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Case Number

Writ Petn. No. 76 of 1958

Attorney(S)

For the Appellant: R. Gopalaswami Iyengar, Advocate.

Judges

Balakrishna Ayyar, J.

Acts

SECTION 108 TRANSFER OF PROPERTY ACT 1882
Section 29 of Act (Central) 44 of 1954
Section 29 of Act 44 of 1954
Section 19 of Act 44 of 1954

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Smart Summary

Structured Summary of the Provided Legal Opinion

Factual and Procedural Background

The subject property, known in the proceedings as Coronation Talkies, was evacuee property belonging to an owner who had gone to Pakistan. The property comprised a cinema theatre, three residential rooms and an office. Officers exercising powers under Central Act 44 of 1954 leased the portion to the petitioner in 1951 for two years, and the lease was renewed from time to time until 1955.

In June 1955 the Regional Settlement Commissioner invited tenders for sale of the property and ordered the eviction of the petitioner. The petitioner appealed to the Chief Settlement Commissioner, New Delhi, who heard the petitioner and his counsel and on 1-8-1957 dismissed that appeal.

On 30-9-1957 the property was sold at auction to another evacuee for Rs. 1,42,000; the purchaser was allowed set-offs of Rs. 1,19,606 and given 15 days from 17-10-1957 to pay the balance of Rs. 22,394. On 19-10-1957 the petitioner and his counsel applied to the Chief Settlement Commissioner for time to continue in possession to satisfy film-distribution obligations; the Chief Settlement Commissioner granted time until 19-1-1958 and recorded the petitioner's acceptance of the necessity for eviction and an undertaking to abide by any order and to hand over the premises peacefully at expiry.

After this extension, the petitioner claimed entitlement to remain in possession under Section 29 of Central Act 44 of 1954 and wrote to the Collector of Nilgiris. The Collector, after consulting the Regional Settlement Commissioner, directed the petitioner to hand over possession by 27-1-1958 and later (by communication dated 24-1-1958) modified that date and informed the petitioner that eviction would take place on 9-2-1958 unless the High Court ordered otherwise. The petitioner moved this Court to quash the Collector's order dated 24-1-1958.

It is also recorded that the sale in favour of the auction purchaser was confirmed by the appropriate officer but that no sale certificate had been issued to him at the time of the opinion.

Legal Issues Presented

Whether the petitioner is entitled to remain in possession as a tenant for two years under Section 29 of Central Act 44 of 1954 by reason of being in lawful possession at the time of the transfer.
Whether, as a factual and legal matter, a transfer has taken place for the purposes of Section 29 given that the auction had been confirmed but no sale certificate had been issued.
Whether the petitioner's prior assurances to the Chief Settlement Commissioner (accepting eviction and agreeing to hand over possession peacefully after the extended period) estop him from resisting eviction.
Whether the petitioner's alleged lack of full and candid disclosure in his affidavit (specifically non-disclosure of the eviction order, the appeal and its dismissal, and his undertaking to vacate) disentitles him to invoke the special jurisdiction of this Court and warrants refusal of relief.

Arguments of the Parties

Petitioner's Arguments

The petitioner (through Mr. Gopalswami Aiyangar) relied on Section 29 of Act 44 of 1954, arguing that a person in lawful possession of immovable property of the notified class that is transferred to another is deemed to be a tenant of the transferee on the same terms as before the transfer and is protected from ejection for a period not exceeding two years (subject to the provisos).
On that basis the petitioner argued he was entitled to retain possession of Coronation Talkies as a lessee for two years from the date of transfer because he was in lawful possession when the property was transferred, provided he paid or tendered rent and did not otherwise disentitle himself to relief under Section 29.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Bombay Salt and Chemical Industries v. L.J. Johnson, Civil Appeal No. 406 of 1956 (Supreme Court)	The principle that on approval of an auction bid a binding contract comes into existence but that the transfer of property under the Act takes effect only upon the issue of the sale certificate; until the sale certificate is issued and the purchase money paid, no transfer has occurred for purposes of invoking Section 29.	The Court relied on this precedent to hold that because no sale certificate had been issued and the balance of purchase money had not been shown to have been paid, there had been no transfer; therefore the petitioner could not claim protection under Section 29.
Rex v. Kensington Income-tax Commissioners; Princess Edmond de Polignac, Ex parte, 1917-1 KB 486	The English Court's doctrine that where an ex parte application is supported by an affidavit that is not candid and misleads the court about material facts, the court may, to protect itself and prevent abuse, refuse to proceed further in the matter.	The Court invoked this principle to assess the petitioner's affidavit and found that material facts had been omitted in a way that could mislead; on that basis the court considered refusal of relief appropriate as a protective measure.
Marappa Gounder v. Central R. T. Board, 1956-1 Mad LJ 324	Approval and application in this Court of the principle in Rex v. Kensington regarding non-candid affidavits in ex parte applications.	The Court noted that the Rex principle had been approved and followed in this Court's decision in Marappa Gounder, reinforcing the Court's approach to non-disclosure by applicants to the Court's special jurisdiction.

