AMICUS AI
Citation Codes
Neutral Citations
1977 INSC 179
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • Section 53-A of the Transfer of Property Act
  • Section 53-A of the statute law of India
  • The Transfer of Property Act
  • West Bengal Premises Tenancy Act, 1956
Are you a practicing lawyer?
Enhance your digital presence and reach by creating a Casemine profile.
Upload pleading to use the new AI search
Cites
Cited by
Citation Codes
Neutral Citations
1977 INSC 179
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • Section 53-A of the Transfer of Property Act
  • Section 53-A of the statute law of India
  • The Transfer of Property Act
  • West Bengal Premises Tenancy Act, 1956
Smart Summary

Factual and Procedural Background

The first respondent (plaintiff) sought recovery of possession of 11 bighas, 17 kathas and 17 sq. ft. of land with structures at Premises 1, Babu Ram Ghosh Road, Calcutta, from the appellant, a private limited company. An earlier ejectment decree (1954) had been passed against the lessees and the appellant (then a sub-lessee). During revision proceedings that decree was not set aside but was compromised on these terms: (i) the appellant would become a direct tenant of the owners at Rs 1,000 per month; (ii) the lease would run for sixteen years from 19 May 1954, with an option of earlier termination by sixty days’ notice. No lease deed was executed nor was the compromise registered.

After the sixteen-year period ended, ownership devolved solely on the first respondent, who served a quit notice. Upon non-compliance, she filed Title Suit 59 of 1970 in the Court of the Subordinate Judge, Alipore, for possession and mesne profits. The appellant contended that payment and acceptance of rent created an independent monthly tenancy. The trial court rejected that plea, holding that the unregistered compromise could not create a lease, that Section 53-A of the Transfer of Property Act protected possession only for the agreed sixteen years, and that no tenancy subsisted thereafter. The first appellate court and the Calcutta High Court (in second appeal) affirmed the decree. The present appeal reached the Supreme Court by special leave.

Legal Issues Presented

  1. Whether, despite the compromise being unregistered and therefore incapable of creating a lease for sixteen years, the continued payment and acceptance of Rs 1,000 per month gave rise to a fresh monthly tenancy in favour of the appellant.
  2. If such a tenancy existed, whether it was protected by the West Bengal Premises Tenancy Act, 1956, thereby barring eviction.

Arguments of the Parties

Appellant's Arguments

  • The monthly payment and corresponding receipts amounted to acknowledgment of a landlord-tenant relationship, creating a tenancy from month to month independent of the defective sixteen-year lease.
  • Consequently, the tenancy attracted the protection of the West Bengal Premises Tenancy Act, 1956, rendering the appellant immune from eviction.
  • Reliance was placed principally on Ram Kumar Das v. Jagadish Chandra Deb Dhabal Deb (AIR 1952 SC 23) to suggest that acceptance of rent under an invalid lease implies a monthly tenancy.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Ram Kumar Das v. Jagadish Chandra Deb Dhabal Deb
AIR 1952 SC 23; 1952 SCR 269
Payment and acceptance of rent may indicate a monthly tenancy depending on facts. Distinguished; Court held the case does not establish that a tenancy automatically arises whenever rent is accepted under a void lease.
Sheth Maneklal Mansukbhai v. Hormusji Jamshedji Ginwalla & Sons
AIR 1950 SC 1; 1950 SCR 75
Section 53-A partially incorporates the English doctrine of part performance and confers only a defensive right. Used to emphasise that Section 53-A does not create an active interest in land but merely bars the transferor from asserting title.
Probodh Kumar Das v. Dentmara Tea Co. Ltd.
AIR 1940 PC 1
Section 53-A gives no active title; it only bars the transferor. Cited to reinforce that the appellant, relying on Section 53-A, could only resist eviction during the contractual period, not assert a tenancy afterwards.
State of Punjab v. British India Corporation Ltd.
AIR 1963 SC 1459; (1964) 2 SCR 114
Distinction between “rent” in a broad sense (payment for use of land) and “rent” in the technical landlord-tenant sense. Invoked to show that mere payment labelled as rent is not conclusive proof of a tenancy.

Court's Reasoning and Analysis

1. The Court noted that an ejectment decree already existed against the appellant prior to the compromise; any subsequent possession had to be referable solely to the compromise terms.

2. Because the compromise attempted to create a sixteen-year lease of immovable property, registration was mandatory under the Registration Act. Its non-registration rendered the lease void for creating any legal estate, though the document could still be used to claim the limited protection of Section 53-A.

3. Section 53-A merely bars the transferor from disturbing possession when the transferee has performed or is willing to perform the contract; it does not vest an estate in the transferee. The appellant fulfilled its obligation by paying Rs 1,000 monthly for the full sixteen-year term, and therefore enjoyed protection only for that term.

