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Smart Summary

Factual and Procedural Background

Patil Exhibitors (Pvt.) Ltd. (appellant) was lessee of the Municipal Corporation of Bangalore (respondent) under a lease dated 31-10-1981 for a cinema-house located in the Public Utility Building on M.G Road, Bangalore. The lease term expired on 31-8-1985. Prior to expiry, the appellant filed a suit seeking specific enforcement of an alleged agreement to renew the lease contained in Clause 27 of the lease deed. Along with the suit, the appellant filed an interlocutory application (I.A.I) under Order 39 Rules 1 and 2 CPC for a temporary injunction restraining the respondent from dispossessing the appellant from the premises.

The trial court declined the interlocutory injunction, leading the appellant to file the present appeal challenging the order dated 31-8-1985.

Legal Issues Presented

  1. Whether a lessee who continues in possession after expiry or termination of the lease against the landlord’s wishes is entitled to an injunction restraining forcible dispossession by the lessor except in accordance with law.
  2. Whether, considering the appellant's specific claim based on alleged entitlement to lease renewal, an injunction limited to preventing forcible dispossession can be granted.

Arguments of the Parties

Appellant's Arguments

  • Clause 27 of the lease deed entitled the appellant to renewal of the lease for a further five-year term.
  • The interlocutory injunction should be understood as restraining the respondent from forcible dispossession until possession is taken in a lawful manner.
  • Despite lease expiry, the appellant continued in possession and could not be forcibly dispossessed.
  • On the midnight of 31st August 1985, the respondent along with police tried to interfere with possession through extra-legal means, which should be restrained.

Respondent's Arguments

  • Clause 27 was merely an agreement to agree and did not create a contractual right to renewal, thus no interlocutory relief was warranted.
  • The lease term had expired and under Section 108 of the Transfer of Property Act, the appellant had a statutory duty to surrender possession.
  • The appellant’s continued possession after expiry was not lawful possession but unlawful, and thus no possessory remedy could be sustained against the true owner.
  • The interlocutory injunction sought on the new ground of restraining forcible dispossession was outside the scope of the suit and could not be granted.
  • The respondent was entitled to resume possession under the Karnataka Public Premises (Eviction of Unauthorised Occupants) Act, 1974, and had already issued notice under that Act.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
M.C Chockalingam v. V. Manickavasagam, 1974 1 SCC 48 Distinction between lawful possession and juridical possession; protection against forcible dispossession even without lawful possession. The Court relied on this precedent to hold that a tenant continuing possession after lease expiry has juridical possession protected against forcible dispossession, though not lawful possession.
Sheik Khalilur Rahaman v. Estate Officer, AIR 1977 Orissa 201 (quoting Mohanlal v. The State of Punjab) Even unauthorized occupants can be evicted only by manner authorized by law; essence of the rule of law forbids forcible dispossession. The Court applied this principle to emphasize that governmental authorities must follow lawful procedures and cannot forcibly dispossess occupants without legal sanction.

Court's Reasoning and Analysis

The Court first addressed whether the appellant could seek an interlocutory injunction restraining forcible dispossession despite the lease expiry and the appellant’s claim being based on renewal entitlement. The Court held that although the appellant’s primary claim was for renewal, the limited relief restraining forcible dispossession was a lesser relief flowing from the appellant’s case and not outside the scope of the suit.

The Court proceeded on the assumption that the trial court’s interpretation of Clause 27 as not creating a contractual right to renewal was correct. It then analyzed the nature of possession post-lease expiry, distinguishing between “lawful possession” and “juridical possession”. While the appellant’s possession was not lawful, it was juridical possession, which the law protects against forcible dispossession.

The Court emphasized the principle that Indian law does not recognize a landlord’s right to extra-judicial re-entry or forcible dispossession, even if the lessee’s possession is not lawful. This protection extends to tenants holding possession after lease expiry, preventing the landlord from resorting to high-handed or extra-legal measures.

Further, the Court highlighted the constitutional and public law principle of the “Rule of Law” which requires all governmental actions affecting individuals to be authorized by law. The respondent, being a governmental authority, must act within legal bounds and cannot forcibly dispossess without due process.

