Supreme Court of India
NAND RAM (D) THROUGH LRS. & ORS.versusJAGDISH PRASAD (D) THROUGH LRS.
- Citation
- 2020 INSC 315
- Decided
- 19 March 2020
- Disposal
- Appeal(s) allowed
Holding
The Reference Court's finding on lease termination is not res judicata for the possession suit; the suit is within the 12‑year limitation period under Article 67, and the lessee is a tenant at sufferance, making the suit for possession maintainable.
Summary
The appellants, owners of land leased for 20 years to the respondent, sought possession after the lease was deemed terminated for non‑payment of rent and after part of the land was de‑notified following acquisition under the Land Acquisition Act. The respondent claimed a share of compensation for the unexpired lease term and later asserted title by adverse possession. The Supreme Court held that the Reference Court's finding that the lease had ended was limited to the compensation issue and could not operate as res judicata in the possession suit. The suit was filed within the 12‑year period prescribed by Article 67 of the Limitation Act, as the tenancy was determined by efflux of time on 23 September 1974. The respondent was held to be a tenant at sufferance, not a tenant holding over, and was estopped from denying the lessor's title. Consequently, the High Court’s limitation ruling was set aside and the decree for possession in favour of the appellants was restored.
Issues considered
- The extent to which the Reference Court's finding that the lease terminated for non‑payment of rent is res judicata in a subsequent suit for possession.
- Which provision of the Limitation Act governs the suit for possession – Article 65, 66 or 67 – and from what date the limitation period begins.
- The legal status of the lessee after lease expiry and non‑payment of rent – tenant at sufferance versus tenant holding over.
- The effect of de‑notification of the acquired land on the parties' rights and title.
- Whether the lessee is entitled to compensation for the unexpired portion of the lease.
- The admissibility of the notice produced in the Reference proceedings as primary evidence for the limitation defence.
Legislation cited
- Code of Civil Procedure, 1908s. 11, s. Order VI Rule 17
- Indian Evidence Act, 1872s. 62, s. 64
- Land Acquisition Act, 1894s. 30, s. 4, s. 48
- Limitation Act, 1963s. Article 65, s. Article 66, s. Article 67
- Transfer of Property Act, 1882s. 106, s. 108(q), s. 111, s. 116
Subjects
lease terminationnon‑payment of rentres judicatalimitation periodArticle 67tenant at sufferanceland acquisitionde‑notificationcompensation apportionmentpossession suit
Judgment
[2020] 4 S.C.R. 1009 1009
NAND RAM (D) THROUGH LRS. & ORS. A
v.
JAGDISH PRASAD (D) THROUGH LRS.
(Civil Appeal No. 9918 of 2011)
MARCH 19, 2020 B
[L. NAGESWARA RAO AND HEMANT GUPTA, JJ.]
Land Acquisition Act, 1894 – Land given on lease for 20
years to the defendant with a clause that plaintiff-lessor could seek
ejectment of the defendant-lessee from the leased premises, only
C
in case the rent for one year remained in arrear – After six years,
entire leased land acquired under s.4 of the Land Acquisition Act
– Land Acquisition Collector determined market value of the
acquired land – Dispute with regard to apportionment of
compensation referred to the Reference Court – Lessee claimed
share in the compensation on the ground that they were deprived D
of the right to retain possession of leased land for the unexpired
period of 14 years of the lease in their favour – Reference court
held that the lessee had not paid rent for more than 12 months and,
thus, in accordance with clause 9 of the lease deed, the lease had
come to an end and therefore, the lessee had no right to claim a
E
share in the compensation payable for the land leased to them –
After about two years, a part of the land acquired stood de-notified
and the said land continued to be in possession of the lessee –
Thereafter, the lessor filed suit for possession of the said land i.e.
the land leased that continued in possession with the lessee post
the de-notification – Trial court decreed the suit – In appeal F
against the said judgment, the lessee sought amendment of his
written statement asserting that the suit was barred by limitation
under Art. 66 of the Schedule to the Limitation Act – First Appellate
Court did not permit the lessee to amend the written statement but
the question of limitation was allowed to be raised on the basis of
G
material available on record – First Appellate Court did not find
any merit in the argument raised by the lessee that the award
passed by the Reference Court operated as res judicata – First
Appellate Court found that the plea of forfeiture was totally
inconsistent and contradictory to the averments made in the
original statement – High Court allowed the second appeal filed H
1009
1010 SUPREME COURT REPORTS [2020] 4 S.C.R.
A by lessee holding that the finding recorded in the award that upon
non-payment of rent for 12 months, the lease had come to an end,
had attained finality – Therefore, such finding would operate as
res judicata – High Court further held that period of limitation
under Art.67 of the Limitation Act is 12 years, the period for which
commences from the date when the tenancy is determined and since
B
the tenancy was determined in 1960, the suit filed in 1981 was
beyond the period of limitation – Hence instant appeal – Held:
The issue in the proceedings under s.30 of the Act, before the
Reference Court was restricted to the apportionment of
compensation, consequent to the acquisition of the leased land –
C The issue was restricted to the payment of compensation on account
of the unexpired period of lease and issue was not the title of the
lessor or the eviction of the lessee – Before the award was
announced by the Reference Court, part of the land acquired was
de-notified – After denotification of the land, the lessee continued
to be in possession and the title of the lessor as owners stood
D
restored – De-notification under s.48 of the Act is possible only
when possession has not been taken and the land has not been
vested in the State – Once the land was de-notified, the status of
the parties as they existed prior to s.4 notification stood revived –
Finding returned in the award of the Reference Court that the lease
E stood determined on account of non-payment of rent was a finding
made by the Reference Court for a limited purpose i.e. not to accept
the lessee’s claim for compensation – Such finding cannot be
binding on the parties in a suit for possession based on title or as
a lessor against a lessee – Limitation Act, 1963 – Art.67.
F Limitation Act, 1963: Art.67 – Suit filed within 12 years of
the determination of the tenancy by efflux of time – The defendant
has not proved forfeiture of tenancy prior to the expiry of lease
period – Mere non-payment of rent does not amount to forfeiture
of tenancy – It only confers a right on the landlord to seek
possession – The plaintiffs filed a suit for possession against the
G defendant on the basis of determination of tenancy, such suit is
governed by Art.67 alone – In view of this, the suit for possession
would not be covered by Art.65 since there is a specific article i.e.
Art.67 dealing with right of the lessor to claim possession after
determination of tenancy – The appellants-plaintiffs claimed
H possession from the defendant alleging him to be the tenant and
NAND RAM (D) THR. LRS. v. 1011
JAGDISH PRASAD (D) THR. LRS.
that he had not handed over the leased property after A
determination of the lease – Therefore, such suit would fall within
Art.67 of the Limitation Act – Such suit having been filed within
12 years of the determination of lease by efflux of time, the same
is within the period of limitation.
Res Judicata: s.11 of the Code bars the subsequent Court B
to try any suit or issue which has been directly and substantially
issue in a former suit – The issue before the Reference Court was
apportionment of compensation and such issue having been decided
against the defendant, the reference to notice for termination of
tenancy does not operate as res judicata – Therefore, the finding
recorded by the High Court that the order of the Reference Court C
operated as res judicata was clearly not sustainable – Code of Civil
Procedure, 1908 – s.11.
Lease: Status of tenant – Tenant at sufferance or tenant
holding over – The defendant was inducted as a lessee for a period
of 20 years – The lessor had a right to seek possession in terms D
of clause 9 of the lease deed – The mere fact that the lessor had
not chosen to exercise that right will not foreclose the rights of
the lessor as owner of the property leased – After the expiry of
lease period, and in the absence of payment of rent by the lessee,
the status of the lessee will be that of tenant at sufferance and not E
a tenant holding over – s.116 of the TP Act confers the status of
a tenant holding over on a yearly or monthly basis keeping in view
the purpose of the lease, only if the lessor accepts the payment of
lease money – If the lessor does not accept the lease money, the
status of the lessee would be that of tenant at sufferance.
F
Estoppel: When lessee continued to be in possession of the
land leased by way of registered lease deed and admitted the
ownership of the lessor before the Reference Court, it operates as
estoppel against the lessee in respect of the title of the lessor.