4. The appellant’s reliance on Ram Kumar Das was rejected. That case turned on specific findings of fact establishing a monthly tenancy from the outset; it does not lay down an inflexible rule that rent acceptance under an invalid lease invariably creates such a tenancy.

5. English law on implied tenancies at will was deemed inapposite because Indian law substitutes a statutory, not equitable, right under Section 53-A.

6. The Court underscored that whether a landlord-tenant relationship arises is a question of intention and fact. All three lower courts had found that the payments were made strictly in performance of the compromise, not as consideration for an independent tenancy. The Supreme Court declined to disturb that concurrent finding of fact.

Holding and Implications

Appeal Dismissed with Costs.

The judgment of the Calcutta High Court stands affirmed. The appellant’s possession after 19 May 1970 was that of a trespasser; no monthly tenancy protected by the West Bengal Premises Tenancy Act arose merely from the payment and acceptance of rent. The decision reiterates that:

  • An unregistered instrument purporting to lease immovable property for more than one year cannot create a lease though it may give defensive protection under Section 53-A for the contract period.
  • Acceptance of payments described as “rent” does not, by itself, establish a tenancy; the parties’ intention remains decisive.

No new legal doctrine was formulated; the Court applied existing principles on registration requirements and the limited scope of Section 53-A.

To access the original judgment, please Sign In or Subscribe.

    Technicians Studio Private Ltd. v. Smt Lila Ghosh And Another

    A.C Gupta, J.— This is an appeal by special leave from a judgment of the Calcutta High Court disposing of a second appeal which arose out of a suit for recovery of possession instituted against the appellant by the first respondent. The property in dispute consists of land measuring 11 bighas, 17 kathas and 17 sq. ft. with structures thereon, being Premises 1, Babu Ram Ghosh Road, Calcutta, previously numbered as Premises 2, 3 and 4,. Babu Ram Ghosh Road. Earlier, in 1952 the predecessors-in-interest of the first respondent had brought a suit for ejectment of the lessees of the property impleading the appellant, a private limited company who were the sub-lessees, also as a defendant. That suit was decreed against all the defendants some time in 1954. The appellant applied for review of the judgment decreeing the suit. The review petition having been dismissed, the appellant moved the High Court in revision. The revision case was ultimately disposed of in terms of a petition of compromise. The relevant terms of the compromise were—

    (i) the appellant would become a direct tenant under the first respondent's husband and his brother, who were then the owners of the property, at a monthly rent of Rs 1000;

    (ii) the lease would be for a period of sixteen years from May 19, 1954 with option to the appellant to terminate the lease earlier on giving sixty days' notice on the lessors.

    No deed of lease was however executed, nor the petition of compromise containing the terms of settlement was registered. There is some dispute as to whether the appellant had been dispossessed in execution of the ejectment decree or continued in possession, but it is clear that their possession on and from May 19, 1954 was on the basis of the compromise.

    2. The property ultimately devolved on the first respondent as sole owner who on the expiry of the period of the lease mentioned in the compromise petition served a notice on the appellant to quit and vacate the premises. As the appellant did not comply with the notice, the first respondent instituted Title Suit 59 of 1970 on May 22, 1970 in the Third Court of the Subordinate Judge at Alipore for recovery of possession and mesne profits on a declaration that the appellant were trespassers and in wrongful occupation of the premises after the period mentioned in the petition of compromise had expired. The appellant's case in their written statement was that by payment and acceptance of rent a monthly tenancy had been created in their favour which was continuing even after the expiry of the said period. The trial court found that to be effective as a lease for sixteen years the petition of compromise required registration, and this not having been done it could not create any interest in favour of the appellant in the premises though they were entitled to protect their possession for a period of sixteen years under Section 53-A of the Transfer of Property Act. It was further held that payment and acceptance of rent made in terms of the unregistered compromise petition did not give rise to a right of tenancy and on the expiry of the said period they had no protection against eviction. The trial court accordingly decreed the suit. The first appellate court having dismissed the appeal preferred against this decision, the appellant took a second appeal to the High Court. The High Court dismissed the second appeal affirming the findings of the Courts below.

    3. The contention of the appellant in this Court also is that as the first respondent and her predecessors-in-interest before her had accepted the rent paid month by month duly granting receipts, a monthly tenancy had been created in favour of the appellant independent of the protection they had under Section 53-A of the Transfer of Property Act. It is claimed that this was a tenancy governed by the West Bengal Premises Tenancy Act, 1956 which protected them against eviction. Was the High Court wrong on the facts found by the Courts below in rejecting this contention?

