Full Judgment Text
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PETITIONER:
UNDAVILLI NAGARATHNAM & ANR.
Vs.
RESPONDENT:
REDDI SATYANARAYANA MURTHI & ORS.
DATE OF JUDGMENT01/04/1976
BENCH:
GOSWAMI, P.K.
BENCH:
GOSWAMI, P.K.
KHANNA, HANS RAJ
CITATION:
1976 AIR 1830 1976 SCR (3) 983
1976 SCC (4) 20
ACT:
Transfer of Property Act 1882-Secs. 76 (a)(e), 105-
Meaning of lease- Distinction between lease & settlement-
Whether recital in a document conclu-give-Andhra Pradesh
(Andhra Area) Tenancy Act 1956 Secs. 2(f)(e) 16, 17 Meaning
of Landlord and Tenant-Bar of jurisdiction.
HEADNOTE:
One Mr. Subbarayudu had no male issue. He had his wife,
plaintiff No. 2, and two daughters, one of whom is plaintiff
No. I and another defendant No. 4. The defendant No. I is
the son of defendant No. 4. Mr. Subbarayudu and plaintiff
No. 2 made various gifts in favour of their daughters. Shri
Subbrayudu made a settlement in the year 1955 whereby he
gave the properties m Schedules A and to the first
plaintiff. The properties were to be enjoyed by Subbarayudu
and plaintiff No. 2 during their life time and after the
death of Subbarayudu plaintiff No. 1 was to get property
mentioned in Schedule A and after the death of plaintiff No.
2 she was to get property mentioned in Schedule In 1958,
Subbarayudu was alleged to have executed 4 documents
including a Deed of Revocation revoking the settlement of
1955. In 1958, Subbarayudu entered into a document with
defendant No. 1 giving him possession of the property in
which he had life interest. The document provided that
defendant No. 1 should deliver 43 bags of paddy every year
to Subbarayudu and take a receipt. After the death of
Subbarayudu plaintiffs Nos. 1 and 2 basing their claim on
the settlement of 1955 called upon the defendant No. 1 to
(deliver the possession of the property. The two issues
which now survive are whether defendant No. 1 is entitled to
any protection under the Andhra Tenancy Act and secondly
whether the deed executed by Subbarayudu in favour of first
defendant is a settlement deed or a lease. The Trial Court
found that the E; settlement deed of 1955 was valid and that
the subsequent deed of revocation was invalid. the High
Court confirmed the said findings. The same are not under
challenge. The Trial Court, however, held the document to be
a settlement deed and not a lease and that. therefore, the
first defendant was not entitled to any protection under the
Andhra Pradesh (Andhra Area) Tenancy Act, 1956. Accordingly,
the Trial Court decreed the suit of possession in favour of
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the plaintiffs.
The High Court in appeal came to the conclusion that
the document satisfied all the conditions of the definition
of lease under section 105 of the Transfer of Property Act
and could not be treated as settlement.
The appellant-plaintiffs contended
(1) That the High Court was wrong in holding the
document to be a lease and not a settlement.
(2) Subbarayudu had reserved only life interest in
Schedule and Properties and after he gifted the same to the
plaintiff No. 2 he could not in law imperil her right to
possession of the same after his death by leasing out the
same property.
(3) In any case it was not an act of prudent management
of the properties in which he had only life interest and the
principles applicable to a mortgagee in possession under
section 76(a) and (e) of the Transfer of Property Act would
be applicable in the present case and the lease would not be
binding on the plaintiffs.
(4) Plaintiffs are not landlords within the meaning of
Section 2(f) of the Act and the defendant No. 1 is not a
cultivating tenant under the plain tiffs.