The Court acknowledged the respondent’s right to resume possession by legal means, including under the Karnataka Public Premises (Eviction of Unauthorised Occupants) Act, 1974, but restrained it from forcible dispossession not sanctioned by law.

Finally, the Court imposed conditions on the injunction, including payment of mesne profits and furnishing of a bank guarantee, to balance the interests of both parties during the interlocutory period.

Holding and Implications

The appeal was allowed in part. The Court granted a temporary injunction restraining the respondent from forcibly dispossessing the appellant except in accordance with law, subject to conditions including monthly payment of Rs. 42,000 as mesne profits and furnishing a bank guarantee. The injunction ensures that the respondent must follow lawful procedures to resume possession and cannot resort to extra-legal or high-handed actions.

The direct effect is that the appellant retains possession temporarily under judicial protection against forcible eviction, while the respondent retains the right to legally recover possession. No new precedent altering existing legal principles was established; rather, the Court reaffirmed established doctrines regarding possession, forcible dispossession, and rule of law constraints on governmental authorities.

    M/S. Patil Exhibitors (P) Ltd. v. Corporation Of The City Of Bangalore

    The Judgment of the Court was delivered by

    Venkatachaliah, J.:— This appeal is by the plaintiff and is directed against the order dated 31-8-1985 on I.A.I in O.S No. 2724 of 1985 on the file of the XI Addl. Civil Judge, Bangalore City, declining an interlocutory injunction restraining dispossession.

    2. Patil Exhibitors (Pvt.) Ltd., appellant, was lessee of the Municipal Corporation of Bangalore-respondent, respecting the plaint schedule property, viz., a Cinema-house located in the Public Utility Building on the M.G Road, Bangalore, under a deed of lease dated 31-10-1981. The term of the lease came to an end, by efflux of time, on the expiry of 31-8-1985.

    Even before the expiry of the term under the lease, appellant brought the present suit for specific enforcement of an alleged agreement to renew the lease said to be contained in Clause 27 of the said deed dated 31-10-1981.

    In the suit, Appellant filed I.A.I under Order 39 Rules 1 and 2 CPC for an interlocutory possessory remedy of a temporary injunction restraining Respondent-lessor from interfering with the plaintiff's possession of the cinema house.

    3. The appeal is in the list of admission cases for the day. Sri R.V Vasantha Kumar, learned Counsel took notice for the respondent and has entered appearance. The appeal is admitted. With the consent of the learned Counsel on both sides the appeal is taken up for final-hearing, heard and disposed of by this Judgment.

    4. Sri H.B Datar, for appellant, confined his argument to a short point. He submitted that whatever might be the merits of the appellant's case that the said Clause 27 entitled it to a renewal of the lease for a further term of five years, the interlocutory prayer admits of being understood as one for an injunction restraining the lessor from resorting to forcible dis-possession till possession is taken in accordance with or in a manner known to or recognised by law. He submitted that on the admitted facts and even on the basis of the case of the lessor that appellant had continued in possession after the expiry of the lease, appellant could not be forcibly dispossessed. He submitted that, on the mid-night of 31st of August 1985, the authorities of the Respondent along with posse of police men came to the premises and demanded surrender of possession and purported to interfere with appellant's possession. He submitted that in the circumstances, respondent requires to be restrained from resorting to extra-legal and illegal procedure for working out its rights.

    5. Sri R.V Vasantha Kumar, Learned Counsel for the Respondent-lessor contended that in the Court-below the interlocutory prayer rested entirely on the appellant's alleged entitlement to a renewal of the lease and that the said Clause 27 merely amounted to an agreement to agree and no contract and that consistently with the prima facie finding of the Court-below on the construction of that clause in the lease deed no interlocutory relief was permissible. He urged that the present argument of the appellant's learned Counsel proceeds and draws on an altogether new case.

    Sri Vasantha Kumar said that the term of the lease had spent itself out and the appellant had a statutory duty under Section 108 of the Transfer of property Act to yield-up and to surrender vacant possession to the lessor. If a lessee fails to do so and continues in possession against the wishes of the land-lord, his continuance in possession, contends Counsel, cannot be called lawful possession. If the possession of the plaintiff is not lawful, plaintiff, says Counsel cannot sustain a claim for any possessory remedy against the true owner, though plaintiff's posssession, in itself, and without more, can justify a possessory remedy against the whole world except the true owner.

