DR. H. K. SHARMAversusSHRI RAM LAL

548                      [2019]REPORTS
               SUPREME COURT    1 S.C.R. 548               [2019] 1 S.C.R.


A                            DR. H. K. SHARMA
                                        v.
                                SHRI RAM LAL
                     (Civil Appeal Nos. 1237-1238 of 2019)
B
                              JANUARY 28, 2019
                     [ABHAY MANOHAR SAPRE AND
                       DINESH MAHESHWARI, JJ.]

C          Uttar Pradesh Urban Buildings (Regulation of Letting, Rent
      and Eviction) Act, 1972:
            s.21(1)(a) – Application under – Seeking eviction on the
      ground of bona fide need – Maintainability of, challenged by the
      tenant/lessee on the ground that relationship of lessor-lessee/
D     landlord-tenant had ceased to exist as the parties had entered into
      agreement to sale/purchase of the suit house – Prescribed Authority
      dismissed the application agreeing with the plea of the
      tenant/lessee – Appellate Court also affirmed the view of Prescribed
      Authority – In Writ Petition, High Court set aside the orders of the
      Prescribed Authority and appellate Court and allowed the
E
      application for eviction – On appeal, held: As per s.111(e) and (f)
      of the Transfer of property Act lease can be determined by express
      or implied surrender – The conditions of the sale agreement do not
      make out a case of express or implied surrender – Therefore, sale
      agreement did not result in termination of the tenancy and hence
F     application was maintainable – The finding of High Court as regards
      bona fide requirement, being question of fact, needs no interference –
      Transfer of Property Act, 1882 – s.111(e) and (f).
            Dismissing the appeals, the Court

G            HELD: 1.1 A lease of an immovable property is a contract
      between the lessor and the lessee. Their rights are governed by
      Sections 105 to 117 of Transfer of Property Act (TP Act) read
      with the respective State Rent Laws enacted by the State. Section
      111 of the TP Act deals with the determination of lease. Clauses
      (a) to (h) set out the grounds on which a lease of an immovable
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                                       548
             DR. H. K. SHARMA v. SHRI RAM LAL                          549


property can be determined. Clauses (e) and (f) provide that a         A
lease can be determined by an express surrender; in case, the
lessee yields up his interest under the lease to the lessor by
mutual agreement between them whereas Clause (f) provides
that the lease can be determined by implied surrender. [Paras
28, 29 and 30][554-G-H; 555-A-B]
                                                                       B
      1.2 None of the conditions set out in the sale agreement
13.05.1993 can be construed for holding that the parties intended
to surrender the tenancy rights. A fortiori, the parties did not
intend to surrender the tenancy rights despite entering into an
agreement of sale of the tenanted property, as necessary provision     C
to that effect was not made by providing a specific clause in the
agreement. On the other hand, the conditions set out in the
agreement do not make out a case of express surrender under
clause (e) or implied surrender under clause (f) of Section 111 of
the TP Act. [Paras 33, 34][555-G-H; 556-A-B]
                                                                       D
      1.3 Thus, the tenancy in question between the parties did
not result in its determination as contemplated under Section
111 of TP Act due to execution of the agreement dated 13.05.1993
between the parties for sale of the suit house. [Para 38][557-C]
       1.4 The respondent (lessor) was rightly held entitled to file   E
an application against the appellant (lessee) under Section 21(1)(a)
of the Uttar Pradesh Urban Buildings (Regulation of Letting, Rent
and Eviction) Act, 1972 and seek the appellant’s eviction from
the suit house after determining the tenancy in question. [Para
39][557-D]
                                                                       F
      Shah Mathuradas Maganlal & Co. v. Nagappa
      Shankarappa Malage & Ors. (1976) 3 SCC 660 :
      [1976] 3 SCR 789 – relied on.
      R. Kanthimathi & Anr. v. Beatrice Xavier (Mrs.) (2009)
      9 SCC 339 – distinguished.                                       G

       2. The question as to whether the respondent has made
out a case of his bona fide need for his residence and the members
of his family as contemplated under the Rent Act, being a question
of fact, the finding recorded by the High Court on this question
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550            SUPREME COURT REPORTS                          [2019] 1 S.C.R.


