Full Judgment Text
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PETITIONER:
SMT. KAMLABAI & ORS. A v.
Vs.
RESPONDENT:
MANGILAL DULICHAND MANTRI
DATE OF JUDGMENT14/10/1987
BENCH:
OZA, G.L. (J)
BENCH:
OZA, G.L. (J)
MUKHARJI, SABYASACHI (J)
CITATION:
1988 AIR 375 1988 SCR (1) 464
1987 SCC (4) 585 JT 1987 (4) 82
1987 SCALE (2)755
ACT:
C.P. and Berar Letting of Houses and Rent Control
order, 1949. 13-The provision puts restriction on right of
landlord to determine the tenancy-Permission required under
the clause is needed only when landlord wants to terminate
the tenancy.
Transfer of Property Act, 1882-ss. 106 and 111-Read
with cl. 13 of the C.P. and Berar Letting of Houses and Rent
Control order 1949-cl. 13 of the order does not restrict the
tenant from surrendering the lease either by specific
agreement or by implication demonstrated by conduct.
HEADNOTE:
On 24-2-1970 the appellants filed an application under
cl. 13(3) of the C.P. and Berar Letting of Houses and Rent
Control order, 1949 for permission to issue notice
determining the respondent’s lease of the premises in
question on grounds of bona fide need, subletting, etc. On
28-3-1970 both the parties made an application for recording
compromise. By the terms of the compromise, the respondent
expressly admitted the claim of the appellants for
permission to terminate the tenancy, and, surrendering his
tenancy rights, undertook to vacate the premises on or
before 31-3-1974. By an order dated 31-3-1970, the Rent
Controller filed the proceedings observing that the matter
had been compromised out of court and since there was no
provision for recording of compromise, he was treating the
petition of compromise as an application for filing the
proceedings.
On 18-2-1974 the parties entered into an arbitration
agreement wherein it was clearly mentioned that the tenancy
in favour of the respondent stood surrendered and the
arbitrator should decide how much further time should be
granted to him for vacating the premises and what should be
the quantum of damages for use and occupation thereof beyond
31-3-1974. Pursuant to the arbitration, a further compromise
was entered into by which time till 31-3-1977 was given for
vacating the premises. An award was made in terms of this
compromise on 29-3-1974 and a decree in terms of the award
was passed by the Civil Judge on 16-4-1974.
465
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The respondent wrote two letters requesting for
extension of time to vacate the premises, firstly upto the
end of December 1977, and then upto the end of December,
1980. However, the respondent did not vacate the premises on
31-12-1980 and the appellant applied for execution of the
decree. Notice was issued, under 0.21, r.22, C.P.C. but no
cause was shown by the respondent. On 24-3-1981, an
application was made by the parties for recording of
compromise to the effect that time for vacating the premises
was extended upto 31-12-1982 as the last chance.
Accordingly, the executing court passed an order disposing
of the execution application as compromised.
The respondent did not vacate the premises on 31-12-
1982. The appellant filed a fresh application for execution
on 31-1-1983. When moves for a further compromise failed,
the respondent filed objections claiming that the decree was
a nullity and could not be executed as it had been obtained
without the prior permission contemplated under cl. 13 of
the aforesaid Rent Control order. The Civil Court, by its
order dated 1-10-1985, rejected the objections and directed
the execution to proceed.
The respondent approached the High Court in revision
but his application was dismissed in limine. The respondent
sought special leave to appeal and this Court disposed of
the matter directing the High Court to admit the revision
and hear it on merits and dispose it of in accordance with
law. The High Court allowed the revision petition.
Allowing the appeal,
^
HELD: The scheme of cl. 13 of the C.P. and Berar
Letting of Houses and Rent Control order, 1949 indicates
that it is meant to protect the rights of the tenant by
restricting the rights of the landlord. Sub-cl. (I) thereof
starts wit the expression no landlord" making it clear that
it is a restriction put on the right of the landlord to
determine the tenancy. Sub-cl.(2) indicates that when a
landlord seeks to obtain permission under sub-cl. (1) he has
to apply to the Rent Controller. Sub-cl. (3) provides that
the Rent Controller shall grant permission if he is
satisfied in respect of the grounds enumerated thereunder.
Thus, the permission which is required under cl. 13 is
needed only when the landlord wants to terminate the
tenancy. It is not at all necessary if the tenant wants to
surrender the lease or terminate the tenancy or vacate the
premises. Clause 13 of the order does not restrict the
tenant from surrendering the lease either by specific
agreement or by implication demonstrated by conduct. [473G-
H; 474H; 475A-B]
466
(b) Section 106 of the Transfer of Property Act
provides for termination of the lease either by the lessor
or by the lessee, and, s. 111 thereof, which lays down the
various circumstances under which the lease of immovable
property comes to an end, contemplated implied surrender.
