Nand Ram(D) Th. Lrs. . vs Jagdish Prasad(D)Th.Lrs on 19 March, 2020


Supreme Court of India

Nand Ram(D) Th. Lrs. . vs Jagdish Prasad(D)Th.Lrs on 19 March, 2020

Author: Hon’Ble Dr. Chandrachud

Bench: Hon’Ble Dr. Chandrachud, Hemant Gupta

                                                                                      REPORTABLE

                                          IN THE SUPREME COURT OF INDIA

                                            CIVIL APPELLATE JURISDICTION


                                           CIVIL APPEAL NO. 9918 OF 2011


                         NAND RAM (D) THROUGH LRS. & ORS.                           .....APPELLANT(S)

                                                              VERSUS

                         JAGDISH PRASAD (D) THROUGH LRS.                         .....RESPONDENT(S)




                                                  JUDGMENT

HEMANT GUPTA, J.

1. The challenge in the present appeal is to an order passed by the

High Court of Delhi on 12 th November, 2010 whereby the appeal

filed by the defendant was allowed and the suit for possession of

land comprising in Khasra No. 9/19 measuring 3 Bighas 11 Biswas

was dismissed.

2. The appellants-plaintiff No. 1 and plaintiff Nos. 2 to 8, as legal heirs

of one Bhagwana, filed a suit for possession asserting that they

were owners in possession of land measuring 3 Bighas 11 Biswas

comprising in Khasra No.9/19 and land measuring 1 Bigha 16
Signature Not Verified
Biswas comprising in Khasra No. 9/20/2, total measuring 5 Bighas 7
Digitally signed by
CHETAN KUMAR
Date: 2020.03.19

Biswas in the revenue estate of Village Tatarpur, Delhi.
12:30:17 IST
Reason:

3. The land measuring 1 Bigha 19 Biswas out of Khasra No. 9/19 and

1
16 Biswas out of Khasra No. 9/20/2, in total measuring 2 Bighas 15

Biswas was taken on lease for 20 years commencing from 23 rd

September, 1954 till 22nd September, 1974 on payment of Rs.235/-

per year by Jagdish Prasad, the defendant. It was agreed between

the parties that it will not be open to the plaintiff-lessor to seek

ejectment of the defendant-lessee from the leased premises,

however, if the rent for one year remained in arrear, then the

lessor would have the right to eject the lessee. The relevant

conditions read as under:

“7. Before the expiry of said lease it shall not be within
the rights of the lessor i.e., party of the First Part to seek
ejectment of party of the second part from the leased
premises.

xx xx xx

9. If rent for one year remains in arrears, then in that
eventuality the lessor i.e., party of the First Part will
have the right to eject the lessee i.e., party of the
Second Part from the property leased and the party of
the Second Part will remove all his malba from the land
leased and deliver vacant possession to the party of the
First Part.”

4. The entire leased land was acquired pursuant to the notification

dated 24th August 1959 under Section 4 of the Land Acquisition

Act, 18941. The Land Acquisition Collector determined a sum of

Rs.28,284.85 as the market value of the land acquired including

the super structure upon it. A dispute arose with regard to

apportionment of compensation and the same was referred to the

Reference Court. In such proceedings, three sets of claims were

1 for short, ‘Act’

2
raised, one by the appellants as owners of the land, another by

Ram Chand and Jagdish Prasad, as lessee of the land and certain

other persons in occupation of the hutments on the land acquired.

The defendant-respondent claimed apportionment of

compensation in lieu of his lease-hold rights by raising a claim

under Section 30 of the Act. The relevant paras from such claim

petition filed by the defendant read as under:

“1. That Shri Nand Ram and Shri Bhagwana sons of
Lakhi Ram were the owners of land comprised in Khasra
Nos.9/19 and 9/20/2 situated at Mauza Tatarpur, Delhi
State.

2. That the said Shri Nand Ram and Shri Bhagwana
leased out land measuring 1 bigha 19 biswa out of
Khasra No. 9/19 and 16 biswa out of Khasra No.9/20/2 to
Shri Jagdish Prasad s/o Shri Daurilal, resident of Tatarpur
the claimant herein for a period of twenty years by lease
deed dated 22.9.54 and registered on 11.10.54.”

5. The respondent-defendant claimed share in the compensation for 2

Bighas 15 Biswas of land on the ground that they were deprived of

the right to retain possession of that land for the unexpired period

of 14 years of the lease in their favour, which was for 20 years in

total. The Reference Court framed the following issues to

determine the claim of rival claimants:

“1. Whether Jagdish and Ram Chand mentioned at
Items No.27 and 28 are entitled to any share of the
compensation awarded for land measuring 2 Bighas and
15 Biswas which was on lease with them and if so, to
how much?

2. Whether Nand Ram and Bhagwana have any lien on
Rs.2263.20 for the structure belonging to Jagdish and
Ram Chand. If so, in what manner and to what extent?

3. Whether the Jhugis on the land measuring 2 Bighas

3
and 15 Biswas leased out in favour of Jagdish were built
by Dharam Chand etc. at their own expenses and they
are entitled to receive the compensation in respect of
their Jhuggis?

4. Relief.”

6. The learned Additional District Judge, in such reference, in its award

dated 21st October, 1961 (Ex.PW1/12), held that the respondent

had not paid rent for more than 12 months and, thus, in

accordance with clause 9 of the lease deed, the lease had come to

an end. Therefore, the defendant had no right to claim a share in

the compensation payable for the land leased to them. The

Reference Court held as under:

“8. Jagdish Chand as R.W.4 has admitted that he did not
pay any rent to Nand Ram and Bhagwan after the
receipt of the notice for acquisition of the land. Nand
Ram as A.W.2 has state rent has not been paid to him
for two years and that he served a notice also on the
lessee. Under clause 9 of the lease deed Ex.A/15, the
lease is to come to an end in case rent is not paid for 12
months. From the evidence on the record it is proved
that Ram Chand and Jagdish have not paid rent for more
than 12 months and thus in accordance with clause 9 of
the lease deed their lease had come to an end and
therefore they have no right to claim a share in the
compensation payable for the land leased out to them. I
decide this issue against Jagdish Prasad and Ram
Chand.”

