Supreme Court of India
PRAMOD KUMAR JAISWAL AND ORS.versusBIBI HUSN BANO AND ORS.
- Citation
- 2005 INSC 246
- Decided
- 3 May 2005
- Disposal
- Dismissed
- Bench
- R C LAHOTI
Holding
A lease is not determined by merger unless the lessee’s and lessor’s interests in the whole property vest simultaneously in the same person; acquisition of only part of the reversion or rights of co‑owner landlords does not meet this requirement.
Summary
The appellants, tenants of a building, argued that having acquired the rights of some co‑owner landlords in 1988 extinguished their lease under the doctrine of merger, invoking Section 111(d) of the Transfer of Property Act, 1882, and therefore the order directing them to deposit fair rent under the Bihar Buildings (Lease, Rent and Eviction) Control Act should be set aside. The Supreme Court examined whether a partial acquisition of the landlord's reversionary interest coalesces the lessee’s and lessor’s interests in the whole property, as required for merger. It held that merger and consequent determination of the lease occur only when the entire interests of both parties in the whole property vest simultaneously in one person; acquiring only a fraction of the reversion or rights of some co‑owners does not satisfy this statutory condition. Consequently, the tenancy continued and the tenants remained liable to deposit the fair rent. The appeal was dismissed, confirming the High Court’s order.
Issues considered
- Does the tenant's acquisition of the rights of some co‑owner landlords extinguish the lease by merger under Section 111(d) of the Transfer of Property Act, 1882?
- Whether a partial assignment of the reversionary interest can coalesce the lessee’s and lessor’s interests in the whole property for the purpose of lease determination?
Legislation cited
- Transfer of Property Act, 1882s. 108(q), s. 109, s. 111(d), s. 44
Subjects
leasemergerTransfer of Property ActSection 111(d)rent controlfair rentevictionco‑ownershipassignmenttenancy determination
Judgment
PRAMOD KUMAR JAISWAL AND ORS. A
v.
BIBI HUSN BANO AND ORS.
MAY 3, 2005
[R.C. LAHOTI, CJ., G.P. MATHUR AND B
P.K. BALASUBRAMANY AN, JJ.)
Transfer of Property Act, I 882 :
s. II I (d)-Determination of lease-Held, lease or tenancy does not get C
determined by tenant acquiring rights of a co-owner landlord-A merger
takes place and lease gets determined only if entire reversion or entire rights
of landlord are purchased by tenant-Doctrine of merger-Bihar Buildings
(Lease, Rent and Eviction) Control Act.
Predecessor-in-interest of the respondents leased out a building to
D
the predccessor-in-int1erest of the appellants. Litigation under the Bihar
Buildings (Lease, Rent and Eviction) Control Act started between the
parties, initially for fixation of fair rent and later for eviction of appellant-
tenant on grounds of arrears of rent and bona fide need. Pending disposal
of the suit for eviction the trial court directed the tenants to deposit the E
fair rent. The order was affirmed by the High Court in. revision.
In the appeal filed before the Supreme Court, the tenants contended
that they having taken an assignment of the rights of some of the co-owner-
landlords, the lease or the tenancy over the building stood extinguished
and since there was no subsisting relationship of landlord-tenant between F
the parties, the order to deposit the rent could not have been passed. The
two-judge Bench before which the appeal was listed for hearing, felt that
the decision in Abdul Alim v. Sheikh Jamal Uddin Ansari* was in conflict
with another coordinate Bench decision in r Lakshmipathi and Ors. v. P.
Nithyananda Reddy and Ors.** Consequently, the appeal came to be hard 0
by the present three Judge Bench.
On the question: whether on acquisition of rights oi some of the co-
owner-landlords by the tenant, there is an extinguishment of the tenancy
by merger as postulated by s.11 l(d) of the Transfer of Property Act, 1882,
1119 H
1120 SUPREME COURT REPORTS [2005] 3 S.C.R.
A Dismissing the appeal, the Court
HELD : Per Balasub,.amanyan, J :
1.1. A plain and grammatical interpretation of Section 11 l(d) of the
Transfer of Property Act, 1882 leaves no room for doubt that unless the
B interests of the lessee and that of the lessor in the whole of the property
leased, become vested at the same time in one person in the same right, a
determination of the lease cannot take place. On tenant's taking an
assignment from some of the co-owner landlords, the interests of the lessee
and the lessor in the whole of the property do not become vested at the
same time in one person in the same right. Where a h:nant takes an
C assignment of the rights of the landlord or the reversion, the lease is
determined, only if by such assignment, the interests of the lessee and the
lessor in the whole of the property, become vested in the tenant. The
emphasis in the section is clearly on the coalescing of the entire rights of
the lessor and the lessee in the whole of the property in the hands of the
D lessee. The provision incorporates the doctrine of merger at common law.
Therefore, a lessee who has taken assignment of the rights of a co-owner
lessor, cannot sucl!essfully raise the plea of determination of tenancy on
the ground of merger of his lessee's estate in that of the estate of the
landlord. (1128-G-H; 1129-A; 1138-G)}
E Badri Narain Jha and Ors. v. Rameshwar Dayal Singh and Ors., _(1951)
SCR 153, relied on.
Someshwari Prasad Narain Dea v. Maheshwari Prasad Narain Dea,
ILR X Patna 630, referred to.
F 1.2. The ingredients of· .!rger are that two immediate estates should
come into the hands of the same person at the same time and it must be
the right in the whole of the property. A merger is prevented if there is
an intermediate estate outstanding with another at the relevant time.
(1130-E-Fl
G Puran Chand v. Kirpal Singh, (20011 2 SCC 433, relied on
P. Veeriah v. Mohammed Kunju Kaya and Ors., (1991) 2 KLJ 96;
Mohan Singh (Dead by l.Rs.) v. Devi Charan and Ors., AIR (1988) SC 1365
and Vishnu Dea v. Bal Kishan, AIR (2002) SC 569, referred to.
