S. Sugumaran v. Seenu Natarajan

Tenant in HR.C.O.P 110 of 1995 on the file of Rent Controller, Pondicherry is the revision petitioner herein.

2. Scheduled premises originally belonged to one Balamirutham under whom petitioner became tenant. Balamirutham executed a settlement deed in favour of her daughter Rohini @ Usha and thereafter lease deed was also executed in favour of Rohini @ Usha as evidenced by Ex. R4 dated 11.4.1984 While the tenancy was subsisting, landlord herein purchased the schedule premises from Rohini @ Usha as per Exs. P5 and P6 dated 11.12.1992 and 14.12.1992 respectively for valid consideration. It is also the case of landlord that tenant was not paying rent for some time and landlord herein paid entire rent arrears to Rohini who in turn executed Ex. P7 deed dated 14.12.1992 and conveyed the right to realise the same and also future rent from the tenant. It is the further case that tenant attorned tenancy in favour of landlord by paying monthly rent of Rs. 1,000/- and thereafter he committed wilful default. Landlord sent a notice demanding rent arrears and also wanted to get vacant possession for his own occupation. According to landlord, he is doing business in Motor oil Lubricants in the rented premises and landlord of that premises asked him to vacate that building and he is in dire need to occupy the scheduled premises. When tenant refused to vacate the premises which he has expressed in his reply, present application was filed for eviction.

3. In the Counter statement filed by the tenant, he said that he has entered into a lease agreement with Rohini under Ex. R.4 but subsequently previous owner Balamirutham asked tenant to pay rent to her and he was paying the same without default. He further said that on 24.4.1989 as evidenced by Ex. Rl, he has entered into an agreement with Rohini to purchase the premises for Rs. 1,40,000/- and paid an advance of Rs. 50,000/-. It is the further case that as per that agreement, there is a provision not to pay rent thereafter and he was allowed to continue in possession on the basis of the agreement and consequently he is entitled to protection under Section 53-A of Transfer of Property Act. According to him, after agreement came into force, he is not liable to pay rent and he has not paid rent to landlord at any point of time. The time is not essence of the contract as per agreement for sale, and his possession is only as per agreement of sale and not as tenant. He also denied the grounds of eviction.

4. On the basis of above allegations, Rent Controller raised issues as to whether denial of title is bona fide and directed landlord to pay additional court fee for the same.

5. As per order dated 3.10.1997, Rent Controller found that denial of title is bona fide and dismissed the application. The ground of eviction was not considered in view of this finding. Rent Controller was of the view that genuineness or otherwise of Ex. P5 is not to be agitated in Rent Control proceedings and that is the matter Civil Court alone will decide. Rent Controller held that tenant has made out prima facie case on the basis of Ex. Rl and existence of document coupled with the evidence of RW2 shows that the denial of title is bona fide.

6. Against the dismissal of Rent Control petition, Landlord filed M.A 9 of 1998 on the file of Principal District Judge. Appellate authority reconsidered the entire evidence and took a contrary view. It held that Ex. Rl is not valid document and even evidence of RW2 will not prove that the document was executed by Rohiniamml @ Usha, who has specifically denied execution. Appellate Authority further held taking into consideration the common course of human conduct that even though alleged agreement is in 1989, till date, tenant has not taken any steps to have the agreement enforced. Appellate authority also held that mere existence of agreement will not put an end to rental arrangement and insertion of certain sentences in the alleged agreement for sale show that it was prepared only for the purpose of the case and its genuineness is not proved. Appellate Authority held that prima facie tenant failed to prove genuineness of Ex. Rl and consequently denial of title is not bona fide. In paras 7 and 18 of the Judgment, Appellate Authority further held that landlord is also entitled to get eviction on all the grounds and ordered eviction.

7. It is against the said judgment, tenant has come with this revision petition under Section 25 of the Pondicherry Buildings (Lease and Rent Control) Act.

8. Learned senior counsel for petitioner submitted that Appellate Authority exceeded in his jurisdiction when there is a finding by Rent Controller that there is no bona fide in the claim. Tenant is expected to only adduce prima facie evidence to show his bona fides and whether agreement is really genuine or not should not be adjudicated in a Rent Control Proceedings which is only summary procedure Learned Senior Counsel further submitted that once it is found that Appellate Authority exceeded in its jurisdiction, this Court is bound to interfere under Section 25 of the Rent Control Act.

9. Learned Counsel for respondent submitted that Appellate Authority has got all the powers of Rent Controller and is competent to reappreciate the evidence tendered before Rent Controller. Appellate Authority after reconsidering the evidence held that the claim is not bona fide. The same is not liable to be interfered with under Section 25 of the Act.

10. After hearing counsel on both sides, the question arises for consideration is what is the scope of enquiry when tenant denies the title of landlord.