7. It may be stated that a part of the land acquired, comprising in

Khasra No.9/19 was de-notified vide notification dated 18 th June,

1961 under Section 48(1) of the Act. Such land, measuring 1 Bigha

19 Biswas continued to be in possession of the defendant-lessee

i.e. respondent herein.

4

8. Thereafter, the plaintiffs served a notice dated 12 th February, 1981

claiming possession of the land comprising the aforementioned

Khasra No. 9/19, measuring 1 Bigha 19 Biswas, i.e. the land leased

that continued in possession with the defendant post the de-

notification. The suit was filed by the plaintiffs on 13 th March, 1981.

In the written statement filed by the defendant, it was asserted

that the land which was in possession of the defendant did not

form a part of the alleged lease deed and that the defendant was

in possession of this land in his own legal right. The defendant

contended that if the plaintiffs had any right in the land in

possession of the defendant, then the defendant had become the

owner of the land in question by adverse possession. It was

pleaded as under:

“10. That the land in possession of defendant does not
lie in the alleged khasra no. and is not covered by any
alleged lease deed. Without prejudice to this plea in
alternative it is submitted that the lease, if any, has
already come to an end, about more than 22 years
back, and defendant is owner in possession in his own
rights.”

9. The learned trial court decreed the suit after evidence was led by

the parties. The certified copy of the original lease deed was

produced as PW1/1 in respect of Khasra No. 9/19 and Khasra

No.9/20. The notice regarding termination of lease as well as the

revenue record was produced to prove the ownership of the

plaintiffs-appellants. The trial court also referred to the award

passed by the Reference Court (Ex.PW1/12) wherein the defendant-

respondent had claimed himself to be a tenant. The learned trial

5
court returned the following findings:

“Thus, the entire available record proves, conclusively
that the plaintiffs are the owners of the suit land and
that the suit land falls in Khasra No.9/19 Village
Tatarpur, Delhi as the land in suit is no longer under
acquisition, and neither is the land in possession of the
D.D.A. as is indicated by Ex.PW1/13. DW2 has been
unable to deny that there has been a notification for
issuance of denotification of acquisition of Khasra
No.9/19 Village Tatarpur, Delhi Ex.PW1/12, Ex.PW5/1,
Ex.PW1/13, are all indications of admissions by the
defendant that the plaintiffs are owners of the suit land
and that the defendant was a lessee of the same under
a registered lease deed dt.22.9.54 under Nand Ram and
Bhagwana.

Thus, issue No. 3 is decided in favour of the plaintiff and
it is hereby held that the land in suit falls in Khasra
No.9/19 Village Tatarpur, Delhi and that the plaintiffs are
the owners of the same, as mere receipt of
compensation for acquisition of land which has been
denotified from acquisition does not in any manner
make the plaintiff any less the owners of the land in suit.
In any event the plaintiffs are certainly the landlords of
the land in suit in terms of Ex.PW1/14 the lease deed,
executed between Bhagwana and Nand Ram, and the
defendant, and execution thereof having been admitted
in the claim of the defendant in Ex.PW5/1.”

10. In appeal against the said judgment and decree, the defendant

moved an application under Order VI Rule 17 of the Civil Procedure

Code, 19082 to amend his written statement and asserted that the

suit was barred by limitation under Article 66 of the Schedule to the

Limitation Act, 19633. The defendant asserted that the lease had

come to an end when a notice for forfeiture of termination of the

lease dated 23rd September, 1954 was issued by the plaintiffs

which is Ex.A-3 in the proceedings before the Reference Court. In

2 for short, ‘Code’
3 for short, ‘Limitation Act’

6
reply to such application, the stand of the plaintiffs was that the

termination of tenancy is not possible vide the said notice in view

of Sections 111 and 106 of the Transfer of Property Act, 18824 as

the lease is said to be terminated w.e.f. 23 rd September, 1959

whereas the notice is required to be served for at least 15 days’

time expiring on the last date of tenancy month. The learned First

Appellate Court did not permit the defendant to amend the written

statement but the question of limitation was allowed to be raised

on the basis of material available on record.

11. The learned First Appellate Court affirmed the findings recorded by

the trial court. It did not find any merit in the argument raised by

the defendant that the award passed by the Reference Court

(Ex.PW1/12) produced by the appellants operated as res judicata.

The First Appellate Court found that the plea of forfeiture was

totally inconsistent and contradictory to the averments made in the

original statement. Further, that the plea of limitation was nothing

but an ingenuity of the counsel for the defendant.

12. Thereafter, the defendant preferred a second appeal. The High

Court framed the following two substantial questions of law:

“1. Whether the judgment rendered by the Land
Acquisition Court on 21st August, 1961 (Ex.PW-1/12)
operates as res judicata between the parties as regards
the title of the suit property?

2. If the first question is answered in the negative,
whether the suit filed by the Respondent for possession
is barred by time?”
4 for short, ‘TP Act’

7

13. The High Court allowed the second appeal holding that the finding

recorded in the award (Ex.PW1/12) that upon non-payment of rent

for 12 months, the lease had come to an end, had attained finality.

Therefore, such finding would operate as res judicata. The High

Court held as under:

“17. Ex.PW1/12 having been rendered by a court of
competent jurisdiction had returned a finding that the
lease between the parties stood determined as rent
since the last 12 months had not been paid by the
appellant/defendant. Reference to the notice dated
13.9.1960 terminating the lease had also been made.
There is no dispute to this factual submission which is
even otherwise a part of the record. In these
circumstances, it cannot be said that this finding
Ex.PW1/12 was only an incidental or obiter observation
made by the Land Acquisition Court/ADJ which is not
binding on the parties. Ex.PW1/12 had while adverting
to the notice dated 13.9.1960 categorically held that
lease between the parties stood determined in terms of
clause 9.”

