LAW FOR ALL

Monday, February 4, 2019

when the lessor and the lessee enters into an agreement for sale/purchase of the tenanted premises where the lessor agrees to sell the tenanted premises to his lessee for consideration on certain conditions, whether, as a result of entering into such agreement, the Jural relationship of lessor and the lessee in relation to the leased property comes to an end and, if so, whether it results in determination of the lease.

Hon'ble Mr. Justice Abhay Manohar Sapre
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL Nos. 12371238 OF 2019
(Arising out of S.L.P.(C) Nos.2842028421 of 2017)
Dr. H.K. Sharma ….Appellant(s)
VERSUS
Shri Ram Lal ….Respondent(s)

J U D G M E N T
Abhay Manohar Sapre, J.
1. Leave granted.
2. These appeals are directed against the final
judgment and orders dated 03.10.2017 in Recall
Application No.871 of 2017 in W.P.(MS) No.396 of
2016 and dated 17.07.2017 in W.P.(MS) No.396 of
2016 passed by the High Court of Uttarakhand at
Nainital.
1
3. In order to appreciate the short controversy
involved in these appeals, few relevant facts need
mention infra.
4. The appellant is the “opposite party” whereas
the respondent is the “applicant” in the original
application out of which these appeals arise.
5. The respondent (applicant) is the owner of
house bearing No.5A, Court Road, Nardev Shastri
Road, Dehradun comprising of four rooms, one
kitchen, two verandahs and two galleries. The
respondent has let out a portion of this house
consisting of three rooms, one kitchen, latrinebathroom, one store and two verandas (hereinafter
referred to as the “suit house”) to the appellant on a
monthly rent of Rs.750/ as per the tenancy
agreement dated 22.07.1985 entered into between
them.
2
6. On 28.04.2008, the respondent filed an
application under Section 21(1) (a) of the U.P. Urban
Buildings (Regulation of Letting Rent and Eviction)
Act, 1972 (hereinafter referred to as “the UP Act”)
against the appellant (opposite party) before the
Prescribed Authority (Civil Judge) Sr. Division,
Dehradun seeking his eviction from the suit house.
7. The eviction was sought on the ground of
respondent's bona fide need for his residence and
also the members of his family. The respondent
alleged that he has retired from the services and
has no other suitable house of his own where he
can live and, therefore, requires the suit house for
his personal residence as also for the residence of
the members of his family.
8. The appellant (opposite party) contested the
application by filing the written statement. While
3
denying the ground of bona fide need, it was
contended that the appellant has entered into an
agreement on 13.05.1993 with the respondent for
purchase of the suit house and pursuant thereto he
has also paid huge amount to the respondent. It
was contended that since the parties have already
entered into an agreement of sale/purchase of the
suit house, the relationship of landlord/tenant
between them has ceased to exist and now it no
longer subsists and has come to an end.
9. It was also contended that consequent upon
the execution of the agreement between the parties
for the purchase of the suit house, the appellant is
no longer in possession of the suit house as tenant
but is now in possession as a purchaser of the suit
house in part performance of the agreement dated
13.05.1993 qua the respondent.
4
10. In other words, it was contended that the
relationship of landlord and tenant between the
parties has come to an end and now the same stood
converted into the new relationship of buyer and
seller of the suit house. It was, therefore,
contended that the application filed by the
respondent under Section 21(1) (a) of the UP Act
against the appellant for his eviction from the suit
house is not maintainable and, therefore, it is liable
to be dismissed on this short ground.
11. The Prescribed Authority by order dated
03.11.2010 dismissed the respondent's application
and held that since the parties entered into an
agreement dated 13.05.1993 for sale of the suit
house, the appellant was not required to pay any
monthly rent to the respondent inasmuch as
according to him the relationship of the landlord
5
and tenant between the parties has come to an end.
He also decided the issue of bona fide need against
the respondent and in appellant's favour.
12. The respondent felt aggrieved and filed an
appeal before the Appellate Court. By order dated
19.12.2015, the Appellate Court dismissed the
appeal and affirmed the order of the Prescribed
Authority. The respondent (applicant) felt aggrieved
and filed the writ petition under Article 227 of the
Constitution of India before the High Court of
Uttarakhand at Nainital.
13. By impugned order dated 17.07.2017, the
High Court allowed the writ petition and set aside
the order of the Appellate Court and the Prescribed
Authority. The appellant felt aggrieved and filed
recall application. The High Court by order dated
03.10.2017 dismissed the recall application.
6
14. The High Court held that mere agreement to
sell the suit house would not result in termination
of landlordtenant relationship between the parties
unless there is a stipulation in the agreement itself
to that effect. It was also held that since the
agreement in question relied on by the appellant
(opposite party) is not a registered agreement, he is
not entitled to raise the plea of part performance
based on Section 53A of the Transfer of Property
Act, 1882 (for short “the TP Act”) against the
respondent. The High Court further held that the
respondent being an old man has every right to live
in his house in the last leg of his life and more so
when he has no other house of his own in the city
and, therefore, he has made out a case of bona fide
need for his residence as also for the members of
his family.
7
15. It is against these two orders of the High Court,
the opposite party, i.e., the tenant has filed these
appeals by way of special leave in this Court.
16. So, the short question, which arises for
consideration in these appeals, is whether the High
Court was justified in allowing the respondent's
application filed under Section 21(1) (a) of the UP Act.
16A. Heard Mr. Jitendra Mohan Sharma, learned
senior counsel for the appellant and Mr. Narender
Hooda, learned senior counsel for the respondent.
17. Mr. Jitendra Sharma, learned senior counsel for
the appellant while assailing the legality and
correctness of the impugned order has essentially
argued one point.
18. Placing reliance on the decision reported in R.
Kanthimathi & Anr. vs. Beatrice Xavier (Mrs.)
[(2000) 9 SCC 339], learned counsel contended that
8
the High Court erred in allowing the application filed
by the respondent against the appellant.
19. It was his submission that the issue raised by
him in support of his submission remains no longer
res integra and stands decided by the decision
rendered in the case of R. Kanthimathi (supra) in
appellant's favour.
20. Learned counsel elaborated his submission by
contending that the moment the landlord and the
tenant enters into an agreement of sale/purchase of
the tenanted property while subsistence of the
tenancy and the tenant pursuant to such agreement
pays part consideration to the landlord towards sale
price of the tenanted premises, the relationship of
landlord and tenant comes to an end and ceases to
exist, i.e., it results in termination of the tenancy
agreement ipso facto and in its place brings into
9
existence a new relationship between the parties,
namely, that of the purchaser and the seller of the
tenanted premises.
21. It was his submission that it is for this reason,
the application filed by the respondent as landlord
of the tenanted premises to seek the appellant's
eviction as his tenant from the suit house was
wholly misconceived and not maintainable for want
of any subsisting relationship of landlordtenant
between them. It was, therefore, rightly dismissed
by the Prescribed Authority and the Appellate
Authority but wrongly allowed by the High Court by
the impugned order.
22. In reply, learned counsel for the respondent
(applicantlandlord) supported the impugned order
and contended that no case is made to interfere in
the impugned order.
10
23. Having heard the learned counsel for the
parties and on perusal of the record of the case, we
find no merit in these appeals.
24. The question, which arises for consideration in
these appeals, is when the lessor and the lessee
enters into an agreement for sale/purchase of the
tenanted premises where the lessor agrees to sell
the tenanted premises to his lessee for
consideration on certain conditions, whether, as a
result of entering into such agreement, the Jural