Court's Reasoning and Analysis

The Court proceeded by applying legal principles to the facts as follows:

Transfer issue: The Court first analysed whether a transfer for the purpose of Section 29 had taken place. Relying on the authority of Bombay Salt and Chemical Industries v. L.J. Johnson, the Court held that although the auction had been confirmed, a transfer under the Act takes effect only upon issue of the sale certificate (and payment of the balance in the circumstances of that case). The petitioner did not allege that a sale certificate had been issued and the Government's material showed no certificate had been issued. On that basis alone the petitioner failed to show any entitlement under Section 29.
Even if transfer assumed: The Court next assumed, for argument's sake, that a transfer had occurred when the auction was confirmed, and addressed entitlement under Section 29. It observed that on 19-10-1957 the Chief Settlement Commissioner had granted the petitioner an extension until 19-1-1958 after recording the petitioner's acceptance of the necessity for eviction and his undertaking to hand over possession peacefully at the expiry of that period. Having given that assurance to the Chief Settlement Commissioner to obtain respite, the petitioner could not be heard later to deny his undertaking; he was estopped from taking a contrary position.
Statutory power to eject: The Court noted that Section 19 of Act 44 of 1954 empowers officers to cancel allotments or terminate leases and, if necessary, eject persons by force and take possession. Absent the petitioner's representations to the Chief Settlement Commissioner, the officer could have summarily dispossessed him; because the petitioner induced the officer to refrain from acting, the petitioner cannot now be allowed to change course.
Non-disclosure in affidavit: The Court considered the petitioner's duty of full and candid disclosure when invoking the Court's special writ jurisdiction. Applying the principle from Rex v. Kensington and the later approval in Marappa Gounder, the Court found that the petitioner had suppressed material facts in his affidavit: he failed to state that the Regional Settlement Commissioner had ordered eviction, that he had appealed and that the appeal had been dismissed on 1-8-1957; and he omitted mentioning his petition accepting the necessity for eviction and his undertaking to hand over possession. Because these omissions created an impression that was misleading, the petitioner was not candid as required and would in any event be disqualified from relief on that ground.

Taking these points cumulatively — (i) absence of transfer because no sale certificate had been issued, (ii) estoppel arising from the petitioner's undertaking to the Chief Settlement Commissioner, and (iii) non-disclosure and misleading affidavit — the Court concluded that the writ petition could not be sustained.

Holding and Implications

Holding: The writ petition is DISMISSED with costs. The Court awarded advocate's fee of Rs. 250.

Implications:

Direct effect: The petitioner was denied the requested writ to quash the Collector's order dated 24-1-1958 and must vacate in accordance with the statutory/administrative process; costs and an advocate's fee were imposed on the petitioner.
No broader legal innovation: The opinion applied existing authorities (including the Bombay Salt decision and the English authority approved in Marappa Gounder) and did not purport to create a new principle; the decision rests on (a) the absence of a sale certificate indicating no transfer for Section 29 purposes, (b) estoppel from the petitioner's undertaking to the Chief Settlement Commissioner, and (c) the petitioner's failure to make full and candid disclosure in his affidavit.

This summary is prepared strictly from the contents of the provided opinion. No facts, arguments or holdings beyond those contained in the opinion have been added.

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Deptylal, Lessee, Coronation Talkies, Ootacamund By Power Of Attorney Agent, Ramaswamy v. Collector Of Nilgiris As The Managing Officer, Under Act Xliv Of 1954, Ootacamund .

2. The property described in the proceedings as Coronation Talkies belonged to an evacuee who has gone away to Pakistan. This property includes a cinema theatre, three residential rooms and an office. In exercise of the powers conferred on them under central act 44 of 1954, the officers concerned gave a lease of this portion to the petitioner in 1951 for a period of two years. The lease was renewed from time to time till 1955. In June 1955, the Regional Settlement Commissioner invited tenders for the sale of the property. He also ordered the eviction of the petitioner. Against the order of eviction the petitioner appealed to the Chief Settlement Commissioner, New Delhi. That Officer heard the petitioner and his counsel and on 1-8-1957 passed an order dismissing his appeal.