[475F; G]
In this case, the terms of the compromise filed on 28-
3-1970 made it clear that the tenant himself offered to
vacate the premises on or before 31-3-1974 without any
recourse to any proceedings before the Rent Control
Authorities or the Civil Court. From the language of cl. 13
of the Rent Control order aforesaid it is plain that after
this compromise there remained nothing for which permission
could be granted by the Rent Controller. Thus, when the
landlord sought per mission, the tenant came forward
offering to surrender the lease thereby expressing a desire
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to terminate the lease from a particular date. As is clear
from cl. 13 aforesaid, no permission is necessary where the
tenant chooses to terminate the lease either by a notice
under s. 106 or by surrender under s. 111 of the Transfer of
Property Act. [476B-D]
The agreement of arbitration signed by the parties
clearly stated that party No. 2, namely the tenant, had
surrendered his tenancy rights and agreed to deliver vacant
possession. The arbitration was entered into on the basis of
this agreement and an award was passed. The decree was
passed in terms of the award. During the proceedings before
the Civil Court no objection was raised that the decree of
eviction could not be passed as there was no permission of
the Rent Controller to determine the lease. Clearly
therefore the decree which is to be executed is not a decree
for eviction on the basis of determination of lease by the
landlord but is a decree passed on the basis of the lease
having been determined by the tenant himself by surrender.
[476G-H; 477H; 478A]
Shah Mathuradas Maganlal & Co. v. Nagappa Shankarappa
Malaga & ors., A.I.R. 1976 S.C. 1565, referred to.
The High Court was in error in applying the principle
of ’a contract contrary to public policy’ to the agreement
of arbitration and compromise filed before the Arbitrator
and in arriving at the conclusion that it could not be
permitted. The arbitration agreement, the compromise filed
before the Arbitrator and the Award, and the decree passed
by the Court all put together clearly go to show that what
was referred to arbitration was not as to whether the lease
was determined or not but the period for which the tenant
should be permitted to continue in possession. The lease
came to an end by surrender and what
467
was evolved by the Award was an arrangement on new terms
which was A not a contract just to bypass cl. 13 aforesaid;
for, when the lease itself is determined nothing survives
and therefore it could not be contended that it was contrary
to the provisions of cl. 13. [479A-D]
The High Court was also not right in coming to the
conclusion that there was no surrender as possession was not
handed over. The tenancy came to an end by mutual agreement
and what was sought by arbitration as an arrangement for
time on payment of damages for use and occupation. It did
not either continue the old tenancy or start a new one.
[481B-C]
Foster v. Robinson, [1950] All E.R. 342, referred to. C
If the tenant intended to raise the objection that the
decree in question could not have been passed on the basis
of the arbitration Award as it was in contravention of cl.
13 aforesaid, he should have raised it when the Award was
filled in the Court and notice was served on him. The tenant
admittedly did not raise this objection which was open to
him even when the decree was put to execution more than
once. In this view of the matter, the contention that, by
not raising this objection earlier the respondent has lost
his right to raise the objection and is estopped from doing
so, deserves to be accepted. It has already been held that
the principles of constructive res judicata are applicable
even in execution proceedings. [481D-F]
Mohanlal Goenka v. Benoy Kishna Mukherjee & Ors.,
A.l.R. 1953 S.C. 65, referred to.
JUDGMENT:
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CIVIL APPELLATE JURlSDlCTION: Civil Appeal No. 4102 of
1986.
From the Judgment and order dated 11.9.1986 of the
Madhya Pradesh High Court in Civil Revision No. 176 of 1986.
F.S. Nariman, V.A. Bobde, Anoop V. Mehta, Shyam Mudalia
C, and A.K. Sanghi for the Appellants.
V.M Tarkunde, Madan Lokur, N.S. Manudhane and Subodh
Lalit for the Respondent.
The Judgment of the Court was delivered by
468
OZA J. This appeal arises out of the judgment passed by
the High Court of M.P. in Civil Revision No. 176/86 dated
11.9.86.
This matter arises out of execution proceedings. This
execution case was filed by the present appellant against
the non-appellant judgment-debtor claiming relief of
possession of property Including the Cinema Theatre known as
Gujanan Talkies bearing House No. 57(209) in Ward No. 12
(new Ward No. 11) Chalapula on Nazul Plot No. 72, Sheet No.