H Rye v. Rye, (1962) AC 496; Faquir Baksh v. Murli Dhar, (58) Indian
PRAMOD KUMAR .IAISWAL v. BIBI HUSN BANO 1121
Appeals 75 and Chambers v. Kingham, Law Reports (1878) 10 Chancery A
743, referred to.
Cheshire and Burn's Modern Law of Real Property, 16th Edition and
Megarry 's Manual of the Law of Real Property, 8th Edition, referred to.
2.1. The decision in Abu/ Alim* cannot be considered as laying down B
a proposition of law that on a tenant acquiring the right of a co-owner
landlord, the tenancy of a building gets extinguished and the landlord
cannot seek eviction of the tenant under the Act or the fixation of fair
rent under the Act. It must be pointed out that the decision was rendered
without referring to Section 111 (d) of the Transfer of Property Act which C
governs such a case and the earlier decisions of this Court. The
observations run counter to the statutory provision. Hence, the decision
must be held to be not correctly decided on this question. (1131-F-HI
*Abu/ Alim v. Sheikh Jamal Uddin Ansari, (19981 9 SCC 683,
overruled.
D
Jagdish Dutt and Anr. v. Dharam Pal and Ors., (1999) 3 SCC 644,
distinguished.
2.2. In T. Lakshmipathi's* case the Court considered the question in
detail in· the context of Sections 105 and 111 of the Transfer of Property E
Act and rightly came to the conclusion that there is no determination of
the lease in terms of Section 11 l(d) of the Transfer of Property Act where
a tenant acquires only partial ownership interest. (1132-El
**T. lakshmipathi and Ors. v. P. Nithyananda Reddy and Ors., (2003)
5 SCC 150 and Ind/a Umbrella Manufacturing Co. and Ors. v. Shagabandei F
Agarwal/a (dead) by Lrs. Savitri Agarwal/a (Smt.) and Ors., (20041 3 SCC
178, affirmed.
Indra Perfumery v. Moti Lal and Ors., (1969) II SCWR 967, held
inapplicable.
G
3. In the instant case, the lessee has acquired only the rights of certain
co-owner landlords and may have the right to work out his rights against
the others. The right to work out his rights would not enable him to plead
that the two rights in the whole of the property have come to vest in him.
The position of the appellants as tenants continue and they are bound to
H
1122 SUPREME COURT REPORTS [2005) 3 S.C.R.
A comply with the requirements of the Rent Control Act under which the
order for deposit has been passed against them. The High Court has rightly
dismissed the revision. (1138-D-F; 1139-AJ
4. The facts in Nalakath Sainuddin v. Koorikadan Sulaiman* indicate
that when the sub-tenant of a part took an assignment of the reversion of
B the head-lease, an intermediate estate in the forni of the original lease was
still outstanding not only as regards the room or portion in the possession
of the lessee himself but also as regards the portion or room in his
possession as a sub-lessee. It could not be said to be a case where the entire
rights of the lessor and the lessee in the whole of the property had come
C into the hands of the sub-lessee. Therefore, there could be no merger in
the eye of law. (1133-D; 1134-E-Fl
Nalakath Sainuddin v. Koorikadan Sulaiman, [20021 6 SCC 1,
explained.
D Per Lahoti, CJ (Concurring, but partly dissenting as regards the view
taken in Nalakath's case).
1.1. Ownership of the property which is the subject matter of tenancy
is certainly a larger estate than the tenancy itself and naturally larger than
the sub-tenancy. If the sub-tenant acquires the entire interest of the owner
E in the whole of the estate forming the subject matter of sub-tenancy, the
sui);.tenancy merges into ownership and the estate of sub-tenant stands
enlarged· into that of a full owner. The sub-tenant cannot be the owner
and the sub-tenant both at the same time. Of course, the situation would
have been different if the sub-tenant would not have acquired the entire
estate of the owner or the ownership interest in the entire estate forming
F subject matter of sub-lease. (1125-G-H; 1126-A)
Badri Narain Jha and Ors. v. Rameshwar Dayal Singh and Ors., AIR
(1951) SC 186 and Shaikh Faqir Bakhsh v. Murli Dhar and Ors., AIR (1931)
PC 63, referred to.
G 1.2. In the case of Nalakath Sainuddin the sub-tenant had acquired
not a share only of the landlord-owner's estate nor an ownership in only
a part confined to sub-tenancy premises; what he had acquired under the
deed dated 12-9-1988 was the.fall ownership in the entire premises. The right
of reve~ion, vesting in the erstwhile owners, had come to vest fully and
H entirely in the sub-tenant. (1126-B-q
PRAMOD KUMAR JAISWAL v. BIBI HUSN BANO [R.C. LAHOTI, CJ.) 1123
Nalakath Sainuddin v. Koorikadan Sulaiman, (2002) 6 SCC 1, explained A
and relied on.
Mohar Singh (dead) by LRs v. Devi Charan and Ors., [1988( 3 SCC
63, cited.
1.3. In Indra Perfumery's case, the impact of Section 109 of the B
Transfer of Property Act has not been considered. The doctrine of merger,
well accepted and well established, has also not received consideration of
the Court in its expanse and then applied to the facts of the case. A very
brief statement of law is to be found therein and the Court has said that
Section lll(d) of the Transfer of Property Act has no application, unless C
the interest of the lessor and the lessee in the whole of the property is vested
in the same person. The Court has gone on to observe that the appellant
is the 'owner' of the house and is also a 'tenant' of a part of the house of
which the respondents were tenants from original lesser. Indra Perfumery
case was not correctly decided and does not lay down the correct law.
(1124-C-D; 1126-DJ 0
Indra Perfumery v. Moti Lal and Ors., (1969) II S.C.W.R. 967, referred
to.
Per G.P. Mathur (Concurring, bet partly dissenting as regards the
view taken in Nalakath 's case) : E
The conclusion that the appeal be dismissed is concurred, and the
dissenting opinion as regards Nalakath 's case is also concurred. (1139-B)
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 336 of2004.