Adverse Possession: Respondent claimed adverse possession G
and claimed possession as owner against a person, who has
inducted him as tenant – The respondent was to prove his
continuous, open and hostile possession to the knowledge of true
owner for a continuous period of 12 years – The respondent has
not led any evidence of hostile possession to the knowledge of true
owner at any time before or after the award of the reference Court H
1012 SUPREME COURT REPORTS [2020] 4 S.C.R.
A nor he has surrendered possession before asserting hostile,
continuous and open title to the knowledge of the true owner –
The question of adverse possession without admitting the title of
the real owner is not tenable.
Allowing the appeal, the Court
B HELD: 1. The issue in the proceedings under Section 30
of the Act, before the Reference Court was restricted to the
apportionment of compensation, consequent to the acquisition
of the leased land. The argument was raised that the lessee had
another 14 years of the lease period, therefore, the lessee
C claimed compensation in lieu of the unexpired lease period. The
issue was restricted to the payment of compensation on account
of the unexpired period of lease. The issue in question was not
the title of the appellants or the eviction of the respondent. Still
further, the finding of the Reference Court is that the respondent
had no right to claim a share in the compensation. The
D entitlement of the appellants to claim possession from the tenant
was not an issue in the previous proceedings. Before the award
was announced by the Reference Court, part of the land acquired
was de-notified. Once the land was de-notified, the status of the
parties as they existed prior to notification under Section 4 of
E the Act stood revived. [Paras 23, 24] [1026-F-H; 1027-A-B]
Sajjadanashin Sayed Md. B.E. Edr. v. Musa Dadabhai
Ummer [2000] 1 SCR 1095 ; Ishwer Singh v. Sarwan
Singh AIR 1965 SC 948 ; Syed Mohd. Salie Labbai
v. Mohd. Hanifa (1976) 4 SCC 780 : [1976] 3 SCR
F 721 ; Run Bahadur Singh v. Lucho Koer ILR (1885)
11 Cal 301 ; Asgar & Ors. v. Mohan Varma and
Others [2019] 2 SCR 664 - referred to.
2. The High Court has relied upon the findings recorded
by the Reference Court that the tenancy stood terminated so
G as to deny the apportionment of the compensation in respect of
acquisition of land. The issue examined by the Reference Court
was whether the defendant was entitled to any share of
compensation awarded for the land acquired. Such issue was
decided against the defendant. It is this finding that the defendant
is not entitled to any share of the compensation awarded which
H operates as res judicata in a subsequent suit and not the
NAND RAM (D) THR. LRS. v. 1013
JAGDISH PRASAD (D) THR. LRS.
reasonings recorded by the Court for arriving at such a finding. A
[Para 25] [1027-C-D]
Union of India v. Nanak Singh AIR 1968 SC 1370:
[1968] 2 SCR 887 ; Mathura Prasad Bajoo Jaiswal
& Ors. v. Dossibai N.B. Jeejeebhoy (1970) 1 SCC 613
: [1970] 3 SCR 830 – relied on. B
3. The finding returned in the award of the Reference
Court that the lease stood determined on account of non-
payment of rent was a finding made by the reference Court for
a limited purpose i.e. not to accept the defendant’s claim for
compensation. Such finding cannot be binding on the parties in C
a suit for possession based on title or as a lessor against a
lessee. Section 11 of the Code bars the subsequent Court to try
any suit or issue which has been directly and substantially issue
in a former suit. The issue before the Reference Court was
apportionment of compensation and such issue having been
D
decided against the defendant, the reference to notice for
termination of tenancy does not operate as res judicata. [Para
27] [1028-E-G]
4. In respect of second question of law examined by the
High Court that the plaintiff’s suit was barred by limitation is
E
based upon the notice produced in proceedings before the
Reference Court as Ex.A-3. The reference to such notice was
made in an application for amendment of the written statement
under Order VI Rule 17 of the Code filed before the First
Appellate Court. The First Appellate Court allowed the
defendant to raise a plea of limitation without amending the F
written statement. Thus, the notice in proceedings before the
Reference Court was never produced in evidence in the suit for
possession and such primary evidence was not before the Court.
In terms of Section 62 of the Evidence Act, primary evidence
means a document itself produced for inspection by the Court.
G
Section 64 of the Evidence Act stipulates that documents must
be proved by primary evidence except in certain cases when
secondary evidence can be led. The defendant has not led any
evidence, including secondary evidence of the alleged notice said
to be served by the plaintiffs. In the absence of primary or
secondary evidence available in the suit for possession, the H
1014 SUPREME COURT REPORTS [2020] 4 S.C.R.
A reference to such notice as the starting point of limitation is
clearly erroneous and not sustainable. [Para 28] [1028-H; 1029-
A-C]
5. The defendant was inducted as a lessee for a period of
20 years. Even if the lessee had not paid rent, the status of the
B lessee would not change during the continuation of the period
of lease. The lessor had a right to seek possession in terms of
clause 9 of the lease deed. The mere fact that the lessor had
not chosen to exercise that right will not foreclose the rights of
the lessor as owner of the property leased. After the expiry of
lease period, and in the absence of payment of rent by the lessee,
C
the status of the lessee will be that of tenant at sufferance and
not a tenant holding over. Section 116 of the TP Act confers the
status of a tenant holding over on a yearly or monthly basis
keeping in view the purpose of the lease, only if the lessor
accepts the payment of lease money. If the lessor does not
D accept the lease money, the status of the lessee would be that
of tenant at sufferance. [Para 29] [1029-D-F]
Bhawanji Lakhamshi and Others v. Himatlal Jamnadas
Dani and Others (1972) 2 SCC 388 : [1972] 2 SCR
890 ; Badrilal v. Municipal Corpn. of Indore (1973) 2
E SCC 388 : [1973] 3 SCR 15 ; R.V. Bhupal Prasad v.
State of A.P and Others (1995) 5 SCC 698 : [1995] 2
Suppl. SCR 658 ; Sevoke Properties Ltd. v. West
Bengal State Electricity Distribution Company Ltd. AIR
2019 SC 2664 ; Bisheshar Nath v. Kundan & Ors.
ILR (1922) 44 All 583 ; Sheo Dulare Lal Sah v. Anant
F
Ram & Anr. AIR 1954 All. 475 – referred to.
6. The suit of the plaintiffs filed within 12 years of the
determination of the tenancy by efflux of time is within the period
of limitation. The defendant has not proved forfeiture of tenancy
prior to the expiry of lease period. Mere non-payment of rent
G
does not amount to forfeiture of tenancy. It only confers a right
on the landlord to seek possession. The appellants-plaintiffs have
claimed possession from the defendant alleging him to be the
tenant and that he had not handed over the leased property after
determination of the lease. Therefore, such suit would fall within
H Article 67 of the Limitation Act. Such suit having been filed on
NAND RAM (D) THR. LRS. v. 1015
JAGDISH PRASAD (D) THR. LRS.
13th March, 1981 within 12 years of the determination of lease A
by efflux of time on 23 rd September, 1974, the same is within
the period of limitation. Thus, the findings recorded by the High
Court are clearly erroneous in law and are, thus, set aside. [Paras
38, 39] [1038-G-H; 1039-A-C]
MEC India Pvt. Ltd. v. Lt. Col. Inder Maira & Ors. 80 B
(1999) Delhi Law Times 67 ; Sidram Lachmaya, heir
and legal representative of deceased Lachmaya
Shivram Madur, heir of Original Plaintiff v. Mallaya
Lingaya Chilaka ILR 1949 Bom 135 (FB) : (1948)
SCC OnLine Bom – referred to. C
7. The respondent continued to be in possession of the
land leased vide registered lease deed dated 22nd September,
1954. The respondent has admitted the ownership of the
appellants before the Reference Court. Such plea operates as
estoppel against the respondent in respect of the title of the D
appellants. However, the claim of compensation put forward by
the respondent was declined for the reason that non-payment
of rent disentitles the respondent from compensation. In the
present proceedings, the respondent has denied his status as
that of a tenant but claimed title in himself. The respondent E
claimed adverse possession and claimed possession as owner
against a person, who has inducted him as tenant. The
respondent was to prove his continuous, open and hostile
possession to the knowledge of true owner for a continuous
period of 12 years. The respondent has not led any evidence of F
hostile possession to the knowledge of true owner at any time
before or after the award of the reference Court nor he has
surrendered possession before asserting hostile, continuous and
open title to the knowledge of the true owner. The question of
adverse possession without admitting the title of the real owner G
is not tenable. [Para 41] [1039-D-G]
Uttam Chand (D) through LRs. v. Nathu Ram (D)
through LRs & Ors. Civil Appeal No. 190 of 2020
decided on 15th January, 2020 : (2020) SCC OnLine
SC 37 – relied on. H
1016 SUPREME COURT REPORTS [2020] 4 S.C.R.
A Case Law Reference
[2000] 1 SCR 1095 referred to Para 20
AIR 1965 SC 948 referred to Para 20
[1976] 3 SCR 721 referred to Para 20
B [2019] 2 SCR 664 referred to Para 22
[1968] 2 SCR 887 relied on Para 25
[1970] 3 SCR 830 relied on Para 26
[1972] 2 SCR 890 referred to Para 29
C [1973] 3 SCR 15 referred to Para 29
[1995] 2 Suppl. SCR 658 referred to Para 29
AIR 2019 SC 2664 referred to Para 29
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 9918
of 2011
D From the Judgment and Order dated 12.11.2010 of the High
Court of Delhi at New Delhi in RSA No.96 of 2001
K.V. Vishwanathan, Sr. Adv., Siddhartha Tanwar, Sanjay Jain,
Apoorv Singhal, Adv. for the Appellants.