14. The High Court further held that period of limitation under Article

67 of the Limitation Act is 12 years, the period for which

commences from the date when the tenancy is determined. Since

the tenancy was determined on 23th September, 1960, the suit filed

on 13th March, 1981 was beyond the period of limitation.

15. Mr. Vishwanathan, learned senior counsel for the appellants raised

two-fold arguments. First, that Harpal Singh, one of the plaintiffs,

died on 4th December, 1997 during the pendency of the appeal

before the First Appellate Court. Since his legal representatives

were not brought on record, the appeal stood abated.

8
Consequently, the High Court could not have entertained the

second appeal and reversed the judgment and decree passed by

the First Appellate Court. Second, that clause 9 of the lease did not

mean that if the rent for one year was not paid, the lease will stand

terminated but only that the lessor would get a right to eject the

lessee. It was further argued that the defendant had not placed on

record the pleadings of the previous litigation which alone would

determine whether the subsequent proceedings were barred by the

principles of res judicata. It was argued that the issue before the

Reference Court was restricted to the entitlement of payment of

compensation on acquisition of lease hold rights. The right of the

landlord to claim possession was not a subject matter of reference

nor could it be a subject matter of such reference. Therefore, the

decision of the Reference Court was neither res judicata nor

constructive res judicata within the meaning of Explanation IV to

Section 11 of the Code.

16. It was also argued that the suit was within the period of limitation

as neither Article 67 nor Article 66 would be applicable but that the

plaintiffs had a right to seek possession under Article 65 of the

Limitation Act, which confers a right on the plaintiffs to seek

possession from a person who is in possession, by virtue of his title.

It is for the defendant to prove that his possession is open,

continuous and uninterrupted so as to ripen the adverse possession

into ownership. It was argued that the defendant had not denied

the tenancy prior to the filing of the present suit for possession.

9
Since the defendant continued to be in possession after the expiry

of lease without any payment of rent, the possession of the

defendant was not that of a tenant holding over but that of a

tenant at sufferance. In terms of Section 116 of the TP Act, the

acceptance of rent by the appellants will alone create a new

tenancy or the status of the tenant as tenant holding over. It was

open to the appellants to seek eviction on account of the non-

payment of rent, but the possession of the respondent could not

ripen into title as his possession was that of a tenant at sufferance.

It was, thus, argued that the possession of the defendant was

merely permissive possession under a lease deed, therefore, the

plea of adverse possession was not available to the defendant.

17. The defendant-respondent contended that in the award of the

Reference Court (Ex.PW1/12), there was a finding to the effect that

the lease stood determined. The reliance is placed upon the

findings recorded by the High Court that the tenancy stood

terminated vide notice dated 13th September, 1960 (sic 23rd

September, 1960). Therefore, the period of limitation commenced

from the date of the notice terminating the lease or in any case

from the date of the award of the Reference Court, thus, the suit

filed by the plaintiffs was barred by limitation.

18. We have heard the learned counsel for the parties. The question

that is required to be examined is as to which Article of the

Limitation Act would be applicable in the present case i.e. Article

10
65
, as asserted by the appellants or Articles 66 or 67, as asserted

by the respondent and that from which date the period of limitation

would commence. For convenience, the Articles are reproduced

hereunder:

Description of Suit Period of Time from which
limitation period begins to run

65. For possession of immovable Twelve When the possession
property or any interest therein years of the defendant
based on title. becomes adverse to
the plaintiff.

66. For possession of immovable Twelve When the forfeiture is
property when the plaintiff has years incurred or the
become entitled to possession condition is broken.
by reason of any forfeiture or
breach of condition.

67. By a landlord to recover Twelve When the tenancy is
possession from a tenant. years determined.

19. Section 111 of the TP Act provides for determination of lease in the

eventualities mentioned therein. Section 111 of the TP Act reads

thus:

“111. Determination of lease. – A lease of immoveable
property determines-

(a) by efflux of the time limited thereby:

xx xx xx

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

(h) on the expiration of a notice to determine the lease,
or to quit, or of intention to quit, the property leased,

11
duly given by one party to the other.”

20. In a judgment reported as Sajjadanashin Sayed Md. B.E. Edr. v.

Musa Dadabhai Ummer5 this Court held that if a matter was only

“collaterally or incidentally” in issue and decided in an earlier

proceeding, the finding therein would not ordinarily be res judicata

in a latter proceeding where the matter is directly and substantially

in issue. This Court found that the statement of law delineated by

Mulla6 is the correct one, that if the issue was “necessary” to be

decided for adjudicating on the principal issue and was decided, it

would have to be treated as “directly and substantially” in

issue and if it is clear that the judgment was in fact based upon

that decision, then it would be res judicata in a latter case. Such is

the test for deciding into which category a case falls. One has to

examine the plaint, the written statement, the issues and the

judgment to find out if the matter was directly and substantially in

issue (Ishwer Singh v. Sarwan Singh7 and Syed Mohd. Salie

Labbai v. Mohd. Hanifa8 ). Which matters are directly in issue

and which are only collaterally or incidentally in issue, must be

determined on the facts of each case. A material test to be applied

is whether the court considers the adjudication of the

issue material and essential for its decision.

21. This Court in Sajjadanashin Sayed approved a decision by the

5 (2000) 3 SCC 350
6 15 Edn., P. 104
7 AIR 1965 SC 948
8 (1976) 4 SCC 780

12
Privy Council reported as Run Bahadur Singh v. Lucho

Koer9 wherein claim of rent from a tenant on the basis survivorship

of Joint Hindu Family property was raised by “c” brother of the

deceased. Two issues were framed in such suit ( 1) whether the

deceased alone received the whole rent of the property in his

lifetime, or whether the rent was received by him jointly with his

brother C; (2) whether any rent was due and if so, how much was

due from B. The finding on the first issue was that the deceased

alone received the whole rent in his lifetime. Subsequently, C sued

the widow for declaration that he and his brother were joint, and he

claimed the property by right of survivorship. The question arose

whether the deceased and C were joint or separate. The earlier

finding was held not res judicata inasmuch as the matter was not

“directly and substantially” in issue in the earlier suit. It was in

issue in the earlier suit only “collaterally or incidentally”, as it did

not cover the entire question of C’s title but related merely to the

joint or separate receipt of rent.