3. On 30-9-1957 the property was sold in auction to another evacuee for a sum of Rs. 1,42,000. The purchaser was permitted to set off a sum of Rs. 1,19,606, which was admissible to him in respect of certain claims which he had. For the payment of the balance of Rs. 22,394 he was given 15 days' time counting from 17-10-1957.

4. On 19-10-1957 the petitioner and his counsel appeared before the Chief Settlement Commissioner, New Delhi, and asked that he should be allowed to continue in possession for a few months in order to enable him to comply with obligations he had undertaken to film distributors. The Chief Settlement Commissioner then passed an order granting the petitioner time till 19-1-1958 to arrange his affairs and to give vacant possession to the Regional Settlement Commissioner. In the course of his order the Chief Settlement Commissioner expressly stated,

"He (the petitioner) has also put in a petition accepting the necessity for his eviction but says that he would abide by any order in regard to extending his stay and would peacefully hand over the premises at the expiry of this period."

The Chief Settlement Commissioner also recorded, "this extension is not being given because of any right which the petitioner might have but solely to save the petitioner from damage. If the petitioner does not hand over possession peacefully at the expiry of this period, he will be evicted." After having obtained that period of respite the petitioner took up the position that he was entitled to remain in possession under Section 29 of Act (Central) 44 of 1954 and wrote to that effect to the Collector of Nilgiris. The Collector addressed the Regional Settlement Commissioner, Bombay, and after obtaining his instructions wrote on 23-1-1958 to the petitioner directing him to hand over possession before 27-1-1958. He was also warned that if he tailed to hand over possession peacefully he would be ejected by force if necessary. The petitioner appears to have made further representations to the Collector who on 24-1-1958 modified the order he had previously passed and informed the petitioner that the eviction would take place on 9-2-1958 unless he obtained orders from the High Court to the contrary. In these circumstances the petitioner has come to this court for the issue of a writ to quash the order of the Collector dated 24-1-1958.

5. To complete the statement of facts it is sufficient to add that the sale in favour of the auction-purchaser was confirmed by the appropriate officer; but no sale certificate has so far been issued to him.

6. Mr. Gopalswami Aiyangar the learned ad vocate for the petitioner rested his case on Section 29 of Act 44 of 1954 It is sufficient to quote the first two paragraphs of the first sub-section:

"Where any person to whom the provisions of this section apply, is in lawful possession of any immovable property of the class notified under Sub-section (2), which is transferred to another person under the provisions of this Act, then, notwithstanding anything contained in any other law, such person shall, without prejudice to any other right which he may have in the property be deemed to be a tenant of the transferee on the same terms and conditions as to payment of rent or otherwise on which he held the property immediately before the transfer;

Provided that notwithstanding anything contained in any such terms and conditions, no such person shall be liable to be ejected from the property during such period not exceeding two years as may be prescribed in respect of that class of property, except on any of the following grounds, namely,

(a) that he has neither paid nor tendered the whole amount of arrears of rent due after the date of the transfer within one month of the date on which a notice of demand has been sewed on him by the transferee in the manner provided in Section 108 of the Transfer of Property Act 1882 (IV of 1882);

(b) that he has, without obtaining the consent of the transferee in writing-

(i) sub-let or otherwise parted with the possession of the whole or any fart of the property, or

(ii) used the property for a purpose other than the purpose for which he was using it immediately before the transfer;

Mr. Gopalaswami Aiyangar argued that the petitioner is a person to whom the provisions of this section apply and that such persons are entitled to remain on the property for a period of two years from the date of its transfer provided he was in lawful possession of the property at the time it was transferred. So long as he pays or tenders the rent and does not otherwise disentitle himself to relief he is entitled to remain as a tenant of the property on the same terms and conditions as before for two years, According to Mr. Gopalaswami Aiyangar, therefore, the petitioner is entitled to retain possession of the Coronation Talkies as a lessee for two years as he was in lawful possession of the property at the time of its transfer.

7. There are various answers to this. The first one is that though the auction has been confirmed the property has not yet been transferred to the auction purchaser since no sale certificate has been issued in his favour. In Bombay Salt and Chemical Industries v. L.J. Johnson, Civil Appeal No. 406 of 1956: , the Supreme Court had to consider a case arising under this very Act and their Lordships held:

"The correct position is that on the approval of the bid by the Settlement Commissioner, a binding contract for the sale of the property to the auction purchaser comes into existence. Then the provision as to the sale certificate would indicate that only upon the issue of it a transfer of the property takes place. It is for the appellants to show that the property had been transferred. They have not stated that the sale certificate was issued, nor that the balance of the purchase money had been paid. In those circumstances, it must be held that there has as yet been no transfer of the salt pans to respondent Nos. 4 and 5. The appellants cannot therefore claim the benefit of Section 29 and ask that they should not be evicted."