53-D, Khamgaon Teh. Khamgaon Distt. Buldhana with furniture
etc. Against an order passed in this execution in favour of
the decree holder the present appellant, the respondent
judgment-debtor filed a revision petition before the High
Court of Bombay at Nagpur. The revision petition was
rejected and against that order a special leave petition was
filed before this Court by Its order dated 4.3.86 in Civil
Appeal No. 842 of 1986 set aside the order of the High Court
and observed that the High Court shall dispose of the
revision petition afresh after hearing parties and giving
reasons in support of the conclusions. It appears that at
the time of hearing, a request was made by the learned
counsel for the judgment-debtor present respondent which was
also supported by the counsel for the other side for the
revision being sent to some other High Court than the High
Court of Bombay at Nagpur and consequently the revision
petition was sent to the High Court of M.P. where the
learned Judge of the High Court disposed of this revision
petition by the impugned judgment and after obtaining leave
from this Court the present appeal is before us.
The facts giving rise to this appeal are that the
petitioners appellants are the landlords, and the respondent
admittedly are the tenants of the suit premises which is a
cinema house alongwith furniture, fittings and other things.
On Feb. 24, 1970 the appellants-landlords filed an
application under Sec. 13(3)(i), (ii), (iii) and (iv) of the
Rent Control order for permission to issue notice
determining the respondent’s lease over the premises on the
grounds of eviction mentioned in the application which were
bona fide, need, subletting, arrears of rent for more than
three months and habitual default in payment of rent. This
application was filed against the five respondents, three of
whom are sub-tenants. on 9.3.1970, the respondent appeared
and filed W.S. denying the allegations but it was not
pleaded that there was a written consent for keeping sub-
tenants which is essential under Section 13 clause 3 (iii)
and therefore in substance Sec. 13(3)(iii) was, in effect,
admitted.
469
The case was fixed for filing of documents and was
adjourned to 16.3.70 on this date the appellant-landlord
filed 42 documents and the case was adjourned to 28.3.70. On
this date an application was made by both the parties for
recording of compromise. The respondent-tenant expressly
admitted the claim of the appellant-landlord for permission
for termination of tenancy and surrendering the tenancy
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rights undertook to vacate the premises on or before
31.3.1974. The learned Rent Controller on 31.3.70 passed an
order saying that as there is no provision for recording of
a compromise, the petition for compromise is treated as an
application for filing of the proceedings. He therefore
filed the proceedings observing that the matter has been
compromised out of the Court.
On 25.6. 1970 there was a partition between the three
landlords and the property in dispute fell to the share of
Shri Vallabhdas Mohta.
On 18.2.1974 an agreement was arrived at between the
parties for referring the matter to the arbitration wherein
it was clearly mentioned that the tenancy in favour of the
respondent tenant stands surrendered and the Arbitrator
should decide how much further time should be granted to the
respondent-tenant for vacating the premises and what should
be the quantum of damages for use and occupation beyond
31.3.1974 which was the agreed date for delivery of
possession in their earlier compromise. It is contended by
the appellant that this agreement for referring the matter
to the Arbitrator clearly showed that the parties agreed
that the tenancy stands surrendered and is substituted by an
arrangement for continuance of possession. lt appears that
in pursuance of the arbitration a further compromise was
entered into by which time till 31.3.1977 was given for
vacating the premises and the compensation for use and
occupation was fixed at Rs.1300 plus taxes and on 29.3.1974
an award was made in terms of this compromise and on the
basis of this award Civil Judge, Senior Division, Khamgaon
by his order dated 16.4.1974 passed a decree in terms of the
award in Civil Suit 95/74 after notice to the parties who
were represented by counsel.
On 29.12.76 respondent wrote a letter requesting for
extension of time to vacate upto the end of December, 1977
on the ground that his amount was blocked with the
Distributors of films. On 18.12.77 respondent wrote another
letter for extension of time for a longer period as the
amount could not be realised during the short period and
agreeing to vacate the premises positively by the end of
December, 1980.
470
On 10.7.1978 the partition was effected between the-members
of the HUF of Shri Vallabhdas Mohta. On 27.4.79 Vallabhdas
Mohta was elevated to the Bench. As the respondent did not
vacate as per their assurances on 31.12.1980 the present
appellant filed an execution case No. 11/81 for execution of
the decree. Notice was issued under order 21 Rule 22 of
C.P.C. but no cause was shown by the respondent and on
24.3.81 an application was made by the parties for recording
of compromise to the effect that time for vacating the
premises is extended upto 31.12.1982 as the last chance. On
24.3.81 the executing court passed an order disposing of the
Execution Application as compromised.