relationship of lessor and the lessee in relation to
the leased property comes to an end and, if so,
whether it results in determination of the lease.
25. In other words, the question that arises for
consideration is when the lessor enters into an
agreement to sell the tenanted property to his lessee
during the subsistence of the lease, whether
11
execution of such agreement would ipso facto result
in determination of the lease and severe the
relationship of lessor and the lessee in relation to
the leased property.
26. In our considered opinion, the aforementioned
question has to be decided keeping in view the
provisions of Section 111 of the TP Act and the
intention of the parties to the lease whether the
parties intended to surrender the lease on execution
of such agreement in relation to the tenanted
premises or they intended to keep the lease
subsisting notwithstanding the execution of such
agreement.
27. Chapter V of the TP Act deals with the leases
of Immovable property. This chapter consists of
Section 105 to Section 117.
12
28. A lease of an immoveable property is a
contract between the lessor and the lessee. Their
rights are governed by Sections 105 to 117 of TP
Act read with the respective State Rent Laws
enacted by the State.
29. Section 111 of the TP Act deals with the
determination of lease. Clauses (a) to (h) set out the
grounds on which a lease of an immoveable
property can be determined.
30. Clauses (e) and (f) with which we are
concerned here provide that a lease can be
determined by an express surrender; in case, the
lessee yields up his interest under the lease to the
lessor by mutual agreement between them whereas
Clause (f) provides that the lease can be determined
by implied surrender.
13
31. This Court in the case of Shah Mathuradas
Maganlal & Co. vs. Nagappa Shankarappa Malage
& Ors., (1976) 3 SCC 660 considered the scope of
clauses (e) and (f) of Section 111 of the TP Act and
laid down the following principle in Para 19 as
under.
“19. A surrender under clauses (e) and (f)
of section 111 of the Transfer of Property
Act, is an yielding up of the term of the
lessee's interest to him who has the
immediate reversion or the lessor's interest.
It takes effect like a contract by mutual
consent on the lessor's acceptance of the act
of the lessee. The lessee cannot, therefore,
surrender unless the term is vested in him;
and the surrender must be to a person in
whom the immediate reversion expectant on
the term is vested. Implied surrender by
operation of law occurs by the creation of a
new relationship, or by relinquishment of
possession. It the lessee accepts a new lease
that in itself is a surrender. Surrender can
also be implied from the consent of the
parties or from such facts as the
relinquishment of possession by the lessee
and taking over possession by the lessor.
Relinquishment of possession operates as an
implied surrender. There must be a taking of
possession, not necessarily a physical taking,
14
but something amounting to a virtual taking
of possession. Whether this has occurred is a
question of fact.
32. It is in the light of the aforementioned legal
principle, the question involved in this case has to
be examined.
33. Perusal of Agreement to Sell dated 13.05.1993
(Annexure P1) shows that though the agreement
contains 9 conditions but none of the conditions
provides much less in specific terms as to what will
be the fate of the tenancy. In other words, none of
the conditions set out in the agreement 13.05.1993
can be construed for holding that the parties
intended to surrender the tenancy rights.
34. A fortiori, the parties did not intend to
surrender the tenancy rights despite entering into
an agreement of sale of the tenanted property. In
other words, if the parties really intended to
15
surrender their tenancy rights as contemplated in
clauses (e) or (f) of Section 111 of the TP Act while
entering into an agreement to sell the suit house, it
would have made necessary provision to that effect
by providing a specific clause in the agreement. It
was, however, not done. On the other hand, we find
that the conditions set out in the agreement do not
make out a case of express surrender under clause
(e) or implied surrender under clause (f) of Section
111 of the TP Act.
35. It is for this reason, the law laid down by this
Court in the case of R. Kanthimathi (supra) has no
application to the facts of this case and is, therefore,
distinguishable on facts. Indeed, it will be clear from
mere perusal of para 4 of the said decision quoted
hereinbelow:
“4. As aforesaid, the question for
consideration is, whether the status of tenant
16
as such changes on the execution of an
agreement of sale with the landlord. It is
relevant at this junction first to examine the
terms of the agreement of sale. The relevant
portions of the agreement of sale records the
following:
“I the aforesaid Mrs. Beatrice Xavier
hereby agree out my own free will, to sell,
convey and transfer the property to you Mrs.
R. Kanthimathi wife of Mr. S. Ramaswami,
435 Trichy Road, Coimbatore for a mutually
agreed sale consideration of Rs.25,000/.
I shall be proceeding to Coimbatore and
shall execute the sale deed and present the
same for admission and registration before
the Registering Authority, accepting and
acknowledge payment of the balance of
consideration of Rs. 5000/ (Rupees five
thousand only) at the time of registration
and shall complete the transaction of sale
and conveyance as the property demised has
already been surrendered to your
possession.” (Emphasis in Original)
36. The words highlighted in italics of the
agreement were construed by Their Lordships for
holding that these italicized words in the agreement
clearly indicate that the parties had really intended
to surrender their tenancy rights on execution of the
17
agreement of sale and bring to an end their jural
relationship of the landlord and tenant.
37. As observed supra, such is not the case here
because we do not find any such clause or a clause
akin thereto in the agreement dated 13.05.1993 and
nor we find that the existing conditions in the
agreement discern the intention of the parties to
surrender the tenancy agreement either expressly or
impliedly.
38. In the light of the foregoing discussion, we are
of the considered opinion that the tenancy in
question between the parties did not result in its
determination as contemplated under Section 111
of TP Act due to execution of the agreement dated
13.05.1993 between the parties for sale of the suit
house and the same remained unaffected
18
notwithstanding execution of the agreement dated
13.05.1993
39. A fortiori, the respondent (lessor) was rightly
held entitled to file an application against the
appellant (lessee) under Section 21 (1) (a) of the UP
Act and seek the appellant's eviction from the suit
house after determining the tenancy in question.
40. Before parting, we make it clear that we
examined the terms of the agreement dated
13.05.1993 only for deciding the question as to
whether the execution of agreement, in any manner,
resulted in determination of the existing tenancy
rights between the parties in relation to the suit
house in the context of the TP Act and the UP Act
and not beyond it.
41. Coming to the next question as to whether the
respondent has made out a case of his bona fide
19
need for his residence and the members of his
family as contemplated under the UP Act, suffice it
to say, it being a question of fact, the finding
recorded by the High Court on this question does
not call for any interference in this appeal. It is
binding on this Court. Even otherwise, we find no
good ground to interfere in the finding for the
reason that the respondent being a landlord and a
retired man has every right to live in his house with
his family. Therefore, there is no perversity in the
finding of the High Court on this issue.
42. In the light of the foregoing discussion, we
concur with the reasoning and the conclusion
arrived at by the High Court in the impugned order.
It does not call for any interference.
43. The appeals thus fail and are accordingly
dismissed.
20
44. The appellant is, however, granted three
months’ time to vacate the suit house subject to the
appellant furnishing usual undertaking in this
Court within two weeks from the date of this order
and paying entire arrears of rent upto date
including three months rent to be paid in advance
to the respondent to enable him to remain in
possession for a period of three months from the
date of this order. The arrears of rent, as directed,
be paid by the appellant to the respondent within
one month from the date of this order.
………...................................J.
[ABHAY MANOHAR SAPRE]

