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Bai Manuben v. Bhimabhai Nagarji

Bombay High Court
Oct 9, 1957
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Concise Analytical Summary of the Provided Opinion

Factual and Procedural Background

The dispute concerns shop buildings (ground floor) and a first floor owned by plaintiffs Nos. 1 and 2. The entire property had been leased to Shivajirao around 1946; he vacated possession on 12-7-1948. On that date the ground-floor shop buildings were leased to plaintiff No. 3, who took possession and put his own lock on them.

Some luggage belonging to the tenant's brother Chimanrao remained in the shops. On 27-7-1948 defendant No.1 (Chimanrao's wife) and defendant No.3 (his other brother) took the key from plaintiff No.3 purportedly to remove the luggage, but instead they occupied the shop buildings and let defendant No.4 occupy them; defendant No.2 is defendant No.1's son.

Plaintiff No.3 filed a criminal trespass complaint; the defendants were acquitted on the ground that the dispute was civil in nature. Subsequently, on 17-9-1951 plaintiffs Nos.1 & 2 and plaintiff No.3 (their tenant) filed Suit No. 282 of 1951 for possession on the ground that defendants were trespassers.

On 16-1-1953 the parties entered into a compromise, and the Court passed a consent decree reflecting its terms. The consent decree (summarized in the opinion) provided for handing over possession by 31-5-1954 to plaintiff No.3 (or to plaintiffs Nos.1 & 2 if plaintiff No.3 declined), rent receipts and payment arrangements up to certain dates, and a provision that failure to hand over possession or non-payment for three months would entitle plaintiffs to execute the decree for possession.

The Bombay Rent Control Act (Bombay Act No. 57 of 1947) was made applicable to the area and premises on 6-4-1953, after the consent decree was passed.

Defendants did not hand over possession on the stipulated date. Plaintiffs filed Darkhast No. 48 of 1955 for execution of the consent decree to recover possession. The executing Court held that the consent decree created a new lease in favour of the judgment-debtors, that such a lease exceeded one year and required registration, and because the consent decree was not registered it was not executable; the executing Court dismissed the darkhast.

Plaintiffs appealed (Civil Appeal No. 162 of 1955) to the District Court at Surat. The learned Assistant Judge held the consent decree did not create any new lease and allowed the appeal, directing execution to proceed. The defendants then brought the matter in the present second appeal.

Legal Issues Presented

  1. Whether the terms of the consent decree recorded in Suit No. 282 of 1951 created a new lease (a landlord-tenant relationship) in favour of the judgment-debtors such that the decree would constitute an unregistered instrument of lease and therefore be non-executable.
  2. Whether the defendants (judgment-debtors) could raise the contention that the consent decree created a lease in execution proceedings, given the subject-matter of the original suit and the Court's role in recording a compromise and passing a decree under Order 23, Rule 3 of the Civil Procedure Code.

Arguments of the Parties

Judgment-Debtors' (Defendants') Arguments — represented by Mr. Shah

  • The consent decree's language, and particularly the repeated use of the word "rent", demonstrates that the parties intended to create a fresh lease and a new landlord-tenant relationship in favour of the judgment-debtors vis-à-vis plaintiff No.3 (their contention focused on plaintiff No.3 as the landlord).
  • Because such a lease (if for more than one year) required registration, the consent decree being unregistered made it incapable of execution for possession.
  • Reliance was placed on prior decisions in which consent decrees were construed in execution proceedings to operate as leases in favour of judgment-debtors (several Bombay decisions cited).

