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Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

The appellant (the plaintiff in the trial Court) filed a suit for possession of agricultural lands and for past and future mesne profits. He had obtained a sale deed (Exhibit A-1) from the Court in execution of a compromise decree for specific performance in O.S. No. 133 of 1959 (Sub-Court, Tiruchirapalli). Possession of the properties under Exhibit A-1 was obtained through E.P. No. 193 of 1964 on 21 September 1964; delivery receipt (Exhibit A-2) showed standing crops about two months old at that time.

The plaintiff's case was that on 21 October 1964 defendants 1 and 2, at the instance of defendants 3 and 4, trespassed and cut and carried away the crops. The second defendant alone resisted, claiming to be a tenant under an insufficently stamped and unregistered lease deed (Exhibit B-1), later validated by payment of stamp duty and penalty, and asserting protection under the Tamil Nadu Cultivating Tenants Protection Act such that he could not be evicted but was liable only to pay rent.

The trial Court decreed the suit, holding that Section 52 of the Transfer of Property Act rendered the lease under Exhibit B-1 invalid as against the plaintiff's right to recover possession. On appeal the Subordinate Judge reversed in part, holding that the lease granted by the owners pending the suit for specific performance was valid and entitled the second defendant to benefits under the Tamil Nadu Act; the appeal was allowed so far as the western moiety (which the second defendant occupied) and the suit was dismissed in respect of that portion. The present judgment is in a second appeal from that decision.

Legal Issues Presented

  1. Whether a lease granted by the owners of agricultural land during the pendency of a suit for specific performance is hit by the doctrine of lis pendens under Section 52 of the Transfer of Property Act and therefore cannot defeat the plaintiff's right to recover possession obtained by decree for specific performance.
  2. Whether a tenant who obtains possession under such a lease during the pendency of a suit for specific performance is entitled to protection under the Tamil Nadu Cultivating Tenants Protection Act (i.e., whether the Act operates so as to prevent eviction of that tenant by the successful plaintiff).
  3. Whether a decree for specific performance entitles the successful plaintiff to be put in possession of the property (including where the decree is silent on delivery of possession), and the executing Court's jurisdiction to order delivery of possession as incidental to execution of such a decree.

Arguments of the Parties

Second Defendant's (Respondent's) Arguments

  • The second defendant contended he was a tenant of a portion of the suit property under the original owner by virtue of Exhibit B-1 (a lease), and that he continued in possession and could not be evicted because of the provisions of the Tamil Nadu Cultivating Tenants Protection Act; his liability was only to pay rent.
  • Counsel for the second defendant argued that the owners (defendants in O.S. No. 133 of 1959) had title until the sale deed was executed and therefore were entitled to lease a portion to the second defendant despite pendency of the specific performance suit; Section 52 of the Transfer of Property Act would not apply. Reliance was placed on certain judicial decisions in support of this contention.

