly is not the forum for the Plaintiff to go and claim the reliefs that are sought in the present suits.

As far as the contention put forward with regard to the judgment of the trial court being non-est is concerned, as rightly submitted by learned Counsel Shri Kannur for the Respondent, the trial court had the inherent jurisdiction to entertain the suit and merely because the court, at the end of its judgment, decided to fix the rent at Rs. 200/- per month, that itself will not take away the case from the jurisdiction of the trial court. The nature of the suits and the valuation of the suits for the purpose of court fee will not get altered merely because the court ultimately fixed the rent at Rs. 200/- per month, although a specific stand was taken in the plaint by the Plaintiff that the rate of rent being paid by the Defendants is Rs. 7,650/- per month and the shop had the area of 306.01 sq. ft.

In this regard, a decision of this Court in the case of B.S. Malleshappa Vs. Koratagere B. Shivalingappa and others, , will have to be referred to and dealing with the case under the Karnataka Court Fees and Suits Valuation Act, a Division of this Court had observed thus:

.... The Plaintiff in a suit being the dominus litis has the choice of filing a suit of a particular nature or seek a particular relief. Neither the Defendant nor the court can alter the suit as one for a different relief or as a suit failing in a different category and require the Plaintiff to pay court fee on such altered category of suit...

Therefore, the argument that the judgment of the trial court is non-est also does not persuade this Court to accept the same.

One other contention raised by learned Counsel for the Appellant Shri Prasanna Kumar which shall have to be considered is with regard to the ground of fraud. It was contended that, on one hand before the High Court, the Plaintiff came forward with a suggestion that the Appellant would be housed in the new complex to be put up and with that assurance, the writ appeal was withdrawn, but later on, the Plaintiff went and filed the suits for ejectment. The Plaintiff did not bring To the note of the trial court about the M.O.U. and, as such, the Plaintiff had played fraud on the court. Reliance is also placed by the learned Counsel in this regard on the Apex Court decision rendered in the case of Ramjas Foundation v. Union of India (Civil Appeal No. 6662/2004) and it was argued that there is a tendency on the part of the litigants to mislead the court by suppression of facts in court proceedings and such a conduct has to be put down with an iron hand.

No doubt, as has been observed by the Apex Court in the decision referred to above, cited by the Appellant''s counsel, truth constitutes an integral part of the justice delivery system and no court would tolerate the fraud being played by the litigants and the Supreme Court itself has said in several decisions that fraud vitiates everything. While agreeing with learned Counsel Shri Prasanna Kumar with regard to the fraud vitiating the whole proceedings, it has to be mentioned that, in the instant case, the suits of the Plaintiff were for the relief of ejectment of the Appellants and to direct the Appellants to hand over possession of the suit premises as the Appellants continued to squat on the premises without paying the rents for more than six long years.

The M.O.U. referred to by the learned Counsel for the Appellants is not the subject matter of the present suits and moreover, as rightly pointed by the learned Counsel for the Respondent, even the M.O.U. also mentions that separate agreements will have to be entered into between the Plaintiff and each one of the tenants and, therefore, the M.O.U. itself cannot be considered as concluded contract as something more was to be done as per the M.O.U. Apart from this, the submission made by the learned Counsel for the Respondent that, subsequent to the M.O.U., nothing has transpired and the Appellants also have not taken any step goes to indicate that the M.O.U. itself was a separate aspect and further submission made by the learned Counsel for the Respondent that, based on the M.O.U., some of the tenants have also filed suits for specific performance also indicates that the matter pertaining to the M.O.U. and subsequent agreements to be entered into between the parties was altogether a different aspect.

Yet another aspect to be taken note of is the submission made by the learned Counsel for the Respondent that even the M.O.U. was signed not by all the tenants who are in the shop premises of Mohan Building, but the association viz., Mohan Building Tenants Association, is one of the parties to the M.O.U. and that association does not represent all the tenants unlike the case of the memo that was filed before this Court being signed by each one of the tenants. Therefore, the question of there being any fraud being played by the Plaintiff does not arise and moreover, the trial court also has not framed any issue on the question of the Plaintiff having played fraud nor is there any finding recorded, muchless evidence was let in by the Appellants in this regard.