From the Judgment and Order dated 10.10.2002 of the Patna High F
Court in C.R No. 1329 of 2002.
M.K.S. Menon and K. Rajeev for the Appellant.
Anil Nauriya, Mrs. Hemantika Wahi and Ms. Sumita Hazarika for the
Respondents. G
The Judgment of the Court was delivered by
R.C. LAHOTI, CJ. I have gone through the judgment proposed by
brother P.K. Balasubramanyan, J. I find myself in agreement with the
conclusion arrived at by him and also with the reasonings assigned by him H
1124 SUPREME COURT REPORTS [2005] 3 S.C.R.
A excepting for his opinion formed on the case of Nalakath Sainuddin v.
Koorikadan Sulaiman, [2002] 6 SCC I, with which opinion I have not been
a~le to pursuade myself to agree and in that regard I am constrained to record
my separate opinion.
The decision of two-Judges Bench of this Court in Indra Perfumery v.
B Moti Lal and Ors., (l 969) 2 SCWR 967 was not brought to the notice of the
two-Judges Bench deciding Nalakath Sainuddin 's case (supra); else the former
decision would have certainly received consideration of the Court in the
latter case. I propose to deal with these two cases.
With respect to the learned Judges who decided Indra Perfumery's case
C (supra), I have certain comments to offer on the case. It is a brief judgment
which does not deal with the law in-depth. The impact of Section 109 of the
Transfer of Property Act has not been considered. The doctrine of merger,
well-accepted and well-established, has also not received the consideration of
the Court in its expanse and then applied to the facts of the case. A very brief
D statement of law is to be found contained in para 4 thereof and therein the
Court has said that Section 11 l(d) of the Transfer of Property Act has no
application, unless the interest of the lessor and the lessee in the whole of the
property is vested in the same person. The Court has gone on to observe that
the appellant is the 'owner' of the house and is also a 'tenant' of a part of
the house of which the respondents were tenants from Mohd. Shafi.
E
If one were to agree with the principle so propounded, certain anomalous
consequences will follow, as can be demonstrated. The facts of Indra
Perfumery's case show that M was the owner of the house which was let out
in its entirety to t. T sub-let a part of the house to IP, the sub-tenant. IP
F purchased the interest of M, the owner, in. the whole of the property and,
therefore, IP stepped into the shoes of M. If M would have filed a suit for
recovery of possession against Ton determination of the latter's lease, then,
in that suit T would have been impleaded as a defendant and IP could also
have been joined as additional defendant being a sub-tenant in possession of
a part of the tenanted premises. Whether IP was joined as a party to the suit
G or not, the estate vesting in IP being subordinate to the estate of T, in the
execution of decree of eviction passed against T, M would have been entitled
to evict T and IP both. Ever since the date of purchase by IP, M can neither
determine the tenancy of T nor file a suit for eviction against him as he has
lost the title in\the property which title has come to vest in IP. The only
H person who can determine the tenancy and claim recovery of possession is
PRAMOD KUMAR JAISWAL v. BIBI HUSN BANO [R.C. LAHOTI, CJ.] 1125
IP inasmuch as the whole of the interest in whole of the property has come A
to vest in IP by purchase. Now, if IP were to file a suit for eviction against
T, would IP, the plaintiff also join IP itself as an additional defendant? Or,
would it be the requirement of law that IP, in its capacity as sub-tenant, must
first deliver possession to T, the tenant and then, the tenant must deliver
possession to IP itself in its capacity as owner? This is what will follow if we
were to agree with the observation made by the learned Judges in Indra ' B
Perfumery case (supra) that, "the appellant is the owner of the house, it is
also a tenant of a part of the house of which the respondent are tenants from
Mohd. Shafi".
The conclusion drawn in Indra Perfumery's case (supra) would have C
been different if only the attention of the learned Judges would have been
invited to Section l 09 of the Transfer of Property Act and the doctrines of
'statutory attomment' and of 'merger' with all the ramifications. This was
done in Nalakath Sainuddin 's case. It has been clearly held on a detailed
examination of all the relevant statutory provisions and the doctrine of merger:-
D
(i) that merger is founded on the principle that two estates one
larger and one smaller cannot - and need not - coexist, if the
smaller estate can in equity, and must in law, sink or merge into
the larger estate. One cannot be an owner and sub-lessee both
at the same time. The smaller estate of sub-tenancy shall sink or
drown into the larger estate of ownership as the two cannot co- E
exist;
(ii) that Section 109 of the TP Act does away with the need for
consensual attornment. The attornment is brought about by
operation of law. The limitation on the right of the landlord
against splitting up of the integrity of the tenancy, inhering in F
the inhibitions of his own contract, does not visit the assignee
of the part of the reversion. The severance of the reversion and
the assignment of the part so severed do not need the consent
of the tenant. [See Mohar Singh (dead) by LRs v. Devi Charan
and Ors., [1988] 3 SCC 63]
G
Ownership of the property which is the subject matter of tenancy is
certainly a larger estate than the tenancy itself and naturally larger than th6
sub-tenancy. If the sub-tenant acquires the entire interest of the owner in the
whole of the estate forming the subject matter of sub-tenancy, the sub-tenancy
merges into ownership and the estate of sub-tenant stands enlarged into that H
1126 SUPREME COURT REPORTS [2005] 3 S.C.R.
A of a full owner. The sub-tenant cannot be the owner and the sub-tenant both
at the same time. Of course, the situation would have been different if the
sub-tenant would not have acquired the entire estate of the owner or the
ownership interest in the entire estate forming subject matter of sub-lease, as
was the case in Badri Narain Jha and Ors. v. Rameshwar Dayal Singh and
B Ors., AIR (1951) SC 186 or in Shaikh Faqir Bakhsh v. Murli Dhar and Ors.,
AIR (1931) PC 63.