Appellant's Arguments

  • The appellant contended that in a suit for specific performance, the successful plaintiff on decree is entitled to be put in possession of the properties and that a lease by the defendant during the pendency of such a suit would defeat the plaintiff's rights, especially where the Tamil Nadu Cultivating Tenants Protection Act confers protection on tenants; therefore Section 52 of the Transfer of Property Act should apply to invalidate such a lease as against the plaintiff.
  • The appellant relied on prior decisions (including a Full Bench decision in Arumugha Goundar v. Ardhandri Mudaliar and Ors) holding that a tenant let into possession by a Receiver pending suit is not entitled to protection under the Tamil Nadu Act, and on authorities that a direction to deliver possession is incidental to a decree for specific performance and the executing Court can order delivery of possession.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Darbha Venkata Somayajulu v. Patula Sathiraju (1936) 159 I.C. 93 : A.I.R. 1935 Mad. 875 Held that a lease granted by a mortgagor after a suit to enforce mortgage but before decree was not affected by lis pendens; purchaser at sale acquired only the mortgagor's rights (e.g., a claim to rent) and not full rights to crops/properties. The Court observed the decision but held it not in point here because, when that lease was granted in earlier cases, there was no provision like the Tamil Nadu Cultivating Tenants Protection Act conferring statutory rights on tenants.
Ram Dayal v. Asghar Khan, A.I.R. 1930 All. 289 Where during pendency of a mortgage suit the mortgagor grants a lease in ordinary management for adequate rent, such lease is not obnoxious to Section 52 of the Transfer of Property Act; the lessee holds subject to mortgagee-decree-holder's rights. The Court treated this authority as not determinative of the present dispute because it pre-dated statutory tenant-protection provisions similar to the Tamil Nadu Act.
Penumatsa Subbaraju v. Veegasena Seetharamaraju and Anr. (1916) I.L.R. 39 Mad. 283 Lease for one year after a suit and decree on mortgage is not affected by lis pendens where lease is an ordinary incident of beneficial enjoyment of a mortgagor allowed to remain in possession. The Court again noted the decision but found it not in point for the same reason: absence of an Act conferring tenant-rights like the Tamil Nadu Act at the time of those decisions.
Apaji Thamaji Patil v. Ragho Bhivraj Patil and Anr., A.I.R. 1973 Bom. 75 (Full Bench) Held that lease during pendency of a mortgage suit did not affect the mortgagee's rights contemplated by Section 52, and the tenant was lawfully cultivating and entitled to benefits under the Bombay Tenancy and Agricultural Hands Act. The Court considered this Full Bench decision but concluded it was not in point on the facts of the present case.
Chandrasekaran v. Kunju Vanniar and Ors. (1975) A.I.R. 1975 Mad. 227 (Full Bench) Held that where tenancy originated in an agreement and tenant continued in possession after redemption of usufructuary mortgage, such tenant fell within the inclusive definition of 'cultivating tenant' under the Tamil Nadu Act and was entitled to its protections. The Court observed this authority but held it inapplicable because the lease in Chandrasekaran was not granted pending a suit (so Section 52's applicability was not in issue there).
Arumugha Goundar v. Ardhandri Mudaliar and Ors. (Full Bench) Held that a tenant let into possession by a Receiver pending suit is not entitled to protection under the Tamil Nadu Cultivating Tenants Protection Act because such letting places the property beyond the Court's reach to give the plaintiff his remedy. The appellant relied on this decision to argue that delivery of possession by courts or acts precluding the plaintiff's remedy should not attract tenant-protection; the Court referenced the principles in this decision in assessing the appellant's entitlement to possession.
Sundara Ramanujam Naidu v. Sivalingam Pillai Held that a direction to deliver possession is incidental to a decree for specific performance of a contract to sell immovable property and that the executing Court has jurisdiction to order delivery of possession even if the decree is silent. The Court treated this authority as supporting the proposition that possession may be granted incidentally on execution of a decree for specific performance.
Vedachari v. Narasimha Mudali and Ors. (1923) 45 M.L.J. 825 Held that the doctrine of lis pendens applies to suits for specific performance of agreements to sell immovable property and applies to Court sales as well as private sales. The Court relied on this authority to conclude that a lease granted during pendency of a suit for specific performance would be affected by the doctrine of lis pendens under Section 52 of the Transfer of Property Act in the circumstances of the present case.

Court's Reasoning and Analysis

The Court examined the interaction between (a) the doctrine of lis pendens as embodied in Section 52 of the Transfer of Property Act, (b) the rights conferred on cultivating tenants by the Tamil Nadu Cultivating Tenants Protection Act, and (c) authorities dealing with leases granted during the pendency of litigation (including mortgage litigation) or after decree.

First, the Court reviewed earlier decisions (including Darbha Venkata Somayajulu, Ram Dayal, and Penumatsa Subbaraju) which had held that certain leases granted during mortgage litigation or after decree were not affected by lis pendens or Section 52. The Court observed, however, that those decisions did not involve a statutory scheme like the Tamil Nadu Cultivating Tenants Protection Act that confers a substantive right on tenants to hold property subject only to payment of rent.