984
Dismissing the appeal,
^
HELD: 1. The document is described as Settlement Deed
but that recital is not decisive of the real intent of the
document. The document makes it clear that the possession
was handed over to defendant No. l; that the defendant No. I
was to give 43 bags of paddy every year and it further
mentioned "without subjecting me to do any expense
whatsoever and obtaining proper receipts from me". The
document does not disclose the disposition of the property
by a grandfather to a grandson but a business-like
instrument. [988C-E]
2. Subbarayudu was old and the Settlement Deed made it
clear that during his life time he would enjoy the produce
of the land. and therefore‘ he was keen to have at least
some paddy from the land during his life time as a source of
income and perhaps thought that his grandson would
faithfully carry out the conditions without creating any
difficulties. [699C-D]
3. Assuming without deciding that the principles under
section 76(a) & (e) of the Transfer of Property Act might be
applicable, it cannot be said that granting of the lease to
defendant No. 1 in the entire circumstances of the case was
not a prudent act of management of the properties. In view
of the relationship of the parties that was a natural
arrangement for cultivation of the land. [989E-F]
4. When a person with full knowledge of the law.
ignorance of which is no excuse, enters upon a lawful
transaction or executes a valid document, the rights flowing
from the law cannot be denied to those who are entitled to
their benefit on the supposed theory of estoppel or a plea
of contracting out by implication. [990A-B]
5. Section 2(f) defines a landlord to mean the owner of
holding or part thereof who is entitled to evict the
cultivating tenant from such holding and includes the heirs
and assigns, legal representatives of such owners. Or per
sons deriving rights through him. Section 2(c) defines
cultivating tenant to mean a person who cultivates by his
own labour or by hired labour under his supervision and
control any land belonging to another under a tenancy
agreement. express or implied. The High Court has found that
defendant No. I was a cultivating tenant of the landlord. In
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view of the conclusion that the instrument is of lease there
is no difficulty in holding that Subbarayudu was the
landlord and on the death or Subbarayudu plaintiffs are
landlords. Section 16 of the Act provides for a special
forum for adjudication of disputes under the Act including
eviction of cultivating tenants and under section 17 of the
Act the provisions of the act over-ride anything
inconsistent therewith contain ed in any pre-existing law.
custom, usage, agreement or decree or order of a Court.
[990C-F, 991E-F]
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1048 of
1968.
Appeal from the Judgment and Decree/order dated the
26th April 1967 of the Andhra Pradesh High Court in Appeal
No. 64 of 1962.
M. Natesan, K. Jayaram and R. Chandrasekar, for the
Appellant.
B. V. Subramanyam, I. Balaiah and G. Narasimhulu, for
Respondent No. 1.
Ex-parte for Respondents 2-4.
The Judgment of the Court was delivered by
GOSWAMI, J.-This is an appeal on certificate from the
judgment of the Andhra Pradesh High Court.
985
The two plaintiffs in the original suit are the
appellants. They brought a suit in the court of the
Subordinate Judge, Rajahmundry, for evicting defendants 1 to
3 from the properties in Schedule A, B and C and for
delivery of possession of A and Schedule properties to the
first plaintiff and of the Schedule properties either to the
first plaintiff or to the second plaintiff. The suit
properties were owned and possessed by Meenavalli.
Subbarayudu of Vedurupaka (hereinafter to be described as
Subbarayudu). Subbarayudu was the husband of the second
plaintiff and father of the first plaintiff. He had no male
issue. He had only two daughters, plaintiff No. 1 and
defendant No. 4., who was the older of the two. Subbarayudu
made various dispositions of his property by executing
several documents during his life time in favour of his
daughters. So did his wife, the second plaintiff. While
making such dispositions he was careful enough to make
provision for himself and for his wife during their life
time. The fourth defendant was married in 1923 and defendant
No. 1 is her son. The first plaintiff was married in 1935.
