Nandkishor Savalaram Malu vs Hanumanmal G. Biyani

CIVIL APPEAL No.11868 OF 2016 (ARISING OUT OF SLP (C) No. 19259 of 2010)

Nandkishor Savalaram Malu (Dead) Through Lrs. …….Appellant(s)

VERSUS

Hanumanmal G. Biyani (D) Thr. Lrs. & Ors. ……Respondent(s)

JUDGMENT

Abhay Manohar Sapre, J.

1) Leave granted.

2) This appeal is filed against the final judgment

and order dated 23.03.2010 passed by the High

Court of Judicature at Bombay in Civil Revision

Application No.493/2008 allowing the said revision

application filed by the respondents herein. Signature Not Verified Digitally signed by SWETA DHYANI Date: 2016.12.07

3) Facts of the case lie in a narrow compass so 17:35:32 IST Reason:

are the issues involved in the appeal, a short one. It

1 would, however, be clear from the facts mentioned

infra.

4) The appellants are the plaintiffs (landlords)

whereas the respondents are the defendants

(tenant).

5) One Mr. Sawalaram Shriram Malu and Mr.

Nandkishore Sawalaram Malu (father and son

respectively) jointly owned House No.47/48 situated

in Madhavnagar at Sangli (MH) (hereinafter called

"the suit house"). They let out the suit house to a

firm called "M/s Biyani Textile" (hereinafter referred

to as "the Firm”) on a monthly rent of Rs.260/-.

6) On 09.03.1982, the landlords served a quit

notice on the tenant-Firm and determined the

tenancy by demanding arrears of rent for the period

01.06.1980 to 28.02.1982 and possession of the

suit house. Since the Firm did not pay the arrears

as demanded and nor vacated the suit house, the

landlords were constrained to file a civil suit being

2 Regular Civil Suit No. 317 of 1982 claiming decree

for arrears of rent and eviction under the provisions

of the Bombay Rent Control Act. The suit was filed

against one employee of the Firm-defendant no.1

and partners of the Firm-defendant nos.2 to 9 in the

Court of IInd Civil Judge, Jr. Division, Sangli.

7) Defendant no.1 filed his written statement

whereas defendant nos. 3, 4 to 9 filed their written

statement jointly. So far as defendant no.1 is

concerned, he set up his case contending that he

was working as employee of the Firm. He further

contended that in 1980, there was some discussion

between the plaintiffs and the partners of the Firm

about vacating of the suit house and pursuant

thereto, the Firm vacated the suit house. The suit

house was then let out to defendant no.1 by the

plaintiffs. It was then contended that plaintiff no.1

died and his legal representatives not having been

brought on record, the suit could not be continued

3 at the instance of plaintiff no. 2 for want of any

privity of contract between defendant no.1 and the

plaintiff no.2.

8) So far as the partners of the Firm, i.e.,

defendant nos. 3, 4 to 9, are concerned, they

contended that they having vacated the suit house

in May 1980 and cleared all their arrears of rent,

they are no more liable to do anything in the case

and, therefore, suit against them is liable to be

dismissed.

9) The Trial Court, vide judgment dated

14.10.1991, dismissed the suit against defendant

no.1 whereas it was decreed against defendant nos.

2 to 9. Firstly, it was held that the suit house was

let out to the Firm through their partners

(defendant nos.2 & 3) and, therefore, the Firm was

the tenant. Secondly, the Firm had committed

defaults in payment of arrears of rent and also

failed to re-pay when demanded by the plaintiff.

4 Thirdly, defendant no.1 was an employee of the

Firm. Fourthly, defendant no. 1 was not the tenant

of the plaintiff as claimed by him and was in

unauthorized occupation of the suit house as a

trespasser. Fifthly, the Firm and its partners

(defendant Nos.2 to 9) having failed to pay the

arrears of rent, are liable to be evicted from the suit

house under the Bombay Rent Control Act. Sixthly,

the suit did not abate on the death of plaintiff no.1

because plaintiff no.2 is already on record and

sufficiently represent the estate of the deceased,

plaintiff no.1. Seventhly, liberty was granted to the

plaintiff to file separate suit against defendant no.1

under the general law to claim possession of suit

house because he was found to be in possession of

the suit house as trespasser and no eviction decree

can be passed against a trespasser under the Rent

laws.

10) Felt aggrieved, Plaintiff no.2 filed first appeal

5 being R.S.A. No. 577 of 1991 before the District

Judge, Sangli. By order dated 03.02.2006, the

District Judge allowed the appeal and decreed the

suit against all the defendants as claimed by the

plaintiffs. It was held that defendant no.1 being an

employee of the Firm was bound by the decree

passed against the Firm and its partners (defendant

Nos.2 to 9). It was further held that the defendants

failed to prove that the Firm or/and its partners

surrendered the possession of the suit house to the

plaintiffs on 12.05.1980 and vacated the suit house.