Second, the Court considered the respondent's reliance on subsequent decisions (for example the Full Bench decisions in Apaji Thamaji Patil and Chandrasekaran). The Court found these authorities not determinative of the present case: the Bombay decision (Apaji Thamaji Patil) did not align factually for the purposes of the present dispute, and Chandrasekaran concerned a tenancy that was not created pending a suit, so Section 52's applicability was not in issue there.

Third, the Court accepted the appellant's contention that in suits for specific performance a successful plaintiff is entitled to be put in possession, and that a direction for delivery of possession is incidental to a decree for specific performance (following Sundara Ramanujam Naidu and the reasoning in Arumugha Goundar). The Court also relied on Vedachari to reiterate that lis pendens applies to suits for specific performance and to court sales as well as private sales.

Bringing these strands together, the Court reasoned that because the Tamil Nadu Act confers rights on cultivating tenants which could operate to prevent eviction, a lease granted by the owners during the pendency of a suit for specific performance would be affected by the doctrine of lis pendens (Section 52). Consequently, such a lease cannot be allowed to defeat the plaintiff's right to obtain possession on the decree for specific performance; therefore Exhibit B-1 (the lease relied upon by the second defendant) was hit by Section 52 in the circumstances of this case.

The Court thus concluded that the appellant was entitled to possession of the property (including the other moiety of the plaint schedule properties) and that the Subordinate Judge's allowance of the appeal so far as it dismissed the suit with respect to the western moiety was not correct.

Holding and Implications

HOLDING: The appeal is allowed. The Court held that the lease granted by the defendants during the pendency of the suit for specific performance is affected by Section 52 of the Transfer of Property Act (the doctrine of lis pendens) and therefore does not defeat the appellant's right to possession obtained in execution of the decree for specific performance.

Immediate consequences for the parties:

  • The appellant is entitled to possession of the properties, including the other moiety which the lower appellate Court had left with the second defendant.
  • Costs are awarded to the appellant and are payable by the second defendant (the first respondent in the appeal).
  • The trial Court's decree regarding mesne profits is to stand (i.e., it remains in force).
  • The judgment states "No leave." (procedural note in the final paragraph of the opinion).

Broader implications and precedent: The Court's reasoning emphasizes that the presence of statutory tenant-protection legislation (the Tamil Nadu Cultivating Tenants Protection Act) alters the effect of leases made during pendency of suits for specific performance: where such statutory protections exist, a lease granted during the suit can be struck down by the doctrine of lis pendens under Section 52 to protect the successful plaintiff's entitlement to possession. The opinion does not state that it is laying down any novel rule beyond applying Section 52 and existing authorities to the factual context; the decision principally resolves the rights between the parties in this case.

    Kathaperumal Pillai v. Murugesam Pillai And Others.

    1. The plaintiff, who succeeded in the trial Court but failed in the lower appellate Court, is the appellant. He filed the suit for possession of agricultural lands. He had obtained the sale deed, Exhibit A-1, from the Court in execution of a compromise decree for specific performance obtained by him against the defendants in O.S. No. i33 of 1959 on the file of the Sub-Court, Tiruchirapalli. The defendants in that suit are not parties to the present action. The appellant obtained possession of the properties covered by Exhibit A-1 through the Court in E.P. No. 193 of 1964 on 21st September, 1964 with some standing crops which were said to be two months old, as seen from the delivery receipt, Exhibit A-2. His case was that thereafter at the instance of defendants 3 and 4, defendants 1 and 2 trespassed on the property on 21st October, 1964 and cut and carried p.way the crops. He, therefore, filed the suit for recovery of possession of the properties with past and future mesne profits.

    2. The second defendant alone resisted the suit contending that he was a tenant of a portion of the suit property under the original owner under the insufficiently stamped and unregistered lease deed, Exhibit B-1, and that he continued to be in possession and could not be evicted in view of the provisions of the Tamil Nadu Cultivating Tenants Protection Act and was liable to pay only the rents. The lease deed, Exhibit B-1, which was insufficiently stamped had been validated by payment of the necessary stamp duty and penalty and has been relied upon by the Court below for the collateral purpose of showing the nature of possession of the second defendant.

