Tarak Nath Sha v. Bhutoria Bros. Pvt. Ltd. And Others

D.P Mohapatra, J.— The appellant Tarak Nath Sha is the landlord of the suit property of which Respondent 1 M/s Bhutoria Bros. Pvt. Limited (hereinafter referred to as “the Company”) was the lessee. The lease was for a period of 21 years commencing from 23-3-1963. The rent stipulated to be paid by the lessee was Rs 700 per month. The suit property was in occupation of Mr Manmal Bhutoria, Respondent 2 herein, who was the Director of Respondent 1 Company. Before expiry of the period of lease the lessee is alleged to have sent a letter dated 18-4-1974 in which it was stated that Manmal Bhutoria had voluntarily resigned as Director of the Company; that the Company was no longer in need of the suit premises; and that the landlord was requested to take over possession of the property. From the endorsement made in the letter, it appears that a copy was sent to Manmal Bhutoria with a request to negotiate with the landlord.

2. After expiry of the period of lease in 1984 the landlord addressed a letter to the Company requiring it to hand over possession of the suit property to him. In the meantime Manmal Bhutoria had filed Title Suit No. 240 of 1984 against the landlord seeking a declaration that he was the tenant of the suit property and a decree of permanent injunction restraining the landlord from disturbing his possession. Since the Company failed to deliver possession of the suit property to him the landlord filed the suit, TS No. 812 of 1984, against the Company and Manmal Bhutoria, Respondent 1, seeking recovery of possession of the suit property. The gist of the case of the landlord was that the letter dated 18-4-1974 allegedly addressed by the Company to him was never received; and that the acknowledgement card purporting to bear his signature was a fabricated document; he denied the signature on the AD card. According to him the lease executed in favour of the Company continued till its expiry by efflux of time and the Company was liable to hand over vacant possession of the suit property to him, which it had failed to comply.

3. It was the case of the Company and Manmal Bhutoria, respondents herein that the lease with the Company was terminated by the aforementioned letter; that a fresh tenancy was created by the lessor with Manmal Bhutoria in his personal capacity and in pursuance thereof, he continued to occupy the suit property on monthly rent of Rs 1100. In the circumstances, he could not be evicted from the property except in accordance with the provisions of the West Bengal Premises Tenancy Act, 1956.

4. The trial court, considering the case of the parties, accepted the case pleaded by Manmal Bhutoria and held that the lease in favour of the Company was terminated by the letter dated 18-4-1974 and a fresh tenancy had been created in favour of Manmal Bhutoria in his personal capacity. On such finding the trial court dismissed the suit filed by the landlord and decreed the suit filed by Manmal Bhutoria.

5. The landlord filed two appeals, FAs Nos. 87 and 88 of 1990 challenging the judgment and decree passed by the trial court. The said appeals were decided by a Division Bench of the High Court by the judgment rendered on 28-8-1997 confirming the judgment and decree passed by the trial court and dismissing the appeals. The said judgment is under challenge in these appeals filed by the landlord.

6. On the case pleaded by the parties, the issues framed by the trial court and the contentions raised in the appeals, the Division Bench formulated the following questions for decision:

“(1) Whether in view of the admitted position that the Company took a lease from the predecessor-in-interest of the appellant, it surrendered the same?

(2) Whether a fresh tenancy was entered into by and between the appellant and the aforementioned Manmal Bhutoria?”

7. Shri Bhaskar P. Gupta, learned Senior Counsel appearing for the appellant contended that the High Court has not recorded any specific finding on the legality and validity of the notice of determination said to have been given under the letter dated 18-4-1974 by the respondent Company. Shri Gupta further contended that even assuming that the letter dated 18-4-1974 was sent by the Company and it was received by the landlord, that does not amount to determination of the lease with the respondent Company. According to Shri Gupta, since the lessee did not deliver vacant possession of the demised premises to the lessor as provided in Section 108(q) of the Transfer of Property Act read with Section 111(h) of the Act the lease could not be held to have been terminated by merely sending the letter. Shri Gupta placed reliance on the decisions of this Court in Kishan Lal v. Ganpat Ram Khosla AIR 1961 SC 1554 and the case of Raptakos Brett & Co. Ltd. v. Ganesh Property (1998) 7 SCC 184.

