Holding

A co‑sharer and subsequent buyers who are in possession of a portion of the property, irrespective of the size of their share, are liable to render accounts of rent and to contribute to the common kitty as assessed by the trial court.

Summary

The plaintiff filed a suit for partition of a jointly owned property, seeking that all co‑sharers render accounts of rent collected and that the property be auctioned. Defendant No.3(a) (S.C. Bhalla) had purchased a 1% share from the original co‑sharer and claimed he neither let out nor earned rent from his portion, while defendants Nos.15‑19, subsequent buyers of a 15% share, asserted they were only in possession of an area equal to their ownership and thus not liable to render accounts. The High Court held that both defendant No.3(a) and defendants Nos.15‑19 were not required to render accounts, a view the Supreme Court found erroneous. The Court observed that the plaintiff had admitted that defendant No.3(a) had collected rent and that the rent notes appeared sham, warranting an inquiry and assessment of appropriate rent. It also noted that the possession of defendants Nos.15‑19 exceeded their share, making them liable to contribute to the common kitty. Consequently, the Supreme Court set aside the High Court’s judgment, directing the trial court to compel the defendants to render accounts and pay assessed rent, and ordered expedited disposal of the case.

Issues considered

Whether a co‑sharer who has purchased a share and is in possession of a portion of the property is liable to render accounts of rent collected.
Whether subsequent buyers who possess a portion of the property proportionate to their share are liable to render accounts or contribute rent.
Whether the High Court erred in absolving defendant No.3(a) and defendants Nos.15‑19 from the duty to render accounts.

Legislation cited

Chandigarh (Sale of Sites and Buildings) Rules, 1960

Subjects

Rendition of accounts by co-sharersSuit for partitionJoint propertyCo-sharers of the suit propertySubsequent buyersFurnishing accounts of rent collectedTenantsPreliminary decreeFinal decreeAuction

Judgment

[2024] 7 S.C.R. 1417 : 2024 INSC 552

Rajinder Kaur (Deceased) Through Legal Heir Usha
v.
Gurbhajan Kaur (Deceased) Through Lrs. Upinder
Kaur and Others
(Civil Appeal Nos. 7946-7947 of 2024)
23 July 2024
[C.T. Ravikumar and Rajesh Bindal,* JJ.]

Issue for Consideration
Suit for partition of the joint property was filed by the appellant-
plaintiff. High Court whether justified in passing the impugned
judgment holding that defendant No.3(a) and defendant Nos.15
to 19 (subsequent buyers) were not liable to render any accounts.

Headnotes†
Suit – Rendition of accounts by co-sharers – Defendant No.3(a)
and defendant Nos.15 to 19, if were liable to render accounts:
Held: Yes – Admittedly, defendant No.3(a) had rented out a
portion of the property and collected rent therefrom, thus, there
was no good reason for the High Court to have absolved him from
rendition of accounts – However, as the plea sought to be raised by
the defendant No.3(a) regarding rent notes produced by him were
prima facie found to be sham transactions, as the market rate of
the rent of the portion in control of the defendant No.3(a) was much
more at that time, the Trial Court will hold an inquiry on this aspect
and fix appropriate rent to which the defendant No.3(a) would be
liable to contribute to the common kitty for appropriation amongst
all the co-sharers – High Court erred in finding that the defendant
No.3(a), being in self-occupation of the part of the property, being
a co-sharer, will not be liable to render any accounts to arrive
at such a conclusion – Reference was made to the fact that his
vendor (defendant No.3) had contested litigation with the tenant
(defendant No.10) and spent huge amount thereon – But the fact
remains that the Defendant No.3(a) had purchased the property
from defendant no.3 after it was already vacated by the tenant and
he was handed over vacant physical possession thereof – Further,
defendant Nos.15 to 19 were absolved from rendering account on
the ground that the portion in their possession was to the extent
of their share in the property – However, this issue has not been
* Author
1418 [2024] 7 S.C.R.

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determined by any authority – High Court erred in holding that
defendant No.3(a) and defendant Nos.15 to 19 were not liable to
render any accounts – Impugned judgments set aside – Defendant
No.3(a) and defendant Nos.15 to 19 to render accounts and/or
liable to contribute rent as assessed by the Trial Court during the
course of passing of final decree for the portions in their respective
possession. [Paras 20, 21, 21.2, 22, 23]

Case Law Cited
Resident’s Welfare Association and Another v. Union Territory of
Chandigarh and Others [2023] 1 SCR 601 : (2023) 8 SCC 643 :
2023 INSC 22 – referred to.