In the case of Nalakath Sainuddin the sub-tenant had acquired not a
share only of the landlord-owner's estate nor an ownership in only a part
confined to sub-tenancy premises; what he had acquired under the deed dated
C 12-9-1988 was the full ownership in the entire premises. The right ofreversion,
vesting in the erstwhile owners, had come to vest fully and entirely in the
sub-tenant.
In my humble opinion Indra Perfumery case (supra) was not correctly
decided and does not lay down the correct law. Subject to this much opinion
D only, which I am placing on record as my view and which is in divergence
with the view expressed by my learned brother P.K. Balasubramanyan, J., I
am in agreement that the appeal has no merit and deserves to be dismissed
confirming the order of the High Court.
P.K. BALASUBRAMANY AN, J. A building, as defined in the Bihar
E Buildings (Lease, Rent and Eviction) Control Act, (hereinafter referred to as
"the Act"), was taken on rent from one Quasim, the predecessor of the
respondents, by Ram Babu Jaiswal, the predecessor of the appellants, some
time in the year 1958. Rent was enhanced and a fresh rent deed was executed
on 7.4.1970. That tenancy continued. Quasim, the landlord died. His rights
F devolved on his heirs. It is the case of the appellants that they have taken
assignment of the rights of certain heirs, being co-owner landlords, on
29 .12.1988. The respondents in this appeal, the heirs of Quasim, filed House
Control Case No. 33 of 1993 under the Act, for fixation of fair rent. By order
dated 22.3.1994 the House Controller fixed the fair rent at Rs. 4,950/- per
month. The plea based on assignment of the reversion by some of ihe legal
G representatives of Quasim, the landlord, and the consequential extinguishment
of the lease was rejected. An appeal preferred by the appellants against the
order fixing the fair rent as H.<;. Appeal No. 3/94-95 was also dismissed. It
is the case of the appellants that they have filed a revision under the Act
against the order fixing fair rent and the same is pending.
H
PRAMOD KUMAR JAISWAL v. BIBI HUSN BANO [BALASUBRAMANYAN, J.J 1127
2. On 13.8.1997, the respondents herein filed a suit, T.S. (Eviction) No. A
80/97, seeking eviction of the appellants on grounds of non payment of rent
and the bona fide need of the landlords for their own occupation. On 13 .9 .1998,
an application for the issue of a direction to the tenants to pay the rent in
arrears, was also filed by the landlords. The trial court, directed the defendants-
tenants, to deposit ren! at the rate of Rs. 600/- per month, on the basis that
it was the last rent that was paid. The suit was subsequently transferred. The B
trial court issued a subsequent direction to the tenants to deposit the rent at
the rate of Rs. 4,950 p.m., being the fair rent fixed under the Act. This was
challenged in revision by the appellants, before the High Court. The High
Court, by the impugned order, dismissed the revision finding against the only
contention on behalf of the appellants that since a revision filed by them C
-· against the order fixing the fair rent was pending, they could not be asked to
deposit the rent at the rate at which the fair rent was fixed. It is this order that
is challenged in this appeal.
,.
3. In this appeal, the only ground taken was that the tenants having
taken an assignment of the rights of certain co-owners, being the heirs of Q
Quasim, the original landlord, the lease or the tenancy over the building must
be taken to have been extinguished and since there was no subsisting
relationship of landlord-tenant betWeen the parties, there could be no direction
to deposit the rent in terms of the Act. On behalf of the appellants a decision
of this Court in Abu/ Alim v. Sheikh Jamal Uddin Ansari, [1998] 9 SCC 683 E
was relied on. The Bench before which the matter came up, noticed that the
decision relied on by the appellants was in conflict with another decision of
a co-equal Bench of this Court in T. Lakshmipathi and Ors. v. P. Nithyauanda
Reddy and Ors., [2003] 5 SCC 150 and referred the matter for being heard
by a Bench of three Judges. The appeal is thus before this Bench.
F
4. Learned counsel for the appellants, Mr. M.K.S. Menon submitted
that the ratio of the decision in Abu/ Alim v. Sheikh Jamal Uddin Ansari
(supra) should be accepted and approved by this Court and the decision in
T. lakshmipathi and Ors. v. P. Nithyananda Reddy and Ors., (supra) deserves
to be overruled. Counsel submitted that once-a tenant acquires even the right
of a co-owner landlord, or a fraction of the reversion, the tenancy comes to
an end and it could not be postulated that there could be a continuance of the
lease or the subsistence of the relationship of landlord and tenant between the
parties. He also referred to the decision in Jagdish Dutt and Anr. v. Dharam
Pal and Ors., [1999) 3 SCC 644 in support, pointing out that therein, this
Court upheld an order of remand to investigate the quantum of shares H
1128 SUPREME COURT REPORTS [2005) 3 S.C.R.
A purchased by the tenant in occupation. Counsel submitted that in T
lakshmipathi and Ors. v. P. Nithyananda Reddy and Ors., (supra) where a
contrary view was taken, the effect of Section 44 of the Transfer of Pw!>erty
Act had not been considered. Learned Counsel for the respondents, on the·
other hand, submitted that the matter ·has been elaborately discussed in T.
lakshmipathi and Ors. v. P. Nithyananda Reddy and Ors., (supra) and the
B view taken therein was consistent with Section 11 l(d) of the Transfer of
Property Act and the settled position in that regard. He also brought to our
notice the decision in the India Umbrella Manufacturing Co. and Ors. v.
Shagabandei Agarwalla (dead) by lrs. Savitri Agarwal/a (Smt.) and Ors.,
[2004] 3 sec 178 in support of his position.
c 5. On the admitted facts and based on the arguments, the only question
that requires to be considered is the effect of the purchase of the rights of
certain co-owner landlords by the tenants of the building, on the lease originally
--
taken by them and on the pasis of which they held the building. A lease in
terms of Section I 05 of the Transfer of Property Act gets determined on the
D happening of one of the events referred to in Section 111 of the Transfer of
Property Act. The clause relevant for our purpose is admittedly clause (d).
