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V. Sanjeevaraya Mudaliar v. N. A. Raghavachari .
Factual and Procedural Background
The respondent owned premises No. 8, Brahmin Street, Saidapet, Madras. By a registered lease dated 21 November 1952 he let only the backyard—consisting solely of vacant land—to the appellant for five years. The lease authorised the appellant to boil and dry paddy on the land and to erect a temporary shed that had to be dismantled upon vacating the site. It expressly stipulated that the appellant “should not erect any kind of permanent super-structures … so as to entitle him to claim in future the value thereof.”
Notwithstanding this clause, the appellant erected permanent structures. When the lease expired he refused to vacate, prompting the respondent to file an eviction suit on 12 March 1959. Before filing his written statement, the appellant applied under section 9 of the Madras City Tenants’ Protection Act, 1921 (“the Act”) seeking a compulsory sale of the land to him.
The trial court decreed eviction (25 August 1960). The first appellate court reversed that decree, but the High Court—on second appeal—restored the trial court’s decision (26 April 1965). The appellant obtained special leave and filed the present appeal before the Supreme Court.
Legal Issues Presented
- Whether a tenant of a vacant site situated in the backyard of a residential house is a “tenant of land” within the meaning of section 2(2) of the Madras City Tenants’ Protection Act, 1921.
- Whether, in light of the proviso to section 12 of the Act, such a tenant who has erected buildings in breach of an express stipulation contained in a registered lease can still invoke the protections of sections 3 and 9 of the Act.
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| R.V. Naidu v. Naraindas, [1966] 1 S.C.R. 110 | A covenant not to build contained in an unregistered lease is not protected by the proviso to section 12; therefore, a tenant who breaches such a covenant may still claim benefits under sections 3 and 9. | Used to contrast the present case: because the lease here was registered, the protective proviso to section 12 applies, making the covenant enforceable against the tenant. |
| Naraindas v. V. Naidu, (1963) 1 M.L.J. 140 | Madras High Court view (later reversed) that an unregistered covenant could bar section 9 protection. | Cited to show the position that was overruled by the Supreme Court in R.V. Naidu v. Naraindas, reinforcing the need for registration for the proviso to operate. |
| Vajrapani Naidu v. New Theatre Carnatic Talkies, [1964] 6 S.C.R. 1015 | A stipulation requiring surrender of vacant land after demolition of structures is not a stipulation “as to the erection of buildings” within the proviso to section 12. | Relied on to distinguish between covenants about removal of structures (not protected) and covenants expressly forbidding erection of permanent structures (protected). |
| Vajrapuri v. New Theatres Carnatic Talkies, (1959) 2 M.L.J. 469 | High Court articulation that the proviso to section 12 covers stipulations concerning the size, cost, design, or similar details of proposed buildings. | Quoted to support the interpretation that only specific types of building-related covenants fall within the proviso. |
Court's Reasoning and Analysis
Issue 1 – Nature of the Tenancy: The Court noted that the respondent retained the house and let only the backyard. Because no building was leased, the subject of the lease was “land” under section 2(2). The High Court had erred by treating the backyard as a “building” merely because it was once appurtenant to the house.
Issue 2 – Effect of the Registered Covenant:
- Sections 3 and 9 grant a tenant compensation for, and a right to purchase, land on which he has erected buildings.
- The main part of section 12 prevents private contracts from limiting those statutory rights; however, the proviso preserves any “stipulation as to the erection of buildings” made by a tenant in a registered writing.
- Drawing on Vajrapani Naidu, the Court distinguished between a covenant about removal of buildings (not within the proviso) and a covenant that forbids erection of permanent structures (which squarely relates to the erection of buildings).
- The appellant’s lease contained an express, registered clause prohibiting permanent structures “so as to entitle him to claim in future the value thereof.” This was a stipulation “as to the erection of buildings” within the meaning of the proviso.
- Because the covenant was protected, the Act could not override it. The appellant’s breach therefore disqualified him from claiming compensation under section 3; lacking such entitlement, his application under section 9 necessarily failed.
Holding and Implications
Appeal Dismissed. The Supreme Court affirmed the High Court’s decree of eviction and denied the appellant the protections of sections 3 and 9 of the Madras City Tenants’ Protection Act, 1921.