Plaintiffs' (Decree-Holders') Position

  • The learned Assistant Judge in the lower appellate Court held that the consent decree did not create any new lease in favour of the judgment-debtors and therefore ordered that the darkhast for execution be proceeded with in accordance with law.
  • Implicit in that ruling (and adopted by the present Court) is the position that the consent decree related to the subject-matter of the suit (possession) and that its terms did not effect a demise or create a fresh tenancy extraneous to the suit.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Sumatibai Waman Kirtikar (Original Plaintiff) v. Anant Balkrishna Shirgaonkar — 51 Bom LR 788 : (AIR 1949 Bom 402) Cited as an example where some consent decrees had been construed in execution proceedings to operate as leases in favour of judgment-debtors. The Court noted the decision was relied upon by Mr. Shah and stated it was bound by such precedents, although it also observed the specific point it was considering did not seem to have been raised in that case.
Gurupadappa Shivlingappa v. Akbar — 52 Bom LR 143 : (AIR 1950 Bom 252) Cited as another decision where consent decrees were construed in execution proceedings as operating like leases. The Court acknowledged the authority and observed it was bound by these decisions; it nevertheless indicated the precise procedural point before it did not appear to have been argued in those cases.
Narayan Ramchandra v. Gangadhar — 56 Bom LR 893 : (AIR 1955 Bom 175) Also cited as a case in which consent decrees were construed in execution proceedings to operate as leases in favour of judgment-debtors. The Court accepted the existence of these precedents as binding authority, but indicated that the particular preliminary point (raising such a contention in execution proceedings when the suit concerned recovery of possession from trespassers) did not seem to have been presented in those cases.
Ramjibhai Virpal v. Gordhandas — 56 Bom LR 365 : (AIR 1954 Bom 370) Cited as an instance where some consent decrees were construed in execution proceedings and were held not to create leases. The Court noted this contrary line was also before it and stated it was bound by precedent. The opinion does not elaborate further facts of the case; the Court nonetheless proceeded on its own analysis of the consent decree before it.

Court's Reasoning and Analysis

The Court's analysis proceeded in two stages: a preliminary procedural point about what may validly be raised in execution proceedings, followed by a construction of the precise terms of the consent decree.

1. Procedural Limitation — scope of execution proceedings:

  • The Court emphasized the original suit's subject-matter: recovery of possession on the ground that the defendants were trespassers and had wrongfully occupied the premises. It was not the case in the suit that defendants were tenants prior to institution of the suit.
  • Under Order 23, Rule 3 of the Civil Procedure Code, where a compromise is recorded, the Court passes a decree only insofar as the compromise relates to the subject-matter or the claim in the suit. Thus, the Court can pass an operative decree only on terms which are relevant to the suit's claims.
  • The Court reasoned that creation of a new lease (if that is what the compromise purported to do) would be extraneous to the suit's subject-matter and could not form the basis of an operative decree in that suit. Consequently, it is not open to the judgment-debtors in execution proceedings to contend that the terms of the compromise created such a new lease, because (a) no decree could have been validly passed on that extraneous matter, and (b) by passing the decree in terms of the compromise the Court must be taken to have considered and implicitly rejected such a contention at the time of recording the compromise and passing the decree.
  • The Court observed that although several decisions had construed consent decrees as leases in execution, the specific procedural objection being raised here (i.e., whether such a contention can be advanced in execution proceedings where the suit concerned possession from trespass) did not appear to have been pressed in those cases; nonetheless, the Court stated itself bound by those precedents.

2. Construction of the Consent Decree:

  • The Court examined the language of the compromise/decree. It noted there were no words effecting an actual demise of the premises by plaintiff No.3 in favour of the defendants; the operative Clause 1 provided that possession was to be handed over to plaintiff No.3 in the first instance, and if he did not take delivery, then to plaintiffs Nos.1 & 2.
  • The Court reasoned that if the decree were construed as creating a tenancy only between plaintiff No.3 and the defendants, plaintiffs Nos.1 & 2 could not, consistently with the decree's wording, have a right to recover possession as the decree expressly entitled "the plaintiffs" to execute for possession in default. Thus, construing the decree as effecting a fresh lease would ignore the material and operative portions of the decree that entitle all plaintiffs to possession.
  • Regarding the use of the term "rent" in the decree, the Court held that mere use of that word did not by itself create a tenancy. The Court explained that the defendants were made liable to pay an amount described as "rent" to plaintiff No.3 during the interim period of occupation; because plaintiff No.3 was himself a tenant of plaintiffs Nos.1 & 2, when plaintiff No.3 passes the collected amount on to plaintiffs Nos.1 & 2 it would be received by them "by way of rent." But the Court characterized the defendants' liability initially as an amount for use and occupation during the interim period rather than as the creation of a fresh demise.
  • On that construction, the Court concluded the decree did not create an operative new lease in favour of the judgment-debtors that would require registration and thereby bar execution.

Holding and Implications

APPEAL DISMISSED WITH COSTS.

Direct Effect on the Parties:

  • The defendants' contention that the consent decree created a new, registrable lease was rejected.
  • The consent decree was held to be an operative decree relating to the subject-matter of the suit (possession) and therefore capable of being executed in terms of the compromise; the executing Court must proceed in accordance with law to recover possession as provided by the decree.