List of Acts
Chandigarh (Sale of Sites and Buildings) Rules, 1960.

List of Keywords
Rendition of accounts by co-sharers; Suit for partition; Joint property;
Co-sharers of the suit property; Subsequent buyers; Furnishing
accounts of rent collected; Tenants; Preliminary decree; Final
decree; Auction.

Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 7946-7947 of
2024
From the Judgment and Order dated 05.04.2018 of the High Court
of Punjab & Haryana at Chandigarh in RSA No. 6076 of 2015 and
RSA No. 2761 of 2016
Appearances for Parties
Samar Pratap Singh, Karanvir Singh Khehar, Ashok K. Mahajan,
Advs. for the Appellant.
Dama Seshadri Naidu, Sanjeev Anand, Sr. Advs., M/s. Delhi Law
Chambers, Rajiv Kataria, Ms. Debjani Das Purkayastha, Shurya
Bhalla, Santosh Krishnan, Ms. Sonam Anand, Ms. Deepshikha
Sansanwal, Ms. Sl Soujanya, Ankit Goel, Nikhil Sharma, Sahil
Patel, Siddharth Batra, Rhythm Katyal, Chinmay Dubey, Ms. Shivani
Chawla, Ms. Archna Yadav, Pratyush Arora, Yuvraj Chhabra, Advs.
for the Respondents.
[2024] 7 S.C.R. 1419

Rajinder Kaur (Deceased) Through Legal Heir Usha v.
Gurbhajan Kaur (Deceased) Through Lrs Upinder Kaur and Others

Judgment / Order of the Supreme Court

Judgment
Rajesh Bindal, J.
1. Leave granted.
2. The present appeals arise out of a suit for partition1 filed by the
appellant for partition of the property jointly owned at that time by the
appellant-plaintiff and respondents-defendant Nos.1 to 9. Defendant
Nos.10 to 14 were impleaded in the suit as they were stated to be
tenants on the part of the property. During the pendency of the
suit before the Trial Court2 respondent-defendant No.3, Bhupinder
Singh, having sold his share to S.C. Bhalla, he was impleaded as
defendant No.3(a). Further, defendant Nos.6 to 9 having sold their
shares to the subsequent buyers, who were impleaded as defendant
Nos.15 to 19.
3. After the amendments were carried out in the plaint, considering
the subsequent events and impleadment of subsequent buyers,
the final prayer was for partition of the suit property by metes and
bounds and in case not possible, sale thereof by open auction and
distribution of the sale proceeds amongst the co-sharers. Prayer was
also made for directing the defendant Nos.3 to 9 to furnish accounts
of rent collected by them from tenants and a direction to the tenants
(defendant Nos.10 to 14) to deposit the rent in the court. Further, the
plaintiff sought direction against defendant No.3-Bhupinder Singh
to pay mesne profit at the rate of ₹150/- per square ft. per month
for the area under his occupation. The present litigation is at the
stage of passing of preliminary decree. The percentage of shares
of the plaintiff and the defendants originally impleaded in the suit, to
which no dispute has been raised by the parties before this Court,
have been noticed by the High Court3 in the impugned judgment
dated 05.04.2018.4 The same is extracted below:

1 Civil Suit No. 4406 of 2005
2 Civil Judge (Junior Division), U.T. Chandigarh
3 High Court of Punjab and Haryana at Chandigarh
4 Passed in RSA No. 6076 of 2015
1420 [2024] 7 S.C.R.

