Full Judgment Text
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PETITIONER:
P.M.C. KUNHIRAMAN NAIR
Vs.
RESPONDENT:
C.R. NAGANATHA IYER AND ORS.
DATE OF JUDGMENT15/05/1992
BENCH:
AGRAWAL, S.C. (J)
BENCH:
AGRAWAL, S.C. (J)
THOMMEN, T.K. (J)
CITATION:
1993 AIR 307 1992 SCR (3) 371
1992 SCC (4) 254 JT 1992 (4) 235
1992 SCALE (1)1216
ACT:
Transfer of Property Act, 1882: Section 111(f).
Lease-Determination of-Implied surrender-Agreement-
Implied surrender of leasehold rights in property-Suit for
recovery of possession not maintainable subsequent to
surrender of right.
Doctrine of Merger-Trial Court-Judgment of-Appeal-
Decision of High Court-Held Judgment of Trial Court stood
merged in the judgment of High Court.
HEADNOTE:
Respondents No. 1 to 5 entered into an agreement with
the appellant whereunder the appellant advanced money to the
respondents and the respondents entrusted the management of
their property, consisting of land and the buildings and the
machinery of mills standing thereon, to the appellant for a
period of one year. The agreement provided that on the
expiry of period of one year, respondents would get back
possession of their property after paying the amount due to
the appellant. However, before the expiry of the period of
one year fixed under the agreement the respondents entered
into another agreement, dated March 22, 1955 with one TM
which provided that on paying the amount due to the
appellant after the stipulated period TM could take up the
management by himself, pay the rent of the building, conduct
the business and if necessary file a suit against the
appellant and get the Mill vacated and do anything as per
his will and pleasure. Thereafter, TM executed a Deed of
Assignment, dated December 11, 1956, whereby he assigned the
property to the appellant for a sale consideration with
liberty to the appellant to manage the mills, to enter into
rental agreement with the Jenmi of the building by paying
the rent directly, to effect alienation etc. The said
agreement also provided that TM would not have any right or
liability thereafter.
Subsequently, respondent Nos. 1,3 and 5 filed a suit
against respondent Nos.2, 4 and 6 as well as against the
appellant and TM seeking
372
partition and separate possession of their shares in the
suit properties, and for possession of the mill contending
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that the agreement dated March 22, 1955 executed by
respondent Nos. 1 to 5 in favour of TM was a sham
transaction and no rights were conferred on TM under the
said agreement. TM died during the pendency of the suit. In
the suit all disputes between the parties and the legal
representatives of TM were settled out of Court and the only
dispute requiring adjudication was that relating to the
property in question which was claimed by the appellant as
the assignee from TM. The said suit was dismissed by the
Trial Court. Respondents 1 to 6 filed an appeal in the High
Court against the said judgment which was dismissed. While
the said appeal was pending before the High Court,
respondent Nos. 1 to 6 filed a suit for redemption and
recovery of possession of property and decree for possession
of the suit property excluding the plant and machinery was
passed in favour of the respondents. The appeal filed by
the appellant was dismissed by the First Appellate Court and
the second appeal filed by the appellant was also dismissed
by the High Court. Relying upon the judgment of the
Additional Sub-Judge in the earlier suit the High Court
rejected the contention urged by the appellant that there
was relationship of landlord and tenant between the
plaintiff respondents and him and he was entitled to
protection of the Kerala Building (Lease and Rent Control)
Act.
In appeal to this Court, on the question whether the
respondents had a subsisting leasehold interest in the
property in question, it was contended on behalf of the
appellant that the judgment of the Additional Sub-Judge,
having merged in the judgment of the High Court on appeal,
the said judgment of the High Court alone was operative and
as per that judgment the earlier suit only related to
transfer of movable property, namely, the Oil Mill. As
regards the leasehold rights in the suit property it was
submitted that the respondents ceased to have any subsisting
right in the property as lessee since they impliedly
surrendered their leasehold rights in favour of TM by
executing the agreement dated March 22, 1955; thereafter a
fresh tenancy was created in favour of TM by executing the
agreement dated March 22, 1955; thereafter a fresh tenancy
was created in favour of TM which was assigned by him in
favour of the appellant.