Harish Pandey, V.V. Gautam, Sahil Patel, Sawan Prasad, Shree
E
Pal Singh, Vijay K. Gupta, Mehul Gupta, Advs. for the Respondent.
The Judgment of the Court was delivered by
HEMANT GUPTA, J.
1. The challenge in the present appeal is to an order passed by
F the High Court of Delhi on 12th November, 2010 whereby the appeal
filed by the defendant was allowed and the suit for possession of land
comprising in Khasra No. 9/19 measuring 3 Bighas 11 Biswas was
dismissed.
2. The appellants-plaintiff No. 1 and plaintiff Nos. 2 to 8, as legal
heirs of one Bhagwana, filed a suit for possession asserting that they
G
were owners in possession of land measuring 3 Bighas 11 Biswas
comprising in Khasra No.9/19 and land measuring 1 Bigha 16 Biswas
comprising in Khasra No. 9/20/2, total measuring 5 Bighas 7 Biswas
in the revenue estate of Village Tatarpur, Delhi.
3. The land measuring 1 Bigha 19 Biswas out of Khasra
H No. 9/19 and 16 Biswas out of Khasra No. 9/20/2, in total measuring
NAND RAM (D) THR. LRS. v. 1017
JAGDISH PRASAD (D) THR. LRS. [HEMANT GUPTA, J.]
2 Bighas 15 Biswas was taken on lease for 20 years commencing from A
23rd September, 1954 till 22nd September, 1974 on payment of Rs.235/
- per year by Jagdish Prasad, the defendant. It was agreed between
the parties that it will not be open to the plaintiff-lessor to seek ejectment
of the defendant-lessee from the leased premises, however, if the rent
for one year remained in arrear, then the lessor would have the right
to eject the lessee. The relevant conditions read as under: B
“7. Before the expiry of said lease it shall not be within the rights
of the lessor i.e., party of the First Part to seek ejectment of
party of the second part from the leased premises.
xx xx xx C
9. If rent for one year remains in arrears, then in that eventuality
the lessor i.e., party of the First Part will have the right to eject
the lessee i.e., party of the Second Part from the property leased
and the party of the Second Part will remove all his malba from
the land leased and deliver vacant possession to the party of the
First Part.” D
4. The entire leased land was acquired pursuant to the notification
dated 24th August 1959 under Section 4 of the Land Acquisition Act,
1894 1 . The Land Acquisition Collector determined a sum of
Rs. 28,284.85 as the market value of the land acquired including the
super structure upon it. A dispute arose with regard to apportionment E
of compensation and the same was referred to the Reference Court.
In such proceedings, three sets of claims were raised, one by the
appellants as owners of the land, another by Ram Chand and Jagdish
Prasad, as lessee of the land and certain other persons in occupation
of the hutments on the land acquired. The defendant-respondent
F
claimed apportionment of compensation in lieu of his lease-hold rights
by raising a claim under Section 30 of the Act. The relevant paras from
such claim petition filed by the defendant read as under:
“1. That Shri Nand Ram and Shri Bhagwana sons of Lakhi
Ram were the owners of land comprised in Khasra
Nos. 9/19 and 9/20/2 situated at Mauza Tatarpur, Delhi G
State.
2. That the said Shri Nand Ram and Shri Bhagwana leased
out land measuring 1 bigha 19 biswa out of Khasra No.
1
for short, ‘Act’ H
1018 SUPREME COURT REPORTS [2020] 4 S.C.R.
A 9/19 and 16 biswa out of Khasra No.9/20/2 to Shri
Jagdish Prasad s/o Shri Daurilal, resident of Tatarpur
the claimant herein for a period of twenty years by lease
deed dated 22.9.54 and registered on 11.10.54.”
5. The respondent-defendant claimed share in the compensation
B for 2 Bighas 15 Biswas of land on the ground that they were deprived
of the right to retain possession of that land for the unexpired period of
14 years of the lease in their favour, which was for 20 years in total.
The Reference Court framed the following issues to determine the claim
of rival claimants:
C “1. Whether Jagdish and Ram Chand mentioned at Items
No.27 and 28 are entitled to any share of the
compensation awarded for land measuring 2 Bighas and
15 Biswas which was on lease with them and if so, to
how much?
D 2. Whether Nand Ram and Bhagwana have any lien on
Rs.2263.20 for the structure belonging to Jagdish and
Ram Chand. If so, in what manner and to what extent?
3. Whether the Jhugis on the land measuring 2 Bighas and
15 Biswas leased out in favour of Jagdish were built by
E Dharam Chand etc. at their own expenses and they are
entitled to receive the compensation in respect of their
Jhuggis?
4. Relief.”
F 6. The learned Additional District Judge, in such reference, in
its award dated 21 st October, 1961 (Ex.PW1/12), held that the
respondent had not paid rent for more than 12 months and, thus, in
accordance with clause 9 of the lease deed, the lease had come to an
end. Therefore, the defendant had no right to claim a share in the
compensation payable for the land leased to them. The Reference Court
G held as under:
“8. Jagdish Chand as R.W.4 has admitted that he did not pay
any rent to Nand Ram and Bhagwan after the receipt of the
notice for acquisition of the land. Nand Ram as A.W.2 has state
rent has not been paid to him for two years and that he served
H a notice also on the lessee. Under clause 9 of the lease deed
NAND RAM (D) THR. LRS. v. 1019
JAGDISH PRASAD (D) THR. LRS. [HEMANT GUPTA, J.]
Ex.A/15, the lease is to come to an end in case rent is not paid A
for 12 months. From the evidence on the record it is proved
that Ram Chand and Jagdish have not paid rent for more than
12 months and thus in accordance with clause 9 of the lease deed
their lease had come to an end and therefore they have no right
to claim a share in the compensation payable for the land leased
B
out to them. I decide this issue against Jagdish Prasad and Ram
Chand.”
7. It may be stated that a part of the land acquired, comprising
in Khasra No.9/19 was de-notified vide notification dated 18th June,
1961 under Section 48(1) of the Act. Such land, measuring 1 Bigha 19
Biswas continued to be in possession of the defendant-lessee i.e. C
respondent herein.
8. Thereafter, the plaintiffs served a notice dated 12th February,
1981 claiming possession of the land comprising the aforementioned
Khasra No. 9/19, measuring 1 Bigha 19 Biswas, i.e. the land leased
that continued in possession with the defendant post the de-notification. D
The suit was filed by the plaintiffs on 13th March, 1981. In the written
statement filed by the defendant, it was asserted that the land which
was in possession of the defendant did not form a part of the alleged
lease deed and that the defendant was in possession of this land in his
own legal right. The defendant contended that if the plaintiffs had any E
right in the land in possession of the defendant, then the defendant had
become the owner of the land in question by adverse possession. It
was pleaded as under:
“10. That the land in possession of defendant does not lie in the
alleged khasra no. and is not covered by any alleged lease deed. F
Without prejudice to this plea in alternative it is submitted that
the lease, if any, has already come to an end, about more than
22 years back, and defendant is owner in possession in his own
rights.”