Broader Implications: The opinion does not purport to lay down a new general rule beyond its application to the facts and procedural posture here. The Court noted it was bound by the existing line of Bombay decisions cited but did not treat the present ruling as establishing a new precedent; the decision resolves the dispute between these parties by applying procedural limits on what may be advanced in execution proceedings and by construing the consent decree's language.

M.K.S
Appeal dismissed.
Show all summary ...

The property in dispute belongs to plaintiffs Nos. 1 and 2. It consists of shop buildings on the ground floor and also of a first floor. This entire property had been leased to one Shivajirao sometime in the year, 1946. Shivajirao continued as a tenant of plaintiffs 1 and 2 till 12-7-1948, on which date he gave up possession of the property on the ground that he did not want it. Thereafter on the same day the ground floor of the said property, which consisted of shop buildings, was leased to plaintiff No. 3. Plaintiff No. 3 got possession of the shop buildings on the same day and put his own lock on them. When Shivajirao, the original tenant of the entire property, left the premises, it appears that some luggage of his brother Chimanrao had been kept in the shop buildings on the ground floor. On 27-7-1948 defendant No. 1, who is the wife of Chimanrao, and defendant No. 3, who is the other brother of Chimanrao, took the key from plaintiff No. 3 on representing to him that they would remove the luggage of Chimanrao. But it appears that after they took the key from plaintiff No. 3, they did not remove the luggage of Chimanrao, but illegally occupied the shop buildings of the ground floor. They then allowed defendant No. 4 to occupy them. Defendant No. 2 is defendant No. 1's son.

2. Plaintiff No. 3 filed a criminal complaint for trespass against the defendants for having illegally occupied the shop buildings, but they were acquitted on the ground that the dispute between them and him was of civil nature.

3. Thereafter on 17th of September, 1951 plaintiffs Nos. 1 and 2 and their tenant plaintiff No. 3 filed suit No. 282 of 1951 for possession of the said property from the defendants, on the ground that they were trespassers and had wrongfully occupied it. The defendants contested the suit and claimed that they were not liable to be evicted. On 16-1-1953, a compromise was arrived at between the parties to the suit, and in terms of the compromise a decree was passed by the Court. The terms of the decree are:

1. The defendants shall hand over the possession of the suit property to the plaintiff No. 3 to this suit on the day of 31st May, 1954. If plaintiff No. 3 is not willing to take possession, the defendants shall hand over the same to the plaintiffs Nos. 1 and 2 to this suit on the day of 31st May, 1954. In case of failure to hand over possession on that date, the plaintiffs shall be entitled to execute the decree in terms of the compromise and recover possession of the suit property from the defendants.

2. The defendants have already paid to the plaintiffs the full amount of rent accrued due upto the date 31-12-1952 and the plaintiffs have received the same.

3. From 2-1-1953 to 31-5-1954 amount of rent at the rate of Rs. 21 in words rupees twenty-one only per month shall be paid by the fifth of each month by the defendants. The said amount shall be passed on by plaintiff No. 3 to plaintiffs Nos. 1 and 2. In case the defendants fail to pay to plaintiff No. 3 the amount in respect of any three months, the plaintiffs are entitled to take possession by executing this decree in terms of consent terms.

4. It may be noted that the provisions of the Bombay Act No. 57 of 1947 were made applicable to the area and the premises in question only on 6-4-1953, that is to say, after the consent decree was passed by the Court in the aforesaid suit.

5. Defendants did not hand over possession of the property to the plaintiffs on 31-5-1954, as required by the terms of the consent decree. Plaintiffs therefore filed the present Darkhast No. 48 of 1955 to execute the consent decree and recover possession of the property.

6. The defendants-judgment-debtors resisted the darkhast, on the ground that the terms of the consent decree created a new lease in their favour, and that the consent decree not having been registered could not be executed against them. It may be noted that in the objections filed by the judgment-debtors to the darkhast they simply stated that they were the tenants of the plaintiffs in view of the terms embodied in the compromise decree. They did not state as to whether they had become the tenants of plaintiff No. 3 or of plaintiffs Nos. 1 and 2. But the receipts which are upon the record make it clear that the judgment-debtors paid the amounts in terms of the decree to plaintiff No. 3, which presumably showed that they had rendered themselves liable only to plaintiff No. 3 in regard to the amounts which they had to pay under the decree.

