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  • provisions of section 5(11)(c) of the Rent Act
  • section 28 of the Bombay Rent Act,
  • Rent Act by Act XXII of 1978,
  • section 5(11)(c)
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Advocates
Judges
Acts
  • provisions of section 5(11)(c) of the Rent Act
  • section 28 of the Bombay Rent Act,
  • Rent Act by Act XXII of 1978,
  • section 5(11)(c)
Smart Summary

Summary of the Opinion

Factual and Procedural Background

The suit was originally filed in the City Civil Court at Bombay. The original defendants are the appellants in this appeal and the original plaintiff is the respondent. The dispute concerns the tenancies of two flats (blocks C and D) in Nicholson Building, Bombay, which were occupied by members of the same extended family.

Key factual points from the opinion:

  • One Soonabai was the tenant of blocks C and D. Her daughter Dhanabai predeceased her. Dhanabai's daughter Putlibai predeceased Soonabai; Putlibai had been married to defendant No. 1 (now deceased after the suit was decided).
  • In 1942 Soonabai transferred the tenancy of block D in favour of defendant No. 1 (Cursetji). At Soonabai's death in 1951, defendant No. 1 and his children were residing in block D, and the plaintiff and another sister Khorshed were residing in block C with Soonabai.
  • The plaintiff lived elsewhere for some period after 1955 but appears to have paid rent (wholly or partly) for block C up to about 1964, and thereafter rent payments became disputed; from 1968 she sent money orders which defendant No. 1 refused.
  • The plaintiff sued in the City Civil Court seeking declarations that the tenancies of blocks C and D belonged to Soonabai (alleging D was held benami by defendant No. 1), that the tenancies devolved on Soonabai's heirs including the plaintiff, and sought eviction of defendant No. 1; an injunction as to defendants Nos. 2 and 3 was later added and alternative relief limited to block C was pleaded.
  • The trial Judge decreed the suit in respect of both blocks, holding block D to be held as benami by defendant No. 1. The defendants appealed against that decree.

Legal Issues Presented

  1. Whether the tenancy of block D was held by defendant No. 1 (Cursetji) as benami for Soonabai.
  2. Whether the plaintiff (as an heir of Soonabai) and/or other heirs had a right to the tenancy or to immediate possession of block C under ordinary succession law or under the Rent Act.
  3. Whether the City Civil Court (and this Appellate Court) had jurisdiction to decide whether the plaintiff was a tenant under section 5(11)(c) of the Bombay Rent Act, or whether that determination fell to the Small Causes Court (by virtue of section 28 of the Bombay Rent Act as interpreted in Mirabelle Hotel v. Manu Subedar).
  4. Whether the amendment of the Rent Act (particularly section 5(11)(c) effected by Act XXII of 1978) alters the relative rights of heirs and members of a tenant's family, and the impact of that amendment on the plaintiff's claim.
  5. Whether the plaintiff's voluntary departure from the premises in 1955 resulted in the loss of tenant protection under the Rent Act.

Arguments of the Parties

Appellants / Defendants' Arguments (as presented by Mr. Dalvi)

  • There is no evidence to prove that defendant No. 1 held the tenancy of block D as benami for Soonabai; the benami claim lacks even an "iota" of proof and thus the plaintiff's claim as regards block D must fail.
  • Regarding block C, the plaintiff and defendants Nos. 2 and 3 would be heirs of Soonabai under Parsi law, but the plaintiff's asserted status as a member of Soonabai's family residing with her at death is contested.
  • By reason of section 5(11)(c) (as amended in 1978), a member of the tenant's family who was residing with the tenant at the time of death has a preferential right to tenancy over an heir who was not residing; the plaintiff was not residing as a member of Soonabai's family at Soonabai's death but had only temporary accommodation.
  • If both Khorshed and the plaintiff were residing as members of Soonabai's family, only the Small Causes Court could decide which of them should succeed as tenant; similarly, on the death of Khorshed those questions would arise under section 5(11)(c).
  • When the plaintiff voluntarily left the premises in 1955, she ceased to have Rent Act protection and thus ceased to be a tenant.
  • Section 28 of the Bombay Rent Act (and the Division Bench interpretation in Mirabelle Hotel v. Manu Subedar, 72 Bom. LR 222) confines the determination of who is a tenant under the Rent Act to appropriate jurisdiction (Small Causes Court).

