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R.S Lala Praduman Kumar v. Virendra Goyal (Dead) By Lrs And Others
Factual and Procedural Background
Under a deed dated 28 October 1949, respondent 1, Virendra Goyal, obtained permanent tenancy rights over twenty-eight plots owned by Lala Praduman Kumar at an annual rent of Rs 250, payable each 1 January. The lease contained a forfeiture clause for default in rent for two consecutive years. Goyal later assigned his interest to Lala Hukam Chand. After the tenants failed to pay rent for two years, the appellant (landlord) served a notice of termination on 4 January 1960 and filed a suit in the Court of the City Munsiff, Saharanpur, seeking ejectment and recovery of Rs 545/11.
The tenants invoked Section 114 of the Transfer of Property Act (TPA) for relief against forfeiture and deposited Rs 1,099.34 during trial. The trial court found the statutory conditions unmet and decreed ejectment. On appeal, the tenants deposited Rs 2,082.50, which the District Judge considered more than sufficient, and granted relief under Section 114 TPA. The High Court of Allahabad summarily dismissed the landlord’s second appeal. The present appeal was heard by the Supreme Court of India.
Legal Issues Presented
- Whether jurisdiction to grant relief against forfeiture under Section 114 of the Transfer of Property Act can be exercised by an appellate court after the trial court has decreed ejectment.
- Whether a tenant’s failure to comply with an opportunity given by the trial court bars the appellate court from granting another opportunity to pay arrears, interest, and costs.
- Whether the District Court’s discretion in granting relief was properly exercised on the facts of the case.
Arguments of the Parties
Appellant's Arguments
- Section 114 TPA empowers only the court of first instance—not an appellate court—to grant relief against forfeiture.
- Because the trial court had already offered an opportunity that the tenants did not use, the appellate court lacked jurisdiction to allow a fresh opportunity.
- Even if jurisdiction existed, the District Court misused its discretion in the circumstances.
The opinion does not contain a detailed account of the respondents' legal arguments.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Chilukuri Tripura Sunderamma v. Chilukuri Venkateswarlu alias Ramchandram, AIR 1949 Mad 841 | Appellate courts may grant relief under Section 114 TPA. | Cited to affirm the existence of appellate jurisdiction to relieve forfeiture. |
| Janab Vellathi v. K. Kadervel Thayammal, AIR 1958 Mad 232 | Same principle regarding appellate relief. | Relied on to support appellate discretion. |
| Shrikishanlal v. Ramnath Jankiprasad Ahir, ILR 1944 Nag 877 | Same principle. | Used to reinforce appellate authority under Section 114. |
| Budhi Ballabh v. Jai Kishan Kandpal, 1963 ALJ 132 | Same principle. | Cited in support of the District Court’s power to grant relief. |
| Bhagwant Rambhau Khese v. Ramchandra Kesho Pathak, AIR 1953 Bom 129 | Bombay High Court’s view that appellate relief is permissible. | Referenced for persuasive authority. |
| Namdeo Lokman Lodhi v. Narmadebai, 1953 SCR 1009 | Guidelines for exercising equitable discretion: tenant must come with clean hands; court weighs conduct and delay. | Quoted to show that the question is one of discretion, not jurisdiction, and to justify upholding the District Court’s exercise of discretion. |
Court's Reasoning and Analysis
The Court first reproduced Section 114 TPA, emphasising that although the text refers to payment “at the hearing of the suit,” an appeal is a continuation and rehearing of the suit. Therefore, appellate courts possess concurrent jurisdiction to grant relief, as consistently held by several High Courts.
Addressing the appellant’s contention that a missed opportunity at trial precludes relief on appeal, the Court held the issue to be discretionary rather than jurisdictional. Failure at first instance does not bar an appellate court from intervening, though a tenant’s conduct may influence the exercise of discretion.
Relying on Namdeo Lokman Lodhi, the Court reiterated that equitable relief depends on the tenant’s bona fides. The District Judge had noted the existence of valuable constructions on the land and that the tenants had deposited an amount substantially exceeding arrears, interest, and costs, indicating good faith. There was no evidence of misconduct disqualifying the tenants from equitable relief.
Because both the District Court and the High Court had exercised discretion in favour of the tenants, and no perversity or misapplication of law was shown, the Supreme Court declined to interfere.
Holding and Implications
The appeal is dismissed with costs.
Immediate effect: the decree for ejectment is set aside and the tenants continue to hold the property as if no forfeiture occurred, upon payment already deposited. Broader implication: the Supreme Court affirms that appellate courts have jurisdiction to grant relief against forfeiture under Section 114 TPA and that discretion will be upheld absent clear abuse, reinforcing equitable protection for tenants who satisfy statutory conditions.
J.C Shah, J.— Under a deed, dated October 28, 1949, Virendra Goyal, the first respondent herein, obtained permanent tenancy rights in 28 plots of land of the ownership of Lala Praduman Kumar. The tenant agreed to pay Rs 250 per annum as advance rent on the first day of January of each year and in default of payment of rent for two consecutive years the tenancy rights were to stand forfeited. Goyal transferred his tenancy rights to Lala Hukam Chand. Pursuant to the lease several tenements were raised on the land demised.
2. The tenant failed to pay the rent accrued due for two years. The appellant then served a notice on January 4, 1960, terminating the tenancy and instituted an action in the Court of the City Munsiff, Saharanpur, against Virendra Goyal and Lala Hukam Chand for a decree in ejectment and for an order for payment of Rs 545/11 as rent and compensation.