Insofar as it is relevant, the Section reads:
"Section 111: Determination of lease - a lease of immovable property
determines -
E
(a) x x x x
(b) x x x x
(c) x x x x
F (d) In case the interests of the lessee and the lessor in the whole of
the property become vested at the same time in one person in the
same right.
(e) x x x x
(f) x x x x
G
(g) x x x x"
On a plain reading of the provision, it is clear that in a case where a tenant
takes an assignment of the rights of the landlord or the reversion, the lease
is determined, only in a case where by such assignment, the interests of the
H
PRAMOD KUMAR JAISWAL v. BIBI HUSN BANO [BALASUBRAMANYAN, J.J 1129
lessee and the lessor in the whole of the property, become vested in the A
tenant. The emphasis in the Section is clearly on the coalescing of the entire '
rights of the lessor and the lessee in the whole of the property in the hands
of the lessee. The above provision incorporates the doctrine of merger at
common law. According to Blackstone (as quoted in Broom's Legal Maxims):
"when a less estate and a greater estate, limited subsequent to it, ·B
·coincide and meet in one and the same person without any intermediate
estate, the less is immediately annihilated; or in the law phraseology,
is said to be merged, that is sunk or drowned in the greater; or to ·
express the same thing in other words, the greater estate is accelerated
so as to become at once an estate in possession".
c
In Cheshire and Burn 's Modern Law of Real Property, 16th Edition, it .
is stated,
"The term 'merger' means that, where a lesser and a greater estate in
the same land come together and vest, without any intermediate estate, D
1
in the same person and in the same right, the lesser is immediately
annihilatt:d by operation of law. It is said to be "merged", that is,
sunk or drowned, in the greater estate. "
It is further stated :-
"The essentials are that the estates shall unite in the same person E
without any intervening estate, and that the person in whom they
unite shall hold them both in the same right.
To illustrate the first essential, if A, who is tenant for life, with
remainder to B for life, remainder to C in fee, purchases and takes a
conveyance of C's fee, the intervening life interest of B, since it is F
vested, excludes the possibility of merger." (see page 993).
In Megarry 's Manual of the law of Real Property, 8th Edition, it is
explained as follows :-
"Merger is the counterpart of surrender. Under a surrender, the landlord G
acquires the lease, whereas merger is the consequence of the tenant
retaining the lease and acquiring the reversion, or of a third party
acquiring both lease and reversion. The principle is the same in botq
surrender and merger: the lease is absorbed by the reversion and
destroyed.
H
1130 SUPREME COURT REPORTS [2005) 3 S.C.R.
A For merger to be effective, the lease and the reversion must be vested
in the same person in the same right with no vested estate intervening."
This is based on the principle that a man cannot be a lessee of himself.
The House of Lords in Rye v. Rye, [1962] AC 496 said that a person cannot
grant himself a lease of the land of which he is the owner.
B
According to the Woodfall on Landlord and Tenant,
"It may be laid down as a general rule that whenever the particular
estate and that immediately in reversion are both legal or both
equitable, and by any act or event subsequent to the creation of the
c particular estate become for the first time vested in one person in the
same right, their separate existence will cease and a merger will take
place."
An extinguishment of a tenancy by merger is thus a counterpart of
surrender by the tenant to the landlord. In Puran Chand v. Kirpal Singh,
D [200 I] 2 sec 433, this Court stated that a landlord could not become his
own tenant and
"when a landlord transfers his rights in the leased property to his
tenant there would be a merger of the rights of the tenant in his
property to his higher rights as owner and the tenancy would come
E to an end under Section 11 l(d) of the Transfer of Property Act."
Thus, the ingredients are that two immediate estates should come into
the hands of the same person at the same time and it must be rights in the
whole of the property. A merger is prevented if there is an intermediate estate
outstanding with another at the relevant time.
F
6. Obviously, the taking of an assignment of a fraction of the reversion,
or the rights of a co-owner landlord, does not and cannot bring about a
determination of the lease in terms of Section 11 l(d) of the Transfer of
Property Act. That a lease is not extinguished because the lessee purchases
G a part of the reversion was laid down by the Privy Council in Faquir Baksh
v. Murli Dhar, (58 Indian Appeals 75). Their Lordships after setting out the
terms of Section I I I of the Transfer of Property Act quoted with approval
the statement of the law made by the trial Court in that case that for a merger
to take place, "The fusion of interests required by law is to be in respect of
the whole of the property." This Court in Badri Narain Jha and Ors. v.
H Rameshwar Dayal Singh and Ors., [1951] SCR 153 held that if a lessor
PRAMOD KUMAR JAISWAL v. BIBI HUSN BANO [BALASUBRAMANYAN, J.] 1131
purchases the whole of .the lessee's interest, the lease is extinguished by ,A
merger, but there can be no merger or extinction where one of several joint
holders of the mokarrari interest purchases portion of the lakhraj interest. It
was held that when there was no coalescence of the interest of the lessor and
the lessee in the whole of the estate, there could be no determination of the
lease by merger. We do not think that it is necessary to multiply authorities B
in the face of the plain language of the provision and the authoritative
pronouncements of the Privy Council and of this Court referred to above.
The position emerging from the relevant provision of the Transfer of Property
Act is that the lease or tenancy does not get determined, by the tenant acquiring
the rights of a co-owner landlord and a merger takes place and the lease gets
determined only if the entire reversion or the entire rights of the landlord are C
purchased by the tenant.
7. In Abu/ Alim v. Sheikh Jamal Uddin Ansari (supra) relied on by the
learned counsel for the appellants, the question has not been considered with
reference to the relevant provision of the Transfer of Property Act referred
to above. There is also no discussion on this question. It appears that in that D
case, an application filed by the landlord under Section 2l(l)(a) of the U.P.
Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 for
release of the building from the tenant, was held to be not maintainable
because the tenant had in the meanwhile acquired co-ownership in the demised
shop. It is simply stated
E
'that the change of status of the tenant to that of being an equal co-
owner of the un-partitioned property, would, therefore, lead to an !
irresistible conclusion that the release application was not maintainable.