Respondent / Plaintiff's Arguments (as presented by Mr. Joshi and evidence)

  • The plaintiff sought declaration that blocks C and D were Soonabai's tenancies and that defendant No. 1 held block D as benami; evidence included the plaintiff's recollection about rent bills and occupancy history (she was about 13 in 1942 when transfer occurred).
  • It was argued (by Mr. Joshi) that when Putlibai died leaving minor children, block D might have been transferred to defendant No. 1 to hold for their benefit; this was offered as a possible explanation for the 1942 transfer.
  • Mr. Joshi contended an adverse inference should be drawn because defendant No. 1 did not "step into the box" to deny benami, implying defendant No. 1's failure to testify warranted such an inference.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Mirabelle Hotel v. Manu Subedar, 72 Bom. LR 222 Interpretation of section 28 of the Bombay Rent Act as relating to jurisdiction (Small Causes Court) to decide questions of entitlement under the Rent Act. The court records that counsel relied on this decision to argue that only the Small Causes Court could decide who among members of the tenant's family should acquire tenancy rights under section 5(11)(c). The opinion treats the jurisdictional point as barring the City Civil Court (and this Court on appeal) from deciding whether the plaintiff is a tenant under s.5(11)(c).
Rajaram B. Upadhaya v. Raniraj R. Upadhay, 1977 Mh. LJ 792 Stated the pre-amendment legal position that an heir entitled to inherit had preferential right to tenancy over a person claiming tenancy by virtue of being a member of the tenant's family residing with the tenant. The court notes this authority to explain the legal position before the 1978 amendment. The opinion finds that the 1978 amendment (Act XXII of 1978) altered that rule so that a member of the tenant's family residing with the tenant at death now takes preferentially under the Rent Act.

Court's Reasoning and Analysis

The Court's analysis proceeds in two main strands: (A) the benami claim as to block D; and (B) the plaintiff's claim to block C (succession and Rent Act considerations), plus a jurisdictional bar to deciding tenancy status under the Rent Act in this forum.

A. Benami claim (block D)

  • The Court emphasized the heavy burden on any party who alleges a benami transaction. It found no evidence to support the claim that defendant No. 1 held block D as benami for Soonabai.
  • The plaintiff's only evidence on this point was her recollection (she was about 13 in 1942). The plaintiff testified that from 1942 there were two separate rent bills and that after the 1942 transfer defendant No. 1 paid the rent for block D—this fact undercuts the benami contention.
  • The Court rejected Mr. Joshi's late-advanced contention that defendant No. 1 held block D on behalf of the minor children (or as trustee), because that case was not pleaded nor supported by evidence; accepting it would contradict the benami case pleaded.
  • The Court declined to draw an adverse inference from defendant No. 1's failure to testify because (i) there was no evidence against him requiring contradiction nor any burden on him to prove a particular fact, and (ii) there was unchallenged evidence that defendant No. 1 was ill with failing memory and confined to bed since about 1975, making it inappropriate to infer adverse facts from non-testimony.
  • Conclusion: benami not established; plaintiff's claim as regards block D fails.