3. Several contentions were raised in their written statement by the defendants one of which alone is material. The tenants prayed that they should be given relief against forfeiture of their tenancy rights under Section 114 of the Transfer of Property Act. In the trial court the tenants deposited an amount of Rs 1099.34 The trial Judge held that the conditions relating to deposit in Court of rent in arrear, interest thereon and costs of the suit were not complied with and decreed the plaintiff's claim. In appeal to the District Court the tenant offered to pay the balance of the amount of the rent due together with costs of the suit and appeal and interest at the rate of 6% per annum or such other rate as the Court may direct and deposit in Court Rs 2082.50 in the aggregate. The learned District Judge was of the view that the amount paid by the tenants was in excess of the amount due by them and observed:
“… the appellants have deposited much more amount than is due to the respondent as arrears of rent, the costs of the suit and of the appeal and the interest. There is no reason why benefit of Section 114 of the Transfer of Property Act be not given to the appellants when they are ready and willing to pay much more amount than is actually due to the respondent. The fact is that there are valuable contructions over the plots and defendants dispossession would put them to a great loss. It is for this reason that they are prepared to pay the amount that may be demanded from them. I, therefore, find that the appellants are entitled to the benefit of Section 114 of the Transfer of Property Act and are relieved against the forfeiture.”
The second appeal against this decision was summarily dismissed by the High Court of Allahabad.
4. In appeal to this Court counsel for the appellant contends—
(1) that jurisdiction under Section 114 of the Transfer of Property Act to relieve against forfeiture for non-payment of rent may only be exercised by the court of first instance and not by the court of appeal;
(2)that the trial court gave an opportunity to the tenants to pay the amount of rent due together with interest and costs, but the tenants failed to avail themselves of the opportunity. In the circumstances the appellate court had no jurisdiction to grant another opportunity to the tenants to make the requisite payment and grant relief against forfeiture of the tenancy;
(3)that in any event, discretion was, in the circumstances, not properly exercised by the District Court.”
5. In our view, there is no substance in any of the contentions.
Section 114 of the Transfer of Property Act provides:
“Where a lease of immovable property has been determined by forfeiture for non-payment of rent, and the lessor sues to eject the lessee, if, at the hearing of the suit, the lessee pays or tenders to the lessor the rent in arrear, together with interest thereon and his full costs of the suit, or gives such security as the Court thinks sufficient for making such payment within fifteen days, the Court may, in lieu of making a decree for ejectment, pass an order relieving the lessee against the forfeiture; and thereupon the lessee shall hold the property leased as if the forfeiture had not occurred.”
The covenant of forfeiture of tenancy for non-payment of rent is regarded by the courts as merely a clause for securing payment of rent, and unless the tenant has by his conduct disentitled himself to equitable relief the courts grant relief against forfeiture of tenancy on the tenant paying the rent due, interest thereon and costs of the suit. Jurisdiction to relieve against forfeiture for non-payment of rent may be exercised by the Court if the tenant in a suit in ejectment at the hearing of the suit pays the arrears of rent together with interest thereon and full costs of the suit. In terms Section 114 makes payment of rent at the hearing of the suit in ejectment a condition of the exercise of the Courts' jurisdiction but an appeal being a rehearing of the suit, in appropriate cases it is open to the appellate court at the hearing of the appeal to relieve the tenant in default against forfeiture. Passing of a decree in ejectment against the tenant by the court of first instance does not take away the jurisdiction of the appellate court to grant equitable relief. This is the view taken by the High Courts in India: see Chilukuri Tripura Sunderamma v. Chilukuri Venkateswarlu alias Ramchandram AIR 1949 Mad 841; Janab Vellathi v. K. Kadervel Thayammal AIR 1958 Mad 232; Shrikishanlal v. Ramnath Jankiprasad Ahir ILR 1944 Nag 877; Budhi Ballabh v. Jai Kishan Kandpal. 1963 ALJ 132 The High Court of Bombay in cases arising under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, has also expressed the same opinion in Bhagwant Rambhau Khese v. Ramchandra Kesho Pathak AIR 1953 Bom 129.
6. We do not think that there is any bar to the exercise of jurisdiction by the appellate court merely because in the court of first instance relief against forfeiture was claimed by the tenants and they failed to avail themselves of the opportunity of paying the amount of rent together with interest thereon and costs of the suit. Failure to avail themselves of the opportunity does not operate as a bar to the jurisdiction of the appellate court. The appellate court may, having regard to the conduct of the tenant, decline to exercise its discretion to grant him relief against forfeiture. The question is not one of jurisdiction but of discretion. This Court in Namdeo Lokman Lodhi v. Narmadebai, 1953 SCR 1009 has observed at p. 1025:
“… in exercising the discretion (under Section 114 of the Transfer of Property Act), each case must be judged by itself, the delay, the conduct of the parties and the difficulties to which the landlord has been put should be weighed against the tenant. … It is a maxim of equity that a person who comes in equity must do equity and must come with clean hands and if the conduct of the tenant is such that it disentitles him to relief in equity, then the court's hands are not tied to exercise it in his favour.”
7. The District Court has observed that valuable contructions had been put up on the land leased and the tenants had deposited an amount very much larger than the amount due to the landlord. Having regard to the circumstances the District Court was of the view that discretion should be exercised in favour of the tenants. The High Court summarily dismissed the appeal. The High Court must be taken to have confirmed the view of the District Court. In an appeal with special leave, this Court will not ordinarily interfere with an order made in exercise of the discretion of the courts below, specially when there is no evidence that the tenants were guilty of conduct disentitling them to relief against forfeiture for non-payment of rent.
8. The appeal therefore fails and is dismissed with costs.
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