It was further held that defendant no.1 failed to

prove that he became plaintiff's tenant in his

individual capacity by entering into a fresh contract

of tenancy on vacating the suit house by the original

tenant as claimed by them and lastly, the

defendants are liable to pay the mesne profits at the

rate of Rs.260/- per month from 01.05.1980 till

delivery of possession of the suit house to the

6 plaintiff.

11) Felt aggrieved, the defendants filed revision

application being C.R.A. No. 493 of 2008 before the

High Court. While the revision application was

pending, defendant no.1 died and hence his legal

representatives were brought on record. The High

Court, by impugned order, though did not disturb

the factual finding of the first appellate Court yet

allowed the revision and while setting aside the

order of the appellate Court, restored the order of

the Trial Court. It is against this order, plaintiff

no. 2 (landlord) felt aggrieved and filed this appeal

by way of special leave before this Court. During the

pendency of this appeal, he also died and hence his

legal representatives were brought on record to

continue the lis.

12) Heard Mr. R.S. Hegde, learned counsel for the

appellants and Mr. Sukhbir Singh, learned counsel

for the respondents.

7

13) Learned counsel for the appellants (plaintiff)

while assailing the legality and correctness of the

impugned order argued three points.

14) In the first place, he argued that the High

Court was not right in allowing the revision.

Learned Counsel urged that the High Court failed to

even take note of the settled legal principles

applicable to the controversy at hand and thus

committed jurisdictional error.

15) In the second place, learned counsel argued

that without disturbing any of the factual findings

of the first appellate Court, which were otherwise

binding on the High Court in its revisionary

jurisdiction, the High Court committed

jurisdictional error in holding that once it is held in

rent proceedings that defendant no.1 was a

trespasser then no decree under the Rent laws

could be passed against a trespasser for his

eviction from the suit house and the remedy of the

8 plaintiffs in such circumstances is to file regular

civil suit under the general law for obtaining

possession.

16) In the third place, learned counsel argued that

the High Court failed to see that a decree for

eviction was rightly passed against the Firm and its

partners holding them as tenant and this decree,

according to him, was binding on defendant no.1 on

all force for the simple reason that firstly, defendant

no.1 even according to his own case was an

employee of the Firm and the Courts also held him

to be so. Secondly, defendant no.1 failed to

establish his independent contract of tenancy with

the plaintiffs though claimed. Thirdly, the Firm

through their partners failed to prove that they

surrendered the vacant possession of the suit house

to the plaintiffs on 12.05.1980.

17) According to learned counsel, it was, therefore,

a clear case where tenant having suffered a decree

9 for eviction, all persons claiming through such

tenant or/and those acting for and on behalf of the

tenant-Firm, had to be dispossessed on the strength

of the decree suffered by the tenant-firm.

18) On these submissions, learned Counsel for the

appellants prayed for reversal of the impugned order

and restoration of the order of the first appellate

Court.

19) In reply, learned counsel for the respondents

supported the impugned order and contended for its

upholding.

20) Having heard the learned counsel for the

parties and on perusal of the record of the case, we

are inclined to accept the submissions of the

learned counsel for the appellants as, in our

opinion, it has a force.

21) Indeed, we are constrained to observe that

there was absolutely no legal basis for the High

Court to have reversed the well-reasoned order of

10 the first appellate Court which had rightly reversed

the order of the Trial Court by passing decree for

arrears of rent, eviction and mesne profits against

all the defendants jointly and severally. The High

Court, unfortunately, failed to apply the settled legal

principles applicable to the case at hand as are

enumerated herein below in the light of following

factual findings of fact recorded by the two Courts

below.

22) Firstly, the Firm was held to be the tenant

whereas defendant no.1 was held to be Firm's

employee. Secondly, the Firm failed to prove that

they surrendered their possession to the appellants

and cleared all arrears of rent and lastly, defendant

no.1 was held to be in possession of the suit house

as “trespasser” and not as “ appellants’ tenant”.

23) With these concurrent findings of fact, we are

of the considered opinion that neither the Firm nor

their partners and nor defendant no.1 had any legal

11 right to remain in possession of the suit house. The

reason being that so far as the Firm and its

partners were concerned (defendant Nos. 2 to 9),

they being the tenant rightly suffered the decree for

payment of arrears of rent and eviction under the

Rent Act and so far as defendant no.1 was

concerned, he was neither an owner of the suit

house nor a tenant inducted by the appellants and

nor a licensee but was held to be an employee of the

Firm and a rank trespasser in the suit house.

24) The legal effect of such eviction decree under

the Rent Act was that the possession of the

tenant-firm and persons claiming through such

tenant became unauthorized. Since the tenant was

a Firm, persons connected with the internal affairs

of the Firm such as its partners and the employees

working in the Firm were also bound by the eviction

decree for the simple reason that all such persons

were claiming through the tenant-Firm.