A     does not call for any interference in the present appeal. It is
      binding on this Court. Even otherwise, there is no good ground
      to interfere in the finding for the reason that the respondent being
      a landlord and a retired man has every right to live in his house
      with his family. Therefore, there is no perversity in the finding of
      the High Court on this issue. [Para 41][557-F-G]
B
                               Case Law Reference
              (2000) 9 SCC 339         distinguished             Para 18
              [1976] 3 SCR 789         relied on                 Para 31
C
            CIVIL APPELLATE JURISDICTION: Civil Appeal
      Nos. 1237-1238 of 2019.
             From the Judgment and Order dated 03.10.2017 and 17.07.2017
      of the High Court of Uttarakhand at Nainital in Recall Application No.871
D     of 2017 in Writ Petition (MS) No.396 of 2016 and in Writ Petition (MS)
      No.396 of 2016 respectively.
           Jitendra Mohan Sharma, Sr. Adv., Ajit Sharma, Pranshu Kaushal,
      Asutosh Senger, Sanchit Garga, Advs. for the Appellant.
            Narender Hooda, Sr. Adv., Dr. Monika Gusain, Hariom Yaduvanshi,
E
      Advs. for the Respondent.
            The Judgment of the Court was delivered by
            ABHAY MANOHAR SAPRE, J. 1. Leave granted.

F           2. These appeals are directed against the final judgment and orders
      dated 03.10.2017 in Recall Application No.871 of 2017 in W.P.(MS)
      No.396 of 2016 and dated 17.07.2017 in W.P.(MS) No.396 of 2016 passed
      by the High Court of Uttarakhand at Nainital.
            3. In order to appreciate the short controversy involved in these
G     appeals, few relevant facts need mention infra.
             4. The appellant is the “opposite party” whereas the respondent
      is the “applicant” in the original application out of which these appeals
      arise.

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              DR. H. K. SHARMA v. SHRI RAM LAL                                 551
                [ABHAY MANOHAR SAPRE, J.]

       5. The respondent (applicant) is the owner of house bearing             A
No.5A, Court Road, Nardev Shastri Road, Dehradun comprising of four
rooms, one kitchen, two verandahs and two galleries. The respondent
has let out a portion of this house consisting of three rooms, one kitchen,
latrine-bathroom, one store and two verandas (hereinafter referred to
as the “suit house”) to the appellant on a monthly rent of Rs.750/- as per
                                                                               B
the tenancy agreement dated 22.07.1985 entered into between them.
      6. On 28.04.2008, the respondent filed an application under Section
21(1) (a) of the U.P. Urban Buildings (Regulation of Letting Rent and
Eviction) Act, 1972 (hereinafter referred to as “the UP Act”) against
the appellant (opposite party) before the Prescribed Authority (Civil          C
Judge) Sr. Division, Dehradun seeking his eviction from the suit house.
       7. The eviction was sought on the ground of respondent’s bona
fide need for his residence and also the members of his family. The
respondent alleged that he has retired from the services and has no
other suitable house of his own where he can live and, therefore, requires     D
the suit house for his personal residence as also for the residence of the
members of his family.
       8. The appellant (opposite party) contested the application by filing
the written statement. While denying the ground of bona fide need, it
was contended that the appellant has entered into an agreement on              E
13.05.1993 with the respondent for purchase of the suit house and
pursuant thereto he has also paid huge amount to the respondent. It was
contended that since the parties have already entered into an agreement
of sale/purchase of the suit house, the relationship of landlord/tenant
between them has ceased to exist and now it no longer subsists and has
come to an end.                                                                F

       9. It was also contended that consequent upon the execution of
the agreement between the parties for the purchase of the suit house,
the appellant is no longer in possession of the suit house as tenant but is
now in possession as a purchaser of the suit house in part performance
                                                                               G
of the agreement dated 13.05.1993 qua the respondent.
      10. In other words, it was contended that the relationship of landlord
and tenant between the parties has come to an end and now the same
stood converted into the new relationship of buyer and seller of the suit
house. It was, therefore, contended that the application filed by the
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552             SUPREME COURT REPORTS                           [2019] 1 S.C.R.