Allowing the appeal and setting aside the judgment of
the High Court, this Court,
373
HELD : 1. The judgment of Additional Sub-Judge had
merged in the judgment of the High Court on appeal which
shows that the earlier suit was confined to the Oil Mill
only, treating it as movable property and the said suit did
not relate to the land and building in which the oil mill is
installed and the plea raised in that suit can have no
bearing in the subsequent suit relating to possession of
land and building. [380A-B]
2. It was permissible for the appellant to raise the
plea that the plaintiffs have no subsistitng leasehold
interest in the suit property and the appellant is in
possession of the same as a tenant of the owner of the
property. [380-C]
3. Under Clause (f) of Section 111 of the Transfer of
Property Act, 1882, implied surrender is a mode for
determination of a lease of immovable property. In English
Law, delivery of possession by tenant to a landlord and his
acceptance of possession effects a surrender by operation of
law. It is also called implied surrender in
contradistinction to express surrender which must be either
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by deed or in writing. Directing the occupier to
acknowledge the landlord as his landlord, i.e., to attorn
to the landlord, is a sufficient delivery of possession by
the tenant to the landlord. Receipt of rent from a person
in possession may be evidence of the landlord’s acceptance
of him as tenant, whether he is a stranger or whether he was
already in possession as sub-tenant. [380F-G]
Under the illustration to clause (f) of Section 111 of
the Transfer of Property Act, there would be an implied
surrender of the former lease if a lessee accepts from his
lessor a new lease of the property leased to take effect
during the continuance of the existing lease. The said
illustration is, however, not exhaustive of cases in which
there may be an implied surrender of the lease. Just as
under the English Law, there can be an implied surrender
under the law of transfer of property in India, if the
lessor grants a new lease to a third person with the assent
of the lessee under the existing lease who delivers the
possession to such person or where the lessee directs his
sub-tenant to pay the rent directly to a lessor. [380H,381-
A-B]
Konijeti Venkayya & Anr. v. Thammana Peda Venkata
Subbarao & Anr., AIR 1957 A.P.619; Noratmal v. Mohanlal,
AIR 1966 Raj. 89, referred to.
Halsbury’s Laws of England, 4th end. Vol.27, paras 444,
445, 446 and
374
450, referred to.
4. By executing the agreement dated March22, 1955
respondent Nos. 1 to 5 surrendered their leasehold interest
in favour of TM inasmuch as in clause 4 of the said
agreement they have clearly stated that respondents will not
have any responsibility or objection for TM paying the
amount due to the appellant after the stipulated period and
take up the management by himself and pay the rent of the
building and conduct its business.
[382-F]
5. After the execution of the agreement dated March 22,
1955, TM entered into an agreement with the landlord for a
fresh lease on a higher rent and by Deed of Assignment dated
December 11, 1956, TM impliedly surrendered his leasehold
rights in the suit property. [383A-C]
6. On the date of the filing of the present suit the
respondents had no subsisting leasehold interest in the suit
property. The suit for the recovery of the possession of
the suit property field by them on the basis that they are
the lessees thereof was, therefore, not maintainable and is
liable to be dismissed. [383-E]
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2460(N)
of 1977.
From the Judgment and Order dated 10.3.1977 of the
Kerala High Court in S.A. No. 1206 of 1976.
T.R.G. Wariyar, Smt. Shanta Vasudevan and P.K. Manohar
for the Appellant.
S.Balakrishnan and G. Srinivasan for the Respondents.
The Judgment of the Court was delivered by
S.C. AGRAWAL.J. This appeal is directed against the
judgment and decree dated March 10, 1977 of the High Court
of Kerala. It arises out of a suit filed by respondents
Nos. 1 to 6 against the appellant and respondent No. 7 for
redemption and recovery of possession of property consisting
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of 25 cents of land in Valiyaveetuparamba in Nagaram Amson,
district Kozhikode, and the buildings and the machinery of
the Flour Mill standing on the said land.
375
The land and buildings belong in Jenm to the vetteth
Tarwad who leased out the same in or about 1939 to Sivarama
Iyer, respondent No. 2 on a rent of Rs. 40 per mensem.