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S. NO. NAME OF OWNER SHAREHOLDING
1. Rajinder Kaur (Plaintiff) 25%
2. Gurbhajan Kaur (Defendant No. 1) 12.5%
3. Prabhasharan Singh Sandhu 12.5%
(Defendant No. 2)
4. Bhupinder Singh (Defendant No. 3) 1%
5. Ajay Aggarwal (Defendant No. 4) 17%
6. Neelam Aggarwal (Defendant No. 5) 17%
7. Amarnath Singla (Defendant No. 6) 3.75%
8. Laxmi Devi (Defendant No. 7) 3.75%
9. Meena Singla (Defendant No. 8) 3.75%
10. Seema Rani (Defendant No. 9) 3.75%
4. The aforesaid position was before the sale of their respective shares
by defendant No.3-Bhupinder Singh to defendant No.3(a)-S.C. Bhalla
and by defendant Nos.6 to 9 to defendant Nos.15 to 19. Preliminary
decree for partition of the suit property to the extent of 25% share
was passed by the Trial Court on 10.10.2012 in favour of the plaintiff.
As the property could not be partitioned on account of legal bar
under the Chandigarh (Sale of Sites and Buildings) Rules, 1960,5 the
same was directed to be auctioned. The preliminary decree was also
passed for rendition of accounts against the defendants wherein all
the co-sharers of the suit property were directed to render accounts.
Defendant Nos.4 & 5 having inducted tenants in some portion of the
suit property in their possession were directed to submit the accounts
of rent collected by them. The market rate of the rent of the portions
in possession of defendant no.3(a)-S.C. Bhalla and defendant Nos.15
to 19 were to be determined while passing the final decree. Defendant
No.3(a) having stepped into the shoes of defendant No.3, defendant
Nos.4 & 5, and defendant Nos.15 to 19, having stepped into the
shoes of defendant Nos.6 to 9, were restrained from creating charge
or encumbrances on the suit property.
5. Challenging the aforesaid preliminary decree passed by the Trial
Court, two appeals were filed. Civil Appeal No. 857 of 2012 was filed
by defendant No.3(a), and Civil Appeal No. 850 of 2012 was filed

5 Hereinafter referred to as ‘the 1960 Rules’
[2024] 7 S.C.R. 1421

Rajinder Kaur (Deceased) Through Legal Heir Usha v.
Gurbhajan Kaur (Deceased) Through Lrs Upinder Kaur and Others

by defendant Nos.15 to 19, the subsequent buyers from defendant
Nos.6 to 9.
5.1. Inter alia the ground raised by defendant No.3(a)-S.C. Bhalla
regarding the mesne profit was that the assessment of the rent
by the Trial Court was not appropriate as material evidence
placed on record was not considered. Rent being given by a
tenant for a small area cannot be made the basis of assessment
of rent of the complete building. There was no denial as such
regarding his liability to pay the rent. He had even admitted the
fact that certain tenants had been inducted by him.
5.2. The defendant Nos.15 to 19/appellants before the First Appellate
Court are in possession of part of the suit property on the ground
floor, in which they are carrying on business. The appeal was
filed primarily on two grounds, firstly, that the property was
sold to them while concealing the fact of pendency of the civil
suit regarding partition of the property and passing of restraint
order. Another objection raised by them was for rendition of
accounts claiming that they were in possession of less than 15
% share of the suit property and had not been collecting any
rent, hence, no accounts are to be rendered.
5.3. The First Appellate Court6 allowed the appeal filed by the
defendant Nos.15 to 19 holding that they, being in possession
of the share of the suit property to the extent of their ownership,
were not liable to render accounts to other co-sharers.
5.4. As far as the appeal filed by the defendant No.3(a) is concerned,
the judgment and decree of the Trial Court was upheld and the
appeal filed by him was dismissed.
6. Aggrieved against the judgment and decree of the First Appellate
Court, two appeals were preferred before the High Court.
6.1. R.S.A. No.6076 of 2015 was filed by the plaintiff impugning
the judgment and decree passed in the appeal preferred by
the defendant Nos.15 to 19, which was allowed by the First
Appellate Court.

6 Additional District Judge, Chandigarh
1422 [2024] 7 S.C.R.

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6.2. R.S.A. No.2761 of 2016 was filed by the defendant No.3(a)
impugning the judgment and decree of the First Appellate Court
whereby the judgment and decree of the Trial Court qua him
was upheld.
6.3. Both the appeals were taken up together and decided vide
judgment7 dated 05.04.2018. Second appeal8 was disposed of
by a short order in terms of judgment passed in R.S.A. No.6076
of 2015. The appeal preferred by the plaintiff challenging the
judgment and decree in favour of the defendant Nos.15 to 19
was dismissed, whereas appeal filed by defendant No.3(a) was
allowed. The High Court held that defendant No.3(a) cannot be
asked to render accounts. He got the possession of the property
after purchase from the earlier co-sharer Bhupinder Singh
(defendant No.3), who got the same vacated after protracted
litigation. Even if he was owner of the 1% share, he was not
in wrongful possession.
6.4. As far as the appeal pertaining to defendant Nos.15 to 19
is concerned, it was opined that they being the co-sharers
in possession having no income are not liable to render any
accounts.
7. In the aforesaid factual matrix, the matter is before this Court at
the stage of preliminary decree in a partition suit. The plaintiff has
challenged the judgment of the High Court.
8. Learned counsel for the appellant-plaintiff submitted that with the
impugned judgment passed by the High Court an anomalous situation
has been created. In the suit property at present there are 11 co-
sharers, which was originally owned by 10 co-sharers. Judgment
and decree of the Trial Court regarding sale of the property by
way of auction was not challenged by any of the co-sharers to the
extent of 84%. Challenge was made on the issue of rendition of
accounts by the co-sharers. Dispute was sought to be raised only
by co-sharers to the extent of 16% by filing two separate appeals.
One by a co-sharer who owns only 1% share and another by a set
of five co-sharers who own 15% shares.