B. Succession, section 5(11)(c) and block C

  • The Court analyzed the effect of the Rent Act and its amendment (Act XXII of 1978) on succession to tenancies. Pre-amendment authority (Rajaram B. Upadhaya) had given preference to heirs over members of the tenant's family; the 1978 amendment altered this by giving preferential right to a member of the tenant's family who was residing with the tenant at the time of death.
  • The Court observed that the Rent Act creates a succession regime different from ordinary inheritance law and that while the Act remains in force, rights of heirs under ordinary law are suspended or "eclipsed" by the preferential right under section 5(11)(c).
  • Therefore, even if the plaintiff would succeed to tenancy under ordinary succession law, she would not have an immediate right to possession if a member of the tenant's family enjoyed preferential entitlement under section 5(11)(c).
  • The Court held that recognition as a tenant under section 5(11)(c) is the relevant criterion for possession and that only one person can be recognized as the tenant under that provision (though the Court did not elaborate on the consequences for other residents already staying there).
  • Crucially, the Court concluded that the question whether the plaintiff is a tenant under section 5(11)(c) is not properly determinable by the City Civil Court (and thus not on appeal before this Court) because of the Rent Act / jurisdictional scheme (section 28 as read with Mirabelle Hotel). As a result, the principal substantive prayer in the plaint (seeking the right to enter and enjoy the premises) could not be granted in this forum.
  • Consequently, the trial court's decree (which had granted reliefs based on the plaintiff's asserted rights) was set aside on jurisdictional grounds and because the plaintiff could not, in this court, obtain recognition or possession under the Rent Act.

C. Procedural consideration regarding non-joinder

  • The Court noted that one sister Banubai (and her heirs) were not parties to the suit. Although an application to add them was made during judgment, the Court declined to allow such a late amendment. To avoid adversely affecting the absent heirs' position, the Court resolved not to grant any relief of a nature that would prejudice Banubai's heirs even if otherwise the plaintiff might have been entitled to it.

Holding and Implications

Core holding: APPEAL ALLOWED; SUIT DISMISSED.

Direct consequences and immediate effects on the parties (as stated in the opinion):

  • The Court held that the benami claim with respect to block D was not established and therefore the plaintiff's claim to block D fails.
  • Regarding block C, the Court held that the plaintiff could not obtain the substantive relief sought (recognition as tenant and right to immediate possession) in the City Civil Court or on this appeal because the determination whether she is a tenant under section 5(11)(c) falls within the Rent Act regime and appropriate jurisdictional forum; accordingly, prayers based on ordinary heirship (prayers (b), (c), (d) and (e) in the plaint) must be rejected in this forum.
  • The decree of the trial Judge is set aside and the suit is dismissed. The Court did not award costs, because the appeal was decided primarily on the ground of jurisdiction and that ground had not been pressed at trial.

Broader implications noted by the Court in the opinion: the 1978 amendment to section 5(11)(c) of the Rent Act changes the statutory mode of succession to tenancies, giving preferential tenancy rights to a member of the tenant's family residing with the tenant at the time of death and thereby affecting the ordinary succession rights of heirs while the Rent Act remains in force. The Court did not claim to set a new precedent beyond its conclusions on the facts and the jurisdictional point in this case.

Appeal allowed.

    C.J Ghadiali And Others v. Z.B Wadiwalla .

    1. The original defendants to the suit which was filed in the City Civil Court at Bombay, are the appellants and the original plaintiff is the respondent. For the sake of convenience the appellants will be referred to as ‘the defendants’ and the respondent will be referred to as ‘the plaintiff’.