22. In Asgar & Ors. v. Mohan Varma and Others10, the

predecessors-in-interest of the appellant relied upon the sale of

land by M/S K. J. Plantations. The predecessor-in-interest of M/s. K.

J. Plantation was the lessee for a period of 75 years vide lease deed

dated 25th November, 1897. The lease expired by efflux

of time in 1972. In the meantime, the land was transferred by the

lessee to different persons. The High Court held the assignees were

9 ILR (1885) 11 Cal 301 : 12 IA 23 (PC)
10 Civil Appeal No. 1500 of 2019 decided on 05.2.2019

13
tenants at sufferance and were not entitled to any estate or

property. Before this Court, the argument was raised that they

were entitled to remain in possession until the compensation was

paid for the improvements made in terms of provisions of Kerala

Land Conservancy Act, 1957. Such claim was resisted by the land

owners inter alia on the ground that the lease had come to an end,

therefore, the assignees from the lease were tenant at sufferance

and the finding in proceedings under Order XXI Rule 97 of the Code

would operate as res judicata. This Court held as under:

“40. We are not inclined to decide this question on a pri-
ori consideration, for the simple reason that under the
CPC, both res judicata (in the substantive part of Section

11) and constructive res judicata (in Explanation IV) are
embodied as statutory principles of the law governing civil
procedure. The fundamental policy of the law is that there
must be finality to litigation. Multiplicity of litigation en-
sures to the benefit, unfortunately for the decree holder,
of those who seek to delay the fruits of a decree reaching
those to whom the decree is meant. Constructive res judi-
cata, in the same manner as the principles underlying res
judicata, is intended to ensure that grounds of attack or
defence in litigation must be taken in one of the same
proceeding. A party which avoids doing so does it at its
own peril. In deciding as to whether a matter might have
been urged in the earlier proceedings, the court must ask
itself as to whether it could have been urged. In deciding
whether the matter ought to have been urged in the ear-
lier proceedings, the court will have due regard to the am-
bit of the earlier proceedings and the nexus which the
matter bears to the nature of the controversy. In holding
that a matter ought to have been taken as a ground of at-
tack or defence in the earlier proceedings, the court is in-

dicating that the matter is of such a nature and character
and bears such a connection with the controversy in the

14
earlier case that the failure to raise it in that proceeding
would debar the party from agitating it in the future.”
(emphasis supplied)

23. The issue in the proceedings under Section 30 of the Act, before

the Reference Court was restricted to the apportionment of

compensation, consequent to the acquisition of the leased land.

The argument was raised that the lessee had another 14 years of

the lease period, therefore, the lessee claimed compensation in

lieu of the unexpired lease period. The issue was restricted to the

payment of compensation on account of the unexpired period of

lease. The issue in question was not the title of the appellants or

the eviction of the respondent. Still further, the finding of the

Reference Court, as reproduced above, is that the respondent had

no right to claim a share in the compensation. The entitlement of

the appellants to claim possession from the tenant was not an

issue in the previous proceedings.

24. Before the award was announced by the Reference Court, part of

the land acquired was de-notified. After denotification of the land,

the respondent continued to be in possession and the title of the

appellants as owners stood restored. De-notification under Section

48 of the Act is possible only when possession has not been taken

and the land has not been vested in the State. The effect of de-

notification is that the land comprising Khasra No. 9/19 was never

deemed to be acquired. Once the land was de-notified, the status

of the parties as they existed prior to notification under Section 4 of

the Act stood revived.

15

25. The High Court has relied upon the findings recorded by the

Reference Court that the tenancy stood terminated so as to deny

the apportionment of the compensation in respect of acquisition of

land. The issue examined by the Reference Court was whether the

defendant was entitled to any share of compensation awarded for

the land acquired. Such issue was decided against the defendant.

It is this finding that the defendant is not entitled to any share of

the compensation awarded which operates as res judicata in a

subsequent suit and not the reasonings recorded by the Court for

arriving at such a finding. In a judgment reported as Union of

India v. Nanak Singh11, it has been held that what operates as

res judicata is the decision and not the reasons given by the Court

in support of the decision.

26. In another judgment reported as Mathura Prasad Bajoo Jaiswal

& Ors. v. Dossibai N.B. Jeejeebhoy12, a three-Judge Bench of

this Court held that the previous decision on a matter in issue

alone is res judicata, the reasons for such decision are not res

judicata. This Court held as under:

“5… A decision of a competent Court on a matter in issue
may be res judicata in another proceeding between the
same parties: the “matter in issue” may be an issue of
fact, an issue of law, or one of mixed law and fact. An
issue of fact or an issue of mixed law and fact decided by
a competent Court is finally determined between the
parties and cannot be re-opened between them in
another proceeding. The previous decision on a matter in
issue alone is res judicata: the reasons for the decision
are not res judicata. A matter in issue between the parties
11 AIR 1968 SC 1370
12 (1970) 1 SCC 613

16
is the right claimed by one party and denied by the other,
and the claim of right from its very nature depends upon
proof of facts and application of the relevant law thereto.
A pure question of law unrelated to facts which give rise
to a right, cannot be deemed to be a matter in issue.
When it is said that a previous decision is res judicata, it is
meant that the right claimed has been adjudicated upon
and cannot again be placed in contest between the same
parties. A previous decision of a competent Court on facts
which are the foundation of the right and the relevant law
applicable to the determination of the transaction which is
the source of the right is res judicata. A previous decision
on a matter in issue is a composite decision: the decision
on law cannot be dissociated from the decision on facts
on which the right is founded. A decision on an issue of
law will be as res judicata in a subsequent proceeding
between the same parties, if the cause of action of the
subsequent proceeding be the same as in the previous
proceeding, but not when the cause of action is different,
nor when the law has since the earlier decision been
altered by a competent authority, nor when the decision
relates to the jurisdiction of the Court to try the earlier
proceeding, nor when the earlier decision declares valid a
transaction which is prohibited by law.”