Dealing with the contention that in any case the sale certificate would be issued as a matter or course and that once it is issued the transfer would take effect from the date of the auction, their Lordships observed,

"It is enough to say in answer to this contention that assuming it to be right, a point which is by no means obvious and which we do not decide, till it is granted no transfer with effect from any date whatsoever takes place and none has yet been granted."

In the present case the petitioner does not allege that the sale certificate has been issued. On the other hand, it is clear from the telegram dated 31-3-1958 and the post copy thereof produced before me on behalf of the Government that no certificate has been issued, There has therefore been no transfer upto now. On this point alone the petitioner is bound to fail.

8. Even if it can be assumed that when the auction was confirmed a transfer of the property took place the petitioner would not appear to be entitled to any relief. On 19-10-1957, while the Chief Settlement Commissioner, New Delhi, passed an order granting extension of lime to the petitioner till 19-1-1958 to wind up his affairs and give vacant possession the sale had not been confirmed in any sense of the word; on that date the auction itself had not been confirmed. The order of the Regional Settlement Commissioner, Bombay, dated 17-10-1957 gave 15 days time from that date to the auction purchaser to make up the balance of Rs. 22,394. The order of the Chief Settlement Commissioner contains this passage;

"He (the petitioner) has also put in a petition accepting the necessity for his eviction but says that he would abide by any order in regard to extending his stay and would peacefully hand over the premises at the expiry of this period."

After having given this assurance the petitioner cannot be heard to say that he is not bound by it; nor can he be permitted to go back upon it.

9. I would point out that Section 19 of Act 44 of 1954 gives the officers concerned power to cancel any allotment or to terminate any lease or to amend the terms of any lease or allotment, and, if necessary to eject person by force and take possession of any property to which the Act applies. But for the representations which the petitioner made to the Chief Settlement Commissioner it would have been open to him to summarily dispossess the petitioner and give vacant possession to the auction purchaser. Having by his representations persuaded the Chief Settlement Commissioner to stay his hand the petitioner, it seems to me, is estopped from contending that he is not bound to vacate. By this conduct the petitioner had persuaded the Chief Settlement Commissioner to desist from acting in a manner which he had a right to do and in which he would have certainly acted. He cannot now be allowed to take up a different line,

10. Finally there is another point. A person invoking the special jurisdiction of this court is bound to make a full and true disclosure of all relevant facts. In Rex v. Kensington Income-tax Commrs. ; Princess Edmond de Poliganac, Ex parte, 1917-1 KB 486, Reading C. J. observed,

"Where an ex parte application has been made to this court for a rule nisi or other process, if the court comes to the conclusion that the affidavit in support of the application was not candid and did not fairly state the facts, but stated them in such a way as to mislead the court as to the true facts, the court ought, for its own protection and to prevent an abuse of its process to refuse to proceed any further with the examination of the merits. This is a power inherent in the court, but one which should only be used in cases which bring conviction to the mind of the court that it has been deceived. Before coming to this conclusion a careful examination will be made of the facts as they are and as they have been stated in the applicant's affidavit, and everything will be heard that can be urged to influence the view of the court when it reads the affidavit and knows the true facts. But if the result of this examination and hearing is to leave no doubt that the court has been deceived, then it will refuse to hear anything further from the applicant in a proceeding which has only been set in motion by means of a misleading affidavit."

11. This case has been approved and followed in later decisions of the English Courts. It has also been approved in this court, viz., Marappa Gounder v. Central R. T. Board, 1956-1 Mad LJ 324.

12. In the present case it cannot possibly be said that the petitioner was as frank and candid as he was under a duty to have been. He did not say in his affidavit that the Regional Settlement Commissioner had ordered his eviction. He did not say that he had gone up in appeal and that he and his counsel had been heard at length and that an order had been passed on 1-8-1957 dismissing his appeal. The averments in paragraph 2 of the affidavit produce the impression that all that happened was that an application of the petitioner that the property might be allotted to him in satisfaction of his claim was not accepted and that the appeal therefore had been dismissed. In that affidavit the petitioner also suppressed the fact that he had put in a petition before the Chief Settlement Commissioner "accepting the necessity for his eviction' and also promising that he "would abide by any order in regard to extending his stay and would peacefully hand over the premises at the expiry of this period."

13. If these two facts had been brought to my notice I am not at all sure that I would have admitted the writ petition, and certainly I would not have granted any interim stay. The petitioner would oe disqualified on this ground also.

14. In the result, this writ petition is dismiss ed with costs. Advocate's fee Rs. 250.

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