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Devi Dass vs Mohan Lal

Supreme Court25 March 1980A.C. Gupta · V.D. Tulzapurkar

Ratio decidendi

The rule this decision rests on

A tenant may challenge the bona fides of a sale of the property by the landlord to a third party, notwithstanding that the tenant was not a party to the sale deed, where the tenant alleges that the sale was a sham transaction undertaken for the collateral purpose of creating grounds for eviction. Where a court at the appellate stage finds that an allegation of sham sale has been made and evidence has been adduced on that question, it is an error of law to reject the tenant's case merely on the ground that the tenant was not a party to the sale deed without examining the evidence and recording a finding on whether the sale was genuine or a paper transaction.

Written by Miss Lucy from the judgment below, not taken from a headnote.

Judgment

As delivered

JUDGMENT
1. Special leave to appeal granted.

2. This appeal arises out of a proceeding for eviction and the tenant is the appellant before us. Respondent Mohanlal's claims for ejectment was allowed on the ground that he required the disputed premises for his own use and occupation. He purchased the building of which the disputed premises is a part on 11th, May, 1972 from its original owners Jagiri Lal and Vasudev. The courts below recorded a finding accepting Mohanlal's case of requirement and the High Court affirmed , that finding. According to the tenant the sale by the original owners in favour of Mohan Lal was not a bona fide one and had been made with the ulterior motive of evicting the tenant.The tenant's case, as set out in the judgment of the appellate authority, was as follows:

Learned Counsel for the appellant while challenging the finding of the trial court under issue No. 1 has further contended that the sale deed Ex. Al is a sham transaction and no right, title or interest passed to Mohan Lal under this document. In this context it has also been argued that the sale consideration was not received by Jagiri Lal and Vasudev and in fact Jugal Kishore, father of Mohan Lal executed the sale deed in the name of his son Mohan Lal, acting as Mukhtiar of Jagirilal and Vasdev and this was done in order to have a ground for ejectment created against Devi Dass, as earlier several applications filed by Jugal Kishore as Mukhtiar of the landlords, Jagirilal and Vasdev for ejectment of Devi Dass, the tenant from the premises in dispute, had failed.

3. The appellate authority, rejected the tenant's case on the view that tenant could not challenge the validity of the sale deed executed in favour of Mohan Lal because the tenant was not a party to it. We do not think this was a correct view to take. An allegation had been made that in reality there was no sale and the sale deed was a paper transaction. The court had to record a finding on this point. The appellate authority however did not permit counsel for the tenant to refer to evidence adduced on this aspect of the matter. The High Court also did not advert to it. We, therefore, allow this appeal, set aside the decree for eviction and remit the case to the trial court to record a finding on the question whether the sale of the building to respondent. Mohan Lal was a bona fide transaction upon the evidence on record. The trial court will allow the parties to adduce further evidence on the point if the court considers it necessary. We do not disturb the other findings recorded in the suit. After recording the finding, the trial court will dispose of the suit in accordance with law, and expeditiously, if possible within six months. There will be no order as to costs.

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