It is not disputed that there has been no partition of the suit pr~mises
till date. The High Court was under the circumstances not justified in F
upsetting the findings of the trial court and the appellate court in
exercise of its powers under writ jurisdiction.'
With respect, we cannot consider this decision as laying down a
proposition of law. that on a tenant acquiring the right of a co-owner landlord,
the tenancy of a building gets extinguished and the landlord cannot seek G
eviction of the tenant under the Act or the fixation of fair rent under the Act.
.... It must be pointed out that the observations as above are made even without
referring to Section 11 l(d) of the Transfer of Property Act which governs
such a case and the earlier decisions of this Court. The observation runs
counter to the statutory provision. Hence, the decision must be held to be not
H
1132 SUPREME COURT REPORTS [2005] 3 S.C.R.
A correctly decided on this question. The decision in Jagdish Dutt and Anr. v.
Dhara~1 Pal and Ors 's. case (supra) is also of no assistance to the appellants
since that was a case to which, according to this Court, Section 111 (d) of the
Transfer of Property Act had no application. Their Lordships stated in
paragraph 6 of the Judgment therein,
B "We need not examine the scope of Section 111 ( d) of the Transfer of
Property Act inasmuch as Respondent No. 2 is held to be trespasser
and not a lessee."
Their Lordships proceeded to say that they had to find out the effect of
the purchase of divided interest of some of the coparceners in the family of
C the decree-holder in respect of the property that was the subject matter of
execution. In view of the fact that, that was not a case dealing with merger
under Section 111 of the Transfer of Property Act, we do not think it necessary
to consider the correctness or otherwise of the above decision, though there
may be merit in the submission on behalf of the respondents that the said
D decision cannot be said to lay down the correct law, even in respect of the
effect of acquisition of co~ownership rights by a person, claiming to obstruct
the execution of a decree for eviction especially since that was also a claim
of right by a judgment debtor who had been directed to be evicted by the
decree.
E 8. In T. Lakshmipathi and Ors. v. P. Nithyananda Reddy and Ors.,
(supra) this-Court considered the question in detail in the context of Sections
105 and 111 of the Transfer of Property Act and came to the conclusion that
there is no determiitation of the lease in terms of Section 111 ( d) of the
Transfer of Property Act ·where a tenant acquires only partial ownership
F interest. After referring to the decision of the Privy Council, the decision of
this Court and other relevant materials, this Court held that the lease cannot
be said to have been determined by merger so long as the interests of the
Jessee, the lesser estate and that of the owner, the larger estate, do not come
to coalesce in full. This Court also noticed that merger was largely a question
of intention dependant on· certain circumstances and the courts will presume
G against it when it operates to the disadvantage of a party. With respect we
find that the position has bet:n correctly stated in T. Lakshmipathi and Ors.
v. P. Nithyananda Reddy and Ors., (supra). The subsequent decision in India
Umbrella Manufacturing Co. and Ors. v. Shagabandei Agarwal/a (dead) by
Lrs. Savitri. Agarwalla (Smt.) and Ors., (supra) also proceeds on the same
lines and supports the above position: We approve the principle of law stated
H
PRAMOD KUMAR JAISWAL v. BIBI HUSN BANO [BALASUBRAMANYAN, J.] 1133
in T. Lakshmipathi and Ors. v. P. Nithyananda Reddy and Ors., (supra). A
9. Learned counsel for the appellants referred to the decision in Nalakath
Sainuddin v. Koorikadan Sulaiman, [2002] 6 SCC l and submitted that the
ratio of that decision supports his arguments. That was a case where a lessor
granted a building consisting of two rooms on lease to a tenant. The tenant,
in his tum sub-let one of the rooms to another and continued to be in possession B
as a tenant of one of the rooms. The sub-tenant of one of the rooms, purchased
the entire reversion or the rights of the landlord from the original owner, the
head lessor. On the strength of the assignment of the reversion, the sub-
tenant of one of the rooms sued his lessor - the original tenant, for eviction
under the Kerala Buildings (Lease and Rent Control) Act. What the sub- C
tenant of a part of the building had in his hands was only sub-tenancy regarding
that portion and the reversion of the entire original lease in his hands. The
original lease granted was still outstanding and it had to be terminated and
the assignee ·sub-tenant had approached the Rent Control Court for
extinguishment of the tenancy granted by the landlord in favour of the original
tenant and for possession of the portion or the room in the hands of the D,
original lessee. It could not be said to be a case where the entire rights of the
lessor and the lessee in the whole of the property had come into the hands
of the sub-lessee. Therefore, there could be no merger in the eye of law. In
an identical situation this Court in Indra Perfumery v. Moti Lal and Ors.,
(1969) II SCWR 967) held that Section 11 l(d) of the Transfer of Property E
Act would have no application. This Court stated :
"Section 11 l{d) of the Transfer of Property Act, on which the
appellant relied, does not assist his case. That clause provides that a
lease of immoveable property determines in case the interests of the
lessee and the lesser in the whole of the property becomes vested at F
the same time in one person in the same right. The clause has no
application, unless the interest of the lessee and the lessor in the
whole of the property is vested in the same person. The appellant is
the owner of the house, he is also a tenant of a part of the house of
which the respondents are tenants from Mohd. Shafi."
G
10. When an owner of property grants a lease to another, he retains
with himself the reversion and transfers the right as a lessee to the transferee .