11. In a recent decision of the Honourable Supreme Court reported in 1999 AIR SCW. 3593=2000 1 L.W 782 (S. Than-gappan v. P. Padmavathy). in para 9, it is held thus,

“…. There is no dispute of this proposition neither it is disputed by the learned counsel for the respondent nor this question of title has been decided in these proceedings. It is only when a tenant denied title of the landlord, the court has to scrutinise the evidence and come to the conclusion prima facie, whether the denial of title is bona fide or not.

It is in the context, of course, court has to go into the evidence to test the veracity of this denial of title. Thus, any finding in this regard could be a finding on the question of title. There is neither any claim of title set up by the respondent nor there is any such issue between the parties in these proceedings and hence recording of any finding in this regard is only to be understood for a limited purpose of testing the bona fide of tenant to deny the title of the landlord.”

(emphasis supplied)

12. The question as to the scope of enquiry when tenant denies title of landlord cameup for consideration before Kerala High Court in the decision reported in 1987 (2) K.L.T 1029 (Joseph v. Thomas), rendered by Justice K.T Thomas (as he then was). In para 5 of the Judgment learned Judge held thus,

“Learned counsel for the respondent-tenant contended that if the Rent Control Court is satisfied that the denial is made honestly, and not with the oblique idea to protract the dispute, the Rent Control Court has to record a finding. “Bona fide” (of good faith) is a familiar term in legal parlance. Honestly, of course, is one of the attributes of good faith, but that is not enough. In certain contexts that which is done with due care and attention is said to have been done in good faith. But the word “bona fide” when used in relation to jurisdictional permutations, has a wider import and a higher degree than the other two attributes. The aspect of bona fides in the context in which it is mentioned in the proviso may be referable to the state of mind of the tenant. But when a court has to come to a finding regarding such state of mind, there must be objective satisfaction for court that the tenant had that state of mind. The Court, whose jurisdiction stands ousted on a finding that a certain plea or assertion made by a party is bona fide, must be in a position to hold that the plea is based on a very fair and reasonable supposition. In holding so, the court must have the satisfaction that there are strong or atleast substantial grounds or sufficient materials in support of the plea. The court must be in a position to say that the chances of the plea being upheld by the Civil Court are fairly on the higher side. Then alone, the Rent Control Court is justified in finding that the denial of landlord's title is bona fide. In White v. Feast (Law Reports-Q.B Vol. VII 353) Cockbum, C.J met the problem of deciding about summary jurisdiction of magistrates under a certain statute. When defendant set up a case of bona fide claim of right, his lordship observed that the defendant is not entitled to call upon such magistrates to hold their hands “unless he gives them sufficient evidence to convince them that he acted under a fair and reasonable supposition that he had a right to do the act, although he may have honestly believed that he was justified in doing the act.” Lord Greene, M.R, in Re Welsh Brick Industries Ltd., (1946) All E.R Vol. 2-197) did not think that there is any difference between the words “bona fide disputed” and the words “disputed on some substantial grounds”. The observation was made in the background of a contention that a petitioning creditor had no locus standi, in winding up proceedings, to present a petition because his alleged debt was subject of bona fide dispute, and that the County Court Judge should have dismissed the petition on the ground that winding up proceedings are not the appropriate procedure for dealing with disputed debits. The aforesaid observations lend support to the view which I take that there cannot be a finding that tenant's denial of title is bona fide unless the denial is based on a very fair and reasonable supposition of the plea on the strength of strong and substantial materials.”

13. The above decision was approved by a Division Bench of Kerala High Court in the decision reported in 1995 (1) K.L.T 553 (Aboobacker v. Girija), wherein the Division Bench held thus,

“We too are of the view that the Court whose jurisdiction stands ousted must have the satisfaction that there are strong or at least substantial grounds or sufficient materials in support of the plea being upheld by the Civil Court must be fairly on the higher side-.”

(emphasis supplied)

It is clear from the above decisions that a mere denial will not oust the jurisdiction of the Rent Controller. Court will have to scrutinise the evidence and conclusion will have to be arrived. While arriving at the conclusion, the Court will have to findout whether there are materials in support of the plea being upheld by the Civil Court and if the case is tried by the Civil Court, there is higher chance of success. In this case, Rent Controller has not entered such a finding. Mere production of Ex. R1 and evidence of RW2 were held as sufficient to oust the jurisdiction. Even evidence of RW2 was not j fully considered by the Rent Controller.