....……..................................J.
[DINESH MAHESHWARI]
New Delhi;
January 28, 2019.
21

In other words, the question that arises for consideration is when the lessor enters into an agreement to sell the tenanted property to his lessee during the subsistence of the lease, whether 11 execution of such agreement would ipso facto result in determination of the lease and severe the relationship of lessor and the lessee in relation to the leased property.

“Where there is a sale of the same property in favour of a prior and subsequent transferee and the subsequent transferee has, under the conveyance outstanding in his favour, paid the purchasemoney to the vendor, then in a suit for specific performance brought by the prior transferee, in case he succeeds, the question arises as to the proper form of decree in such a case. The practice of the Courts in India has not been uniform and three distinct lines of thought emerge. According to one point of view, the proper form of decree is to declare the subsequent purchase void as against the prior transferee and direct conveyance by the vendor alone. A second considers that both vendor and vendee should join, while a third would limit execution of the conveyance to the subsequent purchaser alone. According to the Supreme Court, the proper form of decree is to direct specific performance of the contract between the vendor and the prior transferee and direct the subsequent transferee to join in the conveyance so as to pass on the title which resides in him to the prior transferee. He does not join in any special covenants made between the prior transferee and his vendor; all he does is to pass on his title to the prior transferee.”

“Where there is a sale of the same property in
favour of a prior and subsequent transferee
and the subsequent transferee has, under the
conveyance outstanding in his favour, paid
the purchasemoney to the vendor, then in a
suit for specific performance brought by the
prior transferee, in case he succeeds, the
question arises as to the proper form of
decree in such a case. The practice of the
Courts in India has not been uniform and
three distinct lines of thought emerge.
According to one point of view, the proper
form of decree is to declare the subsequent
purchase void as against the prior transferee
and direct conveyance by the vendor alone.
A second considers that both vendor and
vendee should join, while a third would limit
execution of the conveyance to the
subsequent purchaser alone. According to
the Supreme Court, the proper form of decree
is to direct specific performance of the
contract between the vendor and the prior
transferee and direct the subsequent
transferee to join in the conveyance so as to
pass on the title which resides in him to the
prior transferee. He does not join in any
special covenants made between the prior
transferee and his vendor; all he does is to
pass on his title to the prior transferee.”

