Veeriah vs Mohammed Kunju Koya

Balakrishnan, J.—Plaintiff in O.S. 817/84 on the file of the Principal Munsiffs Court, Alleppey is the Appellant in the second appeal. Plaintiff filed the suit for injunction to restrain the first Defendant from executing the order of the Rent Controller passed in R.C.P. 78/77. The suit was dismissed by the trial court which was later confirmed in appeal.

The facts in brief are as follows. The predecessor-in-interest of the Plaintiff let out the plaint schedule building to the first Defendant on 6-10-70 on a monthly rent of Rs. 75/- as per Ext. A3 rent deed. The tenancy was for a period of 5 months. The first Defendant sublet the plaint schedule building to the 2nd Defendant/who, in turn, sublet the building to the 3rd Defendant. Appellant filed R.C.P. 11/84 for eviction of the tenants. Prior to this Defendants 1 and 2 had filed R.C.P. 78/77 to evict the 3rd Defendant from the paint schedule building. R.C.P. 78/77 was allowed and the 3rd Defendant was directed to surrender possession of the building. During the pendency of R.C.P. 11/84 that is. R.C.P. filed by the Plaintiff, the 3rd Defendant, who was in possession of the building surrendered possession of the same to the Plaintiff on 6-11-84. Thereupon the Plaintiff filed a memo before the Rent Controller stating that R.C.P. 11/84 is not pressed and accordingly R.C.P. 11/84 was dismissed. The Plaintiff alleges that Defendants 1 and 2 are trying to execute the order they obtained in R.C.P. 78/77 by dispossessing the Plaintiff, who got possession of the building from the 3rd Defendant.

Both the courts have found that there was no surrender of the building by the 3rd Defendant and that the building was in the possession of the 3rd Defendant and the alleged surrender is not true.

The learned Counsel for the Appellant contends that the finding is erroneous since it is solely based on the common report, which says that some of the attacks belonging to the 3rd Defendant are still in the plaint schedule building. According to the Plaintiff-Appellant, the possession of the building was obtained by him as early as on 6-11-84 and the articles, if any, of the 3rd Defendant found in the building are kept with the permission of the Plaintiff. In view of the definite contention of the 3rd Defendant that he had surrendered the building to the Plaintiff, I do not think that the courts below were justified in holding that the Plaintiff was not in possession of the building. The evidence on this aspect was not correctly appreciated and even though it is a finding of fact I am constrained to reverse that finding.

The central point that arises in this case is whether there was any merger as contemplated u/s 111(d) of the Transfer of Property Act, in view of the surrender of the building by the 3rd Defendant. It is argued on behalf of the Appellant that the tenancy rights, if any, of the Defendants 1 and 2 merged with the larger properietory rights of the Plaintiff when their sublessee surrendered the building to the Plaintiff. I do not think that the contentions urged by the Appellant are true.

The short question to be considered is by the surrender of the building by the sub-lessee whether the tenancy between the lessor and the lessee would come to an end. The learned Counsel for the Appellant contended that by virtue of Section 111(d) of the T.P. Act there is a merger of the lesser right with the larger right of the lessor right. The relevant portion of Section 111(d) of the T.P. Act is as follows:

A lease of immovable property determines

(a)....

(b)....

(c)....

(d) in the interests of the lessee and the lessor in the whole of the property become vested at the same time on the person in the same right.

When a leasehold and a revision coincide there is a merger of a lesser estate in the greater. Admittedly leasehold is the lesser estate, for it is carved out of the estate of the owner, which is the reversion. The lesser estate is merged, that is, sunk or drowned in the greater. But in the instant case the surrender is by the sub-lessee. The lease between the lessor will continue and there cannot be any merger.

In Madan Pal v. Bashanti Kumar Shit AIR 1989 Cal. 233 the sub lessee acquired 1/3 right of the lessor. The Court held that there was no merger as the interest of the lessor and the lessee in the whole of the property did not vest at the same time in one person and the lease was not extinguished.

Badri Narain Jha and Others Vs. Rameshwar Dayal Singh and Others, was a case where one of the lessee purchased only part of the lessor''s interest. The Supreme Court held that there cannot be any merger under those circumstances. The Court held:

If the lessor purchases the lessee''s interest, the lease no doubt is extinguished as the same man cannot at the same time be both a landlord & a tenant, but there is no extinction of the lease if one of the several lessees purchases only a part of the lessor''s interest. In such a case the leasehold and the reversion cannot be said to coincide.

Applying the above principle of merger in the instant case it cannot be held that there was merger and the lease was extinguished.