    3. The trial Court held that in view of Section 52 of the Transfer of Property Act the lease under. Exhibit B-1 is not valid and would not affect the appellant's right to recover possession of the property, and decreed the suit. But, on appeal, the learned Subordinate Judge held that the lease by the owners of the property pending the suit for specific performance of the agreement to sell these properties to the appellant was valid and entitled the second defendant to the benefits of the Tamil Nadu Cultivating Tenants Protection Act and he allowed the appeal and modified the decree of the trial Court by dismissing the suit in respect of the western moiety in the plaint schedule properties which alone was in the possession of the second defendant. Hence this second appeal.

    4. The learned Counsel for the second defendant submits that the owners of the agricultural lands, who were the defendants in the said O.S. No. 133 of 1959, had title to the properties until the execution of the sale deed, Exhibit A-1, in pursuance of the decree for specific performance of the contract and were, therefore, entitled to lease a portion of the properties to the second defendant and he is entitled to the benefits of the Tamil Nadu Cultivating Tenants' Protection Act, and Section 52 of the Transfer of Property Act will not apply. He relied upon certain decisions in support of his contention.

    5. Pandrang Row, J., has held in Darbha Venkata Somayajulu v. Patula Sathiraju (1936) 159 I.C. 93 : A.I.R. 1935 Mad. 875, that where a mortgagor had granted a lease of the mortgaged property after a suit had been brought to enforce the mortgage but before the decree, and the mortgagee, applied for appointment of a Receiver and the Court made an order directing the lessee to deposit a sum of money in Court every year as annual rent, and the properties were sold in execution and purchased by the mortgagee who again applied for appointment of a Receiver claiming that the crops belonged to him after the sale, that the lease was not affected by the rule of lis pendens and the mortgages-purchaser acquired only the rights of his mortgagor and could therefore only claim his share represented by the rent and not the entire properties. Sen, J., has held in Ram Dayal v. Asghar Khan A.I.R. 1930 All. 289, that where during the pendency of a mortgage suit or proceedings consequential upon a decree passed in such suit the mortgagor in the ordinary course of the management of his property grants a lease of the mortgaged property in whole or in part for an adequate rent, the lease is not obnoxious to the provisions of Section 52 of the Transfer of Property Act and the lessee holds the property subject to the rights of the mortgagee-decree-holder. A Bench of this Court has held in Penumatsa Subbaraju v. Veegasena Seetharamaraju and Anr. (1916) I.L.R. 39 Mad. 283 : 28 I.C. 232 : 1915 M.W.N. 174 where after a decree for sale on a mortgage, the mortgagor who was in possession, granted a lease of his properties for one year with a covenant for payment of the rent on a particular day, that the creation of a lease for one year after a suit and decree on mortgage is not affected by the doctrine of lis pendens on the ground that such a lease is an ordinary incident of the beneficial enjoyment of a mortgagor who had been allowed to remain in possession. In my view, these decisions are not in point, having regard to the fact that when the leases in those cases were granted, there was no provision like the Tamil Nadu Cultivating Tenants' Protection Act conferring a right on the tenant to hold the property subject only to his liability to pay rent to the owner of agricultural lands.

    6. The other decision relied upon by the learned Counsel for the respondent is of a Pull Bench of the Bombay High Court in Apaji Thamaji Patil v. Ragho Bhivraj Patil and Anr. A.I.R. 1973 Bom. 75 (F.B.), where an owner of a land had created a simple mortgage over it and during the pendency of a suit by the mortgagee for sale of the mortgaged land, he had leased it and it has Been held that it does not in any way effect the rights of the mortgagee as contemplated by Section 52 of the Transfer of Property Act and that the tenant cultivating the land in such a case was lawfully cultivating the land and was entitled to the benefits of the Bombay Tenancy and Agricultural Hands Act. The question for consideration there was whether such a tenant was lawfully cultivating the land and entitled to the benefits of the Act. This decision also does not appear, in my opinion, to be in point. The last decision relied upon by the learned Counsel for the respondent is of a Full Bench of this Court in Chandrasekaran v. Kunju Vanniar and Ors. (1975) 88 L.W. 216 : A.I.R. 1975 Mad. 227 (F.B.), which arose out of a suit filed by the purchaser from a mortgagor for redemption of a usufructuary mortgage, and the defendants 1 and 2, who were the successors-in-interest of the usufructuary mortgagee, did not resist the suit, but defendants 3 and 4, who were in possession as tenants inducted by the usufructuary mortgagee resisted the suit on the ground that they were entitled to the benefits of the Tamil Nadu Cultivating Tenants' Protection Act. It has been held:

    Even though the usufructuary mortgage on the strength of which the mortgagee let Out to the tenant has been redeemed, since the tenancy originated in an agreement and since because of the redemption, such an agreement came to an end but the tenant continued to be in possession, he will squarely be within the inclusive definition of the term 'cultivating tenant' entitled to the benefits of the Act.

    This decision also is not in point, as the lease in that case was not pending a suit and therefore the question whether Section 52 of the Transfer of Property Act applied, did not arise for consideration in that suit.

    7. The learned Counsel for the appellant submits that in a suit for specific performance, in the event of a decree, the successful plaintiff is entitled to be put in possession of the properties and that this lease by the defendant in such a. suit pending that suit will defeat the rights of the plaintiff, especially when there is a provision like the Tamil Nadu Cultivating Tenants Protection Act, and therefore Section 52 of the Transfer of Property Act will apply. He relied upon a Full Bench decision of this Court in Arumugha Goundar v. Ardhandri Mudaliar and Ors. , where a tenant who had been let into possession of the land and incidental immovable property by a Receiver appointed by Court pending a suit wag held to be not entitled to protection under the Tamil Nadu Cultivating Tenants' Protection Act, on the ground that by the act of the Receiver letting the tenant in possessions the property has been placed beyond the reach of the Court to give the plaintiff the remedy he sought which, the Court held, he would be entitled to and that the intention of the Act was not to cover such a case, as, according to the preamble of the Act, it is one for the protection from eviction of cultivating tenants in certain areas in the State of Madras because it is necessary to protect such tenants in these areas from unjust eviction. Ismail, J., following a decision of a Bench of this Court Sundara Ramanujam Naidu v. Sivalingam Pillai , that a direction to deliver possession of the property is incidental to a decree for specific performance of an agreement to sell immovable property, and, therefore, the executing Court has jurisdiction to order delivery of possession, although the decree in the suit for specific performance does not specifically provide for delivery of possession and that the executing Court has jurisdiction to grant the relief of possession as incidental to the execution of the decree for specific performance of a contract of sale. Therefore, the plaintiff in a suit for specific performance is entitled in the event of his succeeding in that suit, to be put in possession of the properties even in cases where the decree is silent and does not specifically say that he is entitled to be put in possession of the properties. A Bench of this Court has held in Vedachari v. Narasimha Mudali and Ors. (1923) 45 M.L.J. 825 : 19 L.W. 28 : 76 I.C. 793 : I.L.R. 1924 Mad. 307, that the doctrine of lis pendens applies to suits for specific performance of agreements to sell immovable properties and that it applies to Court sales as well as to private sales. Therefore, though ordinarily the act of leasing of agricultural lands may be an act of management of the property and the title to the property continues with the defendant in a suit for specific performance until a sale deed had been obtained by the plaintiff in that suit in pursuance of a decree obtained by him, having regard to the fact that certain rights in agricultural lands have been conferred on tenants by the Tamil Nadu Cultivating Tenants' Protection Act, in my view, a lease in such a case would be affected by the doctrine of lis pendens, under Section 52 of the Transfer of Property Act. Therefore, I agree with the learned Counsel for the appellant that the lease in this case admittedly granted by defendants in-the suit for specific performance during the pendency of that suit is hit by Section 52 of the Transfer of Property Act and that the appellant is entitled to possession of even the other moiety.

    8. The appeal is, therefore, allowed with costs payable by the second defendant-first respondent. The trial Court's decree regarding mesne profits will stand. No leave.

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    Comments

    Kathaperumal Pillai v. Murugesam Pillai And Others.
    (Nov 5, 1975)