As far as the submission that the Respondent-Plaintiff is morally obliged to act in accordance with the assurance given on the basis of which the memo was filed by the parties is concerned, it is a settled position in law that the court is expected to decide a case in accordance with law and not on other considerations. It may not be out of place to mention that howsoever a court may be convinced morally of the guilt of an accused, yet, moral conviction cannot take the place of legal conviction. In other words, if a person is to be convicted for an offence, it has to be on the basis of the prosecution placing the evidence to prove the case beyond all reasonable doubt. Therefore, moral conviction cannot be considered as sufficient to hold the guilt of a person when there is no evidence pointing towards the case against the accused being proved beyond reasonable doubt.

On the very same analogy, even in the instant case when the suit was filed by the Respondent-Plaintiff, whose ownership is established through Ex.P-5 sale deed and when the said sale deed had remained unquestioned till this day and the Appellants having continued to occupy the shop premises for more than 36 years from the date of the termination notice given to them by the Income Tax Department and despite knowing that the Plaintiff has become the owner of the suit premises by virtue of the sale deed, continuing to stay in the shop premises without paying any rent whatsoever, therefore, led the Plaintiff to file the suits for ejectment of the Appellants and, therefore, it cannot be said that the Plaintiff is not entitled in law to file the suits for ejectment notwithstanding the other transactions between the parties.

Though learned Counsel for the Appellants Shri Prasanna Kumar referred to the advance amount said to have been paid by some of the Appellants and as it is also brought to the notice of the court that some of the Appellants have also filed suits for specific performance, these are all matters which will have to be thrashed out in different forums, but that itself will not be a ground to say that the Plaintiff cannot file a suit for ejectment on the strength of the plaint foundation.

The learned trial judge has considered the entire evidence from every angle as well as the evidence of the witnesses and the documents produced and has recorded a finding on all the issues and the same cannot be termed as perverse or unreasonable. The judgment of the trial court, therefore, does not call for any interference.

At this stage, learned Counsel for the Appellants sought for five years time to vacate the shop premises in question and, at the same time, the Appellants would be willing to pay ten times the rent which they were paying carlier i.e. around Re. 2,000/- per month. It was also submitted that the shop premises are situated in a very busy commercial location of Bangalore i.e., Chickapete, and the building in question also houses the other tenants numbering 43 and, therefore, five year''s time be granted to the Appellants.

On the other hand, the submission of the learned Counsel for the Respondent-Plaintiff is that the building itself is more than 60 years old and the Appellants were not paying rent for more than 16 years and, as such, grant of five years time would not be proper and the court may grant six months time. More over in the connected cases in R.F.A. No. 1478/2010 and others this Court has given six months time to vacate.

Having heard thus with regard to the grant of time, in my view, in the instant case the Appellants admit the ownership of the Plaintiff, and Appellants also have agreed voluntarily to pay a higher rent of Rs. 2,000/- per month. No such circumstance existed in R.F.A. No. 1478/2010 and other cases and under these circumstances the Appellants can be granted two years time to vacate in view of the Appellants agreeing to pay ten times the rent fixed by the trial court i.e., 200 x 10 = 2,000/- per month.

In the result, the following order is passed:

All the appeals are dismissed. The Appellants are given two years'' time from the date of receipt of this judgment to vacate and hand over vacant possession of their respective shop premises to the Respondent-Plaintiff and the Appellants shall also pay Rs. 2,000/- per month as submitted by their counsel from the date of purchase of the property by the Plaintiff i.e., from 9.2.2005, till the termination of tenancy i.e., 31.10.2005. In view of the rent being now modified and also enhanced in view of the submission made by the Appellants'' counsel, the question of the Appellants being liable to pay damages, therefore, does not arise.

Consequently, the judgments of the trial court get modified in the above terms. if the Appellants do not hand over vacant possession of the suit schedule premises at the end of two years, the Plaintiff is at liberty to take action to secure the vacant possession as per law.