A     respondent under Section 21(1) (a) of the UP Act against the appellant
      for his eviction from the suit house is not maintainable and, therefore, it
      is liable to be dismissed on this short ground.
             11. The Prescribed Authority by order dated 03.11.2010 dismissed
      the respondent’s application and held that since the parties entered into
B     an agreement dated 13.05.1993 for sale of the suit house, the appellant
      was not required to pay any monthly rent to the respondent inasmuch as
      according to him the relationship of the landlord and tenant between the
      parties has come to an end. He also decided the issue of bona fide
      need against the respondent and in appellant’s favour.
C           12. The respondent felt aggrieved and filed an appeal before the
      Appellate Court. By order dated 19.12.2015, the Appellate Court
      dismissed the appeal and affirmed the order of the Prescribed Authority.
      The respondent (applicant) felt aggrieved and filed the writ petition under
      Article 227 of the Constitution of India before the High Court of
D     Uttarakhand at Nainital.
             13. By impugned order dated 17.07.2017, the High Court allowed
      the writ petition and set aside the order of the Appellate Court and the
      Prescribed Authority. The appellant felt aggrieved and filed recall
      application. The High Court by order dated 03.10.2017 dismissed the
E     recall application.
             14. The High Court held that mere agreement to sell the suit house
      would not result in termination of landlord-tenant relationship between
      the parties unless there is a stipulation in the agreement itself to that
      effect. It was also held that since the agreement in question relied on by
F     the appellant (opposite party) is not a registered agreement, he is not
      entitled to raise the plea of part performance based on Section 53-A of
      the Transfer of Property Act, 1882 (for short “the TP Act”) against the
      respondent. The High Court further held that the respondent being an
      old man has every right to live in his house in the last leg of his life and
      more so when he has no other house of his own in the city and, therefore,
G
      he has made out a case of bona fide need for his residence as also for
      the members of his family.
             15. It is against these two orders of the High Court, the opposite
      party, i.e., the tenant has filed these appeals by way of special leave in
      this Court.
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              DR. H. K. SHARMA v. SHRI RAM LAL                                 553
                [ABHAY MANOHAR SAPRE, J.]

      16. So, the short question, which arises for consideration in these      A
appeals, is whether the High Court was justified in allowing the
respondent’s application filed under Section 21(1) (a) of the UP Act.
       16A. Heard Mr. Jitendra Mohan Sharma, learned senior counsel
for the appellant and Mr. Narender Hooda, learned senior counsel for
the respondent.                                                                B

      17. Mr. Jitendra Sharma, learned senior counsel for the appellant
while assailing the legality and correctness of the impugned order has
essentially argued one point.
       18. Placing reliance on the decision reported in R. Kanthimathi         C
& Anr. vs. Beatrice Xavier (Mrs.) [(2000) 9 SCC 339], learned
counsel contended that the High Court erred in allowing the application
filed by the respondent against the appellant.
       19. It was his submission that the issue raised by him in support of
his submission remains no longer res integra and stands decided by the         D
decision rendered in the case of R. Kanthimathi (supra) in appellant’s
favour.
       20. Learned counsel elaborated his submission by contending that
the moment the landlord and the tenant enters into an agreement of sale/
purchase of the tenanted property while subsistence of the tenancy and         E
the tenant pursuant to such agreement pays part consideration to the
landlord towards sale price of the tenanted premises, the relationship of
landlord and tenant comes to an end and ceases to exist, i.e., it results in
termination of the tenancy agreement ipso facto and in its place brings
into existence a new relationship between the parties, namely, that of         F
the purchaser and the seller of the tenanted premises.
       21. It was his submission that it is for this reason, the application
filed by the respondent as landlord of the tenanted premises to seek the
appellant’s eviction as his tenant from the suit house was wholly
misconceived and not maintainable for want of any subsisting relationship      G
of landlord-tenant between them. It was, therefore, rightly dismissed by
the Prescribed Authority and the Appellate Authority but wrongly allowed
by the High Court by the impugned order.


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554             SUPREME COURT REPORTS                           [2019] 1 S.C.R.