    2. One Soonabai was a tenant of two flats, being blocks Nos. C and D in Nicholson Building, Wadia Street, Tardeo, Bombay. She had daughter, Dhanabai. Dhanabai had three daughters, Putlibai, Khorshed and Banubai. Putlibai was married to the 1st defendant who is now dead, having died after the suit was decided. The plaintiff and the defendants Nos. 3 and 2 are respectively the two daughters and the son of Putlibai and the 1st defendant. Both Dhanabai and Putlibai predeceased Soonabai. Both of them died prior to 1942. In the year 1942, Soonabai transferred the tenancy of block D in favour of the 1st defendant. On 18th July 1948, both the plaintiff and the defendant No. 3, got married. The plaintiff went to reside with her husband at Fanaswadi, Dhobitalao where they resided with the brother of her husband. The defendant No. 3 along with her husband resided with the 1st defendant in block D. A few months or a year thereafter, the plaintiff and her husband had to leave the Fanaswadi residence and were given accommodation by Soonabai in block C. Soonabai died in the year 1951. The admitted position is, that at the time of the death of Soonabai, the defendant No. 1 along with the defendant No. 2 and the defendant No. 3 and her husband, were residing in block D and the plaintiff and Khorshed were residing in block C with Soonabai. Each block consists of 2 rooms and a kitchen and a large entrance passage. Immediately prior to the death of Soonabai, one room was partitioned and a portion thereof was occupied by Khorshed and the other by the plaintiff and her husband, and the kitchen was in common use. The arrangement of occupation of block D at this stage is not relevant.

    3. In or about the year 1955, the plaintiff's husband who was working with Bombay Gas Co. was given and so occupied company's accommodation. Thereafter, they went to Morvi. It does appear from the evidence that till about the year 1964, the plaintiff had paid either the entire rent or a part of it in respect of block C. Whether she paid the same thereafter, till 1968 is in dispute. After 1968, she started sending rent by money orders, all of which were refused by the defendant No. 1. There were disputes between the plaintiff and her father and possibly with the brothers and sister, which is reflected in the correspondence exchange and produced.

    4. Khorshed died in the year 1971. At that time, Khorshed occupied one room, the 1st defendant occupied one room, and the kitchen was allowed to be used by the defendant No. 2 who was occupying one room in block D. Another room and kitchen in block D were occupied and used by the defendant No. 3. The common passages in both the blocks were in common use of the occupants of the respective flats in 1951 as well as in 1971. It is in these circumstances that the plaintiff filed a suit in the Bombay City Civil Court for a declaration that the tenancies of both the blocks C and D, belonged to Soonabai, the defendant No. 1 holding the tenancy of block D as benami for Soonabai. A declaration is also sought that the tenancies of blocks C and D devolved on the plaintiff and the defendants Nos. 2 and 3 as heirs and next of kin of the said Soonabai; that defendant No. 1 had no right, title or interest in block C or D and was not entitled to deal with the same or use or occupy the same and the plaintiff prayed for eviction of the defendant No. 1. By a subsequent amendment, an injunction was sought against the defendants Nos. 2 and 3 from preventing the plaintiff in any manner exercising her right as a tenant in respect of blocks C and D and it is prayed in the alternative that in the event of it being held, that block D was not held as benami by defendant No. 1, the claim of the plaintiff should be granted in respect of block C as having devolved on the plaintiff and the defendants Nos. 2 and 3.

    5. The learned trial Judge decreed the suit in respect of both the blocks, holding that block D was held as benami. It is against this, that the defendants have filed this appeal.

    6. Mr. Dalvi for the defendants has contended that it is not proved that the defendant No. 1 held the tenancy as benami for Soonabai. According to him, there is not even an iota of evidence to establish this claim. He says that if the benami is not proved, the plaintiff's suit must fail as regards block D. In respect of block C, Mr. Dalvi admits that the plaintiff along with defendants Nos. 2 and 3 will be an heir of Soonabai in accordance with the Parsi Law, by which she was governed. It is admitted by both the parties that on the death of Soonabai, Khorshed also was an heir of Soonabai. I find that one of the sisters, Banubai, who was married in 1919, also survived Soonabai. I am informed that she died in the year 1978, leaving behind heirs. She is not a party to the suit.