27. Thus, the finding returned in the award of the Reference Court (Ex.

PW1/12) that the lease stood determined on account of non-

payment of rent was a finding made by the reference Court for a

limited purpose i.e. not to accept the defendant’s claim for

compensation. Such finding cannot be binding on the parties in a

suit for possession based on title or as a lessor against a lessee.

Section 11 of the Code bars the subsequent Court to try any suit or

issue which has been directly and substantially issue in a former

suit. The issue before the Reference Court was apportionment of

compensation and such issue having been decided against the

defendant, the reference to notice for termination of tenancy does

not operate as res judicata. Therefore, the finding recorded by the

17
High Court that the order of the Reference Court operates as res

judicata was clearly not sustainable. The first substantial question

of law has been, thus, wrongly decided.

28. In respect of second question of law examined by the High Court

that the plaintiff’s suit was barred by limitation is based upon the

notice dated 23rd September, 1960 produced in proceedings before

the Reference Court as Ex.A-3. The reference to such notice was

made in an application for amendment of the written statement

under Order VI Rule 17 of the Code filed before the First Appellate

Court. The First Appellate Court allowed the defendant to raise a

plea of limitation without amending the written statement. Thus,

the notice (Ex.A-3) in proceedings before the Reference Court was

never produced in evidence in the suit for possession and such

primary evidence was not before the Court. In terms of Section 62

of the Evidence Act, primary evidence means a document itself

produced for inspection by the Court. Section 64 of the Evidence

Act stipulates that documents must be proved by primary evidence

except in certain cases when secondary evidence can be led. The

defendant has not led any evidence, including secondary evidence

of the alleged notice said to be served by the plaintiffs. In the

absence of primary or secondary evidence available in the suit for

possession, the reference to such notice as the starting point of

limitation is clearly erroneous and not sustainable.

18

29. The defendant was inducted as a lessee for a period of 20 years.

The lease period expired on 23 rd September, 1974. Even if the

lessee had not paid rent, the status of the lessee would not change

during the continuation of the period of lease. The lessor had a

right to seek possession in terms of clause 9 of the lease deed.

The mere fact that the lessor had not chosen to exercise that right

will not foreclose the rights of the lessor as owner of the property

leased. After the expiry of lease period, and in the absence of pay-

ment of rent by the lessee, the status of the lessee will be that of

tenant at sufferance and not a tenant holding over. Section 116 of

the TP Act confers the status of a tenant holding over on a yearly

or monthly basis keeping in view the purpose of the lease, only if

the lessor accepts the payment of lease money. If the lessor does

not accept the lease money, the status of the lessee would be that

of tenant at sufferance. This Court in the judgments reported as

Bhawanji Lakhamshi and Others v. Himatlal Jamnadas Dani

and Others13, Badrilal v. Municipal Corpn. of Indore14 and

R.V. Bhupal Prasad v. State of A.P and Others 15 and also a

judgment in Sevoke Properties Ltd. v. West Bengal State

Electricity Distribution Company Ltd.16 examined the scope of

Section 116 of the TP Act and held that the lease would be re-

newed as a tenant holding over only if the lessor accepts the pay-

13 (1972) 1 SCC 388
14 (1973) 2 SCC 388
15 (1995) 5 SCC 698
16 Civil Appeal No. 3873 of 2019 decided on 11.04.2019

19
ment of rent after the expiry of lease period. This Court in

Bhawanji Lakhamshi held as under:

“9. The act of holding over after the expiration of the term
does not create a tenancy of any kind. If a tenant remains
in possession after the determination of the lease, the
common law rule is that he is a tenant on sufferance. A
distinction should be drawn between a tenant continuing
in possession after the determination of the term with the
consent of the landlord and a tenant doing so without his
consent. The former is a tenant at sufferance in English
Law and the latter a tenant holding over or a tenant at
will. In view of the concluding words of Section 116 of the
Transfer of Property Act, a lessee holding over is in a bet-
ter position than a tenant at will. The assent of the land-
lord to the continuance of possession after the determina-
tion of the tenancy will create a new tenancy. What the
section contemplates is that on one side there should be
an offer of taking a new lease evidenced by the lessee or
sub-lessee remaining in possession of the property after
his term was over and on the other side there must be a
definite consent to the continuance of possession by the
landlord expressed by acceptance of rent or otherwise.
….”

30. The same view was reiterated in Badrilal v. Municipal Corpn. of

Indore, as well. In R.V. Bhupal Prasad, this Court held that

possession of the licencee on the expiry of the licence period was

that of a tenant at sufferance and was liable to ejectment in due

course of law. His possession was not legal nor lawful. He may

remain in possession until he is ejected in due course in execution

of the decree in the suit filed by the respondent. His possession

cannot be considered to be settled possession. The Court held as

under:

“8. Tenant at sufferance is one who comes into possession
of land by lawful title, but who holds it by wrong after the
termination of the term or expiry of the lease by efflux of

20
time. The tenant at sufferance is, therefore, one who
wrongfully continues in possession after the extinction of
a lawful title. There is little difference between him and a
trespasser. In Mulla’s Transfer of Property Act (7th Edn.) at
page 633, the position of tenancy at sufferance has been
stated thus: A tenancy at sufferance is merely a fiction to
avoid continuance in possession operating as a trespass.