12

25) An employee of a tenant is never considered to

be in actual possession of tenanted premises much

less in possession in his legal right. Indeed, he is

allowed to use the tenanted premises only with the

permission of his employer by virtue of his contract

of employment with his employer. An employee,

therefore, cannot claim any legal right of his own to

occupy or to remain in possession of the tenanted

premises while in employment of his employer or

even thereafter qua landlord for want of any privity

of contract between him and the landlord in respect

of the tenanted premises.

26) There was, therefore, no need for the appellant

to file a separate suit to claim possession of the suit

house against defendant no.1 under the general law

as he was well within his legal right to execute the

decree for eviction from the demised premises in

this very litigation not only against the original

tenant but also against all the persons who were

13 claiming through such tenant. As mentioned above,

defendant no.1 was such person who was held to be

claiming through the tenant being its employee and

was, therefore, bound by the decree once passed

against his employer-tenant.

27) A tenancy is a creation of contract between the

two persons who are capable to enter into contract

called lessor/landlord and the lessee/tenant. The

two persons can be either living person or juristic

persons such as Partnership Firm or a Company.

28) Once the tenancy is created either orally or in

writing with respect to a land or building then it is

always subject to the relevant provisions of the

Transfer of Property Act, 1882 (hereinafter referred

to as “the TP Act”) and the State Rent Acts. Sections

105 to 111 of the TP Act provide certain safeguards,

create some statutory rights, obligations, duties

whereas the State Rent Acts, inter alia, specify the

grounds to enable the lessor to evict the

14 lessee/tenant from the demised premises.

29) If the lessee/tenant is a living person, then in

such event, the tenant would also include his legal

representatives in the event of his death together

with his dependents living with the tenant in the

tenanted premises. Likewise, if the lessee/tenant is

a juristic person, i.e., partnership Firm then such

tenant would represent the interest of all the

partners of the Firm and the employees working in

the Firm. Such persons since claim through the

Firm, they have no right of their own in the tenancy

and in the demised property qua landlord.

30) As a matter of fact, in our view, it was not

necessary for the appellants to have impleaded

defendant no.1 in the present rent proceedings. The

reason being that in rent proceedings the

lessee/tenant is the only necessary or/and proper

party and none else. A person, who claims through

lessee/tenant, is not a necessary party.

15

31) The aforementioned factors were completely

overlooked by the High Court. It is for these

reasons, the impugned order is not legally

sustainable and, therefore, deserves to be set aside.

32) In the light of foregoing discussion, the appeal

succeeds and is accordingly allowed with cost

quantified at Rs.5000/- payable by the respondents

to the appellants. The impugned order is

accordingly set aside and, in consequence thereof,

the judgment/decree passed by the first appellate

Court (District Judge, Sangli) dated 03.02.2006 in

Civil Appeal No.577 of 1991 is hereby restored.

33) The respondents are granted three months’

time to comply with the judgment and decree of the

first appellate Court by depositing the entire money

part of the decree as awarded therein and further to

handover the vacant possession of the suit house to

the appellant. The respondents would also pay to

the appellants three months’ rent by way of

16 damages in advance and the cost awarded by this

Court within one month and to submit the usual

undertaking to this Court, failing which the decree

dated 03.02.2006 be executed against the

respondents forthwith on the expiry of one month.

………...................................J. [A.K. SIKRI]

…...……..................................J. [ABHAY MANOHAR SAPRE] New Delhi;

November 29, 2016

17 ITEM NO.7 COURT NO.9 SECTION IX

S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS

Petition(s) for Special Leave to Appeal (C) No(s). 19259/2010

(Arising out of impugned final judgment and order dated 23/03/2010 in CRA No. 493/2008 23/03/2010 in CRA No. 493/2008 passed by the High Court of Bombay)

NANDKISHOR SAVALARAM MALU (DEAD) THROUGH LRS. Petitioner(s)

VERSUS

HANUMANMAL G.BIYANI(D) BY LRS.& ORS. Respondent(s)

(With appln. (s) for exemption from filing O.T. and permission to file additional documents and interim relief and office report)

Date : 29/11/2016 This petition was called on for hearing today.

CORAM : HON'BLE MR. JUSTICE A.K. SIKRI HON'BLE MR. JUSTICE ABHAY MANOHAR SAPRE

For Petitioner(s) Mr. R.S. Hegde, Adv.

Mr. Chandra Prakash, Adv.

Mrs. Farhat Jahan Rehmani, Adv.

Mr. Rajeev Singh,Adv.

For Respondent(s) Mr. Sukhbir Singh, Adv.

Mr. Mohd. Irshad Hanif,Adv.

UPON hearing the counsel the Court made the following O R D E R

18 Leave granted.

The civil appeal is allowed in terms of the signed reportable judgment.

Pending applications shall also stand disposed of.

(SWETA DHYANI) (MALA KUMARI SHARMA) SR.P.A COURT MASTER

(Signed reportable judgment is placed on the file)

19