After the marriage of the first plaintiff the mother
executed a deed of gift (Ex. B-6) on February 13, 1935 in
her favour in respect of certain land. On the same day her
father also executed is her favour of deed of gift (Ex. B-7)
in respect of some other land. On June 7, 1935, Subbarayudu
executed another deed of gift in favour of his first
daughter, defendant No. 4, giving her also some land (Ex. B-
8). All the three documents were registered on the same day,
namely, on June 11, 1935. After about nine years the mother
executed a settlement deed (Ex. B-5) dated June 7, 1944, in
respect of her joint 1/3 share in certain property in favour
of her two daughters to be shared by them equally reserving
life interest for herself. Then followed a settlement deed
(Ex. A-4) of January 8, 1950 executed by Subbarayudu in
favour of the first plaintiff living her ten acres of
pasture land as mentioned in- Schedule. Subbarayudu further
executed a registered deed dated January 23,1950 (Ex. A-B),
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described as will, whereby he gave to his daughters all the
properties barring a few mentioned therein and stating that
after his own life time and after the life time of his wife
all his movable and immovable properties would be taken in
equal shares by his two daughters. On April 14, 1955, he
executed a settlement deed (Ex. A-l) hereunder he gave A and
Schedule properties to the first plaintiff, his second
daughter. By this document the A Schedule property was to
beyond by the first plaintiff after his life time and
Schedule property after the life time of her parents. Three
years later on August 4, 1958, Subarayudu executed four more
documents including a deed of revocation. Ex. B-10 is the
document by which the earlier document Ex. A-l was revoked
stating that the earlier one had been brought about by fraud
and misrepresentation. Ex. B-ll was executed purporting to
settle his property on both the daughters to be enjoyed in
equal shares after the life time of their parents. Ex. B-12
was executed in favour of his wife and the elder daughter
giving them a certain extent of the land in Mellore village
besides the house sites and houses in Vedurupaka. It was
mentioned in Ex. B-12 that after his life time his wife
would be in possession without powers of alianation and that
thereafter the elder daughter
986
would be entitled to possession and enjoyment of the
property as an absolute owner. Ex. B-13 was executed in
favour of the first defendant, namely, grandson of
Subbarayudu through his first daughter, giving him
possession of the properties in which he had life interest
stipulating at the same time that he (the first defendant)
should deliver forty three bags of paddy and obtain receipt
from him every year during his life time.
The plaintiffs’ case is that Subbarayudu had leased out A
and Schedule properties mentioned in Ex. A-l on August 16,
1958, to the third defendant, the son of the second
defendant and that both these defendants were in possession
of the properties as tenants from that time. Subbarayudu
died on May S, 1960. After his death plaintiffs 1 and 2
basing their claim on Ex. A-l respectively gave notice to
the third defendant on June 14, 1960 and on July 11, 1960 to
deliver back the lands in their possession. The third
defendant replied that he was only working as a farm servant
under the first defendant and the latter was the lessee
under a deed dated August 4, 1950 and that the settlement
deed in favour of the plaintiff‘s had been removed by late
Subbarayudu. The first plaintiff also had trouble with the
first defendant when the latter drove away his watchman and
lodged a complaint with the police claiming that he was in
possession of the lands. The first plaintiff thereupon sent
a notice on August 20, 1960, to the first defendant who, on
the other hand, asserted his rights in the lands under a
deed of settlement (Ex. B-13) dated August 4, 1958. That led
to the institution of the present suit by the plaintiff out
of which this appeal has arisen.
The first daughter of Subbarayudu was impleaded as
defendant No. 4 in the plaint.
The first and the fourth defendants filed separate
written statements. Defendants Nos. 2 and 3 filed a memo
adopting the written statement filed by the first defendant.
All of them repudiated the plaintiffs’ claim for possession
of the lands.
Several issues were raised, but we are concerned in
this appeal only with Issue No. S and the additional Issue
No. 1 which are as follows
"Issue No. 5. Whether defendant No. 1 is entitled to
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any protection under the Andhra Tenancy Act ?
Additional Issue No. 1 "Whether the deed dated 4-8-1958
executed by late Meenavalli Subarayudu in favour of the 1st
defendant is a settlement deed or a lease ?"
It may be mentioned that issue were raised regarding
the validity of Ex. A-l, Ex. B-10, Ex. B-11 and Ex. B-13.
The trial court held that Ex. A-1 on which the plaintiffs
based their suit was a valid document. The trial court
further held that the deed of revocation (Ex. B-10) and deed
of settlement (Ex. B-11) were invalid. The High Court
affirmed these findings of the trial court and that
controversy is closed.