On 31.12.82 the respondent did not vacate and hand over
possession. Consequently on 3 1.1.1983 a fresh application
for execution was filed by the appellant bearing No. 4/83
alongwith four documents. On 29.9.1983 respondent filed
another application requesting for recording a compromise
that the time is further extended upto 30.6.1984. This
application was signed only by two of the appellants and in
sub-stance there was no effective compromise but in the
application the respondent stated that the matter has been
settled. The appellant filed a reply on 20.10.83 denying the
settlement and saying that it was only a tentative
suggestion but was not finally settled. On 26.12.83 the
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respondent filed objections claiming that decree is a
nullity and can not be executed. On 21.1.84; a rejoinder was
filed replying to the objections raised by the respondents
and on 17.4.84 the appellant filed an application praying to
the Court to decide the objections as a preliminary
question.
On 1.10.85 Civil Court rejecting the objections filed
by the respondents directed the execution to proceed and on
4.10.1985 on the request of the respondent granted 10 days
stay in execution. On 14.10.85 a revision application was,
filed by the respondent in the High Court and on 15.10.85
this revision was dismissed by the Bombay High Court in
limine after hearing both the parties but granted one
month’s time staying the execution to approach this Court.
SLP was filed before this Court on 23.10.85 but in the
meantime on 15.11.85 one month’s time granted by the High
Court expired. The respondent moved the trial court
(executing court) and executing court granted a week’s time.
On 19.11.85 the respondent also moved the High Court for
further extension of time but the prayer was rejected by the
High Court and ultimately on 30.11.85 decree was executed
through the process of the Court and possession was taken
from the respondent. on 9.12.85 in the SLP, this Court
passed an order that the appellant he
471
put in possession to run the business of the Cinema house.
The respondent was permitted to take away his machinery and
other things but it was directed that the appellant will not
create any interest in favour of the third party during the
pendency of the matter. Consequently between 28.12.85 and
30.12.85 the respondent removed all his machineries and
other sundry articles. This Court on 4.3.86 granted special
leave and disposed of the Matter finally and remitted it to
the High Court to admit the revision petition and hear it on
merits and dispose it of in accordance with law and on
request made by the parties the matter was sent to the M.P.
High Court. The property was given in possession of the
receiver although in between the petitioners had installed
and put up a new screen. It was also observed by this Court
that the revision petition will be disposed of within three
months. Thereafter the revision petition was disposed of by
the M.P. High Court by the impugned judgment against which
the present appeal is filed.
It was contended by learned counsel for the appellant
that the C.P. & Berar Letting of Houses and Rent Control
order, 1949 is a regulatory order-and controls the action of
the landlord in certain aspects only. According to him Sec.
2 sub-clause 6 read with Sec. 2 sub-clause 5 and Sec.
13(1)(a) and (b) shows that it was meant for restricting
eviction in specific circumstances by fettering the right of
the landlord to terminate the tenancy under Sec. 106 of the
Transfer of Property Act with the permission of the Rent
Controller. But according to the learned counsel so far as
tenant is concerned no permission is necessary and the
tenant may terminate the tenancy by giving a quit notice
under Section 111 of the Transfer of Property Act or may
surrender the tenancy rights by mutual agreement under Sec.
111(e) or surrender impliedly under Sec. 111(f) and such
termination may be lawfully done by the tenant eyen before,
during or after the proceedings under clause 13 of the order
and so far as this right of the tenant is concerned,
according to the learned counsel, no permission is
necessary.
In accordance with the compromise where the tenant
declares his intention to surrender the tenancy it is
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unnecessary for the landlord to pursue the proceedings under
clause 13 as the tenant agrees to go and therefore once the
tenant expresses the desire to surrender the tenancy there
is no need for termination of the lease by the landlord
under Sec. 106. Consequently the compromise petition in this
case filed before the Rent Controller rendered the
proceedings for permission unnecessary. In the face of the
compromise it appears that if the view
472
taken by the Rent Controller is not correct then in
substance the order indicates that he granted permission for
surrender of the tenancy and it is only in that context that
he could pass an order for filing of the application as once
the lease is surrendered the question of determining the
lease does not arise and it was contended that this
conclusion is the direct result of the recitals in the
compromise and the order passed by the Rent Controller.
According to the learned counsel it could only be understood
to mean two things i) that the lease stands surrendered and
therefore the need of permission to determine does not arise
or that as the tenant expresses his desire to surrender the
lease stands terminated and therefore the question of
permission does not arise or as the tenant expresses the
desire to surrender the Rent Controller . files the
proceedings thereby impliedly permitting the determination
of lease by surrender. In either of the event, according to
the learned counsel, in the face of the order passed by the
Rent Controller the objections raised by the judgment-debtor
in execution could not be sustained.