Hon'ble Mr. Justice Abhay Manohar Sapre

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No.5177 OF 2009
Vijay A. Mittal & Ors. ….Appellant(s)
VERSUS
Kulwant Rai (Dead) Thr. LRs.
& Anr. …Respondent(s)
J U D G M E N T
Abhay Manohar Sapre, J.
1. This appeal is directed against the final judgment
and order dated 21.12.2007 passed by the High Court
of Punjab & Haryana at Chandigarh in RSA No.1537 of
1993 whereby the Single Judge of the High Court
dismissed the regular second appeal filed by the
appellants herein and upheld the judgment/decree
1
dated 15.04.1993 of the First Appellate Court in C.A.
No.7 of 15.02.1992.
2. In order to appreciate the controversy involved in
this appeal, it is necessary to set out the relevant facts
hereinbelow.
3. Appellant Nos.1 to 4 and 7 are the legal
representatives of the original defendant No.1Amar
Nath. Appellant No.5 (Yash Pal Mittal), who was the
original defendant No.2 also died and he is now
represented by his legal heirs (i) Rita Mittal (ii)
Akanksha and (iii) Akshay Mittal and Appellant No.6
(Sunil Mittal) is the original defendant No.3 whereas
respondent No.1 (Kulwant Rai) is the original plaintiff,
who also died and is now represented by his legal heirs
(i) Sudesh Goel, (ii) Ajay Goel and (iii) Sanjay K. Goel
and respondent No.2 (Atul Kumar) is the original
plaintiff No.2 in the civil suit out of which this appeal
arises.
2
4. In short, the civil suit out of which this appeal
arises was originally filed by one Kulwant Rai as
plaintiff No.1 and Atul Kumar as plaintiff No.2 against
the defendants, namely, (1) Amar Nath, (2) Yash Pal
Mittal, (3) Sunil Mittal and (4) Bal Kishandas.
5. During the pendency of the civil suit, Kulwant
Rai (Plaintiff No.1), Amar Nath (defendant No.1) and
Yashpal Mittal (defendant No.2) died and, therefore,
their legal representatives, on whom the right to sue
devolved as detailed above, were brought on record in
places of the original plaintiff/defendants in the civil
suit to enable them to continue the lis on behalf of
those who died.
6. As mentioned above, two aforementioned
plaintiffs (respondents herein) filed a civil suit against
the aforementioned four defendants (appellants herein)
on 19.03.1982 claiming a relief of specific performance
of the agreement dated 12.06.1979 in relation to the
suit property (as detailed in the plaint) situated at
3
Narain Dass Building, Durga Charan Road, Ambala
Cantt.
7. The suit was founded on the agreement dated
12.06.1979 entered into between the plaintiffs and the
defendant No.1 (Amar Nath) for sale of the suit
property for a sum of Rs.46,000/. According to the
plaintiffs, they paid a sum of Rs.5,000/ by way of
earnest money to defendant No.1 (Amar Nath) and the
sale deed in relation to the suit property was to be
executed on or before 31.12.1979 by defendant No.1
(Amar Nath) in favour of the plaintiffs on paying the
balance consideration before the subRegistrar.
8. It was alleged that defendant No.1 (Amar Nath)
instead of selling the suit property to the plaintiffs in
terms of agreement dated 12.06.1979 sold it to
defendant Nos. 2 and 3 on 27.11.1981. The plaintiffs
alleged that they were ready to perform their part of
the agreement but it was defendant No.1 (Amar Nath)
who failed to perform his part and committed breach
4
by selling the suit property to defendant Nos. 2 and 3
on a higher price and, therefore, the plaintiffs were
constrained to file the suit for seeking specific
performance of the agreement dated 12.06.1979.
9. Defendant No.1 (Amar Nath) died and, therefore,
he could not file his written statement. His legal
representatives, however, filed the written statement.
Their defense was threefold.
10. First – Amar Nath (defendant No.1) was not the
absolute owner of the suit property because the suit
property was a Joint Hindu Family property; Second,
Amar Nath (defendant No.1) was, therefore, not
competent to enter into an agreement to sell the suit
property; and the Third, the sale in question was not
for any legal necessity and, therefore, it was bad in law
and not binding on the legal representatives because
their consents were not obtained by Amar Nath
(defendant No.1) prior to entering into an agreement of
sale.
5
11. So far as defendant Nos. 2 to 4 are concerned,
they filed their written statement. They admitted that
the suit property belonged to Amar Nath(defendant
No.1). They averred that they purchased the suit
property from Amar Nath pursuant to the agreement,
which they had entered into with him somewhere in
the year 1978. They alleged that they had no
knowledge of the agreement of the plaintiffs and,
therefore, they were bona fide purchasers of the suit
property.
12. The Trial Court by judgment/decree dated
22.11.1991 dismissed the suit. It was held that the
agreement dated 12.06.1979 is proved; the plaintiffs
were ready and willing to perform their part of the
agreement but since Amar Nath was not competent to
enter into the agreement with the plaintiffs because
the suit property was a Joint Hindu Family property
and Amar Nath was only a Karta; and lastly, the
6
Plantiffs failed to aver that the sale was for the legal
necessity and for the benefit of the family.
13. The plaintiffs felt aggrieved and filed appeal
before the First Appellate Court. By judgment/decree
dated 15.04.1993, the First Appellate Court allowed
the appeal, set aside the judgment/decree of the Trial
Court and decreed the plaintiffs’ suit.
14. The First Appellate Court held that the sale deed
executed by Late Amar Nath in favour of defendant
Nos. 2 and 3 was bad in law inasmuch as the same
was obtained by a collusion so as to deprive the
plaintiffs of the fruits of their agreement dated
12.06.1979. It was also held that defendant Nos. 2
and 3 were not bona fide purchaser of the suit
property. It was also held that the suit property was
Joint Hindu family property and Amar Nath was its
Karta. It was also held that the agreement of sale
entered into by Amar Nath was binding on all
coparceners.
7
15. The defendants, therefore, felt aggrieved and filed
the second appeal before the High Court. By
impugned order, the High Court dismissed the second
appeal and upheld the judgment/decree of the first
Appellate Court.
16. It was held that Amar Nath executed the
agreement dated 12.06.1979 as a Karta of Joint Hindu
Family. It was also held that the agreement was
binding on Amar Nath and his legal representatives.
17. It is against this order, the defendants have
carried the matter to this Court in special leave to
appeal.
18. Having heard the learned counsel for the parties
and on perusal of the record of the case, we find no
merit in this appeal.
19. In the first place, in our considered opinion,
when the three Courts below have held against the
defendants and in favour of the plaintiffs that the
plaintiffs were ready and willing to perform their part
8
of the agreement, this finding was binding on the High
Court and also on this Court.
20. Indeed, the Trial Court had already recorded this
finding in plaintiffs’ favour but since the Trial Court
dismissed the suit on other grounds, the defendants
had a right to challenge this finding by filing cross
objection before the First Appellate Court in plaintiffs’
appeal but the defendants did not do so and accepted
this finding. The First Appellate Court while decreeing
the plaintiffs’ suit upheld this finding being not under
challenge and the High Court upheld it by dismissing
defendants’ second appeal.
21. A finding on the issue of readiness and
willingness is one of the important and relevant
findings in a suit for specific performance of an
agreement. It is a finding based on facts and once it is
recorded, it becomes a finding of fact.