It has been described as the least and lowest interest
which can subsist in reality. It, therefore, cannot be cre-
ated by contract and arises only by implication of law
when a person who has been in possession under a lawful
title continues in possession after that title has been de-
termined, without the consent of the person entitled. A
tenancy at sufferance does not create the relationship of
landlord and tenant. At page 769, it is stated regarding
the right of a tenant holding over thus: The act of holding
over after the expiration of the term does not necessarily
create a tenancy of any kind. If the lessee remains in pos-
session after the determination of the term, the common
law rule is that he is a tenant on sufferance. The expres-
sion “holding over” is used in the sense of retaining pos-
session. A distinction should be drawn between a tenant
continuing in possession after the determination of the
lease, without the consent of the landlord and a tenant
doing so with the landlord’s consent. The former is called
a tenant by sufferance in the language of the English law
and the latter class of tenants is called a tenant holding
over or a tenant at will. The lessee holding over with the
consent of the lessor is in a better position than a mere
tenant at will. The tenancy on sufferance is converted into
a tenancy at will by the assent of the landlord, but the re-
lationship of the landlord and tenant is not established un-
til the rent was paid and accepted. The assent of the land-
lord to the continuance of the tenancy after the determi-
nation of the tenancy would create a new tenancy. The
possession of a tenant who has ceased to be a tenant is
protected by law. Although he may not have a right to
continue in possession after the termination of the ten-
ancy, his possession is juridical.

21

xx xx xx

13. In view of the settled position of law, the possession of
the appellant is as tenant at sufferance and is liable to
ejectment in due course of law. But his possession is not
legal nor lawful. In other words, his possession of the the-
atre is unlawful or litigious possession. The appellant may
remain in possession until he is ejected in due course in
execution of the decree in the suit filed by the respon-
dent. His possession cannot be considered to be settled
possession. He is akin to a trespasser, though initially he
had lawful entry.”

31. Sevoke Properties Ltd. was a case where the respondent contin-

ued in possession after the expiry of lease period which ended on

24th May, 1996. A suit for possession was filed without serving a

notice under Section 106 of the TP Act. The stand of the defendant

was that he was a tenant holding over. Such argument was not ac-

cepted and it was held that after the expiry of lease period in terms

of unregistered document of lease, the possession of the respon-

dent was that of a tenant at sufferance. In view thereof, as owners,

the appellants were entitled to possession of the land in terms of

Article 65 of the Limitation Act as the possession of respondent

was that of a tenant at sufferance.

32. The Division Bench of Allahabad High Court in a judgment reported

as Bisheshar Nath v. Kundan & Ors.17 examined a somewhat

similar question where the period of lease was three years vide a

lease deed dated 19th July, 1892 but the lessee remained in

possession thereafter. The suit was filed on 18 th June, 1919 i.e.
17 ILR (1922) 44 All 583

22
after the expiry of 12 years from the determination of the lease.

The High Court considered Article 139 of the First Schedule of the

Limitation Act, 1908 which is now equivalent to Article 67 of the

First Schedule of the Limitation Act. The Court held as under:

“…It seems to me on the facts of this case that the
tenancy was determined on the 19th of July, 1895. It has
not been proved that any new tenancy was created. By
holding over without paying rent, it seems to me that the
defendants became what is known as tenants by
sufferance. Their position in English law has been
summed up in Addison’s Law of Contract, 10th edition,
page 618 in the following words:—“The difference,
therefore, between a tenancy-at-will and what is called a
tenancy by sufferance is that in the one case the tenant
holds by right and has an estate or term in the land,
precarious though it may be, and the relationship of lessor
and lessee subsists between the parties; in the other, the
tenant holds wrongfully and against the will and
permission of the lord and has no estate at all in the
occupied premises. When the tenancy at sufferance has
existed for twenty (now twelve) years, the landlord’s right
of entry is barred by statute, and the tenant becomes the
absolute and complete owner of the property.” So far as
the question of limitation is concerned, the law in India is
not different, in my opinion, although it may not be good
law to hold that a tenant holding over is in adverse
possession to his landlord. In my opinion this view is
supported by Chandri v. Daji Bhau [(1900) I.L.R., 24 Bom.,

504.], where the facts were similar, and which case was
followed in Farman Bibi v. Tasha Haddal Hossein [(1908)
C.L.J., 648.]. In my opinion the suit was clearly barred
under article 139 of the Limitation Act. I would, therefore,
dismiss this appeal with costs.”

33. In a separate but concurring opinion by Justice Stuart, it was held

that a tenant who has been let into possession cannot deny his

landlord’s title, however defective it may be, so long as he has not

restored possession by surrender to his landlord. It was held that

the plaintiff is the landholder and the defendants are tenants by

23
sufferance. It was held so:

“…Their Lordships of the Privy Council say: “A tenant
who has been let into possession cannot deny his
landlord’s title, however defective it may be, so long as
he has act openly restored possession by surrender to
his landlord.” That clearly is the law, but does it in any
way affect the present case? I think it does not. The
defendants cannot be permitted to deny the plaintiff’s
title. They have foolishly denied it but they cannot be
permitted to do so. The plaintiff is undoubtedly the land-
holder and the defendants are tenants by sufferance,
but once having recognized that the tenants are so
estopped, the fact still remains that the suit has been
instituted beyond the period of limitation allowed by the
law. In these circumstances I accept the view of my
learned brother and would dismiss this appeal.”

34. The Division Bench of Allahabad High Court in a judgment reported

as Sheo Dulare Lal Sah v. Anant Ram & Anr.18 examined an

appeal arising out of a suit for possession against the defendants

who were inducted as tenants for a period of one year. However,

the tenants did not make any payment of rent. In a suit for

possession, a plea was taken that the suit is barred by limitation.