It was also contended that delivery of physical
possession by the tenant to the landlord is not a pre-
requisite for an effective and valid surrender under Section
] 11(e) and (f). It is only a circumstance from which an
implied surrender may be inferred as it is also one of the
modes of implied surrender. Similarly actual delivery of
possession is also not essential for the determination of
lease as according to him, the plain language of Sec. 111(e)
and (f) of Transfer of Property Act does not indicate that
delivery of possession is an essential requisite of
surrender.
According to the learned counsel compromise and
subsequent extension of time by mutual consent ultimately
shows the respondent. tenant’s conduct that at every stage
the original position of surrender of his tenancy rights was
accepted and admitted and still after securing about 12
years on the basis of such compromises this objection has
been raised ultimately as according to the learned counsel,
the objection to the executability of the decree or its
validity should have been raised at the earliest moment as
is clear that this decree of 1974 on the basis of
compromise of 1970 is not questioned for all these years but
is questioned for the first time in 1983 and repeatedly the
judgment-debtor respondent having accepted the position and
got further time extended by either compromise or other vise
clearly indicates that he accepted this position and
therefore he is estopped from raising such an objection at
this stage. Learned counsel for the respondent on the other
hand contended that clause 13(1) of the order clearly
provides
473
that no lease could be determined without the permission of
the Rent Controller and therefore when on the basis of the
compromise in 1970 A the Rent Controller passed an order
filing the application, it is clear that no permission was
granted and according to him after that a number of
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compromises have been entered into but as initially the
lease has not been determined with the permission of the
Rent Controller the decree for eviction could not be said to
be in accordance with Clause 13 and on this basis the
objection filed by the respondent judgement-debtor are fully
justified. Learned counsel for both the parties on the
questions involved referred to series of decisions of High
Courts and of this Court in support of their contentions.
Even learned counsel for the respondent could not
contend that even if a tenant intend to terminate the lease,
a permission under Section 13 was necessary nor it was
contended that even if a tenant intended to surrender the
lease he could not do so without the previous permission of
the Rent Controller under Clause 13. In fact clause 13 of
the order puts restriction on the rights of the landlord to
terminate the tenancy and seek eviction. It is because of
this that sub-clause 3 of clause 13 of this order provides
for grounds on the basis of which a permission for
determining the lease could be granted. A perusal of this
Sec 13 of the order therefore indicates that restriction has
been imposed on the right of the landlord to seek eviction
by determining the lease of the tenant and that could only
to be done on specific grounds specified in clause 3 with
the previous permission of the Rent Controller.
" 13(1) No landlord shall, except with the
previous written permission of the Controller-
(a) xx xx xxx F
(b) where the lease is determinable by efflux of
the time limited thereby, require the tenant to
vacate the house by process of law or otherwise if
the tenant is willing to continue the lease on the
same terms and conditions."
The scheme of this order clearly indicates that it is meant
to protect the rights of the tenant by restricting the
rights of the landlord. It initially puts an embargo on the
right of a landlord to determine the lease, if he so
chooses. But it does not restrict the tenant to surrender
the lease either by specific agreement or by an implication
demonstrated by conduct and it will be therefore necessary
to examine the H
474
proceedings which started with the application of the
appellant landlord for permission under clause 13, the reply
filed by the respondent-tenant, compromise petition filed by
both the parties and ultimately an order passed by the Rent
Controller and it is in fact the interpretation of this
order which is really material for the decision of this
matter as the sole ground challenging the execution is that
this decree of eviction is obtained without the prior
permission under clause 13 of the order, the decree can not
be executed and in our opinion therefore it is in this
context that the order passed by the executing court which
rejected the objections of the judgment-debtor respondent
and the High Court of M.P. which allowed the revision
petition and allowed the objections filed by the judgment-
debtor has to be examined.
The executing court by its order dated 1.10.85
considered the question including the question of estoppel
raised by the appellant decree-holder, the learned Court
came to the conclusion that after the compromise and orders
of the Rent Controller in original Suit No.5/74 was filed in
which the decree was passed which is now being executed. It
was held that the tenant respondent did not raise this
objection in the suit and that the suit could not be filed
as there is no previous permission of the Rent Controller in
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accordance with Clause 13 of the order. It also shows that
the first execution i.e. Execution No. 11/1981 was filed and
notice was served on the judgment-debtor the decree was not
challenged by the judgment-debtor on the ground that it was
obtained without the permission of the Rent Controller. In
this view of the matter the executing court rejected the
objections holding that if after the passing of the decree
it was put to execution on number of occasions when the
judgment-debtor instead of raising an objection only pleaded
for time and time was extended again and . again. Ultimately
after 11 years for the first time this objection the
judgment-debtor could not raise, the executing court
rejected the objections filed by the objector judgment-
debtor.