22. In this view of the matter, unless such finding is
found to be against the pleadings or contrary to the
9
evidence or the law governing the issue, it is binding
on the High Court and also on this Court.
23. Learned counsel for the appellants was not able
to point out any infirmity or illegality in this finding. It
is apart from the fact that the appellants (defendants)
failed to challenge its legality and correctness at the
first appellate stage in an appeal filed by the plaintiffs,
which was the appropriate stage to challenge. It is,
therefore, binding on this Court.
24. The other argument of learned counsel for the
appellants (defendants) was that since the respondents
(plaintiffs) got impleaded only some legal
representatives out of eight legal representatives of late
Amar Nath in their first appeal and remaining legal
representatives were not impleaded, the decree of the
Trial Court dismissing the civil suit qua those legal
representatives, who were not made parties in the
appeal, had become final.
10
25. It was, therefore, urged that the First Appellate
Court by allowing the appeal filed by the plaintiffs and
decreeing their suit has passed two conflicting
decreesone against some which has decreed the suit
and other against some which has resulted in
dismissal of the suit. It is not legally permissible.
26. This submission was dealt with by the High
Court while answering 5th substantial question and
was rejected. In our view, the High Court was right for
the following reasons.
27. First, all the legal representatives of late Amar
Nath were already on record in the Trial Court in the
suit and all had taken similar defense in support of
their case against the plaintiffs. In other words, there
was no conflict of interest amongst them either inter se
or qua the plaintiffs.
28. Second, those legal representatives, who filed the
written statement, had filed a joint and common
written statement whereas those, who did not file the
11
written statement, had given their power of attorney in
favour of the legal representatives, who had filed the
written statement.
29. Third, one legal representative, who did not file
his written statement remained exparte. In these
circumstances, it was not necessary to implead him
as party respondent in the first appeal.
30. Fourth, it is a trite law that if out of all the legal
representatives, majority of them are already on record
and they contested the case on merits, it is not
necessary to bring other legal representatives on
record. The reason is that the estate and the interest
of the deceased devolved on the legal representatives is
sufficiently represented by those who are already on
record.
31. Fifth, the defendants, who were respondents in
the first appeal, did not raise any objection before the
First Appellate Court. Had such objection been raised,
the appellants (plaintiffs) would have cured the defect
12
by impleading them as party respondents before the
First Appellate Court.
32. As rightly argued by the counsel for the
respondents, the reason for not impleading some legal
representatives in the first appeal was that their
names were not shown in the decree of the Trial Court.
It was for this reason, the first appeal was filed by the
plaintiffs only against those legal representatives
whose names were shown in the decree.
33. In the light of this factual scenario and the
reasons set out above, we are of the considered
opinion that no case was made out by the appellants
to challenge the decree before the High Court on the
ground that the impugned decree has resulted in
passing any conflicting decree by the First Appellate
Court one of dismissal of the suit by the Trial Court
and the other decreeing the suit by the First Appellate
Court.
13
34. Learned counsel for the appellants (defendants)
then argued that the two Courts below were not
justified in declaring the sale made in favour of
defendant Nos. 2 and 3 by defendant No.1 as bad in
law. According to the learned counsel, it should have
been held to be a bona fide sale for consideration
without notices to the agreement of the plaintiff with
defendant No.1.
35. We find no merit in this submission for more
than one reason. First, the finding on this issue being
a concurrent finding of fact recorded against the
appellants by the Appellate Court and the High Court,
the same is binding on this Court.
36. Second, the finding apart from being concurrent
is otherwise not liable to be interfered with for the
reason that the sale made by defendant No.1 in favour
of defendant Nos. 2 and 3 was on the face of it, a
collusive sale made to avoid the agreement of the
plaintiffs.
14
37. Third, defendant Nos. 2 and 3 did not adduce any
evidence to prove that their agreement was prior in
point of time as against the agreement of the plaintiffs
and, therefore, they were entitled to get the sale deed
executed pursuant to their prior agreement.
38. Fourth, the legal representatives of Amar Nath
having stepped into his shoes were entitled to raise
that defense which was available to Amar Nath against
the plaintiffs in addition to one which was appropriate
to their character as legal representatives as provided
under Order 22 Rule 4(2) of the Code of Civil
Procedure, 1908.
39. Fifth, the plaintiffs were only entitled to prove the
existence of the valid agreement with the defendant
No.1 – Amar Nath and its performance by the plaintiffs
qua him. This finding of readiness and willingness was
recorded in plaintiffs’ favour throughout.
40. The Trial Court had framed two Issues (7 and 8)
on the questions as to whether the suit property was a
15
Joint Hindu Family property of Amar Nath and, if so,
whether Amar Nath was its Karta or not. The Trial
Court held that the suit property was the Joint Hindu
Family property of which Amar Nath was its Karta.
41. This Court in a case Sunil Kumar & Anr. vs.
Ram Parkash & Ors., (1988) 2 SCC 77 examined the
status and the powers of a Karta while dealing with
the Joint Hindu Family property in the following
words.
“6. In this appeal we are called upon to
decide the only question whether a suit for
permanent injunction restraining the Karta
of the joint Hindu family from alienating the
house property belonging to the joint Hindu
family in pursuance of the agreement to sell
executed already in favour of the predecessor
of the appellants, Jai Bhagwan, since
deceased, is maintainable. It is well settled
that in a Joint Hindu Mitakshara Family, a
son acquires by birth an interest equal to
that of the father in ancestral property. The
father by reason of his paternal relation and
his position as the head of the family is its
Manager and he is entitled to alienate joint
family property so as to bind the interests of
both adult and minor coparceners in the
property, provided that the alienation is
made for legal necessity or for the benefit of
the estate or for meeting an antecedent debt.
The power of the Manager of a joint Hindu
16
family to alienate a joint Hindu family
property is analogous to that of a Manager for
an infant heir as observed by the Judicial
Committee in Hunoomanpersaud Panday v.
Mussumat Babooee Munraj Koonweree (1856)
6 Moo Ind App 393)”
42. Keeping in view the aforementioned principle of
law and applying the same to the facts of the case at
hand, we are of the considered opinion that the Courts
below were justified in holding that the agreement
dated 12.6.1979 was binding on the legal heirs of
Amar Nath for the following reasons:
43. First, no issue was framed on the question of
“legal necessity”. In our opinion, it should have been
framed; Second, yet the First Appellate Court while
allowing the plaintiffs’ appeal recorded a categorical
finding that one son of Amar Nath had signed the