14. If this is the scope of enquiry, to consider the question of bona fide denial of title, I donot think that Appellate Authority went wrong in reappreciating evidence rendered by Rent Controller and entered his finding as to scope of bona fides. Much reliance was placed on the evidence of RW2 by the Rent Controller. Before proceeding with the evidence of RW2, it must be noted that landlord Rohini @ Usha specifically denied execution of Ex. Rl. RW2 is one of the witness to Ex. Rl. Nowhere in his evidence he said that he was Rohini signing Ex. Rl. According to him, he went to Respondent to purchase gunny bags and respondent asked him to accompany him. Respondent took RW2 to Rohiniammal's house where he saw Rohiniammal and her mother. According to him, she asked respondent whether he got agreement prepared along with advance of Rs. 50,000/-and respondent produced agreement to Rohiniammal's mother and mother and daughter after going through the document and after receiving advance stated that sale price is Rs. 1, 40,000/- and he can pay balance amount when she gives title deeds and other documents. It is also said that sale could be concluded at an early date because there is a clause that he will not pay rent from that date onwards. There is no statement in the chief examination that he saw Rohiniammal signing Ex. Rl agreement. In cross-examination he only said that he does not know where Ex. Rl got typed and he also did not read the contents of Ex. Rl. He saw Rohiniammal for the first and last time. He further said that when he was taken by respondent, Ex. Rl was complete in form. He also saw Rohiniammal's mother for the first and last time and he further said that he can identify her and she will be more than 75 years. He also did not see other witnesses previously. Even in subsequent portion of cross-examination also, she did not say that he saw Rohiniammal affixing her signature.

15. There is one crucial sentence in Ex. Rl which causes doubt about its genuineness. Paper is purchased by one Prema on 21.4.1989 whose identity is not disclosed by tenant. It is a type written document and in page 2, second para, one Sentence is interpolated thus,

No person with some common sense will incorporate such sentence and nobody got case that petitioner herein is the owner. In the same para, it is further said thus,

Even according to tenant it is only agreement for sale. Ownership is yet to be transferred on payment of balance consideration. Under normal circustances no person will make a statement that because tenant is already in occupation in view of the agreement, he may enjoy the property as owner. A crucial circumstance has been made out by document itself which tells about its genuineness.

16. Appellate Authority disbelieved the evidence of RW2. Circumstances, also show that normally such a document would not have been executed by such a person. It is not the argument of learned counsel that Appellate Authority has no powers of Rent Controller while appreciating evidence. It is also fact finding authority.

17. Ex. Rl is alleged to have been executed in 1989. Till date, he has not taken any steps to have the document executed. Of course, it is his case that he is in possession and that is sufficient protection so far as he is concerned. But at least when eviction notice was issued, he could have taken steps to see that the document is executed in his favour or would have taken action for implementing Ex. Rl.

18. In (1996) I SCC 639 (Mohan Lal v. Mirza Abdul Gaffar), the scope of Section 53-A was considered by their Lordships wherein it is held thus,

“Even otherwise, in a suit for possession filed by the respondent, successor — in — interest of the transferor as a subsequent purchaser, the earlier transferee must plead and prove that he is ready and willing to perform his part of the contract so as to enable him to retain his possession of the immovable property held under the agreement The High Court has pointed out that he was not expressly pleaded this in the written statement. We have gong through the written statement. The High Court is right in its conclusion. Except vaguely denying that he is not ready and willing to perform his part, he did not specifically plead it. Under Section 16 (C) of the Specfic Relief Act, 1963, the plantiff must plead in the plaint, his readiness and willingness from the date of the contract till date of the decree. The plaintiff who seeks enforcement of the agreement is enjoined to establish the same. Equally, when the transferee seeks to avail of Section 53-A to retain possession of the property which he had under the contract, it would also be incumbent upon the transferee to plead and prove his readiness and willingness to perform his part of the contrast..He who comes to equity must, do equity, The doctrine of readiness and willingness is an emphatic way of expression to establish that the transferee always abides by the terms of the agreement and is willing to perform his part of the contract. Part performance, as statutory right, is conditioned upon the transferee's continues willingness to perform his part of the contract in terms covenanted thereunder.”

(emphasis supplied)

19. It is clear from the above decision that merely because he happened to be in possession he cannot claim protection of Section 53-A unless he is also ready to take sale deed in his favour. Even for the purpose of defence, he has to prove the ingredients of Section 16 of Specific Relief Act. Once it is found that the agreement is not proved to be prima facie genuine and also he is not entitled to the benefit of Section 53-A of Transfer of Property Act, it can only be held that denial of title is not bona fide. In that view of the matter on the basis of decision reported in AIR 1989 SC 2187 (M. Subbarao v. P.V.K Krishna Rao), eviction can be ordered in this proceeding itself though that is not a ground for eviction. In para 5 of the Judgment it is held thus,

