Dr. H.K. Sharma vs Ram Lal

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)

JUDGMENT

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 Signature Not Verified Digitally signed by ANITA MALHOTRA Date: 2019.01.28 17:20:17 IST Nainital.

Reason: 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, latrine­

bathroom, 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.

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