    4. Admittedly there was an ejectment decree against the appellant before the petition of compromise was filed in the High Court. By the compromise the decree was not set aside but a lease for sixteen years was sought to be created in favour of the appellant. Thus whatever interest the appellant may have had in the property was extinguished after the passing of the decree and even if they continued in possession after the decree was passed, the subsequent possession in order to be valid must be referable to the compromise. Clearly, the petition of compromise seeking to create a lease for sixteen years was required to be registered and not being registered it did not affect the immovable property to which it relates and could not be received as evidence of any transaction affecting the property though it was admissible as evidence of part performance of a contract for the purposes of Section 53-A of the Transfer of Property Act or as evidence of any collateral transaction not required to be effected by registered instrument. In order to be entitled to the protection of Section 53-A, the transferee must perform or must be willing to perform his part of the contract. In this case one of the terms in the petition of compromise was that the appellant would pay a monthly rent of Rs 1000 and there is no dispute that this sum was paid every month for the period of sixteen years. It has not been found or even claimed that any such sum was paid and accepted after the expiry of that period. Mr A.K Sen appearing for the appellant contends that as a result of these monthly payments not only the protection under Section 53-A was available to the appellant, but a monthly tenancy also came into existence which subsisted after the period of sixteen years mentioned in the petition of compromise had expired. In support of his contention Mr Sen relies mainly on the decision of this Court in Ram Kumar Das v. Jagadish Chandra Deb Dhabal Deb AIR 1952 SC 23, 1952 SCR 269. We do not think that Ram Kumar case is an authority for the proposition Mr Sen was contending for that in every case where a person enters into possession on the strength of an invalid lease and the landlord accepts “rent” in terms of that invalid lease, a monthly tenancy is created by implication of law. In Ram Kumar case it was admitted that in the beginning there was a relationship of landlord and tenant between the parties, and the only question that arose for decision was whether the defendant was in fact a monthly tenant under the plaintiff at the date when the notice to quit was served upon him. The Court speaking through Mukherjee, J. came to the conclusion that “on the facts of this case it would be quite proper to hold that the tenancy of the defendant was one from month to month since its inception in 1924”. It is not necessary to refer to the other cases cited by Mr Sen, these are the decisions of several High Courts which are either based on an incorrect reading of Ram Kumar case or in which the contention Mr Sen has raised here did not arise for consideration. If Mr Sen's contention were correct, then it was unnecessary to enact Section 53-A.

    5. Mr Sen has also referred to the law in England according to which a tenancy at will is implied when a person enters into possession under a void lease. But part performance in this country does not give rise to an equity as in England but to a statutory right which is comparatively a restricted right in that it is available only as a defence. It has been held that Section 53-A is only a partial importation in the statute law of India of the English doctrine of part performance. (See Sheth Maneklal Mansukbhai v. Hormusji Jamshedji Ginwalla and Sons AIR 1950 SC 1, 1950 SCR 75. It is well settled that Section 53-A confers no active title on the transferee in possession, it only imposes a statutory bar on the transferor. (See Probodh Kumar Das v. Dentmara Tea Company Limited AIR 1940 PC 1). Thus a person who is let into possession on the strength of a void lease does not acquire any interest in the property but gets under Section 53-A only a right to defend his possession. As the section says, this right is subject to the condition that the transferee has performed or is willing to perform his part of the contract. In this case under the petition of compromise the appellant had to pay a monthly sum of Rs 1000 as rent during the period of the intended lease which the appellant did. These monthly payments brought the appellant under the coverage of Section 53-A, but from this fact alone that the appellant had performed his part of the contract, it is not possible to conclude that a tenancy was brought into existence. Even the acceptance of these payments tendered as rent is not decisive of a tenancy. “In its wider sense rent means any payment made for the use of land or buildings. ... In its narrower sense it means payment made by tenant to landlord for property demised to him”. (State of Punjab v. British India Corporation, Ltd. AIR 1963 SC 1459, (1964) 2 SCR 114). Here the payments can be explained, as the Courts have done, as evidence of the appellant's willingness to perform their part of the contract. This does not mean however that there cannot be a relationship of landlord and tenant in any case where the transferee has taken possession of the property under a void lease or in part performance of a contract and is entitled to protection under Section 53-A of the Transfer of Property Act. Such a view would be incorrect and encourage attempts to circumvent the protection of the Rent Acts given to the tenants. Whether the relationship of landlord and tenant exists between the parties depends on whether the parties intended to create a tenancy, and the intention has to be gathered from the facts and circumstances of the case. It is possible to find on the facts of a given case that payments made by a transferee in possession were really not in terms of the contract but independent of it, and this might justify an inference of tenancy in his favour. The question is ultimately one of fact. In the present case the High Court has found in agreement with the Courts below that the “payment of rent by the appellant to the plaintiff respondent who accepted the same did not create any tenancy in favour of the appellant inasmuch as the said payments were made in part performance of the said contract of lease contained in the compromise petition”. We cannot go behind this finding of fact on which the appeal turns. The appellant's plea of tenancy cannot therefore be accepted.

    6. The appeal is dismissed with costs.

    Use AI to get other relevant cases.

    Comments

    Technicians Studio Private Ltd. v. Smt Lila Ghosh And Another
    (Sep 19, 1977)