Late C.N. Rama Iyer, father of respondents Nos. 1 to 5 and
husband of respondent No. 6 started a flour mill known as
‘Sivaram Mills’ on the said premises in or about 1940 and
for that purpose, he installed an engine and necessary plant
and machinery and also made some further constructions over
the land. C.N.Rama Iyer died on May 2, 1953 and after his
death,, repondents No.1 to 5 entered into an agreement with
the appellant on February 7, 1954 whereunder the appellant
advanced Rs. 4,500 to respondents Nos. 1 to 5 and
respondents Nos. 1 to 5 agreed to entrust the appellant with
the management of the mill for a period of one year from
March 5, 1954 on a monthly payment of Rs.300 out of which
Rs. 125 was to be appropriated every month towards the
advance given. Respondents Nos. 1 to 5 could not entrust
the management of Mill to he appellant on or before March 5,
1954 and they could do so only in the middle of April 13,
1954, a fresh agreement (Ex. B2) modifying the terms of the
previous agreement was entered into between respondents Nos.
1 to 5 and the appellant. Under the said agreement dated
April 13, 1954 a further sum of Rs. 1,900 (in addition to
the sum of Rs. 4,500) was advanced by the appellant to
respondents Nos. 1 to 5 and it was agreed by respondents 1
to 5 that the total sum of Rs. 6,400 which had been advanced
by the appellant to respondents Nos. 1 to 5 will not bear
any interest from the date of the said agreement and that
the appellant shall run the mill for one year and after the
stipulated period, respondents Nos. 1 to 5 would get the
possession of the mill back from the appellant. It was also
agreed that a sum of Rs.40 which is the rent of the building
where the mill is situate and current charges for each month
of the electric lights of the mill should be paid by the
appellant to respondent Nos. 1 to 5 and a sum of Rs. 100 per
month would be paid by the appellant as rent for the mill,
out of which a sum of Rs. 50 shall be adjusted by the
appellant towards Rs.6,400 paid inadvance and the balance
amount of Rs. 50 should be paid to respondents Nos. 1 to 5
every month. It was also agreed that on the expiry of the
period of one year, respondents Nos. 1 to 5 would get back
the possession of the mill after paying the balance amount
of Rs. 5,800 to the appellant. Before the expiry of the
period of one year fixed under the agreement dated April 13,
1954, the plaintiffs-respondents Nos. 1 to 5 entered into
an agreement (Ex. B3) dated March
376
22, 1955 with one T.M. Rama Iyer (who happened to be the
father-in-law of respondent No. 2). In the said agreement,
reference has been made to the agreement dated April 13,
1954 with the appellant and it was stated that a sum of Rs.
5,600 is to be paid as balance amount to the appellant after
adjusting the sum of Rs. 800 which has already been paid to
him. It was further stated that a sum of Rs. 5,072 and
annas 2 was payable to T.M.Rama Iyer towards the arrears of
rent for the building belonging to the said T.N. Rama Iyer,
which has been taken rent by respondent Nos. 1 to 5 and that
since there was difficulty for respondents Nos. 1 to 5 to
clear the said liability, they have decided to assign the
Company (named ‘Sivaram Mills & Co.) to T.M. Rama Iyer for a
consideration of Rs. 10,672 and annas 2, out of which Rs.
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5,072 and annas 2 had been adjusted and from the balance
amount due to them the sum Rs. 5,600 due to be paid to the
appellant may be paid to him. In the said agreement, it was
also stated that the said T.M. Rama Iyer on paying the
amount due to the appellant after the stipulated period
could take up the management by himself, pay the rent of the
building, conduct the business and if necessary to file a
suit against the appellant and get the company vacated and
do anything as per his will and pleasure. In the said
agreement, respondents Nos. 1 to 5 further agreed that
either after his taking the possession of the company or
whenever demanded by T.M. Rama Iyer, they would execute the
sale deed and get the same registered. On December 11,
1956, the said T.M. Rama Iyer executed a Deed of Assignment
(Ex. B4) in favour of the appellant and his younger brother,
Gopalan Nair, whereby the assigned the Sivaram Oil Mill and
Flour Mill to the appellant and his younger brother on a
sale consideration of Rs. 8,000. The sum of Rs. 6,000 that
was payable to the appellant inclusive of interest was
adjusted against the said consideration and the balance
amount of Rs. 2,000 was paid by the appellant to the said
T.M. Rama Iyer. In the said document, it was stated that
after execution of the agreement dated March 22, 1955, T.M.