    6. On the contentions urged, the points that fall for consideration in the appeal are: Whether a lessee, who after the expiry or termination of the lease does not yield-up possession but sticks on to possession against the wishes of landlord, is entitled to an injunction against forcible-dispossession by the lessor otherwise than in accordance with law; and whether having regard to the specific ground taken in the suit in support of the appellant's right to continue in possession, even an injunction so limited can, at all, be granted.

    7. We may dispose of the second aspect first. It is urged by Sri Vasantha Kumar that the limited relief on the ground now urged is not asked for in the suit even alternatively, and that, therefore, no interlocutory injunction in those terms can be granted as it is outside the scope of the suit itself. This contention is more of form than of substance. Though appellant's specific case is one based on its alleged entitlement to a renewal of the lease, the limited injunction in terms now sought is a lesser relief comprised in the larger relief. It is true that a party cannot, generally, seek to sustain a prayer on a ground other than, and totally distinct from, the one specifically raised and urged. Relief, it is true, must be founded on the specific case pleaded, But, as is said, quite often the legitimate considerations of substance are allowed to prevail over the limitations of mere form. If a relief, either interlocutory or final, is consistent with and flows from the very case of the opposite side or what must be held necessarily consistent with it, and does not take the opposite side by surprise, then Court can mould the relief accordingly.

    In the present case, even on Respondent's own case, the relationship is one of lessor and lessee and that after the expiry of the term-certain, appellant has not been dis possessed in a manner known to or recognised by law. We, therefore, think that the objection that the present ground for relief, not having been taken in the suit, is unavailable is not one of substance.

    8. Then what remains is the short question whether the appellant whose term has run-out could restrain the landlord from resorting to extra-judicial and forcible methods for resumption of possession. In considering this case, we proceed on the footing that the view of the Court-below as to the scope of Clause 27 is correct.

    9. There are three aspects to the matter. First is that though the possession of a quondam-lessee, who continues in possession without there being a bi-lateral, consensual act of holding-over is not “lawful possession” but is merely “juridical possession”, however, the landlord with the best of title cannot resort to forcible dispossession. Law in India does not recognise in the landlord a right of extra judicial re-entry.

    Sri Vasantha Kumar, urged that it was the statutory-duty of the tenant to surrender possession after the termination of the lease and that where public properties are concerned, the occupants take un-fair advantage of the proverbial slowness of the Governmental-machinery, and resort to legal manoeuvres in pursuit of unjust gains and that as a result public-interest suffers. This might be true; but that is no justification on the part of any person, more so a Governmental - authority, to resort to forcible dispossession. The remedy lies in the Respondent taking vigilant and appropriate steps at law to protect its interests.

    The tenant, on the expiry of the lease, as urged by Sri Vasantha Kumar, may not be in “lawful possession”; but the tenant's possession in such a situation is “juridical possession” and such a possession is protected by law against wrongful dispossession though ‘juridical’ possession cannot always be equated with ‘lawful possession’.

    In M.C Chockalingam v. V. Manickavasagam . 1974 1 SCC 48 the Supreme Court while holding that a tenant on the expiry of the lease cannot be said to continue in “lawful possession” of the property if such a possession is not otherwise statutorily protected, however, observed:

    “………… Section 6 of the Specific Relief Act does not offer such protection, but only, as stated earlier, forbids forcible dispossession, even with the best of title.”

    (vide para - 14)

    “Lawful possession is not litigious possession and must have some foundation in a legal right to possess the property which cannot be equated with a temporary right to enforce recovery of the property in case a person is wrongfully or forcibly dispossessed from it.

    We are clearly of opinion that juridical possession is possession protected by law against wrongful dispossession but cannot per se always be equated with lawful possession.”

    (vide para - 15)

    (underlining ours)

    There can, thus, be no forcible dispossession of a person who had such juridical possession and the landlord can be restrained from resorting to high - handed acts aimed at forcible dispossession, otherwise than in accordance with law.