987
With regard to Ex. B-13, the trial court held it to be
a true document and that it was a settlement deed and not a
lease and that the first defendant was not entitled to any
protection under the Andhra Pradesh (Andhra Area) Tenancy
Act, 1956 (briefly the Andhra Act) and that defendants 2 and
3 were not tenants in possession of the land at the time of
institution of the suit. In the view it tools the trial
court decreed the suit for possession of A and Schedule
properties in favour of the first plaintiff and directing
that the future profits, which would be payable by the first
defendant, were to be determined in separate proceedings.
The suit was also decreed in favour of the second plaintiff
for possession of the Schedule properties with similar
orders regarding future profits.
On appeal by the defendants the High Court, after
hearing the parties, remanded the matter for a finding under
order 41, rule 25, Civil Procedure Code, by framing the
following issue:
"Whether the plaintiffs accepted the gift of A and
Schedule properties by late Subbarayudu before its
revocation on 4-8-1958 by late Subbarayudu" ?
The subordinate judge returned a finding that the gift
had been accepted prior to the execution of the deed of
revocation (Ex. B-10). The High Court thereafter heard the
appeal and partly allowed the same.
The High Court, in disagreement with the trial court,
came to the conclusion that the document Ex. B-13 satisfied
all the conditions of the definition of lease under section
105 of the Transfer of Property Act and could not be treated
as a settlement. The High Court further observed:
"The term of lease is co-terminus with the life of
the lessor with the result that as soon as the life of
Subbarayudu ended, the term of lease automatically
expired. On the death of Subbarayudu the property would
pass to the per sons specified in Exc. A-1. That must
be the normal incidents of the transaction under the
ordinary law. At the time of the transaction of lease
was entered into the Andhra Tenancy Act had already
come into force. Subbarayudu was the landlord and the
1st defendant was the cultivating tenant within the
meaning of those terms in the Andhra Tenancy Act. On
the death of Subbarayudu his heirs, assignees and
successors would likewise be landlords and they are
entitled to evict the cultivating tenants".
Repelling the contention of the plaintiffs that the
first defendant was not the tenant of Subbarayudu at all,
but only a trespasser, the High Court held, on the oral and
documentary evidence as well as on the admissions of
defendants 2 and 3 with regard to the possession of
defendant No. 1 as a lessee, that the defendant No. 1 was a
cultivating tenant under the plaintiffs on the death of
Subbarayudu. The High Court having come to that conclusion
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further held that the plaintiffs could evict the defendants
only under the provisions of the
988
Andhra Act by making an appropriate application to the
Tehsildar and not in the present suit in the civil court.
The High Court, therefore, granted all the reliefs prayed
for by the plaintiffs except that of eviction from A and
Schedule properties which was directed to be obtained by due
recourse to. the provisions of the Andhra Act The High Court
accordingly partly allowed the appeal refusing the prayer
for eviction from A and Schedule properties but at the same
time declaring that the plaintiffs were entitled to the
suit properties in terms of Ex. A-l. The Schedule property
was not the subject matter of appeal before the High Court
and the decree in relation to that property was unaffected.
Mr. Natesan, the learned counsel appearing on behalf of
the appellants, submits that the High Court is wrong in
holding that Ex. A-1 is a lease and not a settlement.
We have perused the document (Ex. B-13). It is true
that it is described in the very opening words of the
document as "settlement deed". But that recital is not
decisive of the real intent of the document. Under section
105 of the Transfer of Property Act, a lease of immovable
property is a transfer of a right to enjoy such property,
made for a certain time, express or implied, or in
perpetuity, in
consideration of a price paid or promised, or of money, a
share of crops, service or any other thing of value, to be
rendered periodically or on specified occasions to the
transferor by the transferee, who accepts the transfer on
such terms. The necessary ingredients mentioned under
section 105 of the, Transfer of Property Act are found in
the document (Ex. B-13). It is clear from the recitals that
possession of the land was handed over by Subbarayudu to the
first defendant for enjoying the same during the life time
of Subbarayudu inconsideration of ’’fortythree weighed bags
of paddy worth Rs. 800/....every year commencing from 15-1-
1959". The document does not disclose a disposition of the
property by a grandfather to a grandson out of love and
affection but is a business-like instrument. To illustrate,
the document refers to paddy to be delivered to Subbarayudu
"without subjecting me to any expenses whatsoever and
obtaining proper receipts from me". It goes on to say that
"payment not borne by receipt need not be given credit to
you". We are satisfied that the document (Ex. B-13) fulfils
the ingredients of a lease under section 105 of the Transfer
of Property Act. The submission of Mr Natesan, therefore,
cannot be accepted.