.,.,,_ __, When that transferee, the first lessee, leases out the building or a part thereof
further, that lessee retains with him the reversion of that sub-lease and transfers
to the sub-lessee only the rights of a lessee under him. Even in spite of the
H
1134 SUPREME COURT REPORTS [2005] 3 S.C.R.
A transfer of the reversion of the first lease by the ultimate landlord to the sub-
Iessee, the original lessee, on the strength of the tenancy created by him, is
entitled to seek eviction of his tenant, namely, the sub-tenant on the strength
of his letting. The fact that the sub-tenant had acquired the ultimate reversion,
might not stand in the way since so long as the tenancy in favour of the
original lessee is not terminated in the mode known to law, that lessee would
B continue to enjoy the rights of the transfer in his favour by way of lease. The
merger takes place in terms of Section 111 (d) of the Transfer of Property
Act, only in a case where the interests of the lessee and that of the lessor in
the whole of the property, become vested at the same time in one person, in
the same right. In Nalakath Sainuddin v. Koorikado11 Sulaiman (supra) such
C a sub-tenant had rightly approached the Rent Control Court for eviction of
his lessor, the lessee from the landlord, by invoking the relevant provisions
of the Rent Control Act on the strength of the transfer of ownership in his
favour .by the head lessor. The rights under the original lease still continued ~·
with the original lessee and the right in the property to possess, outstanding '
with the lessee had not come into the hands of the sub-lessee merely on the
D strength of the assignment of the ultimate reversion. It could not, therefore,
be said that there was a coalescing of the interest of the lessee and the lessor
in the assignee landlord, (the sub-tenant) in respect of the original lease in the
whole of the property as contemplated by Section 11 l(d) of the Transfer of
Property Act. The decision in Nalakoth Sainuddin v. Koorikadan Sulaiman
E (supra) is of no avail to the appellants. ·
11. It is clear from the facts of the case in Nalakath Sainuddin v.
Koorikadan Su/aiman (supra) that when the sub-tenant of a part took an
assignment of the reversion of the head-lease, an intermediate estate in the
form of the original lease was still outstanding not only as regards the room
F or portion in the por' ·ssion of the lessee himself but also as regards the
portion or room in his possession as a sub-lessee.
12. As the passages from text books extracted in paragraph 6 show, the
intervention of an intennediate estate prevents a merger in the hands of the
sub-lessee-assignor of the ultimate reversion. The original lease still
G outstanding, is an intermediate estate. 'Intermediate', according to concise
Oxford Dictionary means "coming between two things in time, place, character
,_
.... _...
etc." The estate in the leasehold would hence be an intermediate estate coming I
between the ultimate reversion and the sub-lease.
In Someshwari Prasad Narain Deo v. Maheshwari Prasad Narain Deo,
H
PRAMOD KUMAR JAISWAL v. BIBI HUSN BANO [BALASUBRAMANYAN, J.]} }35
'
ILR X Patna 630, the owner had acquired the rights of the sub-tenant of a A,
portion of the leased property. The plea of merger raised therein was rejected
in the following words :
"The position in Artoka was that the Raj was the superior and had
granted the village in lekheraj to certain Baids who had created a
mukarrari lease of a portion thereof. This mukarrari wasacquired by B
the Raj. Consequently there could be no coalescence, because there
is an intermediate estate of the Baids still in existence to prevent it;
and moreover the mukarrari interest was only over a portion of the
property."
Fry, J, stated in Chambers v. Kingham, Law Reports (1878) 10 Chancery c
--- 743, "I take the general rule to be, that where one of the interests is held en
autre droit, no merger takes place." According to Black's Law Dictionary en
autre droit means 'in the right of another'. The leasehold interest outstanding
with the original lessee would be an interest held by that lessee in his own
right standing in the way of merger. D
In Madan Pal v. Bashanti Kumar Shit, AIR (1989) CALCUTTA 223,
a sub-lessee of a portion had acquired a part of the interest of the superior
lessor. The plea of extinguishment by a merger was raised. The Court held.
"The interest of the lessor and the lessee in the whole of the property
E
should become vested at the same time in one person and in the same
right, i.e., there must be the union of the entire interest of the lessor
and the lessee. Thus a lease is not extinguished because the lessee
purchases a part of the reversion. Again, the union of estate cannot
occur if there is any intervening estate. In the instant case the petitioner
has acquired only I/3rd interest of the lessor. Moreover, the petitioner F
has not acquired the interest of the opposite party, who is his lessee.
He has acquired only a partial interest of the superior landlord or the
lessor of the first degree. It can not, therefore, be said that there has
been the union of the entire interest of the lessor and the lessee. There
is no merger even though by virtue of the purchase, the petitioner has
G
become one of the co-sharer landlords of the opposite party but the
sub-tenancy created by the opposite party in favour of the petitioner
-- can not be said to have determined."
In a case involving surrender by a sub-lessee in favour of the landlord
or the ultimate owner, the Kerala High Court in P. Veeriah v. Mohammed H
1136 SUPREME COURT REPORTS (2005] 3 S.C.R.
A Kunju Koya and Ors., (1991) 2 KLJ 96, held that there would be no
extinguishment of the original lease granted by the owner by merger and that
the lease between the lessor and the lessee will continue. Thus, so long as an
intermediate estate was outstanding, it appears to be not possible to say that
there would be a merger in the hands of sub-lessee of a portion when he takes
B an assignment of the interests of the original landlord.
13. Section 44 of the Transfer of Property Act referred to by learned
counsel does not enable him to contend that rights of the lessee and the lessor
in the whole of the property has vested in the lessee. The right to joint
possession acquired by the assignment from a co-owner, under that section
C still leaves outstanding the rights of the other co-owners in the property and
does not bring about a situation enabling the lessee to plead that the entire
rights in the whole of the. property have come to coalesce in him so as to
bring about a merger. There is no merger unless the interests are co-extensive.
In other words, there must be a union of the entire interest of the lessor and
the lessee. This does not happen when a lessee takes an assignment of only
D the rights ofa co-owner-lessor. The position emerging from Section 44 of the
Transfer of Property Act, therefore, does not make any dent in the ratio
enunciated in T. Lakshmipathi and Ors. v. P. Nithyananda Reddy and Ors.,
(supra).