In fact the basic question is as to what is the
restriction put because of Sec. 13 of the C.P. & Berar Rent
Control order. As this Ci Section has been quoted above it
is very clear that it starts with no landlord and it is this
which makes it clear that it is a restriction put on the
right of landlord to proceed with the determination of the
tenancy and for that purpose it is necessary that he should
obtain the permission of the Rent Controller. Sub-clause 2
of this Section again indicates that when a landlord seeks
to obtain permission under sub-sec. 1 then he will have to
apply to the Rent Controller.
475
Sub-clause 3 of this Section thereafter provides that
the Rent Controller shall grant permission if he is
satisfied in respect of grounds enumerated as sub-clauses of
clause 3 of Section 13. The scheme of this Section therefore
clearly indicates that the permission which is required
under Sec. 13 is only needed when the landlord wants to
terminate the tenancy. It is not at all necessary if the
tenant wants to surrender the lease or terminate the tenancy
or vacate the premises. Section 106 of the Transfer of
Property Act reads as under:-
"106. In the absence of a contract or local law or
usage to the contrary, a lease of immoveable
property for agricultural or manufacturing
purposes shall be deemed to be a lease from year
to year, terminable, on the part of either lessor
or lessee, by six months, notice expiring with the
end of a year of the tenancy, and a lease of
immoveable property for any other purpose shall be
deemed to be a lease from month to month,
terminable, on the part of either lessor or
lessee, by fifteen days’ notice expiring with the
end of a month of the tenancy.
Every notice under this section must be in
writing, signed by or on behalf of the person
giving it, and either be sent by post to the party
who is intended to be bound by it or be tendered
or delivered personally to such party or to one of
his family or servants, at his residence, or (if
such tender or delivery is not practicable)
affixed to a conspicuous part of the property."
This provides for termination of the lease and it is clear
that the lease could be determined either by the lessor or
by the lessee and it is only when the lease is determined by
the lesser i.e. Iandlord that provisions of Section 13 of
the C.P. & Berar Rent Control order is attracted but not
otherwise.
Section 111 of the Transfer of Property Act provides
for various circumstances when the lease of immovable
property comes to an end. It contemplates surrender, implied
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surrender and it is in this context that the compromise
filed before the Rent Controller deserves to be looked at.
This compromise was filed before the Rent Controller on
23.3.70. The relevant clause of this compromise reads:
"(b) The applicants assure and hereby undertake
not to evict N.A. 2 before 3 1st March, 1974. The
Applicant No. 2
476
shall vacate the premises on or before that day
without recourse to any procedure to be followed
either before Rent Control Authorities or the
Civil Court.
It is therefore clear that the tenant himself offered to
vacate the premises on or before 31st March, 1974 without
any recourse to any proceedings before any Tribunal. It
therefore clearly appears from this compromise that the
tenant agreed to surrender the lease and further agreed to
hand over possession on or before 31st March 1974. It is in
this context that if language of Sec. 13 is examined, it is
plain that after this compromise there remained nothing for
which permission could be granted by the Rent Controller.
The permission is necessary if the landlord wants to
terminate the tenancy on any one sf the grounds available
under the provisions of Section 13 and before granting such
permission the Rent Controller has to satisfy himself about
the existence of the grounds. In this case when landlord
sought permission the tenant came forward offering to
surrender the lease thereby the tenant expressed a desire to
terminate the lease from a particular date and as is clear
from the language of Section 13 that no permission is
necessary where the tenant chooses to terminate the lease
either by a notice under Sec. 106 or by surrender under Sec.
111 of the Transfer of Property Act and under these
circumstances therefore the order passed by the Rent
Controller filing this compromise appears to be just and
fair. It appears that the Rent Controller took the view that
as the tenant himself has offered to surrender and determine
the lease by surrender the question of permission does not
arise.
In 1974, Civil Suit No. 5/74 was filed before the Civil
Judge and an agreement of arbitration was filed before the
Court. In this agreement of arbitration the first clause is
very material which reads as under:
"Whereas Party No. 2 had surrendered his tenancy
rights and had agreed to deliver vacant possession
of the following property to landlord party No. 1
and"
It is signed by the landlord and the tenant and it is
clearly stated that party No. 2 had surrendered his tenancy
rights and had agreed to deliver vacant possession. It is on
the basis of this arbitration agreement that the matter was
before the Arbitrator where the compromise was filed which
is the basis of the award and on the basis of the award a
decree was passed by the Court of Civil Judge, Khamgaon
Senior Division in Regular Civil Suit No. 95/74. During the
proceedings in
477
this suit it is clear that no objection was raised that a
decree for eviction could not be passed as there was no
permission of the Rent Controller to determine the lease. On
the contrary the arbitration agreement itself started with
the condition that the tenant had already surrendered his
tenancy rights as is clear from the clause quoted above.