agreement in question and, therefore, it was a case
where legal representatives of Late Amar Nath were
aware of the existence of the agreement and also had
given their consent; and Third, this finding was upheld
17
by the High Court while dismissing the defendants’
appeal.
44. One cannot dispute the power of a Karta to sell
the Joint Hindu Family property. It is, indeed,
inherent in him. However, it is subject to certain
restrictions, namely, the sale should be for the legal
necessity and for the benefit of the family.
45. It is clear that Amar Nath had obtained the
consent of the legal heirs before entering into an
agreement for sale of the suit property to the plaintiffs.
The very fact that one son of Amar Nath was a
signatory to the agreement was sufficient to draw a
presumption that the agreement to sell was made by
Amar Nath with the consent of other coparceners. It is
also for the reason because none of the coparceners
had raised any objection till the filing of written
statement in the suit. The very fact that Amar Nath
sold the suit property to defendant Nos. 2 and 3 and
which was not objected to by his legal heirs showed
18
that the plea regarding legal necessity had no factual
basis to sustain.
46. It is for all these reasons, we are of the view that
the appellants (defendants) have failed to make out
any case so as to call for any interference in the
impugned judgment.
47. This takes us to examine another question which
arises in this case but was not taken note of by the
Courts below while decreeing the suit. It relates to the
nature of decree to be passed in this case.
48. The question arises in this way. The effect of
the decree passed in this case is that the original
defendant No.1, now represented by his legal
representatives (Appellant Nos.14 & 7) along with
legal representatives of original defendant No. 2, i.e.,
(i) Rita Mittal, (ii) Akanksha and (iii) Akshay Mittal,
and defendant No. 3 (Appellant No.6 herein) are
required to execute the sale deed in favour of legal
representatives of original plaintiff No.1, i.e.,
19
respondent No.1(i) Sudesh Goel, (ii) Ajay Goel and
(iii) Sanjay K. Goel and Atul Kumar, plaintiff No.2
(respondent No.2 herein) jointly.
49. Yet another effect of the decree is that the
transaction of sale of suit property between original
defendant No.1, now represented by his legal
representatives (Appellant Nos.14 & 7) and
defendant No.2 (Appellant No.5 herein), now
represented by his legal representatives and
defendant Nos.3(Appellant No.6 herein) is declared
bad in law and stands nullified. As a consequence
thereof, legal representatives of defendant
No.1(Appellant Nos.14 & 7) are required to return
Rs.48,000/ to original defendant No.2 (appellant
No.5 herein), now represented by his legal
representatives and defendant No.3 (appellant No.6
herein) in the absence of any contract to the
contrary in this behalf between the parties. The
reason being that once the sale is declared bad, the
20
transaction of sale fails and, therefore, the
seller(defendant No.1) has no right to retain the sale
consideration with himself and has to refund the
sale consideration to the buyers(defendant Nos.2 &
3) [See Section 65 of the Indian Contract Act].
50. The question arose before this Court in the
case of Lala Durga Prasad & Anr. Vs. Deep Chand
& Ors., AIR 1954 SC 75 as to what form of decree
should be passed in the case of specific performance
of contract where the suit property is sold by the
defendant, i.e., the owner of the suit property to
another person and later he suffers a decree for
specific performance of contract directing him to
transfer the suit property to the plaintiff in term of
contract.
51. The learned JudgeVivian Bose, J. examined
this issue and speaking for the Bench in his
inimitable style of writing, held as under:
21
“Where there is a sale of the same property in
favour of a prior and subsequent transferee
and the subsequent transferee has, under the
conveyance outstanding in his favour, paid
the purchasemoney to the vendor, then in a
suit for specific performance brought by the
prior transferee, in case he succeeds, the
question arises as to the proper form of
decree in such a case. The practice of the
Courts in India has not been uniform and
three distinct lines of thought emerge.
According to one point of view, the proper
form of decree is to declare the subsequent
purchase void as against the prior transferee
and direct conveyance by the vendor alone.
A second considers that both vendor and
vendee should join, while a third would limit
execution of the conveyance to the
subsequent purchaser alone. According to
the Supreme Court, the proper form of decree
is to direct specific performance of the
contract between the vendor and the prior
transferee and direct the subsequent
transferee to join in the conveyance so as to
pass on the title which resides in him to the
prior transferee. He does not join in any
special covenants made between the prior
transferee and his vendor; all he does is to
pass on his title to the prior transferee.”
52. We, therefore, consider it just and proper and
with a view to end this litigation between the
parties, which is pending since 1982 and also to
balance the equities amongst the parties that
defendant No.1 through his legal representatives
22
(Appellant Nos. 14 & 7 herein) would return a sum
of Rs.48,000/ to the legal representatives of
defendant No.2 (Appellant No.5 herein) and
defendant No. 3 (Appellant No.6 herein). This
direction we give by taking recourse to our powers
under Article 142 of the Constitution of India to do
complete justice between the parties to the lis
because we do not want another round of litigation
to go on for years in future between the defendants
inter se for recovery of this amount.
53. In the light of the foregoing discussion, the
appeal is disposed of by modifying the judgment
and decree as under:
(i) The legal representatives of defendant No.1
(Appellant Nos.14 and 7) shall deposit a sum of
Rs. 48,000/ in the executing Court for being paid
to the legal representatives of defendant No.2, i.e.,
(i) Rita Mittal, (ii) Akanksha and (iii) Akshay Mittal
23
and Defendant No.3 (Appellant No.6 herein) within
three months as an outer limit.
(ii) The legal representatives of original Plaintiff
No.1,(respondent No.1 herein) i.e., (i) Sudesh Goel,
(ii) Ajay Goel, and (iii) Sanjay K. Goel and Atul
Kumar, plaintiff No.2 (respondent No.2 herein) shall
deposit in the executing Court a sum of Rs.41,000/
for being paid to the legal representatives of original
Defendant No.1 (Appellant Nos.1 to 4 and 7 herein)
within three months as an outer limit.
(iii) The original defendant No.1, now represented
by his legal representatives (Appellant Nos.14 & 7)
along with legal representatives of original
defendant No. 2 and defendant No. 3 (Appellant
No.6 herein) will jointly execute the sale deed in
favour of legal representatives of original plaintiff
No.1, i.e., respondent No.1 herein (i) Sudesh Goel,
(ii) Ajay Goel and (iii) Sanjay K. Goel and Atul
Kumar, plaintiff No.2 (respondent No.2 herein) and
24
hand over the possession of the suit property to
them simultaneously and then will withdraw the
money deposited for them in Court.
54. The executing Court will ensure completion of
proceedings within the time fixed and record due
satisfaction of the decree in accordance with law. In
case of any default, the parties will be entitled to
put the decree in execution for enforcement of the
terms of the decree of this Court amongst the
defaulting parties.
55. In view of the foregoing discussion, the appeal
stands disposed of.
………...................................J.
[ABHAY MANOHAR SAPRE]