Mr. Natesan next contends that Subbarayudu reserving;
only "life interest" in the Schedule and properties after he
had gifted the same to the plaintiffs by A-1 on April 14,
1955, could not in law imperil their rights to possession of
the same after his death by leasing out the same properties
in 1958 in the manner done in view of the provisions of the
Andhra Act which had already come into force in 1956. At any
rate, says Mr. Natesan, it was not an act of prudent
management of the properties in which he had only life
interest and the principles applicable to a mortgagee in
possession under section 76(a) and (e) of the Transfer of
Property Act would be applicable in the present case and the
lease will not be binding on the plaintiffs.
989
In Ex. A-l itself, which is the sheet-anchor of
plaintiffs’ claim, A there was reference, inter alia, to two
things relevant for consideration on this aspect of the
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matter. Firstly, it is stated there:
"I and my wife, Bapanamma, who is your mother
shall during our life time, be in enjoyment of the A
Schedule mentioned property and Schedule mentioned
property respectively without powers of disposition by
way of gift, sale, etc., but only enjoying the produce
got there by paying all Government taxes".
Secondly, further:
"After my life time you take possession of the A
Schedule mentioned property and after your mother’s
life-time the Schedule mentioned property".
In the first extract just set out, Subbarayudu made it
clear that during his life he would enjoy the produce of the
land "got there by paying all Government taxes". Subbarayudu
was already an old man in 1955 and was apparently unable
personally to look after cultivation of the land. His wife
and younger daughter were also, perhaps, considered by him
no better for the purpose. Besides, it appears that he was
keen to have at least some paddy to come to him from the
land during his life time as a source of income and perhaps
thought that his grandson, the first defendant, would
faithfully carry out the conditions without creating
difficulties. This position does not appear to have been
disapproved even by the plaintiffs during the life time of
Subbarayudu.
Assuming, but not deciding, that the principles under
section 76(a) and (e) of the Transfer of Property Act may
even be applicable in this case, we are unable to hold that
granting of the lease to defendant No. 1 in the entire
circumstances of the case was not a prudent act of
management of the properties. In view of the relationship of
the parties, that was a natural arrangement for cultivation
of the land.
Mr. Natesan drew our attention to several decisions of
this Court dealing with section 76 of the Transfer of
Property Act and in particular to the decision in Prabhu v.
Ramdev & ors.(l), wherein this Court held that-
"even in regard to tenants inducted into the land
by a mortgagee cases may arise where we said tenants
may acquire rights of special character by virtue of
statutory provisions which by, in the meanwhile, come
into operation. A permissible settlements a mortgagee
in possession with a tenant in the course of prudent
management and the springing up of rights in the tenant
conferred or created by statute based on the nature of
the land and possession for the requisite period, it
was observed, was a different matter altogether".
990
Counsel submits that the present case is clearly
distinguishable from the above case since prior to the
execution of Ex. B-13 in 1958 the Andhra Act had already
come into force and it was not a case where certain special
rights were created "in the meanwhile".
When a person with full knowledge of the law, ignorance
of which is no excuse, enters upon a lawful transaction or
executes a valid document, the rights flowing from the law
cannot be denied to those who are entitled to their benefit
on the supposed theory of estoppel or a plea of contracting
out by implication. Prabhu’s case (supra) is not an
authority for such a proposition which counsel seeks to
spell out. The provisions of the Andhra Act will, therefore,
be attracted to the tenancy created by Ex. B-13.