    10. The second aspect is this. It is part of the concept of “Rule of Law” that no claim to a right to dispossess by the use of force without recourse to procedure in accordance with law is recognised or countenanced by Courts. Such a right in the Respondent cannot be recognised regardless of the question whether or not the appellant itself has any subsisting right to remain in possession. The protection that the Court affords is not of the possession — which in the circumstances is litigious possession and cannot be equated with lawful possession — but a protection against forcible dispossession. The basis of relief is a corollary of the principle that even with the best of title there can be no forcible dispossession.

    11. This, in itself, is sufficient to support appellant's present prayer. However there is yet a third ground on which the prayer becomes supportable. That ground is particular to the circumstance that respondent in this case is a governmental-authority. The third aspect is an incident of public law and stems from the secondary meaning of “Rule of Law” which requires that Government should be conducted within the frame-work of recognised rules and principles which restrict discretionary power. Indeed the expression “Rule of Law” has a number of different meanings and connotations. The primary concept is that every thing must be done according to law. Applied to the powers of governmental authorities, this requires that every governmental-authority which does some act affecting any person must be able to justify its action as strictly authorised by law. The intensive, pluralist, Welfare State is, in the last analysis, a “service corporation”. Its manifold functions cannot be carried on without a great deal of discretion. But all exertions of Governmental power must be shown to have a strictly “legal pedigree”. The affected person can resort to Courts of law if the legal foundation of the action is not perfectly in order. Courts restrain the offending party Quia-Timet. In Mohanlal v. The State of Punjab . CA No. 1024 of 1967 dated 25-11-1969. Quoted from para 15 in Sheik Khalilur Rahaman v. Estate Officer AIR 1977 Orissa 201., Supreme Court observed:—

    “Mr. Keswani, Learned Counsel for the Gram Panchayat contended that as the High Court has come to the conclusion that the appellants are in unauthorised occupation of the suit properties, they are not entitled to invoke the jurisdiction of the High Court under Articles 226 and 227 of the Constitution. This contention has no merit. Under our jurisprudence even an unauthorised occupant can be evicted only in the manner authorised by law. This is the essence of the rule of law.

    (underlining supplied)

    12. We are, therefore, of the opinion that looked at from any point of view the appellant is entitled to such a limited injunction; but on terms. Respondent is restrained from dispossessing appellant forcibly and otherwise than in accordance with law.

    Sri Vasantha Kumar submitted that Respondent should be entitled to take further steps to resume possession under the provisions of the Karnataka Public Premises (Eviction of Unauthorised Occupants) Act, 1974, pursuant to which notice had already been issued. Suffice it to say that Respondent is entitled to take all such steps as may be open to it at law to resume possession. The injunction that we grant shall not come in the way of the respondent. Corporation resuming possession in a manner known to or recognised by law. The injunction merely restrains it from resorting to forcible dispossession otherwise than in accordance with law.

    13. Now to the conditions to which the grant of injunction should be subject, we think that during the period of subsistence of the injunction appellant shall pay to the respondent-Corporation towards the account of mesne profits or damages for use and occupation, as the case may be, a sum of Rs. 42,000/- per month. If appellant succeeds in the suit these payments shall be subject to accounting. These sums at Rs. 42,000/- per month shall be paid in advance for each month on or before 10th day of each month. If any default is committed in this behalf the respondent-Corporation shall be entitled to move the Trial Court to have the injunction vacated. Appellant shall also furnish a fresh guarantee to the Respondent to the tune of Rs. 1,58,000/- from a Nationalised or Schedule Bank within 4 weeks from to-day in terms of the guarantee which was earlier furnished from the South Indian Bank. The appellant shall not also remove any of the fixtures, fittings, machinery, equipment etc., constituting a part of the leased property. The respondent-Corporation shall afford, during the period of subsistence of this injunction, all such facilities as may be necessary for or incidental to the running of the Cinema house, as heretofore.

    14. This appeal is accordingly allowed in part; and in modification of the order under appeal, we now grant a temporary injunction, subject to conditions hereinbefore mentioned, restraining the Respondent from dispossessing appellant of the plaint schedule property except in accordance with law.

    15. Appeal disposed of accordingly.

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    M/S. Patil Exhibitors (P) Ltd. v. Corporation Of The City Of Bangalore
    (Sep 2, 1985)