Implications: The decision clarifies that (a) a tenancy of vacant land appurtenant to—but leased separately from—a house falls within “land” for the Act’s purposes, and (b) a registered covenant that expressly forbids erection of permanent structures is enforceable under the proviso to section 12, thereby nullifying a tenant’s statutory claims to compensation or compulsory purchase. The ruling re-emphasises the formal requirement of registration for such covenants to prevail but sets no new precedent beyond reinforcing existing interpretations.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 7
PETITIONER:
V. SANJEEVARAYA MUDALIAR
Vs.
RESPONDENT:
N.A. RAGHAVACHARY
DATE OF JUDGMENT:
19/09/1968
BENCH:
BACHAWAT, R.S.
BENCH:
BACHAWAT, R.S.
SIKRI, S.M.
HEGDE, K.S.
CITATION:
1969 AIR 435 1969 SCR (1) 158
CITATOR INFO :
RF 1970 SC1683 (29,30)
ACT:
Madras City Tenant's Protection Act, 21 of 1922, ss. 2, 3, 9 and 12-Tenant of vacant site in backyard of residential house whether a tenant of land under s. 2(2)-Written lease deed containing stipulation against raising of permanent structures-Such stipulation whether one as to erection of buildings within meaning of proviso to s. 12-Breech of such stipulation by tenant-Tenant whether can take advantage of ss. 2 and 9 thereafter.
HEADNOTE:
The respondent, by a registered lease deed, let to the appellant for a period of five years the backyard of a residential house in Madras. The backyard consisted of vacant land. According to the lease deed the appellant was allowed inter alia to boil and dry paddy on the said land and he was also allowed to erect a temporary shed for keeping the paddy on condition that while vacating the land he would dismantle the same. The deed also specifically provided that the appellant "should not erect any kind of permanent super-structure on the said vacant site so as to entitle him to claim in future the value thereof." In continuation of his stipulation the appellant erected permanent super-structures on the land. On the expiry of the lease of the appellant refused to vacate the land. The respondent thereupon filed a suit for his eviction. The appellant claimed protection under the Madras City Tenants' Protection Act, 1921, Within the prescribed time he flied an application under s. 9 of the Act asking for an order that the respondent be directed to sell the land for a price to be fixed by the court. The trial court decreed the respondent's suit. The first appellate court reversed the decree of the trial court but the High Court restored it. In appeal by special leave to this Court the questions that fell for determination were: (i) Is the tenant of a vacant site in the backyard of a residential house a tenant of land within the purview of s. 2(2) of the Madras City Tenants' Protection Act, 1921 ? (ii) Having regard to the proviso to s. 12 is such a tenant entitled to the protection of ss. 3
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and 9 of the Act in a case when he has erected buildings on the land in contravention of an express stipulated in a registered deed ?
HELD: (i) If the respondent had let the residential building together with its appurtenant land the tenancy would not be a tenancy of land within the meaning of the Act. But the respondent did not let the building with land appurtenant thereto. He retained the building and let the land separately. The letting was of land and nothing else. The appellant was not a tenant of a building as defined in s. 2(1) either before or after its amendment by Madras Act XIII of 1960. He was a tenant of land as defined in s. 2(2). [162 A-C]
(ii) (a) Under s. 3 a tenant on ejectment is entitled to he paid as compensation the value of any building erected by him. A tenant entitled to compensation under s. 3 and against whom a suit for ejectment has been instituted is entitled to purchase the whole or part of the land by invoking the procedure under s. 9. The effect of the main part of s. 12 is that nothing in any contract made by a tenant takes away or limits his rights under ss. 3 and
9. The proviso to
159
however, saves stipulations as to erections of buildings made by a tenant in a registered writing. [162 D-E]
(b) A stipulation as to the erection of buildings made orally or in an unregistered writing is not protected by the proviso and a tenant erecting a building in breach of the covenant is entitled to the benefits of as. 3 and 9. [162 E-
F]
R.V. Naidu v. Naraindas, [1966] 1 S.C.R. 110 and Naraindas v. Naidu, (1963) 1 M.L.J. 140. referred to.