A            22. In reply, learned counsel for the respondent (applicant-landlord)
      supported the impugned order and contended that no case is made to
      interfere in the impugned order.
             23. Having heard the learned counsel for the parties and on perusal
      of the record of the case, we find no merit in these appeals.
B
             24. The question, which arises for consideration in these appeals,
      is when the lessor and the lessee enters into an agreement for sale/
      purchase of the tenanted premises where the lessor agrees to sell the
      tenanted premises to his lessee for consideration on certain conditions,
      whether, as a result of entering into such agreement, the Jural relationship
C     of lessor and the lessee in relation to the leased property comes to an
      end and, if so, whether it results in determination of the lease.
             25. In other words, the question that arises for consideration is
      when the lessor enters into an agreement to sell the tenanted property to
      his lessee during the subsistence of the lease, whether execution of such
D     agreement would ipso facto result in determination of the lease and
      severe the relationship of lessor and the lessee in relation to the leased
      property.
             26. In our considered opinion, the aforementioned question has to
      be decided keeping in view the provisions of Section 111 of the TP Act
E
      and the intention of the parties to the lease - whether the parties intended
      to surrender the lease on execution of such agreement in relation to the
      tenanted premises or they intended to keep the lease subsisting
      notwithstanding the execution of such agreement.

F           27. Chapter V of the TP Act deals with the leases of Immovable
      property. This chapter consists of Section 105 to Section 117.
             28. A lease of an immoveable property is a contract between the
      lessor and the lessee. Their rights are governed by Sections 105 to 117
      of TP Act read with the respective State Rent Laws enacted by the
G     State.
             29. Section 111 of the TP Act deals with the determination of
      lease. Clauses (a) to (h) set out the grounds on which a lease of an
      immoveable property can be determined.

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              DR. H. K. SHARMA v. SHRI RAM LAL                               555
                [ABHAY MANOHAR SAPRE, J.]

       30. Clauses (e) and (f) with which we are concerned here provide      A
that a lease can be determined by an express surrender; in case, the
lessee yields up his interest under the lease to the lessor by mutual
agreement between them whereas Clause (f) provides that the lease
can be determined by implied surrender.
       31. This Court in the case of Shah Mathuradas Maganlal &              B
Co. vs. Nagappa Shankarappa Malage & Ors., (1976) 3 SCC 660
considered the scope of clauses (e) and (f) of Section 111 of the TP Act
and laid down the following principle in Para 19 as under.
      “19. A surrender under clauses (e) and (f) of section 111 of
      the Transfer of Property Act, is an yielding up of the term            C
      of the lessee’s interest to him who has the immediate
      reversion or the lessor’s interest. It takes effect like a
      contract by mutual consent on the lessor’s acceptance of
      the act of the lessee. The lessee cannot, therefore,
      surrender unless the term is vested in him; and the                    D
      surrender must be to a person in whom the immediate
      reversion expectant on the term is vested. Implied
      surrender by operation of law occurs by the creation of a
      new relationship, or by relinquishment of possession. It the
      lessee accepts a new lease that in itself is a surrender.
      Surrender can also be implied from the consent of the parties          E
      or from such facts as the relinquishment of possession by
      the lessee and taking over possession by the lessor.
      Relinquishment of possession operates as an implied
      surrender. There must be a taking of possession, not
      necessarily a physical taking, but something amounting to              F
      a virtual taking of possession. Whether this has occurred
      is a question of fact.
      32. It is in the light of the aforementioned legal principle, the
question involved in this case has to be examined.
                                                                             G
       33. Perusal of Agreement to Sell dated 13.05.1993 (Annexure P-
1) shows that though the agreement contains 9 conditions but none of
the conditions provides much less in specific terms as to what will be the
fate of the tenancy. In other words, none of the conditions set out in the
agreement 13.05.1993 can be construed for holding that the parties
intended to surrender the tenancy rights.                                    H
556             SUPREME COURT REPORTS                            [2019] 1 S.C.R.


A            34. Afortiori, the parties did not intend to surrender the tenancy
      rights despite entering into an agreement of sale of the tenanted property.
      In other words, if the parties really intended to surrender their tenancy
      rights as contemplated in clauses (e) or (f) of Section 111 of the TP Act
      while entering into an agreement to sell the suit house, it would have
      made necessary provision to that effect by providing a specific clause
B
      in the agreement. It was, however, not done. On the other hand, we find
      that the conditions set out in the agreement do not make out a case of
      express surrender under clause (e) or implied surrender under clause (f)
      of Section 111 of the TP Act.