The plaintiffs filed a suit on the basis of title without any averment

that defendants were indicted as tenants except to the effect that

the vendor of the plaintiff has executed a rent note and that the

defendants have denied the title of the plaintiff, therefore, they are

liable for ejectment. The Court held that in terms of Section 108(q)

of the TP Act, the lessee had a duty to put the lessor into

possession of the property. If he did not do so, he was merely a

tenant whose lease had expired and who had continued to remain

in wrongful possession of the property on the expiry of the lease. It

18 AIR 1954 All. 475

24
was open to the landlord to regularise the position by giving his

assent to the continuance of possession and in that situation,

provisions of Section 116 of the TP Act would apply. The Court held

as under:

“10. Taking up the third point first, on the expiry of a
lease for a period, Section 108(q) of the Transfer of
Property Act imposes a duty on the lessee to put the
lessor into possession of the property. Sahib Dayal,
therefore, on the expiry of the period of one year fixed
under the lease was bound to put Sri Krishna Das in
possession of the property in accordance with the
provisions of Section 108(q) of the Transfer of Property
Act. If he did not do so, he was merely a tenant whose
lease had expired and who had continued to remain in
wrongful possession of the property on the expiry of the
lease. It was open in such a case to the landlord to
regularise the position by giving his assent to the
continuance of possession and in that case the provision
of Section 116 of the Transfer of Property Act would apply
and the lessee would, in accordance with the provisions of
that section, become a month to month tenant.”

35. It was further held that in order to create a tenancy at sufferance

the tenant should have lawfully entered into possession in

recognition of the landlord’s superior title and should have

continued to remain in possession in the same right after the

termination of the tenancy without asserting any title hostile to

that of the landlord. The Court held as under:

“12. In order to create a tenancy at sufferance the tenant
should have lawfully entered into possession in
recognition of the landlord’s superior title and should have
continued to remain in possession in the same right after
the termination of the tenancy without asserting any title
hostile to that of the landlord and without his assent or
dissent. The continuance in possession should be due to
the laches of the owner in not asking for payment of the
rent or vacation of the premises or taking over possession
of the property. In Corpus Juris Secundum, Vol. 51, p. 780,

25
175, it is pointed out that:

“The holding of a tenant at sufferance is the
most shadowy estate recognized at common
law, and practically the only distinction between
such a tenant’s holding and the possession of a
trespasser is that the land-owner may, by his
acquiescence, at any time base on the tenancy
at sufferance the relation of landlord and tenant,
which he cannot establish at law against a mere
trespasser, and that the tenant cannot be
subjected to an action in trespass before entry
or demand for possession.”

The law thus enunciated is in line with the provisions of
Section 116 of the Transfer of Property Act (No. 4 of 1882)
which pointed out that:

“If a lessee or under-lessee of property remains
in possession thereof after the determination of
the lease granted to the lessee, and the lessor
or his legal representative accepts rent from the
lessee or under-lessee, or otherwise assents to
his continuing in possession, the lease is, in the
absence of an agreement to the contrary,
renewed from year to year, or from month to
month, according to the purpose for which the
property is leased as specified in S. 106.”

36. The Full Bench of Bombay High Court in a judgment reported as

Sidram Lachmaya, heir and legal representative of

deceased Lachmaya Shivram Madur, heir of Original

Plaintiff v. Mallaya Lingaya Chilaka19 rightly held that ‘it is a

well recognised construction of the Limitation Act that when there

is a specific article dealing with a specific subject, that article is to

be applied in preference to a general and residuary article’. The Full

Bench was examining the question as to whether the possession of

the tenant is adverse to the landlord upon the expiration of the

19 ILR 1949 Bom 135 (FB) : 1948 SCC OnLine Bom 4

26
tenancy period merely because the tenant has not paid rent. The

second question examined was whether in a suit based upon title

by a landlord against his ex-tenant, whether Article 139 or Article

144 is applicable. In such suit filed by the tenant, the claim was

that the title of his landlord had extinguished under Section 28 of

the Limitation Act, 1908. The Court held as under:

“Now, there can be no doubt that on the determination of
the tenancy on June 11, 1925, the plaintiff became a
tenant at sufferance, if we might make use of an English
expression, or a trespasser. Although his possession was
originally lawful, and he entered by lawful demise, at the
termination of the tenancy his possession became
wrongful and he became a trespasser. Therefore on the
determination of the tenancy the right would arise in the
landlord to recover possession from him of the property
and the period of limitation would be governed by article
139
of the Indian Limitation Act.

xx xx xx

Our Court almost consistently has taken the view that in a
case by a landlord against a tenant it is art. 139 that
applies, the first case which might be looked at
is Kantheppa v. Sheshnppa, [(1897) 22 Bom. 893.] a
decision of Sir Charles Farran, Chief Justice, and Mr. Justice
Candy. There at p. 897 Sir Charles Farran says:

“We are inclined to think that the termination of
the period of a fixed lease where nothing further
occurs, is the time from which limitation begins
to run against the landlord within the meaning
of article 139 of the limitation Act.”

The expression “where nothing further occurs” is
obviously with reference to s. 116 of the Transfer of
Property Act, because it is open to the landlord on the
expiration of the tenancy of accept rent from the tenant
or otherwise assent to his continuing in possession and
thereby create a fresh lease under the provisions of that
section. But if the landlord neither accepts rent nor
otherwise assents to the continuing of the possession of
the tenant, then it is clear that the tenancy expires,

27
limitation begins to run against the landlord under art.

139 and his right to obtain possession from his tenant
would be barred after the period of 12 years.

xx xx xx

As we have taken the view that a suit by a landlord
against his ex-tenant is always governed by art. 139 and
as we have indicated earlier in the judgment that the
question whether his possession is adverse or not does
not arise, we answer question No. 2 submitted to us as
follows: art. 139. And with regard to question No. 1 our
answer, with respect to the learned Judges who have
referred this question to us, is that on the view we have
now taken the question does not arise.”

37. In another judgment by a Single Bench of the Delhi High Court

reported as MEC India Pvt. Ltd. v. Lt. Col. Inder Maira &

Ors.20, it has been held that in terms of Section 108(q) of the TP

Act, a lessee continues to be liable to the lessor till possession has

been actually restored to the lessor. The continuing in possession

of the lessee is expressive of his continuing stand that the tenancy,

in whatever form, continues. It was held as under:

“40. Section 108(q) thus ensures that a lessee continues
to be liable to the lessor till possession has been actually
restored to the lessor and a semblance of relationship
subsists till that contingency takes place. His continuing in
possession is expressive of his continuing stand that the
tenancy, in whatever form, continues. It is said that he
does not hold it adversely to the landlord only till he has
unequivocally renounced his status as a tenant and
asserted hostile title, but even that appears to be
doubtful, for in law his possession remains permissive till
it has been actually restored to the landlord.