14. Section 109 of the Transfer of Property Act also does not help the
E appellant. Section 109 only provides that even without an attomment by the
lessee, an assignee of the rights of the lessor would be entitled to proceed
against the lessee on the basis that he is his lessee, except as regards arrears
of rent already accrued (unless it is specifically conveyed). This statutory
attomment, so ·to say, does not enable the assignee of the reversion to plead
F that the lease has becorr extinguished. It would only enable the assignee
from the lessor to assert his rights as a lessor notwithstanding that there is no
privity of contract between him and the lessee. In a case where he is an
assignee of a portion, he could enforce his right to claim eviction or that
portion, on the strength of Section I 09 of the Act even though the original
lessor could not split up the lease himself. Construing the effect of the words
G of the Section, in connection with the question whether the tenancy gets split
up on the assignment of a part of the reversion, this Court in Mohan Singh
(Dead by L.Rs.) v. Devi Charan and Ors., AIR (1988) SC 1365, observed:
"It is trite proposition that a landlord cannot split the unity and integrity
of the tenancy and recover possession of a part of the demised premises
H
.....
PRAMOD KUMAR JAISWAL '"BIBI HUSN BANO [BALASUBRAMANYAN, J.J 1137
from the tenant. But S.109, T.P. Act, provides a statutory exception A
to this rule and enables an assignee of a part of the reversion to
exercise all the rights of the landlord in respect of the portion respecting
which the reversion is stl assigned subject, of course, to the other
covenants running with the land. This is the true effect of the words
'shall possess all the rights ..... of the lessor as to the property or part B
transferred ...... ' occurring in S.109, T.P. Act. There is no need for a
consensual attomment. The attomment is brought about by operation
of law. The limitation on the right of the landlord against splitting up
of the integrity of the tenancy, inhering in the inhibitions of his own
contract, does not visit the assignee of the part of the reversion. There
is no need for the consent of the tenant for the severance of the C
reversion and the assignment of the part so severed. This proposition
is too well settled to require any further elucidation or reiteration."
This indicates the effect of Section I 09 of the Act. It only does away with
the need for an attomment and brings about a splitting up of the tenancy in
certain cases. It does not put an end to the tenancy itself as regards the split D
portion and only leaves the assignor-lessor to work out the rights against the
tenant.
In Vishnu Deo v. Bal Kishan, AIR (2002) SC 569, this Court considered
the availability of a plea based on an attommcnt by a sub-lessee to the
original lessor. In that case, the lessee had sued the sub-lessee for eviction E
with arrears of rent under the Rent Control Act. The ultimate lessor, the
owner, a trust, had sued the lessee for possession. The sub-lessee resisted the
suit by his lessor by pleading that he had attomed to the original lessor-owner
and since t~e owner had sued the lessee for possession, the lessee could not
seek to evict the sub-lessee and the lessee's suit was not maintainable. This F
Court repelled the said contention. This Court held that the defence of eviction
by title paramount, was not available to the sub-lessee. On the subsistence of
the relationship of lessor and lessee between the parties in spite of the
attornment by the sub-lessee to the ultimate lessor-owner, this Court held :
"The tenant's tenancy with the trust will not come to an end unless G
and until a decree for eviction on one of the grounds available under
the Rajasthan Act has been passed against him and termination of his
tenancy upheld by a judicial verdict. Till then he would remain a
tenant of the Trust. Mere institution of a suit for eviction by the
Trust, the owner of the property; against the tenant does not bring the
tenancy of the tenant to an end. The tenant cannot be said to have H
ll38 SUPREME COURT REPORTS (2005] 3 S.C.R.
A been evicted by paramount title holder. It cannot be said that the
tenant does not have any defence nor ·can he lawfully resist the suit
filed by the owner Trust. The plain and simple legal position which
flows is that the sub-tenant must discharge his statutory obligation to
put his landlord, that is, the tenant in possession of the premises in
view of the latter's entitlement to hold the tenancy premises until his
B own right comes to an end and the tenant must discharge his statutory
obligation to put his own landlord, that is, the Trust, in possession of
the tenancy premises on his entitlement to hold the tenancy premises
·-
coming to an end."
(Head Notes. Emphasis supplied)
c
This Court also re-emphasized the obligation of the sub-tenant to surrender
to his lessor in terms of Section 108 (q) of the Transfer of Property Act.
15. Here in this case, the lessee has acquired only the rights of certain
D co-owner landlords and may have the right to work out his rights against the
others. The right to work out his rights would not enable him to plead that
the two rights in the whole of the property has come to vest in him. What
is involved in the present case is the question whether on the acquisition of
the rights of some of the co-owner landlords by the tenant, there is an
extinguishment of the tenancy by merger as postulated by Section 111 (d) of -
E the Transfer of Property Act. T. Lakshmipathi answers that question and .with
respect, answers that question correctly.
16. A plain and grammatical interpretation of Section 11 l(d) of the
Transfer of Property Act leaves no room for doubt that unless the interests
of the lessee and that of the lessor in the whole of the property leased,
F become vested at the same time in one person in the same right, a determination
of the lease cannot take place. On taking an assignment from some of the co-
owner landlords, the interests of the lessee and the lessor in the whole of the
property do not become vested at the same time in one person in the same
right. Therefore, a lessee who has taken assignment of the rights of a co-
G owner lessor, cannot successfully raise the plea of determination of tenancy
on the ground of merger of his lessee's estate in that of the estate of the
landlord. It is, thus, clear that there is no substance in the contention of the
learned counsel for the appellants that in the case on hand, it should have
been held that the tenancy stood determined and the application of the landlord
for a direction to the tenant to deposit the rent in arr.ears should have been
H dismissed. The position of the appellants as tenants continue and they are
PRAMOD KUMAR JAISWAL v. BIBI HUSN BANO [G.P. MATHUR, J.] } }39
bound to comply with the requirements of the Rent Control Act under which A
the order for deposit has been passed against them. The High Court has
rightly dismissed the revision.
17. Thus, there is no merit in this appeal. Confirming the order of the
High Court the appeal is dismissed.
B
G.P. MA THUR, J. I am in agreement with the judgment of brother
Balasubramanyan, J. that the appeal be dismissed, except on a limited point
on which the learned Chief Justice has written a separate opinion, with which
I concur.
R.P. Appeal dismissed.
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