Rama Iyer had taken the building where the mills are
situated on a monthly rent of Rs. 75 for a period of one
year from Vettathu Tharavad under an oral agreement. In the
said document, it was further mentioned that the appellant
and his younger brother had the liberty to mange the mills,
to enter into rental agreements with the Jenmi of the
building by paying the rent directly, to effect alienation
etc. as per their wishes and he (T.M. Rama Iyer) would not
have any right or liability hereafter. In the said
document, it is also
377
mentioned that the rent receipts for the rent paid to the
Jenmi were being handed over with the document.
Respondents Nos. 1, 3 and 5 filed a suit (O.S.No. 3 of
1964) against respondents Nos. 2, 4 and 6 as well as against
the appellant and T.M. Rama Iyer. In the said suit, the
plaintiffs, while seeking partition and separate possession
of their shares in the suit properties, had also prayed for
possession of the oil and flour mills and had asserted that
the agreement dated March 22, 1955 executed by respondents
Nos. 1 to 5 in favour of T.M. Rama Iyer, was a sham
transaction and no rights were conferred on T.M. Rama Iyer
under the said agreement. T.M. Rama Iyer, who was defendant
no. 1 in the said suit, died during the pendency of the
suit. In the suit all disputes between the plaintiffs
(respondents Nos. 1, 3 and 5) and Defendants nos. 2 to 4
(respondents Nos. 2, 4 and 6) and the legal representatives
of T.M. Rama Iyer were settled out of court and the only
dispute requiring adjudication was that relating to the
property in question in these proceedings which was claimed
by the appellant as the assignee from T.M. Rama Iyer. The
said suit was dismissed by the Additional Sub-Judge,
Kozhikode by judgment (Ex.A1) dated January 25, 1968. It
was held that the agreement dated March 22, 1955 was not
sham, nominal and void and it operates as an outright sale
of plant and machinery. It was, however, held that the
tenancy right of the plaintiffs had not been affected by
either the agreement dated March 22, 1954 or the Deed of
Assignment dated December 11, 1956 and that the plaintiffs
would be entitled to possession of the site and buildings in
which the plant and machinery were installed. It was
further held that the appellant had been inducted into
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possession of the site and buildings by virtue of the
agreement dated April 13, 1954, and that the appellant would
be entitled to continue in possession of the same until the
right created in his favour as per agreement dated April 13,
1954 was extinguished. Respondents 1 to 6 filed an appeal
(A.S. No. 129/68) in the High Court against the said
judgment and decree of the Additional Sub-Judge. The said
appeal was dismissed by the High Court by its judgment dated
April 6, 1973. The High Court found that according to the
averments in the plaint what was conveyed under the
agreement dated March 22, 1955 was only the oil mill and it
was not the case of the plaintiffs that immovable property
was conveyed under the said agreement and that in view of
the pleadings, there was no scope for considering whether
any immovable property had been transferred and therefore,
no question of registration of the document arose.
378
While the said appeal was pending before the High
Court, respondents Nos. 1 to 6 filed the suit giving rise to
this appeal in the Court on Munsif, Kozhikode wherein it was
prayed that the possession of the suit property may be
restored to the plaintiffs-respondents by way of
redemption and that the plaintiffs-respondents were willing
to pay any amount that is found payable by them to the
appellant. The said suit is based on the fotting that the
earlier suit was resisted by the appellant on the ground
that he was in possession of and management of the business
of the Mill as posessory mortgagee thereof and the same had
found favour with the court. The plaintiffs-respsondents
have, however, pleaded that since the appellant has
continued in possession and management of the property even
after the expiry of the term, no amount is likely to be
payable on settlement of accounts. Respondent No. 7 was
impleaded as defendant in the said suit on the ground that
the appellant had leased the mill to him. The said suit
was contested by the appellant. In the said suit, a decree
for possession of the suit property excluding the plant and
machinery was passed in favour of the plaintiffs-respondents
by the Additional Munsif, Kozhikode-I by his judgment dated
June 22, 1972. The appeal filed by the appellant against
the judgment anddecree of the Additional Munsif was
dismissed by the District Judge, Kozhikode by judgment dated
November 20, 1976 and the second appeal filed by the
appellant was also dismissed by the learned Single Judge of
the High Court by judgment dated March 10, 1977.