8. Per contra Shri B. Sen, learned Senior Counsel appearing for the respondent Manmal Bhutoria contended that delivery of possession of the demised premises is not a condition precedent in law for determination of lease. Therefore, submitted Shri Sen, merely because vacant possession of the suit premises was not given to the landlord by the Company it could not be held that there was no valid determination of the lease. Shri Sen fairly accepted the position that the courts below did not record any specific finding regarding the validity or otherwise of the notice of determination of lease.

9. We have perused the impugned judgment of the High Court. As noted earlier the High Court formulated, and in our view, rightly, two questions for determination in the case. Thereafter the High Court proceeded to discuss at length certain principles of law enunciated in different decisions rendered by this Court, the Calcutta High Court and other High Courts. From the judgment it appears that lengthy discussions have been made with reference to certain observations made in the decisions rendered thereunder. But the High Court does not appear to have considered in depth the evidence on record. The High Court has also not recorded any specific findings on the validity or otherwise of the notice of determination of the lease said to have been given under the letter dated 18-4-1974. It is clear from the discussions in the judgment that the High Court having answered the question whether the said letter was received by the landlord, against the landlord and in favour of the tenant assumed that there was a valid determination of the lease. The further finding of the High Court that after determination of the lease a fresh tenancy in respect of the premises had been created in favour of Manmal Bhutoria is not based on any discussion of the evidence on record but on the mere observation i.e:

“The Court is required to consider the cumulative effect of all the materials and there cannot be any doubt whatsoever that keeping in view the fact that the plaintiffs had manufactured rent receipts and also sought to put a date in the Hindi letter addressed by Manmal Bhutoria to the appellant clearly goes to show that Manmal Bhutoria became a tenant of the appellant in his personal capacity. The position might have been different if Shri Manmal Bhutoria continued to occupy the said premises as a Director of the Company.”

This finding in our view is begging the question itself. The point to be determined by the Court was whether the tenancy in favour of the Company had been validly terminated and thereafter a fresh tenancy in respect of the premises had been created in favour of Manmal Bhutoria in his personal capacity. This question is of considerable importance for decision in the case, in view of the undisputed factual position that during subsistence of the lease with the Company, Manmal Bhutoria was in occupation of the premises for residential purpose as a Director of the Company, and after the alleged determination of the lease by the Company he continued to remain in occupation of the premises using it as his residence. Since Manmal Bhutoria had taken the stand that after determination of the tenancy with the Company a fresh tenancy has been created with him in his personal capacity, it was for him to establish the case. Unfortunately, the approach of the High Court to the case has not been on proper lines. Further the High Court appears to have been under an impression that the appellate court would be slow to interfere with the finding of fact arrived at by the trial court. So while making the observations to this effect the High Court failed to note that it was seized of the first appeal filed under Section 96 of the Code of Civil Procedure in which the appellate court was to consider the matter both on facts and on points of law. Further the judgment of the High Court is based on an erroneous assumption which appears from the observations to the effect—

“Once it is held that Shri Manmal Bhutoria became a tenant under the appellant, surrender of the tenancy by the Company and acceptance thereof by the appellant would be deemed to have been proved.”

This observation cannot but amount to begging the question. The question for determination before the High Court was whether the tenancy in favour of the Company had been validly terminated; and this question was required to be proved by the party alleging it (the tenant Company) by adducing evidence. A matter which is required to be proved by evidence cannot be assumed. If this question is answered in the affirmative only then the further question whether there was a fresh tenancy in favour of Manmal Bhutoria in his personal capacity will arise.

10. On careful consideration of the matter, we have no hesitation to hold that the judgment of the High Court under challenge is unsustainable. Accordingly, the appeals are allowed. The judgment of the High Court in FAs Nos. 87 and 88 of 1990 is set aside and the cases are remanded to the High Court for fresh disposal in accordance with law. The parties will bear their respective costs.