9. The learned trial court decreed the suit after evidence was G
led by the parties. The certified copy of the original lease deed
was produced as PW1/1 in respect of Khasra No. 9/19 and Khasra
No.9/20. The notice regarding termination of lease as well as the
revenue record was produced to prove the ownership of the plaintiffs-
appellants. The trial court also referred to the award passed by the
Reference Court (Ex.PW1/12) wherein the defendant-respondent had H
1020 SUPREME COURT REPORTS [2020] 4 S.C.R.
A claimed himself to be a tenant. The learned trial court returned the
following findings:
“Thus, the entire available record proves, conclusively that the
plaintiffs are the owners of the suit land and that the suit land
falls in Khasra No.9/19 Village Tatarpur, Delhi as the land in suit
B is no longer under acquisition, and neither is the land in possession
of the D.D.A. as is indicated by Ex.PW1/13. DW2 has been
unable to deny that there has been a notification for issuance of
denotification of acquisition of Khasra No.9/19 Village Tatarpur,
Delhi Ex.PW1/12, Ex.PW5/1, Ex.PW1/13, are all indications of
admissions by the defendant that the plaintiffs are owners of the
C suit land and that the defendant was a lessee of the same under
a registered lease deed dt.22.9.54 under Nand Ram and
Bhagwana.
Thus, issue No. 3 is decided in favour of the plaintiff and it is
hereby held that the land in suit falls in Khasra No.9/19 Village
D Tatarpur, Delhi and that the plaintiffs are the owners of the same,
as mere receipt of compensation for acquisition of land which
has been denotified from acquisition does not in any manner make
the plaintiff any less the owners of the land in suit. In any event
the plaintiffs are certainly the landlords of the land in suit in terms
E of Ex.PW1/14 the lease deed, executed between Bhagwana and
Nand Ram, and the defendant, and execution thereof having been
admitted in the claim of the defendant in Ex.PW5/1.”
10. In appeal against the said judgment and decree, the defendant
moved an application under Order VI Rule 17 of the Civil Procedure
F Code, 19082 to amend his written statement and asserted that the suit
was barred by limitation under Article 66 of the Schedule to the
Limitation Act, 19633. The defendant asserted that the lease had come
to an end when a notice for forfeiture of termination of the lease dated
23rd September, 1954 was issued by the plaintiffs which is Ex.A-3 in
the proceedings before the Reference Court. In reply to such
G application, the stand of the plaintiffs was that the termination of tenancy
is not possible vide the said notice in view of Sections 111 and 106 of
the Transfer of Property Act, 18824 as the lease is said to be terminated
2
for short, ‘Code’
3
for short, ‘Limitation Act’
4
H for short, ‘TP Act’
NAND RAM (D) THR. LRS. v. 1021
JAGDISH PRASAD (D) THR. LRS. [HEMANT GUPTA, J.]
w.e.f. 23rd September, 1959 whereas the notice is required to be served A
for at least 15 days’ time expiring on the last date of tenancy month.
The learned First Appellate Court did not permit the defendant to amend
the written statement but the question of limitation was allowed to be
raised on the basis of material available on record.
11. The learned First Appellate Court affirmed the findings B
recorded by the trial court. It did not find any merit in the argument
raised by the defendant that the award passed by the Reference Court
(Ex.PW1/12) produced by the appellants operated as res judicata. The
First Appellate Court found that the plea of forfeiture was totally
inconsistent and contradictory to the averments made in the original
statement. Further, that the plea of limitation was nothing but an C
ingenuity of the counsel for the defendant.
12. Thereafter, the defendant preferred a second appeal. The
High Court framed the following two substantial questions of law:
“1. Whether the judgment rendered by the Land Acquisition D
Court on 21st August, 1961 (Ex.PW-1/12) operates as
res judicata between the parties as regards the title of
the suit property?
2. If the first question is answered in the negative, whether
the suit filed by the Respondent for possession is barred E
by time?”
13. The High Court allowed the second appeal holding that the
finding recorded in the award (Ex.PW1/12) that upon non-payment of
rent for 12 months, the lease had come to an end, had attained finality.
Therefore, such finding would operate as res judicata. The High Court F
held as under:
“17. Ex.PW1/12 having been rendered by a court of competent
jurisdiction had returned a finding that the lease between the
parties stood determined as rent since the last 12 months had
not been paid by the appellant/defendant. Reference to the notice
G
dated 13.9.1960 terminating the lease had also been made. There
is no dispute to this factual submission which is even otherwise
a part of the record. In these circumstances, it cannot be said
that this finding Ex.PW1/12 was only an incidental or obiter
observation made by the Land Acquisition Court/ADJ which is
not binding on the parties. Ex.PW1/12 had while adverting to the H
1022 SUPREME COURT REPORTS [2020] 4 S.C.R.
A notice dated 13.9.1960 categorically held that lease between the
parties stood determined in terms of clause 9.”
14. The High Court further held that period of limitation under
Article 67 of the Limitation Act is 12 years, the period for which
commences from the date when the tenancy is determined. Since the
B tenancy was determined on 23th September, 1960, the suit filed on
13th March, 1981 was beyond the period of limitation.
15. Mr. Vishwanathan, learned senior counsel for the appellants
raised two-fold arguments. First, that Harpal Singh, one of the plaintiffs,
died on 4th December, 1997 during the pendency of the appeal before
C the First Appellate Court. Since his legal representatives were not
brought on record, the appeal stood abated. Consequently, the High
Court could not have entertained the second appeal and reversed the
judgment and decree passed by the First Appellate Court. Second, that
clause 9 of the lease did not mean that if the rent for one year was not
paid, the lease will stand terminated but only that the lessor would get
D a right to eject the lessee. It was further argued that the defendant
had not placed on record the pleadings of the previous litigation which
alone would determine whether the subsequent proceedings were barred
by the principles of res judicata. It was argued that the issue before
the Reference Court was restricted to the entitlement of payment of
E compensation on acquisition of lease hold rights. The right of the
landlord to claim possession was not a subject matter of reference nor
could it be a subject matter of such reference. Therefore, the decision
of the Reference Court was neither res judicata nor constructive res
judicata within the meaning of Explanation IV to Section 11 of the
Code.
F
16. It was also argued that the suit was within the period of
limitation as neither Article 67 nor Article 66 would be applicable but
that the plaintiffs had a right to seek possession under Article 65 of the
Limitation Act, which confers a right on the plaintiffs to seek possession
from a person who is in possession, by virtue of his title. It is for the
G defendant to prove that his possession is open, continuous and
uninterrupted so as to ripen the adverse possession into ownership. It
was argued that the defendant had not denied the tenancy prior to the
filing of the present suit for possession. Since the defendant continued
to be in possession after the expiry of lease without any payment of
H rent, the possession of the defendant was not that of a tenant holding
NAND RAM (D) THR. LRS. v. 1023
JAGDISH PRASAD (D) THR. LRS. [HEMANT GUPTA, J.]
over but that of a tenant at sufferance. In terms of Section 116 of the A
TP Act, the acceptance of rent by the appellants will alone create a
new tenancy or the status of the tenant as tenant holding over. It was
open to the appellants to seek eviction on account of the non-payment
of rent, but the possession of the respondent could not ripen into title
as his possession was that of a tenant at sufferance. It was, thus, argued
B
that the possession of the defendant was merely permissive possession
under a lease deed, therefore, the plea of adverse possession was not
available to the defendant.
17. The defendant-respondent contended that in the award of
the Reference Court (Ex.PW1/12), there was a finding to the effect
that the lease stood determined. The reliance is placed upon the findings C
recorded by the High Court that the tenancy stood terminated vide notice
dated 13th September, 1960 (sic 23rd September, 1960). Therefore, the
period of limitation commenced from the date of the notice terminating
the lease or in any case from the date of the award of the Reference
Court, thus, the suit filed by the plaintiffs was barred by limitation. D
18. We have heard the learned counsel for the parties. The
question that is required to be examined is as to which Article of the
Limitation Act would be applicable in the present case i.e. Article 65,
as asserted by the appellants or Articles 66 or 67, as asserted by the
respondent and that from which date the period of limitation would E
commence. For convenience, the Articles are reproduced hereunder:
Description of Suit Period of Time from which
limitation period begins to run
65. For possession of immovable Twelve When the possession of
property or any interest years the defendant becomes
therein based on title. adverse to the plaintiff. F
66. For possession of immovable Twelve When the forfeiture is
property when the plaintiff years incurred or the condition
has become entitled to is broken.
possession by reason of any
forfeiture or breach of
condition. G
67. By a landlord to recover Twelve When the tenancy is
possession from a tenant. years determined.