Clause 2 incorporated in the compromise filed before the
Arbitrator reads as under:
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|"(2) That Party No. 2 shall pay Rs 1301 (Rs
Thirteen hundred and, one only) per month as damages from
1.4.1˜74 and shall also pay all the present and future
taxes, including house tax and nazal rent, regularly every
month in advance. The quantum of damages is agreed between
the parties only upto the agreed date of vacation, after
which Party No. 1 will be entitled to damages on the basis
of the then market rate."
A similar clause in the agreement and consequent decree go
to show that as lease was surrendered and a new arrangement
was substituted under which the respondent continued in
possession and agreed to hand over possession upto 31.3.77.
Thereafter there was no objection that could be raised
to the passing of this decree for eviction and thereafter
when possession was not given as provided for in this decree
upto 31.3.77 further time was sought and ultimately in spite
of repeated extension of time the possession was not handed
over till 31.12.80 an execution case was filed which was No.
11/81 and notice was issued under order 21 Rule 22. In
response to this notice again an application was made for
recording of compromise for grant of time till 31.12.82 as a
last chance and on 24.3.81 the executing court passed an
order disposing of the execution on the basis of the
compromise permitting time upto 31.12.82. But when
possession was not delivered even on 31.12.82 an execution
was filed on 31.1.83 bearing No. 4/83 out of which the
present appeal arises.
It is clear that from the beginning in 1970 when the
compromise was filed before the Rent Controller the tenant
has admitted to have surrendered the tenancy rights and
thereby determined the lease by surrender. This was again
reaffirmed when second time the arbitration was entered into
and on the basis of that arbitration agreement, an award was
passed on the basis of a compromise, and a decree was passed
in terms of the award. Clearly therefore the decree which is
to
478
be executed is not a decree for eviction on the basis of
determination of the lease by the landlord but is a decree
passed on the basis of lease having been determined by the
tenant himself by surrender which has been stated by the
tenant on number of occasions in categorical terms.
In Shah Mathuradas Maganlal and Co. v. Nagappa
Shankarappa Malaga and others, AIR 1976 S.C. 1565 this Court
had the occasion to examine the question of surrender and it
was observed as under:
"A surrender clause (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 of 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 1) creation of a new relationship,
or by relinquishment of pos session. If 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 fact as the
relinquishment of possession by the lessee and
taking over possession by the lessor."
It appears that the learned Judge of the High Court
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felt that when originally a compromise was filed before the
Rent Controller it was not in accordance with Sec. 13. In
fact Sec. 13 contemplates a permission for determination of
the lease but where the tenant agrees to determine the lease
himself by mutual consent the question of permission does
not arise. Apart from it, it has not been noticed that in
the reply filed before the Rent Controller the subletting is
not disputed and it is not pleaded by the tenant the
judgment-debtor now the respondent that the sub-lease was
with the written consent of the landlord as is required and
in this view of the matter the order of the Rent Controller
could even be interpreted to mean that permission ˜, was
granted but apart from it as the order itself states that
the matter is filed apparently because the Rent Controller
felt that as the tenant himself has agreed to determine the
lease on a particular date there is no question for grant of
permission and it is here it appears that the learned Judge
fell into the error.
Thereafter the learned Judge of the High Court has
examined
479
the agreement of arbitration and the compromise filed before
the Arbitrator, and had applied the principle of a contract
contrary to the public policy and on that basis have come to
the conclusion that this could not be permitted. Here again
it appears that the learned Judge has committed an error.
Apparently the arbitration agreement, the compromise filed
before the Arbitrator and the Award and the decree passed by
the Court all put together clearly go to show that what was
referred to the Arbitration was not as to whether the lease
is determined or not but what was referred was the period
for which he should be permitted to continue in possession.
The determination of lease was agreed between the parties as
it was even agreed earlier. The only question therefore was
grant of time on the new terms and conditions which were to
be determined by the Arbitrator. Thus, in fact the lease
came to an end by surrender and what by the Award was
evolved was an arrangement on new terms and this therefore
does not appear to be any contract just to bypass Section
13, as when the lease itself is determined nothing survives
and therefore it could not be contended that it was contrary
to provisions of Section 13.