Another contention urged by the Appellant''s counsel is that the lease in favour of the lessee is extinguished as he was only a "statutory tenant" at the time when the sub-lessee surrendered the property to the landlord, as he had only right of "irremoveability" and nothing more. It is true that the lease in favour of the lessee was terminated and an original petition was filed under Act 2 of 1965 to evict the lessee. It is during the pendency of these proceedings that sub-lessee surrendered the property. So, in fact, the lessee was continuing as a statutory tenant. The learned Counsel for the Appellant further contended that a statutory tenant has only a right to continue in possession and he is not interested in the property. The Appellant''s counsel relied on an earlier decision of the Supreme Court in Kaushalya Rani Vs. Gopal Singh, wherein Mis Lordship Shah J. speaking for himself and Hidayatullah, J. observed in the course of their judgment:

A statutory tenant has no interest in the premises occupied by him, and he has no estate to assign or transfer. ...A statutory tenant is, as we have already observed, a person who on determination of his contractual right, is permitted in remain in occupation so long as he observes and performs the conditions of the tenancy and pays the standard rent and permitted increases. His personal right of occupation in incapable of being transferred or assigned, and he having no interest in the property there is no estate on which subletting may operate.

Based on the above observation it was contended that a statutory tenant has no interest in the premises occupied by him and he has only a right of irremoveability. However, a later decision in Damadilal and Others Vs. Parashram and Others, while interpreting the provisions of the Madhya Pradesh Accommodation Control Act, 1961 held that in India the statutory tenant has not only the right of irremoveability or a personal right to remain in occupation, but he would enjoy all the benefits of the acts. The Supreme Court held:

We find it difficult to appreciate how in this country we can proceed on the basis that a tenant whose contractual tenancy has determined but who is protected against eviction by the statute, has no right of property but only a personal right" to remain in occupation, without ascertaining what his rights are under the statute. The concept of a statutory tenant having no estate or property in the premises which he occupies is derived from the provisions of the English Rent Acts. But it is not clear how it can be assumed that the position is the same in this country without any reference to the provisions of the relevant statute. Tenancy has its origin in contract. There is no dispute that a contractual tenant has an estate or property in the subject-matter of the tenancy, and heritability is an incident of the tenancy. It cannot be assumed, however, that with the determination of the tenancy the estate must necessarily disappear and the statute can only preserve his statute of irremoveability and not the estate he had in the premises in his occupation. It is not possible to claim that the "sanctity" of contract cannot be touched by legislation.

In A Calcutta decision in Krishna Prasad Bose v. Sarajulata 65 Cal.W.N. 293, 197-298 the Court made an interesting observation that:

the Rent Control and Tenancy Acts create a special word of their own. They speak of life after death. The statutory tenancy arises Phoenix-like out of the ashes of contractual tenancy. The contractual tenant may die but the statutory tenant may live long thereafter.

The statutory tenant is ex-tenant and still he is a tenant.

A question of similar nature came up for consideration before M.P. Menon, J. In Vasu v. Kallianikutty Amma 1982 KLT 53 : 1982 KLJ 36. It was held that by virtue of the definition of tenant in Section 2(6) of Act 2 of 1965 a tenant includes a person continuing in possession after the termination of his tenancy. Therefore he will continue as a tenant even after the termination of the tenancy. In other words, his statutory tenancy continues. The Court observed:

The expression "statutory tenancy" is something coined by the courts to explain the position of a tenant who continues to be in possession of the building during the pendency of Rent Control proceedings. Tenancy is strictly a matter of contract. If it is for a term it expires at the cod of the term. If there is no agreed term, it can be terminated by due notice. When the tenancy is terminated either by efflux of time or by notice, the landlord-tenant relationship ceases to be there. But still the tenant cannot be turned out of the building except under the provisions of the Rent Control Act where that applies. Section 2(6) of Act 2 of 1965 defines a tenant so as to include a person continuing in possession after the termination of his tenancy. That is, even after the termination of the contractual tenancy, he continues to be a tenant for the purpose of fine Act. He will have all the rights and obligations of a tenant as defined in the Act, inspite of the termination of his tenancy. It is this peculiar'' position of his under the provisions of the statute that is denoted by the expression statutory tenancy.

The law on the point seems to be clear. By virtue of the surrender of the building by the 3rd Defendant in favour of the Plaintiff there cannot be any merger of the leasehold right within the proprietory right of, the Plaintiff. The leasehold still existed. The first Defendant continued as a statutory tenant. Even though the expression statutory tenant is borrowed from the English law it may not be correct to import all the nuances and meanings attached to that term as found in the English law. In view of the provision of rent control enactments the statutory tenant is not only entitled to the right of irremove-ability, but also entitled to the benefit of the tenancy legislation, in this case, the benefit of Act 2 of 1965. So, the tenancy in favour of the first Defendant is still alive and by virtue of the surrender of possession of the building by the 3rd Defendant it cannot be said that the lease between the Plaintiff and the first Defendant was extinguished. The possession of the Plaintiff can only be taken as an agent of the 3rd Defendant and the first and 2nd Defendants are entitled to execute the order passed in R.C.P. 78/77. So, the injunction sought for by the Plaintiff has rightly been rejected by the courts below.

The second appeal fails and the same is dismissed with costs.