7. The executing Court held that the consent decree created a new lease in favour of the judgment-debtors and that the lease being for a period of more than one year required registration and that the compromise decree not being registered was not executable. Accordingly it dismissed the darkhast.

8. The plaintiffs-decree-holders preferred Civil Appeal No. 162 of 1955 in the District Court at Surat against the order passed by the executing Court. The appeal came on for hearing before the learned Assistant Judge, at Surat, who held that the terms of the consent decree did not create any new lease in favour of the judgment-debtors and allowed the appeal by directing that the darkhast should be proceeded with in accordance with law.

9. The judgment-debtors have now come in second appeal. Mr. Shah, who appears for the judgment-debtors in this second appeal, contends that the terms of the consent decree, and particularly the mention of the word “rent” therein, make it clear that what was intended by the parties and what has been expressed by the terms of the consent decree was that there was to be a new relationship of landlord and tenant created between plaintiff No. 3 on the one hand and the judgment-debtors on the other. Mr. Shah has rightly laid stress on the use of the expression “rent” which has occurred in the consent decree in more than one place, and he urges that the use of the expression “rent” was significant, and it could not be explained except on the basis of tenancy in favour of the judgment-debtors.

10. Before I deal with this contention of Mr. Shah on merits, it seems to me there is an initial difficulty in the way of the judgment-debtors' raising such contention in execution proceedings. I have already stated that the suit out of which the present darkhast proceedings have arisen had been instituted by plaintiffs Nos. 1 and 2 as owners and by plaintiff No. 3 as their tenant for possession of the suit premises on the ground that the defendants were trespassers and had wrongfully occupied the suit premises. It is to be noted that it was never the case of the plaintiffs that defendants were their tenants at any time before the institution of the suit and that the suit had been instituted after the termination of their tenancy. When there was a compromise in such a suit, that compromise was recorded by the Court, which under the provisions of O. 23, R. 3 of the Civil Procedure Code passed a decree in accordance therewith so far as it related to the suit. The subject-matter of the suit in the present case was, as I have already stated, a claim for possession of the suit property from the defendants on the ground that they were trespassers. The Court could therefore pass an operative decree, though in accordance with the compromise that was subsequently arrived at, but only in so far as that compromise related to the subject-matter or the claim in the suit. If the executing Court finds that there is a valid, operative decree regard being had to the subject-matter or claim in the suit, it must execute that decree and is not concerned to find whether the terms of the compromise are capable of being construed as giving rise to a new relationship of landlord and tenant between the parties. Even assuming that the terms of the compromise are capable of such a construction, no operative decree in that event could have been passed in accordance with such a compromise, as the creation of a new lease was a matter entirely extraneous to the suit. It is undisputed that the creation of a new lease such as is now contended for by the judgment-debtors was not a matter which related to the suit. In fact, it is urged by them the terms of the compromise for the first time gave rise to a new tenancy in their favour. If therefore there has been an operative decree passed as in the present case, it must necessarily and exclusively relate to the subject-matter or claim in the suit. When the Court is called upon to record a compromise and pass a decree in terms thereof, the Court can pass a decree in terms of the compromise only in so far as those terms relate to the suit and not in relation to those terms which are extraneous to the suit. The function of the executing Court would then be to execute such a decree and I do not think that it would be open to the judgment-debtors to contend in the execution proceedings that the terms of the compromise upon which the decree was based created a new lease in their favour. If the terms of the compromise evidenced only a transaction of lease in favour of the defendants, no decree could have been passed in accordance with such terms as such terms obviously did not relate to the suit. Besides it may be noted when the Court applied its mind and passed a decree in terms of the compromise, it must also mean that the Court impliedly negatived the plea that is now raised in the execution proceedings, namely, that the terms of the compromise created a new lease; for, otherwise if the Court had come to the conclusion or if the defendants had raised the contention that the terms of the compromise created a new lease, it would never have proceeded to pass a decree as it did in the present case. The Court would have stated in that event that the compromise terms had given rise to a case of new lease, and as the case of a new lease was not a matter relating to the suit, no operative decree embodying such terms could be passed under the provisions of O. 23, R. 3 of the Civil Procedure Codes. I should therefore think that it is not open to the judgment-debtors now to agitate the point which must be deemed to have been considered and overruled by the Court when it passed the decree in accordance with the compromise. Mr. Shah has however relied upon the decisions reported in Sumatibai Waman Kirtikar…(Original Plaintiff), v. Anant Balkrishna Shirgaonkar…(Original Defendant), .*, 51 Bom LR 788 : (AIR 1949 Bom 402) (A); Gurupadappa Shivlingappa v. Akbar, 52 Bom LR 143 : (AIR 1950 Bom 252) (B) and Narayan Ramchandra v. Gangadhar, 56 Bom LR 893 : (AIR 1955 Bom 175) (C), in which some consent decrees were construed in execution proceedings to operate as lease in favour of the judgment-debtors. He has also drawn my attention to the case of Ramjibhai Virpal v. Gordhandas, reported in 56 Bom LR 365 : (AIR 1954 Bom 370) (D), in which again some consent decrees were construed in execution proceedings and were held not to create leases. However, the point which I am now considering does not seem to have been raised in any of those cases. Even so, I must respectfully state that I am bound by those decisions. If however I had rested by judgment on the view which I have ventured to express on the point I have dealt with so far, I would have referred this appeal to a Division Bench, but as I agree with the view which has been taken by the lower appellate Court on the construction of the consent decree, I do not think it necessary to do so in the present case.