(c) A stipulation for giving vacant land after demolition of the building which the tenant has been authorised to construct thereon is not one as to the erection of buildings within the proviso to s. 12. Therefore in the present case the stipulation that the appellant could erect a temporary shed on condition that while vacating the land he would dismantle the same was not protected by the proviso to s. 12. [164 C-D]
Vajrapani Naidu v. New Theatre Carnatic Talkies, [1964]
6 S.C.R. 1015, relied on. Vajrapuri v. New Theatres Carnatic Talkies, (1959) 2 M.L.J. 469, 477-8, referred to.
(d) But in the present case the lease deed also contained an express stipulation that the appellant would not erect permanent structures of any kind so as to entitle him to claim the future value thereof. This stipulation was clearly one as to the erection of buildings. [164 E] In contravention of the stipulation as to the erection of buildings in the registered deed the appellant erected permanent structures on the land after the date of the lease. The effect of the proviso to s. 12 is that nothing in the Act affects the stipulation. Sections 3 and 9 are subject to and controlled by s. 12. The stipulation overrides the tenant's right under s. 3. If the tenant erects a permanent structure in contravention of the stipulation he is not entitled to any compensation under s.
3. As he is not entitled to any compensation under s. 3 he cannot claim the benefit of s. 9. The High Court rightly held that the appellant was not entitled to the benefit of s. 9. [164 C---165 B]
2
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 776 of 1966. Appeal by special leave from the judgment and order dated April 26, 1965 of the Madras High Court in A.A.O. No. 1 of 1962.
S.C. Manchanda and T. A. Ramachandran, for the appellant. B. Sen, M. Srinivasan and R. Thiagarajan for the respondent.
The Judgment of the Court was delivered by Bachawat, J. The respondent is the owner of premises No. 8, Brahmin Street, Saidapet, Madras. By a registered lease dated November 21, 1952 he let to the appellant the backyard of the
160
premises for a term of 5 years. The backyard consisted of vacant land. The lease deed authorized the appellant to use land for boiling ,and drying paddy, to use the gate in the western compound wall for ingress and egress, to erect an opening in the wall for bringing in and taking out the paddy, and to erect a temporary shed for keeping the Daddy on condition that while vacating the land he would dismantle the same. The deed specifically provided that the appellant
"should not.erect any kind of permanent super.structures on the said vacant site so as to entitle him to claim in future the value thereof," except such facilities as were necessary for drying Daddy at his own expense. In contravention of this stipulation and without any authority from the respondent, the appellant erected permanent super-structures on the land. On the expiry of the lease the appellant refused to vacate the land. On March 12, 1959 the respondent filed a suit for his eviction. The appellant c1aimed protection under the Madras City Tenants, Protection Act. 1921 (Act III off 1922). Before filing his written statement on February 15, 1960. he filed an application under sec. 9 of the Act asking for an order that the respondent be directed to sell the land for a price to be fixed by the Court. The trial Court decreed the suit on August 25, 1960. The first appellate Court reversed the decree and dismissed the suit. The High Court on second appeal restored the decree of the trial Court. The present appeal has been filed after obtaining special leave.
The Courts below concurrently found that the appellant had constructed permanent super-structures on the vacant land after November 21, 1952 without any authority from the respondent and in contravention of the stipulation in the registered lease. This finding is not challenged before us. In view of the fact that the construction was in contravention of the stipulation in the lease, the Trial Court and the High Court held that the appellant was not entitled to the protection of s. 9 of the Act; but the first appellate Court held' that the appellant was nevertheless entitled to such protection. The Trial Court and the High Court held that the vacant site in the backyard being appurtenant to a house was building and not land, and the appellant not being a tenant of land was not protected by the Act; but the first appellate Court held that the vacant site was land and the tenancy was within the purview of the Act. The appellant challenges the findings of the High Court on both points. The following two questions arise for determination in this appeal. (1) Is the tenant of a vacant site in the backward of a residential house a tenant of land within the purview of the Madras City Tenants' Protection Act, 1921 ? (2) Having regard to the proviso to sec. 12 is such a tenant entitled to the protection ss. 3 and 9 of the Act in a case where he has erected buildings on the land in
3
contravention of an express stipulated in a registered lease ?
161
To appreciate the points arising in this case it is necessary to refer to the relevant provisions of the Madras City Tenants Protection Act, 1921. The Act was passed with a view to give protection to tenants who in certain areas had constructed buildings on others' lands in the hope that they would not be evicted so long as they paid fair rent for the land. The Act was amended from time to time. It extends to the city of Madras and other notified areas and applies only to tenancies of land created before certain specified dates. (s. 1). It is common case before us that the Act extends to the area where the disputed land is situated. Section 2 is the definition section. "Building"
is defined in s. 2( 1 ) to include any building, hut or other structure whether of masonry, bricks, wood, metal or any other material whatsoever used (i) for residential or non-residential purposes in certain specified areas and
(ii) for residential purposes only, in any other area and includes the appurtenances thereto. It may be mentioned that ."building" was not defined to include the appurtenances thereto in any area under see. 2( 1 ) before its amendment on July 27, 1960 by Madras Act III of 1960.