19. Section 111 of the TP Act provides for determination of lease
in the eventualities mentioned therein. Section 111 of the TP Act reads
thus: H
1024 SUPREME COURT REPORTS [2020] 4 S.C.R.
A “111. Determination of lease. - A lease of immoveable property
determines-
(a) by efflux of the time limited thereby:
xx xx xx
B (g) by forfeiture; that is to say, (1) in case the lessee breaks
an express condition which provides that, on breach
thereof, the lessor may re-enter; or (2) in case the lessee
renounces his character as such by setting up a title in
a third person or by claiming title in himself; or (3) the
lessee is adjudicated an insolvent and the lease provides
C that the lessor may re-enter on the happening of such
event; and in any of these cases the lessor or his
transferee gives notice in writing to the lessee of his
intention to determine the lease;
(h) on the expiration of a notice to determine the lease, or
D to quit, or of intention to quit, the property leased, duly
given by one party to the other.”
20. In a judgment reported as Sajjadanashin Sayed Md. B.E.
Edr. v. Musa Dadabhai Ummer5 this Court held that if a matter was
only “collaterally or incidentally” in issue and decided in an earlier
E proceeding, the finding therein would not ordinarily be res judicata in
a latter proceeding where the matter is directly and substantially in issue.
This Court found that the statement of law delineated by Mulla 6 is the
correct one, that if the issue was “necessary” to be decided for
adjudicating on the principal issue and was decided, it would have to
F be treated as “directly and substantially” in issue and if it is clear that
the judgment was in fact based upon that decision, then it would be
res judicata in a latter case. Such is the test for deciding into which
category a case falls. One has to examine the plaint, the written
statement, the issues and the judgment to find out if the matter was
directly and substantially in issue (Ishwer Singh v. Sarwan Singh7
G and Syed Mohd. Salie Labbai v. Mohd. Hanifa8 ). Which matters are
directly in issue and which are only collaterally or incidentally in issue,
5
(2000) 3 SCC 350
6
15 Edn., P. 104
7
AIR 1965 SC 948
8
H (1976) 4 SCC 780
NAND RAM (D) THR. LRS. v. 1025
JAGDISH PRASAD (D) THR. LRS. [HEMANT GUPTA, J.]
must be determined on the facts of each case. A material test to be A
applied is whether the court considers the adjudication of the
issue material and essential for its decision.
21. This Court in Sajjadanashin Sayed approved a decision by
the Privy Council reported as Run Bahadur Singh v. Lucho
Koer9 wherein claim of rent from a tenant on the basis survivorship of B
Joint Hindu Family property was raised by “c” brother of the deceased.
Two issues were framed in such suit (1) whether the deceased alone
received the whole rent of the property in his lifetime, or whether the
rent was received by him jointly with his brother C; (2) whether any
rent was due and if so, how much was due from B. The finding on the C
first issue was that the deceased alone received the whole rent in his
lifetime. Subsequently, C sued the widow for declaration that he and
his brother were joint, and he claimed the property by right of
survivorship. The question arose whether the deceased and C were joint
or separate. The earlier finding was held not res judicata inasmuch
as the matter was not “directly and substantially” in issue in the earlier D
suit. It was in issue in the earlier suit only “collaterally or incidentally”,
as it did not cover the entire question of C’s title but related merely to
the joint or separate receipt of rent.
22. In Asgar & Ors. v. Mohan Varma and Others 10, the
predecessors-in-interest of the appellant relied upon the sale of land E
by M/S K. J. Plantations. The predecessor-in-interest of M/s. K. J.
Plantation was the lessee for a period of 75 years vide lease deed dated
25th November, 1897. The lease expired by efflux of time in 1972. In
the meantime, the land was transferred by the lessee to different
persons. The High Court held the assignees were tenants at sufferance F
and were not entitled to any estate or property. Before this Court, the
argument was raised that they were entitled to remain in possession
until the compensation was paid for the improvements made in terms
of provisions of Kerala Land Conservancy Act, 1957. Such claim was
resisted by the land owners inter alia on the ground that the lease had
G
come to an end, therefore, the assignees from the lease were tenant
at sufferance and the finding in proceedings under Order XXI Rule 97
of the Code would operate as res judicata. This Court held as under:
9
ILR (1885) 11 Cal 301 : 12 IA 23 (PC)
10
Civil Appeal No. 1500 of 2019 decided on 05.2.2019 H
1026 SUPREME COURT REPORTS [2020] 4 S.C.R.
A “40. We are not inclined to decide this question on a
priori consideration, for the simple reason that under the CPC,
both res judicata (in the substantive part of Section 11) and
constructive res judicata (in Explanation IV) are embodied as
statutory principles of the law governing civil procedure. The
fundamental policy of the law is that there must be finality to
B litigation. Multiplicity of litigation ensures to the benefit,
unfortunately for the decree holder, of those who seek to delay
the fruits of a decree reaching those to whom the decree is
meant. Constructive res judicata, in the same manner as the
principles underlying res judicata, is intended to ensure that
C grounds of attack or defence in litigation must be taken in one
of the same proceeding. A party which avoids doing so does it
at its own peril. In deciding as to whether a matter might have
been urged in the earlier proceedings, the court must ask
itself as to whether it could have been urged. In deciding
whether the matter ought to have been urged in the earlier
D proceedings, the court will have due regard to the ambit of
the earlier proceedings and the nexus which the matter bears
to the nature of the controversy. In holding that a matter
ought to have been taken as a ground of attack or defence
in the earlier proceedings, the court is indicating that the
E matter is of such a nature and character and bears such a
connection with the controversy in the earlier case that the
failure to raise it in that proceeding would debar the party
from agitating it in the future.”
(emphasis supplied)
F 23. The issue in the proceedings under Section 30 of the Act,
before the Reference Court was restricted to the apportionment of
compensation, consequent to the acquisition of the leased land. The
argument was raised that the lessee had another 14 years of the lease
period, therefore, the lessee claimed compensation in lieu of the
unexpired lease period. The issue was restricted to the payment of
G compensation on account of the unexpired period of lease. The issue
in question was not the title of the appellants or the eviction of the
respondent. Still further, the finding of the Reference Court, as
reproduced above, is that the respondent had no right to claim a share
in the compensation. The entitlement of the appellants to claim
H possession from the tenant was not an issue in the previous proceedings.
NAND RAM (D) THR. LRS. v. 1027
JAGDISH PRASAD (D) THR. LRS. [HEMANT GUPTA, J.]
24. Before the award was announced by the Reference Court, A
part of the land acquired was de-notified. After denotification of the
land, the respondent continued to be in possession and the title of the
appellants as owners stood restored. De-notification under Section 48
of the Act is possible only when possession has not been taken and
the land has not been vested in the State. The effect of de-notification
B
is that the land comprising Khasra No. 9/19 was never deemed to be
acquired. Once the land was de-notified, the status of the parties as
they existed prior to notification under Section 4 of the Act stood
revived.
25. The High Court has relied upon the findings recorded by the
Reference Court that the tenancy stood terminated so as to deny the C
apportionment of the compensation in respect of acquisition of land.
The issue examined by the Reference Court was whether the defendant
was entitled to any share of compensation awarded for the land
acquired. Such issue was decided against the defendant. It is this
finding that the defendant is not entitled to any share of the D
compensation awarded which operates as res judicata in a subsequent
suit and not the reasonings recorded by the Court for arriving at such
a finding. In a judgment reported as Union of India v. Nanak Singh11,
it has been held that what operates as res judicata is the decision and
not the reasons given by the Court in support of the decision.
E
26. In another judgment reported as Mathura Prasad Bajoo
Jaiswal & Ors. v. Dossibai N.B. Jeejeebhoy12, a three-Judge Bench
of this Court held that the previous decision on a matter in issue alone
is res judicata, the reasons for such decision are not res judicata.