The High Court was of the view that the appellant could
not come forward with a case that there was relationship of
landlord and tenant between the plaintiffs-resspondents and
him and he could not be evicted from the suit property since
he is entitled to protection of the Kerala Building (Lease
and Rent Control) Act. In this regard, the High Court,
after referring to the judgment of the Additional Sub-Judge
in the earlier suit (O.S. No.3 of 1964), has observed that
in that suit the appellant did not put foroward the case
that as per the agreement (Ex.B2) dated April 13, 1954 there
was a relationship of landlord and tenant between plaintiffs-
respondents and him and the case of the appellant in that
suit was that the plaintiffs-respondents could get the
possession of the property only on extinguishment of the
charge created by the said agreement. The High Court held
that in the circumstances the appellant could not be
permitted to plead in this suit what he did not plead in the
earlier suit. According to the High court, the
consideration paid for the movables under Deed of
379
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Assignment (Ex.B4) dated December 11, 1956 would not make
the appellant the tenant of the property. The High Court
was of the view that the appellant could not be allowed to
put foroward inconsistent pleas to the detriment of the
opposite side. The High Court was also of the view that
since there was a lease for running a business, it could not
be said that the appellant is a tenant of a building and is
entitled to the protection of the Kerala Building (Lease and
Rent Control) Act.
In support of this appeal, Shri Wariyar, the learned
counsel for the appellant, has submitted that the High court
was in error inrelying upon the observations contained in
the judgment of the trial court in a previous suit (O.S No.3
of 1964) inasmuch as after the decision of the High Court in
appeal (A.S. No. 129/68), the said judgment of the trial
court had merged in the judgment of the High Court dated
April 6, 1973 and that is the only judgment which is
operative and that the said judgment of the High Court shows
that the only question which was considered by the High
Court was whether the agreement (Ex. B3) dated march 22,
1955 was inoperative on account of non-registration.
According to Shri Wariyar, the High Court has held that the
said agreement did not require registration inasmuch as it
related to transfer of movable property, namely, the oil
mill and that the effect of the said judgment of the High
Court is that the plaintiffs-respondents are precluded from
claiming possession of the oil mill. The only question that
remains is whether plaintiffs-respondents can claim
possession of the land and building in which the mill is
installed and that involves the question as to whether
plaintiffs-respondents, who were originally the lessee of
the land and building, had a subsisting right in the same on
the date of filing of the subsequent suit by them. Shri
Wariyar has urged that the plaintiffs-respondents ceased to
have any subsisting right in the property as a laces in view
of the agreement (Ex.B3) dated March 22, 1955 which shows
that there was an implied surrender by the plaintiffs-
respondents of their leasehold right in the property in
favour of T.M. Rama Iyer which fact is further established
by Deed of Assignment (Ex.B4) dated December 11, 1956
executed by T.M. Rama Iyer in favour of the appellant and
his younger brother which indicates that a fresh lease had
been created by the landlord in favour of T.M. Rama Iyer
and T.M. Rama Iyer had surrendered his leasehold rights in
favour of the appellant.
We find considerable force in the aforesaid submissions
of Shri Wariyar.