"Land" does not include buildings, Is. 2(2)]. "Landlord"
means any person owning any land, Is. 2(3)]. "Tenant" in relation to any land means a person liable to pay rent in respect of such land under a tenancy express or implied and includes any such person who continues in possession of the land after the determination of the tenancy agreement, Is. 2( 4)]. Section 3 provides that every tenant shall on ejectment be entitled to be paid as compensation the value of any building which may have been erected by him and for which compensation has not already been paid. Section 9 ( 1 ) provides that a tenant who is entitled to compensation under sec. 3 and against whom a suit in ejectment has been instituted may within the prescribed time apply to the Court for an order that the landlord should be directed to sell the whole or part of the land for a price .to be fixed by the Court. Section 10 provides that sec. 9 shall apply to suits in ejectment which are pending before certain specified dates. Section 11 requires 3 months notice in writing before the institution of a suit in ejectment against a tenant. Section 12 provides that "nothing in any contract made by a tenant shall take away or limit his rights under this Act, provided that nothing herein contained shall affect any stipulations made by the tenant in writing registered as to the erection of buildings, in so far as they relate to buildings erected after the date of the contract." Section 13 provides that in its application to the city of Madras and to other notified areas the Transfer of Property Act shall to the extent necessary to give effect to the provisions of' the-Act be deemed to have been repealed or modified.
The first question is whether the appellant is a tenant of land as contemplated by the Madras City Tenants Protection Act, 1921.
162
Before the execution of the lease deed dated November 21, 1952 the land in the backyard was occupied with and was appurtenant to the residential house at. No. 8, Brahmin Street. It may be conceded that if the respondent had let the residential building together with its appurtenant land, the tenancy would not be a tenancy of land within the purview of the Act. But the respondent did not let the
4
building with the land appurtenant thereto. He retained the building and let the land separately. The letting was of land and nothing else. The appellant is not a tenant of a building as defined in sec. 2( 1 ) either before or after its amendment by Madras Act XIII of 1960. He is a tenant of land as defined in s. 2(2). The High Court was in error in holding that he was a tenant of building. The next question is whether having regard to the proviso to see. 12, the appellant is entitled to the benefits of sees. 3 and 9 in view of the fact that he constructed buildings in contravention of the express stipulation in the registered lease. Under sec. 3 a tenant on ejectment is entitled to be paid as compensation the value of any building erected by him. A tenant entitled to compensation under sec. 3 and against whom a suit for ejectment has been instituted is entitled to purchase the whole or part of the land by invoking the procedure under sec. 9. The effect of the main part of sec. 12 is that nothing in any contract made by a tenant takes away or limits his rights under sees. 3 and 9. The proviso to sec. 12 saves stipulations as to the erection of buildings made by a tenant in a registered writing. But a stipulation as to the erection of buildings made orally or in an unregistered writing is not protected by the proviso and a tenant erecting a building in breach of the covenant is entitled to the benefits of sees. 3 and 9. In R.V. Naidu v. Naraindas(1) a piece of vacant land was let under an unregistered instrument of lease which provided that the tenants would not raise any building in the vacant site. The tenants erected a building on the land in breach of the covenant. This Court held reversing the decision of the High Court in Naraindas v. V. Naidu(2) that the tenants against whom a suit for ejectment had been instituted was entitled to the benefits of sees. 3 and 9. The Court pointed out that as the covenant not to build was contained in an unregistered lease. the proviso to sec. 12 had no application and the landlord could not rely on the covenant. In the present case a registered lease contains a stipulation by the tenant that he would not build any permanent structure on the land so as to entitle him to claim in future the value thereof. The point in issue is whether this is a stipulation as to the erection building within the proviso to see. 12. In Vajrapuri v. New
[1966] I S.C.R. 1107 (2) [1963] 1 M.L.J.