C            35. It is for this reason, the law laid down by this Court in the case
      of R. Kanthimathi (supra) has no application to the facts of this case
      and is, therefore, distinguishable on facts. Indeed, it will be clear from
      mere perusal of para 4 of the said decision quoted hereinbelow:
            “4. As aforesaid, the question for consideration is, whether
D           the status of tenant as such changes on the execution of an
            agreement of sale with the landlord. It is relevant at this
            junction first to examine the terms of the agreement of sale.
            The relevant portions of the agreement of sale records the
            following:

E           “I the aforesaid Mrs. Beatrice Xavier hereby agree out my
            own free will, to sell, convey and transfer the property to
            you Mrs. R. Kanthimathi wife of Mr. S. Ramaswami, 435
            Trichy Road, Coimbatore for a mutually agreed sale
            consideration of Rs.25,000/-.
F           I shall be proceeding to Coimbatore and shall execute the
            sale deed and present the same for admission and
            registration before the Registering Authority, accepting and
            acknowledge payment of the balance of consideration of
            Rs. 5000/- (Rupees five thousand only) at the time of
            registration and shall complete the transaction of sale and
G
            conveyance as the property demised has already been
            surrendered to your possession.”     (Emphasis in Original)
             36. The words highlighted in italics of the agreement were construed
      by Their Lordships for holding that these italicized words in the agreement
      clearly indicate that the parties had really intended to surrender their
H
              DR. H. K. SHARMA v. SHRI RAM LAL                                  557
                [ABHAY MANOHAR SAPRE, J.]

tenancy rights on execution of the agreement of sale and bring to an end        A
their jural relationship of the landlord and tenant.
       37. As observed supra, such is not the case here because we do
not find any such clause or a clause akin thereto in the agreement dated
13.05.1993 and nor we find that the existing conditions in the agreement
discern the intention of the parties to surrender the tenancy agreement         B
either expressly or impliedly.
       38. In the light of the foregoing discussion, we are of the considered
opinion that the tenancy in question between the parties did not result in
its determination as contemplated under Section 111 of TP Act due to
execution of the agreement dated 13.05.1993 between the parties for             C
sale of the suit house and the same remained unaffected notwithstanding
execution of the agreement dated 13.05.1993
       39. A fortiori, the respondent (lessor) was rightly held entitled to
file an application against the appellant (lessee) under Section 21 (1) (a)
of the UP Act and seek the appellant’s eviction from the suit house after       D
determining the tenancy in question.
       40. Before parting, we make it clear that we examined the terms
of the agreement dated 13.05.1993 only for deciding the question as to
whether the execution of agreement, in any manner, resulted in
                                                                                E
determination of the existing tenancy rights between the parties in relation
to the suit house in the context of the TP Act and the UP Act and not
beyond it.
        41. Coming to the next question as to whether the respondent has
made out a case of his bona fide need for his residence and the members         F
of his family as contemplated under the UP Act, suffice it to say, it being
a question of fact, the finding recorded by the High Court on this question
does not call for any interference in this appeal. It is binding on this
Court. Even otherwise, we find no good ground to interfere in the finding
for the reason that the respondent being a landlord and a retired man has
every right to live in his house with his family. Therefore, there is no        G
perversity in the finding of the High Court on this issue.
      42. In the light of the foregoing discussion, we concur with the
reasoning and the conclusion arrived at by the High Court in the impugned
order. It does not call for any interference.
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558             SUPREME COURT REPORTS                           [2019] 1 S.C.R.


A            43. The appeals thus fail and are accordingly dismissed.
             44. The appellant is, however, granted three months’ time to vacate
      the suit house subject to the appellant furnishing usual undertaking in this
      Court within two weeks from the date of this order and paying entire
      arrears of rent upto date including three months rent to be paid in advance
B     to the respondent to enable him to remain in possession for a period of
      three months from the date of this order. The arrears of rent, as directed,
      be paid by the appellant to the respondent within one month from the
      date of this order.

C
      Kalpana K. Tripathy                                         Appeals dismissed.




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