41. In law there is presumption in favour of the continuity
of the tenancy and against the possession of the tenant
becoming adverse. Furthermore, the doctrine of tenant
estoppel, which continues to operate even after the

20 80 (1999) Delhi Law Times 679

28
termination of the tenancy, debars a tenant who had been
let into possession by a landlord, from disputing the
latter’s title or pleading adverse possession, without first
openly and actually surrendering possession of the
tenanted premises and restoring them to the landlord.

42. A tenant who upon determination of the tenancy does
not deliver up possession to the landlord as required by
Section 108(q), cannot be heard to say that he is not a
tenant—be he one at sufferance or be he one from
month-to-month. Therefore, unless the landlord is actually
put into possession, the premises remain under a
tenancy, which unless assented to by the landlord, has
the character of one at sufferance.

43. Thus, a tenant at sufferance is one who wrongfully
continues in possession after the extinction of a lawful
title and that a tenancy at sufferance is merely a legal
fiction or device to avoid continuance in possession from
operating as a trespass. A tenant remaining in possession
of the property after determination of the lease does not
become a trespasser, but continues as a tenant at
sufferance till possession is restored to the landlord. The
possession of an erstwhile tenant is juridical and he is a
protected from dispossession otherwise than in due
course of law. Although, he is a tenant, but being one at
sufferance as aforesaid, no rent can be paid since, if rent
is accepted by the landlord he will be deemed to have
consented and a tenancy from month-to-month will come
into existence. Instead of rent, the tenant at sufferance
and by his mere continuance in possession is deemed to
acknowledge both the landlord’s title and his (tenant’s)
liability to pay mesne profits for the use and occupation of
the property.

44. To sum up the legal position or status of a lessee
whose lease has expired and whose continuance is not
assented to by the landlord, is that of a tenant at
sufferance. If, however, the holding over has been
assented to in any manner, then it becomes that of a
tenant from month-to-month. Similar, i.e. from month-to-
month, is the status of a lessee who comes into
possession tinder a lease for a period exceeding one year
but unregistered. He holds it not as a lessee for a fixed
term, but as one from month-to-month or year-to-year
depending on the purpose of the lease. If upon a tenant
from month-to-month (or year-to-year) and in either of the
aforesaid two contingencies, a notice to quit is served,

29
then on the expiry of the period, his status becomes of a
tenant at sufferance. Waiver of that notice, or assent in
any form to continuation restores to him his status as a
tenant from month-to-month, but capable, of once again
being terminated with the expiry of any ensuing tenancy
month.”

38. Thus, the suit of the plaintiffs filed within 12 years of the

determination of the tenancy by efflux of time is within the period

of limitation. The defendant has not proved forfeiture of tenancy

prior to the expiry of lease period. Mere non-payment of rent does

not amount to forfeiture of tenancy. It only confers a right on the

landlord to seek possession. The plaintiffs have filed a suit for

possession against the defendant on the basis of determination of

tenancy, such suit is governed by Article 67 alone.

39. In view of the above, the suit for possession would not be covered

by Article 65 since there is a specific article i.e. Article 67 dealing

with right of the lessor to claim possession after determination of

tenancy. The appellants-plaintiffs have claimed possession from

the defendant alleging him to be the tenant and that he had not

handed over the leased property after determination of the lease.

Therefore, such suit would fall within Article 67 of the Limitation

Act. Such suit having been filed on 13th March, 1981 within 12

years of the determination of lease by efflux of time on 23 rd

September, 1974, the same is within the period of limitation. Thus,

the findings recorded by the High Court are clearly erroneous in

law and the same cannot be sustained and are, thus, set aside.

30

40. Though, Mr. Vishwanathan has argued that the first appeal stood

abated as the legal representatives of one of the deceased

respondents was not impleaded but we find that it is not necessary

to decide such question as on merits, we have found the claim of

the plaintiffs to be meritorious.

41. The respondent continued to be in possession of the land leased

vide registered lease deed dated 22nd September, 1954. The

respondent has admitted the ownership of the appellants before

the Reference Court. Such plea operates as estoppel against the

respondent in respect of the title of the appellants. However, the

claim of compensation put forward by the respondent was declined

for the reason that non-payment of rent disentitles the respondent

from compensation. In the present proceedings, the respondent

has denied his status as that of a tenant but claimed title in

himself. The respondent claimed adverse possession and claimed

possession as owner against a person, who has inducted him as

tenant. The respondent was to prove his continuous, open and

hostile possession to the knowledge of true owner for a continuous

period of 12 years. The respondent has not led any evidence of

hostile possession to the knowledge of true owner at any time

before or after the award of the reference Court nor he has

surrendered possession before asserting hostile, continuous and

open title to the knowledge of the true owner. The question of

adverse possession without admitting the title of the real owner is

not tenable. Such question has been examined by this Court in

31
Uttam Chand (D) through LRs. v. Nathu Ram (D) through

LRs & Ors.21.

42. In view of the said fact, we find that the High Court erred in law in

holding that the suit is barred by limitation in terms of Article 66 of

the Limitation Act, therefore, the order passed by the High Court is

clearly erroneous and is not sustainable in law. The same is set

aside and the suit is decreed by restoring the decree of the First

Appellate Court. Accordingly, the appeal is allowed.

………………………………………J.

(L. NAGESWARA RAO)

………………………………………J.

(HEMANT GUPTA)

NEW DELHI;

MARCH 19, 2020.

21 Civil Appeal No. 190 of 2020 decided on 15th January, 2020 : 2020 SCC OnLine SC 37

32



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