    7. This matter was argued at great length by both the sides but none of the parties raised the point of non-joinder of necessary party. It is only while dictating the judgment that I realised, that it may be difficult to give the reliefs claimed in the absence of the other heirs. In the midst of the judgment I pointed this out to Mr. Joshi who made an application for leave to amend the plaint by adding the heirs of Banubai as party to the suit. In my view, the application made at such a late stage should not be granted. However, if the basis of the plaintiff's claim is accepted, Banubai and consequently her heirs, will have as much right to the tenancy of Soonabai as the plaintiff and the defendants Nos. 2 and 3 put together. In view of this position, rather than dismiss the suit, I propose not to grant any relief to the plaintiff of such a nature as would adversely affect the position of the heirs of Banubai, even if I find that otherwise, the plaintiff is entitled to such relief.

    8. The contention of Mr. Dalvi is that in view of section 5(11)(c), after its amendment in the year 1978, a member of a tenant's family who was residing along with the tenant at the time of his or her death, will have a preferential right over the tenancy as against an heir who was not so residing, in respect of any premises to which Rent Act applies. He contends that at the time of the death of Soonabai in 1951, the plaintiff was not residing with Soonabai as a member of her family but was given only a temporary accommodation till she and her husband acquired suitable accommodation. His further contention is that even if Khorshed and the plaintiff were both residing with Soonabai as members of her family, only the Small Causes Court could have decided as to between Khorshed and the plaintiff, who should be the tenant. He further contends that on the death of Khorshed, her interest, if any, in the flat, would again become open for consideration and under section 5(11)(c), it will have to be decided, in case she was held to be a tenant, as to who acquired rights under section 5(11)(c) to be a tenant in her place. He then contends that in any event when the plaintiff left the premises voluntarily in the year 1955, she lost the protection afforded to her under the Rent Act, and therefore, ceased to be a tenant. He submits that whether the plaintiff became a tenant as being a member of the Soonabai's family residing with her, including the question, whether she was in fact residing with Soonabai as a member of the tenant's family, is a question which can be decided only by the Small Causes Court at Bombay by virtue of section 28 of the Bombay Rent Act, as interpreted by a Division Bench of this Court in Mirabelle Hotel v. Manu Subedar . 72 Bom. LR 222..

    9. There is no substance in the contention of benami. This is not a question of purchase of property out of somebody's money; it is the question of tenancy which is transferable without any payment of premium. Really speaking the words transfer of tenancy are quite often loosely used. The actual transaction involved is the surrender of tenancy by a tenant and creation of a new tenancy by the landlord in favour of another person at the request of the previous tenant. In case of such a transfer no payment of consideration can legally be involved in view of the Rent Act. It is well settled, that the burden is heavily on the person who claims the property as having been held benami for somebody else. In the present case, I find that there is absolutely no evidence to hold that Cursetji was a benami for Soonabai. The only evidence relied on in support of the contention is that of the plaintiff who was about 13 years old in the year 1942. The evidence she has given is that as far as she recollects from 1942 there were two separate rent bills in respect of blocks C and D and that she did not know the earlier position of tenancy in respect of these blocks, except that prior to 1942, both the blocks stood in the name of Soonabai. It is in evidence that block C was occupied only by Soonabai and Khorshed till about 1949, that is for about 7 years, while in block D, defendant No. 1 and his three children stayed. There is no evidence to show that both the blocks were used in common. It is the evidence of the plaintiff herself that after block D was transferred to the defendant No. 1 in 1942, he used to pay the rent of block D. This itself destroys the claim of the block D being held benami. It is contended by Mr. Joshi that when Putlibai died, the children were minor and the block D, which was actually meant to be kept for the benefit of the minor children, was because of the minority, transferred to the defendant No. 1. This contention cannot be tenable even for a second, because this is not the case made out anywhere, either in the plaint or in the evidence. If this contention is accepted, it will either amount to defendant No. 1 holding it benami for the children or as a trustee for the children and will be contrary to the case of benami made out in the plaint. The contention, is therefore, rejected.