It is further contended by Mr. Natesan that the
plaintiffs are not landlords within the meaning of section
2(f) of the Andhra Act. He also submits that defendant No. 1
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is not a cultivating tenant under the plaintiffs.
By section 2(f) of the Andhra Act, " ’landlord’ means,
the owner of a holding or part thereof who is entitled to
evict the cultivating tenant from such holding or part, and
includes the heirs, assignees, legal representatives of such
owner, or person deriving rights through him".
By section 2(c) of the said Act, " ’cultivating tenant’
means a per son who cultivates by his own labour or by that
of any other member of his family or by hired labour under
his supervision and control, any land belonging to another
under a tenancy agreement, express or implied, but does not
include a mere intermediary".
The High Court has found that defendant No. 1 was a
cultivating tenant of the landlord under Subbarayudu relying
on Ex. B-13 r and also on admissions by the defendants 2 and
3 who conceded possession of the land by defendant No. 1 as
a lessee under Subbarayudu and their own possession as farm
servants under the first defendant. We have no reason to
take a contrary view.
In view of our conclusion that Ex. B-13 is an
instrument of lease, there is no difficulty in holding that
Subbarayudu was the quondam landlord of the first defendant
within the meaning of section 2(f) of the Andhra Act.Once
that is established, section 10 of the Andhra Act takes care
of the tenancy that has been created under Ex. B-13.
Section 10 of the Andhra Act at the relevant time reads
as under :
"10(1) "The minimum period of every lease entered
into between a landlord and his cultivating tenant on
or after the commencement of this Act, shall be six
years. Every such lease shall be in writing and shall
specify the holding, its extent and the rent payable
therefor, with such other particulars, as may be
prescribed. The stamp and registration charges for
every such lease shall be borne by the landlord and the
cultivating tenant in equal shares.
991
(2) Notwithstanding anything contained in sub-
section (1) all tenancies subsisting on the date of
promulgation of the Andhra Cultivating Tenants’
Protection ordinance, 1956 (Andhra ordinance 1 of
1956), and protected by that ordinance, and all
subsequent tenancy agreements entered into up to the
commencement of this Act, shall continue for a period
of five years from the 1st June 1956 or until the
expiry of the lease in the normal course, whichever is
later, on the same terms and conditions as before, but
subject to the determination of fair rent in case of
dispute.
(3) After such termination, the landlord may
resume the land from the cultivating tenant without any
notice, and if the tenant does not surrender
possession, the landlord may by an application before
the Tahsildar obtain an order for delivery of
possession in the prescribed manner".
Thus under section 10(1) when Ex. B-13 was executed on
August 4, 1958, the lease created would by statute continue
up to August 4, 1964 and even for further periods by later
amendments of the Act. Taking the original section 10(1)
itself, the landlord Subbarayudu died in May 1960 and there
is no question of the lease ceasing on his death in view of
the clear provision under section 10(1). As assignees by
gift the plaintiffs are landlords on the death of
Subbarayudu. Under section 11, the ownership thus being
changed on the death of the landlord, the tenancy, which
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subsists by operation of law, will continue on the same
terms and conditions for the unexpired portion of the lease
under the scheme of the Act as amended. The expression
"currency of the lease" in section 1-1 will include the
statutory extension of the lease under the provisions of the
Andhra Act.
Termination of tenancy under the Andhra Act is provided
for under section 13. Under section 16" there is a special
forum for adjudication of disputes under the Act including
eviction of cultivating tenants. Under section 17 the
provisions of the Andhra Act override anything inconsistent
therewith contained in any preexisting law, custom, usage,
agreement or decree or order of a Court.
It is, therefore, clear that the civil litigation
between the parties having established their respective
rights based on the two documents, Ex. A-1 and Ex. B-13, and
the plaintiffs being landlords and defendant No. 1 being a
cultivating tenant, eviction will have to be sought for in
accordance with the provisions of the Andhra Act. The High
Court is right in refusing eviction through the process of
the civil court.
In the result we are unable to interfere with the
judgment and decree of the High Court. The appeal is
dismissed. There will be, however, no order as to costs.
P.H.P. Appeal dismissed.
992