380
After the decision of the High Court dated April 6,
1973 in A.S.129 of 1968 the judgment of the Additional
Subordinate Judge stood merged in the judgment of the High
Court. The judgment of the High Court shows that the
earlier suit was confined to the oil mill only, treating
it as movable property independent of the property. Since
the said suit did not relate to the land and building in
which the oil mill is installed the said suit and the plea
raised by the appellant in that suit can have no bearing in
the present suit relating to possession of the land and
building. The learned Judge of the High Court, with due
respect, was not right in negativing the plea raised by the
appellant that he is in possession of property as a tenant
on the view that the appellant did not raise this plea in
the earlier suit and he could not to be allowed to put
forward inconsistent pleas. Since the question with regard
to possession of the land and building arises in the present
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suit only it was permissible for the appellant to raise the
plea that the plaintiffs have no subsisting leasehold
interest in the suit property and that the appellant is in
possession of the same as a tenant of the owner of the said
property.
As to whether the plaintiffs had a subsisting leasehold
interest in the property involves the question whether they
had surrendered the said rights. The case of the appellant
is that the plaintiffs had impliedly surrendered their
leasehold rights when they executed the agreement (Ex. B-3)
dated March 22, 1955 and thereafter a fresh a tenancy was
created in favour of T.M. Rama Iyer which was assigned by
T.M. Rama Iyer in favour of the appellant.
Under clause (f) of s.111 of the Transfer of Property
Act, 1908, implied surrender is a mode for determination of
a lease of immovable property. In English Law, delivery of
possession by the tenant to a landlord and his acceptance of
possession effects a surrender by operation of law. It is
also called implied surrender in contradistinction to
express surrender which must be either by deed or in writing.
It has been held that directing the occupier to acknowledge
the landlord as his landlord, i.e., to attorn to the
landlord, is a sufficient delivery of possession by the
tenant to the landlord, is a sufficient delivery of
possession by the tenant to the landlord. It also been held
that receipt of rent from a person in possession may be
evidence of the landlord’s acceptance of him as tenant,
whether he is a stranger, or whether he was already in
possession as sub-tenant. [See Halsbury’s Laws of England;
4th Edn. Vol.27, paras 444, 445, 446 and 450; and Note (1)
to para 446]. Under the illustration to clause (f) of s.111
of the Transfer of Property Act, there would be an implied
surrender of the
381
former lease if a lessee accepts from his lessor a new lease
of the property leased to take effect during the continuance
of the existing lease. The said illustration is, however,
not exhaustive of the cases in which there may be an implied
surrender of the lease. Just as under the English law,
there can be an implied surrender under the law of transfer
of property in India, if the a lessor grants a new lease to
a third person with the assent of the lessee under the
existing lease who delivers the possession to such person or
where the lessee directs his sub-tenant to pay the rent
directly to a lessor. [See : Konijeti Venkayya & Anr. v.
Thammana Peda Venkata Subbarao & Anr., AIR 1957 A.P. 619 at
pp. 624 and 625; and Noratmal v. Mohanlal, AIR 1966 Raj. 89,
at pp.90 and 91].
Reference may, therefore, be made to the relevant
clauses in the agreement (Ex. B3) dated March 22, 1955 and
the Deed of Assignment (Ex.B4) December 11, 1956 on which
reliance has been placed by Shri Wariyar. In the agreement
(Ex. B3) dated March 22, 1955, executed by respondents Nos.
1 to 5 in favour of T.M. Rama Iyer, it is stated :
"(4) We will not have any responsibility or
objection for your paying the amount due to
Kunhiraman Nair after the stipulated period and to
take up the management by yourself, pay the rent of
the building, conduct the business and if necessary
to file a suit against Kunhiraman Nair and get the
Company vacated; and to do any thing as per your
will and pleasure.
(5) The Company is not charged by and other
liability except the loan mentioned above. The
gift deed given to us and the copy of the agreement
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with Kunhiraman Nair are hereby given to you.
Either after your taking possession of the Company
or whenever you make demand we shall execute sale
deed and get the same registered."
In the Deed of Assignment (Ex. B4) dated December 11,
1956 executed by T.M. Rama Iyer in favour of the appellant
and his younger brother, it is stated :
"(2) After this for the purpose of clearing of the
loan liability to you; the mill etc. started by the
abovesaid Naganatha Iyer and others was given to me
as per the agreement dated the 22nd of March, 1955.