    10. Another contention of Mr. Joshi is that defendant No. 1 has not stepped in the box to deny that he held it as a benami, and hence, I must draw adverse inference. In my view, such an adverse inference cannot be drawn for two reasons; firstly, a person is required to step into the box if either there is some evidence against him which requires contradiction or if the burden is on him to prove a particular thing and in the present case there is not even an iota of evidence against him nor is the burden of proof on him, and secondly, there is unchallenged evidence on record to show that since sometime in 1975, the defendant No. 1 was not keeping well and had failing memory and was confined to bed. In these circumstances no adverse inference can be drawn.

    11. In view of the fact that benami is not established the plaintiff's claim regarding block D fails.

    12. As regards block C, though the plaintiff has asked for declaration of right to tenancy on the basis of her being one of the heirs, the main claim is right to possession of block C along with defendants Nos. 2 and 3, on the basis of her being an heir of Soonabai. Till the amendment of Rent Act by Act XXII of 1978, which came into force on 23-10-1978, the legal position was as laid down in Rajaram B. Upadhaya v. Raniraj R. Upadhay . 1977 Mh. LJ 792.. It was therein held that an heir of a deceased who was entitled to inherit the estate of the deceased had preferential right to tenancy over the right of a person who claimed tenancy by virtue of his being a member of the tenant's family residing with the tenant. However, there is a complete change in law by this amendment and now it is only in the absence of a member of the tenant's family residing with the tenant, at the time of his death, that any heir of the deceased tenant acquires the tenancy rights under the Rent Act.

    13. It is obvious that the provisions of section 5(11)(c) of the Rent Act provides for a right of succession different from the one under the ordinary law. It must, therefore, follow that the right of possession also will be of the person who is a tenant under section 5(11)(c). In the circumstances, even if the plaintiff may be entitled to tenancy rights as an heir of Soonabai under the ordinary law, she will have no right of possession, in any case right to immediate possession. No doubt, bombay rent act is a statute which is supposed to be enacted as a temporary measure and so, it was not enacted to last till repealed but for a limited period which is being extended from time to time. It would therefore, appear that the mode of succession provided by the Rent Act is not a permanent mode and the right of the heirs or legal representative, under the normal law is suspended and eclipsed till the preferential right conferred by section 5(11)(c) to tenancy continues. Hence, at the time of the filing of the suit and even at present, it cannot be said that the plaintiff as an heir had a right to the tenancy of or to occupy block C. Her claim can only be to recognition as a tenant under section 5(11)(c) and to occupation alone or jointly with others under the provisions of Rent Act. It is held by this Court that only one person can be recognised as a tenant under section 5(11)(c). However, it is not decided that all other persons who were already staying in the premises will have to go out. I do not think that the intention of the Legislature was to protect the possession of only one of the members of the tenant's family or to give a right of protected possession only to one of the heirs. This question will have to be considered when it arises.

    14. Whether the plaintiff is a tenant under section 5(11)(c) is a question which cannot be decided by the City Civil Court and hence by this Court sitting in appeal from a decree in a suit filed in the City Civil Court. Prayer (el) which is the real substantial prayer in the plaint, cannot be granted in view of section 5(11)(c), in the sense that it includes a right to enter and enjoy premises. In the circumstances the judgment and decree of the learned trial Judge is liable to be set aside. It is true that the plaintiff is one of the heirs of Soonabai but she could not have at the time of filing of the suit nor can she claim now, any right even to block C as an heir under normal law. She can claim a right only under the Rent Act. Till the Rent Act is in force the question of declaration in terms of prayer (b) also cannot arise. The prayers (c), (d) and (e) are based on the right claim by the plaintiff as an heir of Soonabai and hence must be rejected.

    15. In the circumstances I allow the appeal. The suit is dismissed. I am not awarding the cost in view of the fact that I am deciding the appeal basically on the ground of jurisdiction, which issue though taken up in the written statement, no issue was raised by the Court nor insisted upon by the appellant.

    Appeal allowed.
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    Comments

    C.J Ghadiali And Others v. Z.B Wadiwalla .
    (Jul 24, 1981)