11. Now, coming to the terms of the consent decree, I do not feel any doubt whatever as to the import of those terms and the intention of the parties when those terms were settled between the defendants and the plaintiffs. I proceed on the basis that — and Mr. Shah also fairly concedes that the case which was tried to be developed even in the executing Court was that — the terms of the decree gave rise to a relationship of landlord and tenant only between plaintiff No. 3 and the defendants. Mr. Shah says that the decree made it clear that the relationship, which was brought about between them by the terms of the decree, was accepted also by the plaintiffs 1 and 2. That may be so. But that does not seem to be relevant for the purpose of determining the nature of the relationship between plaintiff No. 3 and the defendants. In the first place there are no words in the whole of the compromise purporting to effect an actual demise of the premises by plaintiff No. 3 in favour of the defendants. The first clause of the decree makes it clear that the possession of the property is to be handed over to plaintiff No. 3 in the first instance, and if plaintiff No. 3 is not prepared to take delivery of the property, then, to plaintiffs 1 and 2. I fail to see how if the terms of the compromise decree gave rise to a relationship of landlord and tenant between plaintiff No. 3 and defendants, plaintiffs 1 and 2 would under any circumstances be entitled to recover possession of the property, unless the decree was a decree in ejectment passed in favour of all the plaintiffs. It would not be possible to conceive how on the basis that the decree had created only a tenancy between the defendants and plaintiff No. 3, plaintiffs 1 and 2 would be entitled to possession of the property. If, therefore, this decree is tried to be construed as giving rise to a fresh lease between plaintiff No. 3 and the defendants, we would be ignoring the material and the operative part of the decree which entitles all the plaintiffs to execute the decree for possession of the premises. All that was settled under the compromise was that some time was to be given to the defendants to enable them to vacate the premises, and this concession also was made dependent upon compliance with Cl. 3 of the compromise.

12. Then, Mr. Shah has emphasised the fact that the decree mentions the amount for which the judgment-debtors have been made liable to plaintiff No. 3 as the amount of rent. It is true that the amount which the judgment-debtors have been called upon to pay to plaintiff No. 3 has been described as rent; but in my view the mere mention of an amount for which liability has been created under the decree as rent does not by itself without more create a tenancy between the persons who have been made liable to pay it, and the person to whom that amount has to be paid. In this case, there appears to be some justification for the use of the word “rent” in the decree. It seems to me that the word “rent” is used in the decree, because when the amount is paid into the hands of plaintiff No. 3 and plaintiff No. 3 in his turn makes that amount over to plaintiffs 1 and 2, it is only by way of rent that the latter receive it from plaintiff No. 3, who is admittedly their tenant. The amount for which the judgment-debtors have been made liable in the first instance was not an amount of rent at all. On my construction of the terms of the decree, it was only an amount for the use and occupation for the intervening period during which the defendants were to be in possession. As soon as that amount was paid over to plaintiff No. 3, to whom the defendants had rendered themselves liable to pay, that amount at the time when it was to be passed on to plaintiffs 1 and 2 must be regarded as having transformed itself into rent which indeed it would be when paid to plaintiffs 1 and 2. I therefore do not attach any importance to the mention of the word “rent” particularly in view of the other recitals in the decree.

13. The result is, the appeal fails and is dismissed with costs.

M.K.S
Appeal dismissed.