They belong to me and I have on oral
382
agreement taken the building where the mills
situate on a monthly rent of Rs. 75 for a period of
1 year from the Vettathu Tharavad which is the
jenmi of the same.
(3) I have decided to assign the Oil Mill and
Flour Mill described in the schedule below to you.
The sale consideration is fixed at Rs. 8,000
inclusive of Rs. 100 given by me as advance to the
Jenmi. Of this Rs. 8,000 the sum of Rs. 6,000/-
due to you inclusive of interest is adjusted and
after deducting the same, the balance amount of Rs.
2,000 due to me is paid and the entire sale
consideration has been paid to me in full
satisfaction in the above said 2 counters and I
have handed over to you the mills described in; the
schedule with all the quipments and all the other
rights pertaining to the same. You have derived
the same and hereafter you are at liberty to manage
the mills by yourself; to enter into rental
agreements with the Jenmi of the building by paying
the rent directly, to effect alienation etc. as per
your wishes. I will not have any right, question
or liability hereafter. I have made you believe
and hereby certify that the properties are not
charged by any loan liability or alienation and
none except myself have any right over the same.
The abovesaid agreement, the gift deed obtained by
Naganatha Iyer and others and the rent receipts for
having paid rent to the Jenmi are hereby given."
From the aforesaid clauses, it would appear that by
executing the agreement (Ex. B3) dated March 22, 1955,
respondents Nos 1 to 5 surrendered their leasehold interest
in favour of T.M. Rama Iyer inasmuch as in clause 4 of the
said agreement they have clearly stated that plaintiffs-
respondents will not have any responsibility or objection
for T.M. Rama Iyer paying the amount due to the appellant
after the stipulated period and take up the management by
himself and pay the rent of the building and conduct its
business. By empowering T.M. Rama Iyer to pay the rent of
the building respondents Nos. 1 to 5 were impliedly
surrendering their leasehold interest in the premises in
favour of T.M. Rama Iyer. This is borne out by the Deed of
Assignment (Ex. B4) dated December 11, 1956 wherein in
clause 2, T. M. Rama Iyer had stated "I have on oral
agreement taken the building where the mills situate on a
monthly rent of Rs. 75 for a period of one year from
Vettathu Tharavad which is the jenmi of the
383
same." The original rent for the property as let out to
respondent No.2 was Rs. 40 per month. The fact that after
execution of the agreement dated March 22, 1955, T.M. Rama
Iyer entered into another agreement with the landlord on a
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higher majority rent of Rs. 75 would show that fresh lease
was created by the landlord in favour of T.M. Rama Iyer and
the earlier lease in Favour of respondent No. 2 stood
determined by implied surrender. In clause 3 of the Deed of
Assignment (Ex. B4) dated December 11, 1956, T.M. Rama Iyer
has empowered the appellant "to enter into rental agreements
with the Jenmi of the building by paying the rent directly
to effect alienation". This shows that T.M. Rama Iyer had
impliedly surrendered his leasehold rights by agreeing that
the appellant could enter into rental agreements with the
landlord by paying the rent directly. The case of the
appellant is that ever since the execution of the Deed of
Assignment (Ex. B4) dated December 11, 1956, rent is being
paid by him to the landlord directly. It is not the case of
the plaintiffs-respondents that they had paid the rent for
the premises to the landlord after March 22, 1955. In these
circumstances, we are of the opinion that the plaintiffs-
respondents, by executing the agreement (Ex. B3) dated March
22, 1955, had impliedly surrendered their leasehold rights
in the suit property in favour of T.M. Rama Iyer and on the
date of the filing of the present suit they had no
subsisting leasehold interest in the same. The suit for the
recovery of the possession of the suit property filed by
them on the basis that the plaintiffs-respondents are the
lessees thereof was, therefore, not maintainable and is
liable to be dismissed.
The appeal is consequently allowed, the judgment and
decree of the High Court of Kerala dated March 10, 1977 in
S.No. 1206/76-E is set aside and O.S.No.636/68 filed by
respondents Nos. 1 to 6 against the appellant is dismissed.
There will be no order as to costs.
T.N.A. Appeal allowed.
384