This Court held as under:
F
“5… A decision of a competent Court on a matter in issue may
be res judicata in another proceeding between the same parties:
the “matter in issue” may be an issue of fact, an issue of law, or
one of mixed law and fact. An issue of fact or an issue of mixed
law and fact decided by a competent Court is finally determined
between the parties and cannot be re-opened between them in G
another proceeding. The previous decision on a matter in issue
alone is res judicata: the reasons for the decision are not
res judicata. A matter in issue between the parties is the right
11
AIR 1968 SC 1370
12
(1970) 1 SCC 613 H
1028 SUPREME COURT REPORTS [2020] 4 S.C.R.
A claimed by one party and denied by the other, and the claim of
right from its very nature depends upon proof of facts and
application of the relevant law thereto. A pure question of law
unrelated to facts which give rise to a right, cannot be deemed
to be a matter in issue. When it is said that a previous decision
is res judicata, it is meant that the right claimed has been
B
adjudicated upon and cannot again be placed in contest between
the same parties. A previous decision of a competent Court on
facts which are the foundation of the right and the relevant law
applicable to the determination of the transaction which is the
source of the right is res judicata. A previous decision on a matter
C in issue is a composite decision: the decision on law cannot be
dissociated from the decision on facts on which the right is
founded. A decision on an issue of law will be as res judicata in
a subsequent proceeding between the same parties, if the cause
of action of the subsequent proceeding be the same as in the
previous proceeding, but not when the cause of action is different,
D
nor when the law has since the earlier decision been altered by
a competent authority, nor when the decision relates to the
jurisdiction of the Court to try the earlier proceeding, nor when
the earlier decision declares valid a transaction which is prohibited
by law.”
E 27. Thus, the finding returned in the award of the Reference
Court (Ex. PW1/12) that the lease stood determined on account of non-
payment of rent was a finding made by the reference Court for a limited
purpose i.e. not to accept the defendant’s claim for compensation. Such
finding cannot be binding on the parties in a suit for possession based
F on title or as a lessor against a lessee. Section 11 of the Code bars the
subsequent Court to try any suit or issue which has been directly and
substantially issue in a former suit. The issue before the Reference
Court was apportionment of compensation and such issue having been
decided against the defendant, the reference to notice for termination
of tenancy does not operate as res judicata. Therefore, the finding
G recorded by the High Court that the order of the Reference Court
operates as res judicata was clearly not sustainable. The first
substantial question of law has been, thus, wrongly decided.
28. In respect of second question of law examined by the High
Court that the plaintiff’s suit was barred by limitation is based upon
H the notice dated 23rd September, 1960 produced in proceedings before
NAND RAM (D) THR. LRS. v. 1029
JAGDISH PRASAD (D) THR. LRS. [HEMANT GUPTA, J.]
the Reference Court as Ex.A-3. The reference to such notice was made A
in an application for amendment of the written statement under Order
VI Rule 17 of the Code filed before the First Appellate Court. The
First Appellate Court allowed the defendant to raise a plea of limitation
without amending the written statement. Thus, the notice (Ex.A-3) in
proceedings before the Reference Court was never produced in
B
evidence in the suit for possession and such primary evidence was not
before the Court. In terms of Section 62 of the Evidence Act, primary
evidence means a document itself produced for inspection by the Court.
Section 64 of the Evidence Act stipulates that documents must be
proved by primary evidence except in certain cases when secondary
evidence can be led. The defendant has not led any evidence, including C
secondary evidence of the alleged notice said to be served by the
plaintiffs. In the absence of primary or secondary evidence available
in the suit for possession, the reference to such notice as the starting
point of limitation is clearly erroneous and not sustainable.
29. The defendant was inducted as a lessee for a period of 20 D
years. The lease period expired on 23rd September, 1974. Even if the
lessee had not paid rent, the status of the lessee would not change during
the continuation of the period of lease. The lessor had a right to seek
possession in terms of clause 9 of the lease deed. The mere fact that
the lessor had not chosen to exercise that right will not foreclose the
rights of the lessor as owner of the property leased. After the expiry E
of lease period, and in the absence of payment of rent by the lessee,
the status of the lessee will be that of tenant at sufferance and not a
tenant holding over. Section 116 of the TP Act confers the status of a
tenant holding over on a yearly or monthly basis keeping in view the
purpose of the lease, only if the lessor accepts the payment of lease F
money. If the lessor does not accept the lease money, the status of
the lessee would be that of tenant at sufferance. This Court in the
judgments reported as Bhawanji Lakhamshi and Others v. Himatlal
Jamnadas Dani and Others 13, Badrilal v. Municipal Corpn. of
Indore14 and R.V. Bhupal Prasad v. State of A.P and Others15 and
also a judgment in Sevoke Properties Ltd. v. West Bengal State G
Electricity Distribution Company Ltd. 16 examined the scope of
13
(1972) 1 SCC 388
14
(1973) 2 SCC 388
15
(1995) 5 SCC 698
16
Civil Appeal No. 3873 of 2019 decided on 11.04.2019 H
1030 SUPREME COURT REPORTS [2020] 4 S.C.R.
A Section 116 of the TP Act and held that the lease would be renewed
as a tenant holding over only if the lessor accepts the payment of rent
after the expiry of lease period. This Court in Bhawanji Lakhamshi
held as under:
“9. The act of holding over after the expiration of the term does
B not create a tenancy of any kind. If a tenant remains in possession
after the determination of the lease, the common law rule is that
he is a tenant on sufferance. A distinction should be drawn
between a tenant continuing in possession after the determination
of the term with the consent of the landlord and a tenant doing
so without his consent. The former is a tenant at sufferance in
C
English Law and the latter a tenant holding over or a tenant at
will. In view of the concluding words of Section 116 of the
Transfer of Property Act, a lessee holding over is in a better
position than a tenant at will. The assent of the landlord to the
continuance of possession after the determination of the tenancy
D will create a new tenancy. What the section contemplates is that
on one side there should be an offer of taking a new lease
evidenced by the lessee or sub-lessee remaining in possession
of the property after his term was over and on the other side
there must be a definite consent to the continuance of possession
by the landlord expressed by acceptance of rent or
E
otherwise.….”
30. The same view was reiterated in Badrilal v. Municipal
Corpn. of Indore, as well. In R.V. Bhupal Prasad, this Court held
that possession of the licencee on the expiry of the licence period was
that of a tenant at sufferance and was liable to ejectment in due course
F of law. His possession was not legal nor lawful. He may remain in
possession until he is ejected in due course in execution of the decree
in the suit filed by the respondent. His possession cannot be considered
to be settled possession. The Court held as under:
“8. Tenant at sufferance is one who comes into possession of
G land by lawful title, but who holds it by wrong after the
termination of the term or expiry of the lease by efflux of time.
The tenant at sufferance is, therefore, one who wrongfully
continues in possession after the extinction of a lawful title. There
is little difference between him and a trespasser. In Mulla›s
H Transfer of Property Act (7th Edn.) at page 633, the position of
NAND RAM (D) THR. LRS. v. 1031
JAGDISH PRASAD (D) THR. LRS. [HEMANT GUPTA, J.]
tenancy at sufferance has been stated thus: A tenancy at A
sufferance is merely a fiction to avoid continuance in possession
operating as a trespass. It has been described as the least and
lowest interest which can subsist in reality. It, therefore, cannot
be created by contract and arises only by implication of law when
a person who has been in possession under a lawful title continues
B
in possession after that title has been determined, without the
consent of the person entitled. A tenancy at sufferance does not
create the relationship of landlord and tenant. At page 769, it is
stated regarding the right of a tenant holding over thus: The act
of holding over after the expiration of the term does not
necessarily create a tenancy of any kind. If the lessee remains C
in possession after the determination of the term, the common
law rule is that he is a tenant on sufferance. The expression
“holding over” is used in the sense of retaining possession. A
distinction should be drawn between a tenant continuing in
possession after the determination of the lease, without the
D
consent of the landlord and a tenant doing so with the landlord›s
consent. The former is called a tenant by sufferance in the
language of the English law and the latter class of tenants is called
a tenant holding over or a tenant at will. The lessee holding over
with the consent of the lessor is in a better position than a mere
tenant at will. The tenancy on sufferance is converted into a E
tenancy at will by the assent of the landlord, but the relationship
of the landlord and tenant is not established until the rent was
paid and accepted. The assent of the landlord to the continuance
of the tenancy after the determination of the tenancy would
create a new tenancy. The possession of a tenant who has
F
ceased to be a tenant is protected by law. Although he may not
have a right to continue in possession after the termination of
the tenancy, his possession is juridical.
xx xx xx
13. In view of the settled position of law, the possession of the G
appellant is as tenant at sufferance and is liable to ejectment in
due course of law. But his possession is not legal nor lawful. In
other words, his possession of the theatre is unlawful or litigious
possession. The appellant may remain in possession until he is
ejected in due course in execution of the decree in the suit filed
by the respondent. His possession cannot be considered to be H
1032 SUPREME COURT REPORTS [2020] 4 S.C.R.
A settled possession. He is akin to a trespasser, though initially he
had lawful entry.”