In Foster v. Robinson, [1950] 2 All E.R. 342 a question
more or less similar, as is before us, came for
consideration. In that case the question of surrender
although the tenant continued to be in possession was
considered. It was observed as under:
"The landlord, a farmer, was the owner of a
cottage. Shortly after the 1914-19 18 war the
defendant’s father was engaged to work for the
landlord on his farm, and at the time of that
engagement and in consequence of his employment
the cottage was let to the defendant’s father at a
rent of 3.5.s a half year. Shortly before May
1946, the defendant’s father, owing to age and
infirmity, gave up work, and in that month there
was made between him and the landlord a verbal
agreement whereby the existing tenancy was to
cease, the landlord was not to charge rent any
more, and the defendant’s father was to be allowed
to live in the cottage for the remainder of his
life rent free. On Jan. 15, 1950 the defendant’s
father died. The defendant, a daughter of the
deceased, had lived with him in the cottage for a
number of years and was residing there at the date
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of his death. The landlord informed the defendant
that it was his intention to sell the cottage, but
that she could continue to reside there rent free
until Apr. 6, 1950. On Feb. 18, 1950, letters of
administration were granted to the defendant
480
who refused to leave the cottage, claiming that at the
date A of his death her father was still a contractual
tenant under the original tenancy and that tenancy was
now vested in her.
The question on the facts quoted above was examined and in
plain language it was observed:
"The question in the present case is whether on the
facts as found by the learned county court judge there
are circumstances which prevent the tenant from
asserting that the old relationship has been superseded
by the new. Put in its simplest form, if there is a new
arrangement which the tenant represents by his conduct
that he is asserting, then he is estopped from denying
that the landlord was capable of entering into the new
arrangement, and, if the pew arrangement could not be
entered into if the old agreement subsisted, it follows
that the tenant is equally prevented from denying that
the old agreement has gone."
And having so found it was further held:
"Having so found, I can see no ground why the
transaction should not have the result the parties
intended it should have. I think it amounts to this,
that the determination of the former tenancy was
equivalent to delivery up of possession under that
tenancy and then a resumption of possession under a new
transaction immediately afterwards. I think, to use the
language of Cockburn, C.J. in Oastler v. Henderson (6)
(2 Q.B.D. 578) there was a virtual taking of
possession. If the key had been handed over and then
been handed back the next minute that would have
symbolised the delivery up and the grant of possession
and I cannot think that it vitally matters that
performance was not gone through. That is the effect of
a surrender by operation of law in such a case as the
present and the learned Judge has so found, and, there
being evidence to support that finding, we would not be
justified in differing from his conclusion as to fact,
and, if not, it seems to me the conclusions which I
have stated necessarily follow. The whole question is:
Was the old contractual tenancy determined? Was it
determined as the result of surrender by operation of
law? The learned county court judge found that it was,
and I think that is a finding supported by the evidence
without any misdirection.
481
in law and that this appeal should be dismissed."
It is thus clear that when the parties surrendered the
tenancy and substituted by a fresh arrangement merely
because technically the possession was not handed over is of
not much consequence. Apparently in the present case also by
mutual agreement the tenancy came to an end, and by
arbitration what was sought was an arrangement for time on
payment of damages for use and occupation. Admittedly it did
not either continue the old tenancy or started any new one.
This substitution of new arrangement and the determination
of the old by mutual agreement clearly indicates that the
tenant surrendered his tenancy rights and the court below
was not right in coming to the conclusion that the surrender
is no there as possession was not handed over.
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The next question which is of some importance is about
raising of the objections at the earlier stage. Admittedly
when the award was filed in the court, notice was served and
no objection was raised. If the tenant intended to raise the
objection that this decree on the basis of the award could
not be passed as it was in contravention of Sec. 13 of the
Rent Act and therefore was absolutely without jurisdiction.
Such an objection could have been raised there and then. The
tenant admittedly did not raise this objection which was
open to him. In this view of the matter, the contention on
behalf of the appellant about the constructive res-judicata
also is of some significance. This question of constructive
res judicata in execution proceedings came before this Court
in Mohanlal Goenka v. Benoy Kishna Mukherjee and others, AIR
1953 S.C. 65. In this decision following the earlier
decision of the Privy Council, this Court ruled that the
principles of constructive res-judicata will be applicable
even in execution proceedings.
It is also clear that if when the decree was passed on
the basis of award and notice was issued to the judgment-
debtor respondent no such objection was raised. It is also
clear that the decree was put in execution on more than one
occasions and this objection was for the first time raised
only in 1983. In this view of the matter also the contention
of the learned counsel for the appellant that by not raising
this objection earlier the judgment-debtor has lost his
right to raise this objection and he is estopped, deserves
to be accepted, although in the light of what we have
discussed earlier, it is not necessary to go into this
question, having come to the conclusion on the first
question against the respondent.
482
In the light of the discussion above therefore the
judgment passed by the High Court can not be maintained. The
appeal is therefore allowed. The judgment passed by the High
Court is set aside and that passed by the executing court is
maintained. In the circumstances of the case the parties are
directed to bear their own costs.
H.L.C. Appeal allowed.
483