140,
163
Theatres Carnatic Talkies Ltd.(1) the tenants obtained a lease of land for constructing a building suitable for use as a theatre. The registered lease deed provided that on the expiry of the lease the tenants would surrender possession of the land after dismantling and removing the building constructed by him. 'The Madras High Court held that this stipulation was not one as to the erection of buildings and was not protected by the proviso to sec. 12 and that the tenants against whom a suit for ejectment had been instituted could claim the protection of sees. 3 and 9. Ganapatia Pillai J. observed:
"In our opinion, the application of the Proviso should be limited to those cases where the stipulations in the contract relate to erection of the building, such as the size of the building, the cost of the building and the design of the building or other cognate matters."
He added :-
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"We are not concerned here with a case of erection of buildings contrary to the stipulations contained in the written contract, to which the tenant was a party. How far, in such a case, the tenant would be protected from foregoing his rights under the impugned Act does not arise for our consideration.."
This decision was affirmed by this Court by a majority. decision in Vajrapani Naidu v. New Theatre Carnatic Talkies(a). Shah J. speaking for the majority said at pp. 1022-23 :--
"A covenant in a lease which is duly registered that the tenant shall on expiry of the lease remove the building constructed by him and deliver vacant possession, is undoubtedly a stipulation relating to the building, but it is not a stipulation as to the erection of building .... Having regard to the object of the Act, and the language used by the legislature, the exception must be strictly construed, and a stipulation as to the erection of buildings would not, according to the ordinary meaning of the words used, encompass a stipulation to vacate and deliver possession of the land on the expiry of the lease without claiming to enforce the statutory rights conferred upon the tenant by s. 9. The stipulations not protected in s. 12 are only those in writing registered and relate to erection of buildings such as restrictions about the size and nature of the building constructed, the building materials to be used' therein and the purpose for which the building is to be utilised."
(1) [1959] 2 M.L.J, 469. 477-8. (2) [1964] 6
S.C.R. 1015.
164
The minority was of the opinion that the stipulation was protected by the proviso to sec. 12. Ayyangar 1. speaking for the minority said at p. 1032 :-
"If a stipulation forbidding erection of buildings and requiting their removal before surrendering possession of the site is conceded to. be one in respect of erection of building--as has to be conceded it is not possible to accept the construction that stipulation for the removal of buildings which the lessee is permitted to erect and keep in the site only for the duration of the tenancy is any the less one in respect of erection of buildings."
Having regard to this decision it must be held that a stipulation for giving vacant possession of the land after demolition of the building which the tenant has been authorised to construct thereon is not one as to the erection of buildings within the proviso to s. 12. In the present ease the registered lease deed authorised the appellant to erect a temporary shed on condition that while vacating the land he would dismantle the same. The stipulation for vacating the land after dismantling the temporary shed is not protected by the proviso to s. 12. Had the appellant constructed a temporary shed he could in spite of the stipulation claim the protection of ss. 3 and 9.
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In the present case, the registered lease deed also contained an express stipulation that the appellant would not erect permanent structures of any kind on the land so as to entitle him to claim in future the value thereof. This stipulation is dearly one as to the erection of buildings. In common parlance a stipulation forbidding erection of building is understood to be one in respect of the erection of building. The popular meaning furnishes the key to the interpretation of the proviso to sec. 12. If a stipulation concerning the size and .nature of the building to be erected on the land' is one as to the erection of buildings, a fortiori a stipulation forbidding the erection of buildings of a particular kind altogether is one as to the erection of buildings within the proviso to sec. 12. In contravention of the stipulation, as to the erection of buildings, in the registered lease deed the appellant erected permanent structures on the land after the date of the lease. The question is whether the appellant is entitled to compensation for the structures under see. 3 and to the benefits of see. 9. The effect of the proviso to see. 12 is that nothing in the Act affects the stipulation Sections 3 and 9 are subject to and controlled by the proviso to see. 12. Section 3 provides that a tenant shall on ejectment be entitled to be paid as compensation the value of any building erected by him. The right conferred on the tenant by see. 3 is
165
controlled by the stipulation in the registered lease deed that he shall not erect permanent structures of any kind on the land so as to entitle him to claim in future the value thereof. The stipulation overrides the tenant's rights under s. 3. If the tenant erects a permanent structure in contravention of the stipulation he is not entitled to any compensation under sec. 3. As he is not entitled to any compensation under sec. 3 he cannot claim the benefit of sec. 9. The High Court rightly held that the appellant was not entitled to the protection of Sec. 9. In the result, the appeal is dismissed with costs. G.C. Appeal dismissed.
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