31. Sevoke Properties Ltd. was a case where the respondent
continued in possession after the expiry of lease period which ended
on 24th May, 1996. A suit for possession was filed without serving a
B notice under Section 106 of the TP Act. The stand of the defendant
was that he was a tenant holding over. Such argument was not accepted
and it was held that after the expiry of lease period in terms of
unregistered document of lease, the possession of the respondent was
that of a tenant at sufferance. In view thereof, as owners, the appellants
were entitled to possession of the land in terms of Article 65 of the
C Limitation Act as the possession of respondent was that of a tenant at
sufferance.
32. The Division Bench of Allahabad High Court in a judgment
reported as Bisheshar Nath v. Kundan & Ors.17 examined a some
what similar question where the period of lease was three years vide
D a lease deed dated 19th July, 1892 but the lessee remained in possession
thereafter. The suit was filed on 18th June, 1919 i.e. after the expiry
of 12 years from the determination of the lease. The High Court
considered Article 139 of the First Schedule of the Limitation Act, 1908
which is now equivalent to Article 67 of the First Schedule of the
Limitation Act. The Court held as under:
E
“…It seems to me on the facts of this case that the tenancy was
determined on the 19th of July, 1895. It has not been proved that
any new tenancy was created. By holding over without paying
rent, it seems to me that the defendants became what is known
as tenants by sufferance. Their position in English law has been
F summed up in Addison’s Law of Contract, 10th edition, page
618 in the following words:—“The difference, therefore, between
a tenancy-at-will and what is called a tenancy by sufferance is
that in the one case the tenant holds by right and has an estate
or term in the land, precarious though it may be, and the
relationship of lessor and lessee subsists between the parties; in
G
the other, the tenant holds wrongfully and against the will and
permission of the lord and has no estate at all in the occupied
premises. When the tenancy at sufferance has existed for twenty
(now twelve) years, the landlord’s right of entry is barred by
17
H ILR (1922) 44 All 583
NAND RAM (D) THR. LRS. v. 1033
JAGDISH PRASAD (D) THR. LRS. [HEMANT GUPTA, J.]
statute, and the tenant becomes the absolute and complete owner A
of the property.” So far as the question of limitation is concerned,
the law in India is not different, in my opinion, although it may
not be good law to hold that a tenant holding over is in adverse
possession to his landlord. In my opinion this view is supported
by Chandri v. Daji Bhau [(1900) I.L.R., 24 Bom., 504.], where
the facts were similar, and which case was followed in Farman B
Bibi v. Tasha Haddal Hossein [(1908) C.L.J., 648.]. In my
opinion the suit was clearly barred under article 139 of the
Limitation Act. I would, therefore, dismiss this appeal with costs.”
33. In a separate but concurring opinion by Justice Stuart, it was
held that a tenant who has been let into possession cannot deny his C
landlord’s title, however defective it may be, so long as he has not
restored possession by surrender to his landlord. It was held that the
plaintiff is the land holder and the defendants are tenants by sufferance.
It was held so:
“…Their Lordships of the Privy Council say: “A tenant who has D
been let into possession cannot deny his landlord’s title, however
defective it may be, so long as he has act openly restored
possession by surrender to his landlord.” That clearly is the law,
but does it in any way affect the present case? I think it does
not. The defendants cannot be permitted to deny the plaintiff’s E
title. They have foolishly denied it but they cannot be permitted
to do so. The plaintiff is undoubtedly the land-holder and the
defendants are tenants by sufferance, but once having recognized
that the tenants are so estopped, the fact still remains that the
suit has been instituted beyond the period of limitation allowed
by the law. In these circumstances I accept the view of my F
learned brother and would dismiss this appeal.”
34. The Division Bench of Allahabad High Court in a judgment
reported as Sheo Dulare Lal Sah v. Anant Ram & Anr.18 examined
an appeal arising out of a suit for possession against the defendants
who were inducted as tenants for a period of one year. However, the G
tenants did not make any payment of rent. In a suit for possession, a
plea was taken that the suit is barred by limitation. The plaintiffs filed
a suit on the basis of title without any averment that defendants were
indicted as tenants except to the effect that the vendor of the plaintiff
18
AIR 1954 All. 475 H
1034 SUPREME COURT REPORTS [2020] 4 S.C.R.
A has executed a rent note and that the defendants have denied the title
of the plaintiff, therefore, they are liable for ejectment. The Court held
that in terms of Section 108(q) of the TP Act, the lessee had a duty to
put the lessor into possession of the property. If he did not do so, he
was merely a tenant whose lease had expired and who had continued
to remain in wrongful possession of the property on the expiry of the
B
lease. It was open to the landlord to regularise the position by giving
his assent to the continuance of possession and in that situation,
provisions of Section 116 of the TP Act would apply. The Court held
as under:
“10. Taking up the third point first, on the expiry of a lease for
C
a period, Section 108(q) of the Transfer of Property Act imposes
a duty on the lessee to put the lessor into possession of the
property. Sahib Dayal, therefore, on the expiry of the period of
one year fixed under the lease was bound to put Sri Krishna Das
in possession of the property in accordance with the provisions
D of Section 108(q) of the Transfer of Property Act. If he did not
do so, he was merely a tenant whose lease had expired and who
had continued to remain in wrongful possession of the property
on the expiry of the lease. It was open in such a case to the
landlord to regularise the position by giving his assent to the
continuance of possession and in that case the provision of
E
Section 116 of the Transfer of Property Act would apply and the
lessee would, in accordance with the provisions of that section,
become a month to month tenant.”
35. It was further held that in order to create a tenancy at
sufferance the tenant should have lawfully entered into possession in
F
recognition of the landlord’s superior title and should have continued to
remain in possession in the same right after the termination of the
tenancy without asserting any title hostile to that of the landlord. The
Court held as under:
“12. In order to create a tenancy at sufferance the tenant should
G
have lawfully entered into possession in recognition of the
landlord’s superior title and should have continued to remain in
possession in the same right after the termination of the tenancy
without asserting any title hostile to that of the landlord and
without his assent or dissent. The continuance in possession
H should be due to the laches of the owner in not asking for
NAND RAM (D) THR. LRS. v. 1035
JAGDISH PRASAD (D) THR. LRS. [HEMANT GUPTA, J.]
payment of the rent or vacation of the premises or taking over A
possession of the property. In Corpus Juris Secundum, Vol. 51,
p. 780, 175, it is pointed out that:
“The holding of a tenant at sufferance is the most shadowy
estate recognized at common law, and practically the only
distinction between such a tenant’s holding and the possession B
of a trespasser is that the land-owner may, by his
acquiescence, at any time base on the tenancy at sufferance
the relation of landlord and tenant, which he cannot establish
at law against a mere trespasser, and that the tenant cannot
be subjected to an action in trespass before entry or demand
for possession.” C
The law thus enunciated is in line with the provisions of Section
116 of the Transfer of Property Act (No. 4 of 1882) which
pointed out that:
“If a lessee or under-lessee of property remains in possession
thereof after the determination of the lease granted to the D
lessee, and the lessor or his legal representative accepts rent
from the lessee or under-lessee, or otherwise assents to his
continuing in possession, the lease is, in the absence of an
agreement to the contrary, renewed from year to year, or from
month to month, according to the purpose for which the E
property is leased as specified in S. 106.”
36. The Full Bench of Bombay High Court in a judgment reported
as Sidram Lachmaya, heir and legal representative of deceased
Lachmaya Shivram Madur, heir of Original Plaintiff v. Mallaya
Lingaya Chilaka19 rightly held that ‘it is a well recognised construction
F
of the Limitation Act that when there is a specific article dealing with
a specific subject, that article is to be applied in preference to a general
and residuary article’. The Full Bench was examining the question as
to whether the possession of the tenant is adverse to the landlord upon
the expiration of the tenancy period merely because the tenant has not
paid rent. The second question examined was whether in a suit based G
upon title by a landlord against his ex-tenant, whether Article 139 or
Article 144 is applicable. In such suit filed by the tenant, the claim was
that the title of his landlord had extinguished under Section 28 of the
Limitation Act, 1908. The Court held as under:
19
ILR 1949 Bom 135 (FB) : 1948 SCC OnLine Bom 4 H
1036 SUPREME COURT REPORTS [2020] 4 S.C.R.
A “Now, there can be no doubt that on the determination of the
tenancy on June 11, 1925, the plaintiff became a tenant at
sufferance, if we might make use of an English expression, or a
trespasser. Although his possession was originally lawful, and he
entered by lawful demise, at the termination of the tenancy his
possession became wrongful and he became a trespasser.