…...……..................................J.
[INDU MALHOTRA]
New Delhi;
January 28, 2019
25

Sunday, February 3, 2019

N. Sankaranarayanan ….Appellant(s) VERSUS The Chairman, Tamil Nadu Housing Board & Ors. ….Respondent(s)

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL Nos.73907391 OF 2009
N. Sankaranarayanan ….Appellant(s)
VERSUS
The Chairman, Tamil Nadu Housing
Board & Ors. ….Respondent(s)
WITH
CIVIL APPEAL Nos.74057406 OF 2009
Aruna Theatres & Enterprises
Pvt. Ltd. ….Appellant(s)
VERSUS
The Chairman, Tamil Nadu Housing
Board & Ors. ….Respondent(s)

J U D G M E N T
Abhay Manohar Sapre, J.
In Civil Appeal Nos.73907391 of 2009
1. These appeals are directed against the final
judgment and order dated 04.03.2008 passed by
1
the High Court of Judicature at Madras in Writ
Appeal No.1499 of 2005 and Writ Petition No.5718
of 2005 whereby the Division Bench of the High
Court dismissed the writ appeal and the writ
petition filed by the appellant herein.
2. In order to appreciate the controversy involved
in these appeals, it is necessary to set out few
relevant facts hereinbelow.
3. The appellant herein is the appellant in Writ
Appeal No.1499 of 2005 and writ petitioner in W.P.
No. 5718 of 2005 whereas respondent Nos. 1 to 6
herein are the respondents of the said writ appeal
and the writ petition out of which these appeals
arise.
4. In the aforesaid writ petition, the Single Judge
passed an interim order dated 07.03.2005. The
appellant herein (writ petitioner) felt aggrieved by
the said interim order and filed intra court appeal
before the Division Bench.
2
5. The Division Bench, with the consent of the
parties, decided the main writ petition itself on
merits and finding no merit therein dismissed the
writ petition filed by the appellant herein by the
impugned order, which has given rise to filing of
these appeals by way of special leave by the writ
petitioner in this Court.
6. On perusal of the list of dates, special leave
petitions, writ petition, its counter, the documents
enclosed in the appeal and lastly, the findings of the
Division Bench in the impugned order, it is clear
that the dispute, which was subject matter of the
writ petition and which is now carried in these
appeals at the instance of the writ petitioner
(appellant herein), is essentially between the
members of one family whose ancestor was Late S.
Narayanapillai. He died leaving behind six sons.
Late S. Narayanapillai owned several properties
3
which, on his death, were inherited by his legal
representatives.
7. The disputes arose between the members of
the family of Late S. Narayanapillai on his death. In
order to resolve the disputes, the members of the
family, therefore, executed one memorandum of
understanding on 24.09.1998 in relation to their
family properties. Unfortunately, the disputes did
not come to an end and, on the other hand,
persisted amongst them, which led to filing of the
cases in the Company Law Board by some members
against the other and also the writ petition in
question by the appellant herein.
8. The dispute, which is subject matter of the
writ petition out of which these appeals arise,
centers around to the land which is situated in a
scheme known as "Ashok Nagar Scheme" in
Chennai. The dispute is between the appellant, who
is one of the members of the family and respondent
4
No. 2, which is a Private Limited Company formed
by another member of the family.
9. One of the grievances of the appellant against
respondent No. 2 in the writ petition is that
respondent no 2 is running a petrol pump on a
portion of the land in question and has also let out
its part to respondent No. 3 who, in turn, is using
the same as marriage hall for public under the
name "Udayam Kalyana Mandapam". This act of
respondent No. 2 is being objected to by the
appellant amongst them.
10. It is with these background facts and the
grievance, which is elaborated, the appellant filed a
writ petition and sought therein a relief for issuance
of a writ of mandamus against the State authorities
namely, Tamil Nadu Housing Board (R1), Chennai
City Municipal Corporation (R4) and Chennai
Metropolitan Development Authority (R 5) directing
them jointly and severally to take appropriate action
5
in law against Respondent Nos. 2 and 3 and
restrain them from continuing with their activities
on the land. According to the appellant, the
activities undertaken by respondent No. 3 on the
land in question are illegal, hazardous and against
the public safety inasmuch as they are being carried
in violation of several provisions of the laws in force.
11. As mentioned above, the Division Bench
dismissed the writ petition finding no merit therein
with the following reasons in Para 17, which reads
as under:
“17. A perusal of the records produced
before this Court leaves no iota of
doubt that principally the dispute now
raised before this Court is a private
dispute between the various family
members having contesting the claims
to be on the Board apart from those
relating to the affairs of the Company.
It is an admitted fact that the company
is a closely held company by a family
members of six brothers. The present
dispute is nothing but a trial for the
show of their respective strength to
each other herein. A petition before
the Company Law Board is pending
consideration as regards the
continuance of the directorship of Mr.
6
Muthusami. Whatever be the merits of
the petition before the Company Law
Board, taking note of the various
contentions, which included a dispute
with reference to the area occupied by
the Theatre and the construction of the
mandapam and the petrol pump, this
Court in the order passed on 19.9.2007
in C.M.A. No.1900 of 2007 has rightly
directed the Company Law Board to
dispose of the main petition by
31.1.2008.”