“It was argued by learned counsel for the appellant that even accepting that, there was a denial of title by the appellant and the result would be only that the respondent — Landlord became entitled to forfeit, the lease and in order to be a ground for eviction in a suit that forfeiture would have to “precede the suit or petition for eviction. It was submitted by him that it was not open to a landlord to take advantage of a denial of title by the tenant in the very proceedings for eviction in the course of which the denial was made. The denial must be anterior to the eviction proceedings. In support of this argument learned counsel placed reliance on the decision in Maharaja of Jeypore v. Rukmani Pattamahadevi 46 Ind App. 109: AIR 1919 P.C.I In our view, this argument also does not stand scrutiny. In V. Dhanapal Chettiar v. Yesodai Ammal (1980) I SCR 334=AIR 1979 SC 1745=92 L.W 49 S.N a Constitution Bench of this Court comprising seven learned Judges held that in the matter of determination of tenancy, the State Rent Acts do not permit a landlord to snap his relationship with the tenant merely by serving on him a notice to quit as is the position under the Transfer of Property Act. The Landlord can recover possession of the property only on one or more of the grounds enacted in the relevant section of the Rent Acts. Even after the termination of the contractual tenancy, the landlord under the definitions of Landlord and tenant contained in the Rent Acts remains a landlord and a tenant remains a tenant because of the express provision made in the enactments that a tenant means a person continuing in possession after the termination of the tenancy in his favour. Yet another important feature of the Rent Acts is that either by way of a non obstante clause or by necessary implication these enactments have done away with the law contained in Section 108 of the Transfer of Property Act dealing with rights and liabilities of the lessor and the lessee. The difference between the position obtaining under the Transfer of Property Act and the Rent Acts in the matter of determination of a lease is that under the former Act in order to recover possession of the leased premises determination of the lease is necessary because during the continuance of the lease, the landlord cannot recover possession of the premises while under the Rent Acts the landlord becomes entitled to recover possession only on the fulfilment of the conditions laid down in the relevant sections. He cannot recover possession merely by determining the tenancy. Nor can he be stopped from doing so on the ground that he has not terminated the contractual tenancy. In the case before us, we find that the denial of landlord's title by the tenant has been expressly made a ground for eviction under Section 10(2) (vi) of the A.P Rent Act which we have already set out earlier. In view of this, the entire basis for the argument that the denial of title must be anterior to the proceedings for eviction under the A.P Rent Act is knocked out. In our opinion, the argument of learned counsel for the appellant must, therefore, be rejected. We find, on the other hand, that a number of High Courts have taken the view that even a denial of the landlord's title by a tenant in a written statement in an eviction petition under the Rent Act concerned furnishes a ground for eviction and can be relied upon in the very proceedings in which a written statement containing the denial has been filed. (See: Sada Ram v. Gajjan Shiama, AIR 1970 Punj & Har 511; Shiv Parshad v. Smt. Shila Rani, AIR 1974 Him Pra 22 and Machavaram Venkata Narayana Rao v. Sarvepalli Narayana Rao Sarada, (1978) 1 Rent CJ 368 (AIR 1978 NOC 160) (Andh Pra). As observed by the Punjab and Haryana High Court to insist that a denial of title in the written statement cannot be taken advantage of in that suit but can be taken advantage of only in a subsequent suit to be filed by the landlord would only lead to unnecessary multiplicity of legal proceedings as the landlord would be obliged to file a second suit for ejectment of the tenant on the ground of forfeiture entailed by the tenant's denial of his character as a tenant in the written statement.”

(emphasis supplied)

20. Rent Controller has not entered a finding on the ground of eviction. But Appellate Authority has held that the claim of landlord is bona fide. It has been found by appellate authority that landlord is in occupation of rented premises and his landlord is demanding vacant possession of that premises. Owner of the premises wanted to occupy his own property. There is nothing to doubt the genuineness of that claim. When landlord says that he is in possession of rented premises and wanted to occupy his own premises presumption of bona fides can be had and no rebutting evidence was also adducted by tenant. I find that the landlord has proved that the claim is bona fide. Appellate Authority has further held that tenant has also not paid rent. Even according to tenant, he has not paid any rent after the alleged agreement for sale. Once it is found that the agreement is not genuine, nonpayment of rent also can be termed as ‘Wilful default’.

21. I do not find that Appellate Authority's order is vitiated by illegality, irregularity or impropriety. Appellate Authority has considered the evidence and disbelieved the evidence of PW2. This circumstances has also been taken note of by Appellate Authority to hold that denial of title is not bona fide. On the basis of! materials placed before it, that view is possible. If the decision is rendered ‘in accordance with law’ as held in (1999) 6 SCC 222 (Shiv Sarup Gupta v. Dr. Mahesh Chand Gupta), the scope of interfernce is prohibited since jurisdiction is only supervisory.

22. In the result, I do not find any ground for interference under Section 25 of the Act and the revision petition is dismissed with costs. C.M.P 22173 of 1999 is also dismissed.

RR/VCS