B
Therefore on the determination of the tenancy the right would
arise in the landlord to recover possession from him of the
property and the period of limitation would be governed by article
139 of the Indian Limitation Act.
xx xx xx
C
Our Court almost consistently has taken the view that in a case
by a landlord against a tenant it is art. 139 that applies, the first
case which might be looked at is Kantheppa v. Sheshnppa,
[(1897) 22 Bom. 893.] a decision of Sir Charles Farran, Chief
Justice, and Mr. Justice Candy. There at p. 897 Sir Charles
D Farran says:
“We are inclined to think that the termination of the period of
a fixed lease where nothing further occurs, is the time from
which limitation begins to run against the landlord within the
meaning of article 139 of the limitation Act.”
E
The expression “where nothing further occurs” is obviously with
reference to s. 116 of the Transfer of Property Act, because it
is open to the landlord on the expiration of the tenancy of accept
rent from the tenant or otherwise assent to his continuing in
possession and thereby create a fresh lease under the provisions
F of that section. But if the landlord neither accepts rent nor
otherwise assents to the continuing of the possession of the
tenant, then it is clear that the tenancy expires, limitation begins
to run against the landlord under art. 139 and his right to obtain
possession from his tenant would be barred after the period of
G 12 years.
xx xx xx
As we have taken the view that a suit by a landlord against his
ex-tenant is always governed by art. 139 and as we have
indicated earlier in the judgment that the question whether his
H possession is adverse or not does not arise, we answer question
NAND RAM (D) THR. LRS. v. 1037
JAGDISH PRASAD (D) THR. LRS. [HEMANT GUPTA, J.]
No. 2 submitted to us as follows: art. 139. And with regard to A
question No. 1 our answer, with respect to the learned Judges
who have referred this question to us, is that on the view we
have now taken the question does not arise.”
37. In another judgment by a Single Bench of the Delhi High
Court reported as MEC India Pvt. Ltd. v. Lt. Col. Inder Maira & B
Ors.20, it has been held that in terms of Section 108(q) of the TP Act,
a lessee continues to be liable to the lessor till possession has been
actually restored to the lessor. The continuing in possession of the
lessee is expressive of his continuing stand that the tenancy, in whatever
form, continues. It was held as under:
C
“40. Section 108(q) thus ensures that a lessee continues to be
liable to the lessor till possession has been actually restored to
the lessor and a semblance of relationship subsists till that
contingency takes place. His continuing in possession is
expressive of his continuing stand that the tenancy, in whatever
form, continues. It is said that he does not hold it adversely to D
the landlord only till he has unequivocally renounced his status
as a tenant and asserted hostile title, but even that appears to be
doubtful, for in law his possession remains permissive till it has
been actually restored to the landlord.
41. In law there is presumption in favour of the continuity of E
the tenancy and against the possession of the tenant becoming
adverse. Furthermore, the doctrine of tenant estoppel, which
continues to operate even after the termination of the tenancy,
debars a tenant who had been let into possession by a landlord,
from disputing the latter’s title or pleading adverse possession, F
without first openly and actually surrendering possession of the
tenanted premises and restoring them to the landlord.
42. A tenant who upon determination of the tenancy does not
deliver up possession to the landlord as required by Section
108(q), cannot be heard to say that he is not a tenant—be he G
one at sufferance or be he one from month-to-month. Therefore,
unless the landlord is actually put into possession, the premises
remain under a tenancy, which unless assented to by the landlord,
has the character of one at sufferance.
20
80 (1999) Delhi Law Times 679 H
1038 SUPREME COURT REPORTS [2020] 4 S.C.R.
A 43. Thus, a tenant at sufferance is one who wrongfully continues
in possession after the extinction of a lawful title and that a
tenancy at sufferance is merely a legal fiction or device to avoid
continuance in possession from operating as a trespass. A tenant
remaining in possession of the property after determination of
the lease does not become a trespasser, but continues as a tenant
B at sufferance till possession is restored to the landlord. The
possession of an erstwhile tenant is juridical and he is a protected
from dispossession otherwise than in due course of law. Although,
he is a tenant, but being one at sufferance as aforesaid, no rent
can be paid since, if rent is accepted by the landlord he will be
C deemed to have consented and a tenancy from month-to-month
will come into existence. Instead of rent, the tenant at sufferance
and by his mere continuance in possession is deemed to
acknowledge both the landlord’s title and his (tenant’s) liability
to pay mesne profits for the use and occupation of the property.
44. To sum up the legal position or status of a lessee whose lease
D has expired and whose continuance is not assented to by the
landlord, is that of a tenant at sufferance. If, however, the holding
over has been assented to in any manner, then it becomes that
of a tenant from month-to-month. Similar, i.e. from month-to-
month, is the status of a lessee who comes into possession tinder
E a lease for a period exceeding one year but unregistered. He
holds it not as a lessee for a fixed term, but as one from month-
to-month or year-to-year depending on the purpose of the lease.
If upon a tenant from month-to-month (or year-to-year) and in
either of the aforesaid two contingencies, a notice to quit is
served, then on the expiry of the period, his status becomes of a
F tenant at sufferance. Waiver of that notice, or assent in any form
to continuation restores to him his status as a tenant from month-
to-month, but capable, of once again being terminated with the
expiry of any ensuing tenancy month.”
38. Thus, the suit of the plaintiffs filed within 12 years of the
G determination of the tenancy by efflux of time is within the period of
limitation. The defendant has not proved forfeiture of tenancy prior to
the expiry of lease period. Mere non-payment of rent does not amount
to forfeiture of tenancy. It only confers a right on the landlord to seek
possession. The plaintiffs have filed a suit for possession against the
defendant on the basis of determination of tenancy, such suit is governed
H by Article 67 alone.
NAND RAM (D) THR. LRS. v. 1039
JAGDISH PRASAD (D) THR. LRS. [HEMANT GUPTA, J.]
39. In view of the above, the suit for possession would not be A
covered by Article 65 since there is a specific article i.e. Article 67
dealing with right of the lessor to claim possession after determination
of tenancy. The appellants-plaintiffs have claimed possession from the
defendant alleging him to be the tenant and that he had not handed over
the leased property after determination of the lease. Therefore, such
suit would fall within Article 67 of the Limitation Act. Such suit having B
been filed on 13th March, 1981 within 12 years of the determination of
lease by efflux of time on 23rd September, 1974, the same is within the
period of limitation. Thus, the findings recorded by the High Court are
clearly erroneous in law and the same cannot be sustained and are,
thus, set aside. C
40. Though, Mr. Vishwanathan has argued that the first appeal
stood abated as the legal representatives of one of the deceased
respondents was not impleaded but we find that it is not necessary to
decide such question as on merits, we have found the claim of the
plaintiffs to be meritorious. D
41. The respondent continued to be in possession of the land
leased vide registered lease deed dated 22nd September, 1954. The
respondent has admitted the ownership of the appellants before the
Reference Court. Such plea operates as estoppel against the
respondent in respect of the title of the appellants. However, the claim
E
of compensation put forward by the respondent was declined for the
reason that non-payment of rent disentitles the respondent from
compensation. In the present proceedings, the respondent has denied
his status as that of a tenant but claimed title in himself. The respondent
claimed adverse possession and claimed possession as owner against
a person, who has inducted him as tenant. The respondent was to prove F
his continuous, open and hostile possession to the knowledge of true
owner for a continuous period of 12 years. The respondent has not led
any evidence of hostile possession to the knowledge of true owner at
any time before or after the award of the reference Court nor he has
surrendered possession before asserting hostile, continuous and open
title to the knowledge of the true owner. The question of adverse G
possession without admitting the title of the real owner is not tenable.
Such question has been examined by this Court in Uttam Chand (D)
through LRs. v. Nathu Ram (D) through LRs & Ors.21.
21
Civil Appeal No. 190 of 2020 decided on 15th January, 2020 : 2020 SCC OnLine
SC 37 H
1040 SUPREME COURT REPORTS [2020] 4 S.C.R.
A 42. In view of the said fact, we find that the High Court erred
in law in holding that the suit is barred by limitation in terms of Article
66 of the Limitation Act, therefore, the order passed by the High Court
is clearly erroneous and is not sustainable in law. The same is set aside
and the suit is decreed by restoring the decree of the First Appellate
Court. Accordingly, the appeal is allowed.
B
Devika Gujral Appeal allowed.
C
D
E
F
G
H
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