12. The question, which arises for consideration in
these appeals, is whether the Division Bench was
justified in dismissing the appellant's writ petition
on the aforementioned reasoning.
13. We heard the learned counsel for the parties
and perused the record of the case. Having heard
the learned counsel, we are inclined to agree with
the reasoning and the conclusion arrived at by the
Division Bench in the impugned order.
14. In our considered opinion also, the writ
petition filed by the appellant was wholly
misconceived and deserved dismissal at the
threshold.
7
15. As rightly observed by the Division Bench, the
dispute sought to be raised by the appellant in his
writ petition was essentially a private property
dispute between the members of one family of which
the appellant and respondent No. 2 are the
members.
16. By indirect means such as the one resorted to
by the writ petitioner (appellant herein) by filing the
writ petition, a dispute inter se private parties of the
nature mentioned above could not be allowed to be
raised in the writ petition under Article 226/227 of
the Constitution for seeking issuance of mandamus
against the State and its authorities in relation to
the properties in question.
17. It is not in dispute that the appellant did not
file the writ petition in his capacity as publicspirited person, i.e., Public Interest Litigation (PIL).
It was, on the other hand, a writ petition was filed
by the appellant essentially to settle his personal
8
property rights disputes qua respondent Nos. 2 and
3. It is a settled law that no writ petition can be
entertained for issuance of any writ against any
private individual in respect of any private property
dispute. The remedy in such case lies in civil
Courts.
18. In other words, it is a settled law that the
questions such as, who is the owner of the land in
question, the appellant or respondent No. 2 or any
other member of their family, whether the land in
question was let out by respondent No. 2 to
respondent No. 3 and, if so, when, why and for
what purpose, who had the right to let out the said
land (appellant or respondent No. 2 or any other
member of the family), what was the arrangements,
if any, made in the memorandum of settlement in
relation to the land in question inter se members of
the family, whether it was breached or not and, if
so, by whom, what activities are being carried on
9
the said land and, if so, by whom, whether such
activities are legal or illegal etc. are not the
questions which can be raised by any private
individual against other private individual in the
writ petition under Article 226 of the Constitution.
19. Even if the writ petitioner did not raise
pointedly these questions for claiming reliefs in the
writ petition yet, in our view, such questions have
a material bearing while considering the grant of
reliefs claimed by the writ petitioner in the writ
petition.
20. It is not in dispute that some proceedings are
pending before the Company Law Board between
the parties in relation to their private property
disputes. If that be so, the parties to such
proceedings have to prosecute the proceedings
before CLB in accordance with law for obtaining
appropriate reliefs.
10
21. Before parting, we consider it apposite to
mention that we have not expressed any opinion on
the merits of the case. Rather, it is not possible to
express any opinion for want of jurisdiction. The
parties, therefore, will be at liberty to take recourse
to all judicial remedies, as may be available to them
in law, for adjudication of their respective
grievances in appropriate judicial forum against
each other.
22. Similarly, it is for the State authorities to see
as to whether any person(s) has/have contravened
or/and is/are contravening any provision(s) of any
Act or Rules or Regulations or Statutory Schemes in
any manner while using the properties and, if so,
what action is called for qua such persons and
against the activities carried on by such person(s) in
law. We, however, express no opinion on any of
these issues and leave it for the State authorities to
11
act against any such person(s) in accordance with
law.
23. We also make it clear that all such disputes
between the parties concerned on its merits will be
decided strictly in accordance with law by the
Court/Tribunal/Authority, as the case may be,
uninfluenced by any observation made by the High
Court in the impugned order and by this Court in
this order.
24. In the light of the foregoing discussion and
with the aforementioned observations and the
liberty, we find no merit in these appeals. The
appeals thus fail and are hereby dismissed. Interim
order, if any, passed stands vacated.
In Civil Appeal Nos.74057406 of 2009
These appeals are filed by respondent No.2 in
the writ petition and the writ appeal against the
final judgment and order dated 04.03.2008 passed
12
by the High Court of Judicature at Madras in W.A.
No.1499 of 2005 and W.P. No.5718 of 2005.
In view of the order passed above in CA
Nos.73907391 of 2009, these appeals are also
dismissed.
………...................................J.
[ABHAY MANOHAR SAPRE]

....……..................................J.
[DINESH MAHESHWARI]
New Delhi;
January 31, 2019.
13

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Monday, February 4, 2019

Sunday, February 3, 2019

N. Sankaranarayanan ….Appellant(s) VERSUS The Chairman, Tamil Nadu Housing Board & Ors. ….Respondent(s)