7 Passed in R.S.A. No. 6076 of 2015.
8 Passed in R.S.A. No. 2761 of 2016 dated 05.04.2018
[2024] 7 S.C.R. 1423

Rajinder Kaur (Deceased) Through Legal Heir Usha v.
Gurbhajan Kaur (Deceased) Through Lrs Upinder Kaur and Others

8.1. The party which owned 1% share in the suit property has in
his possession half portion of the ground floor in a three-story
building. Whereas another set of persons who were owners to
the extent of 15% of shares are in possession of another half
on the ground floor. The first and second floors of the building
were under the control of the defendant Nos.4 & 5 which were
let out to the tenants. They have no objection to render accounts
of the rent collected.
9. As far as defendant No.3(a)-S.C. Bhalla, who is owner to the extent
of 1% share and in possession of half portion of the ground floor, is
concerned even if he had not let out the property, still he is liable to
make good the loss suffered by the other co-sharers. The reasoning
given by the High Court to absolve him from rendering accounts
cannot be legally sustained as he had purchased the property from
the erstwhile owner defendant No.3-Bhupinder Singh and got the
vacant physical possession. There is nothing on record to suggest
that after purchasing the property, he litigated and got the possession
from the tenants.
9.1. Insofar as another set of co-sharers to the extent of 15% shares
is concerned, they are using half portion of the ground floor for
their business, hence liable to pay for use and occupation of
the property. They cannot, of their own, claim that the portion
in their possession is to the extent of their ownership in the suit
property. This is to be determined by the Court. In case they
are found to be in possession of the property to the extent of
their share and they do not contribute to the common kitty for
use and occupation of the premises, they will not be entitled to
any share out of the amount collected from the balance 85%.
This exercise can very well be done at the time of passing of
final decree.
10. Learned counsel for the respondents-defendant nos.15 to 19, set of
co-sharers having 15% share in the property, submitted that they are
in possession of only 9.48% of the property, on the ground floor. It
was purchased during the pendency of litigation. There was no relief
claimed for rendition of accounts qua them in the suit. There was
no prayer made in the suit for a direction to the defendant Nos.15
to 19 to render accounts. They may be liable to render accounts if
they are in possession of area more than their share. In fact, they
1424 [2024] 7 S.C.R.

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are in possession of area less than their share. In the alternative,
regarding the rate of rent to be calculated in such circumstances,
it was submitted that in case the said defendants are required to
render accounts, the rent should not be calculated at the market
rate. In fact, the defendant No.3(a)-S.C. Bhalla is in possession of
the area of the property more than his share.
11. Insofar as the co-sharer, defendant No.3(a)-S.C. Bhalla, to the extent
of 1% share is concerned, the argument is that issue no.3 framed
by the Trial Court was regarding direction to furnish the accounts
of rent collected from the tenants. In the case in hand, the portion
in possession of the present co-sharer was never let out. Rendition
of accounts and mesne profits are two different concepts. It was
further argued that when the matter was pending before the High
Court, defendant No.3(a) offered to give possession of the suit
property with him to other co-sharers. An application9 in the paper
book at page no.343 was referred to. The same is dated 27.09.2017.
The argument raised is that he having offered possession cannot
now be made liable to render accounts or mesne profits. He had
purchased the property from defendant No.3-Bhupinder Singh.
Whatever possession was available with him was given to defendant
No.3(a)-S.C. Bhalla. Issue of mesne profits will come in only if the
defendant No.3(a) is found to be in wrongful possession and the
same was not given to other owners when asked for.
12. As far as the respondents-defendant Nos.4 & 5 are concerned, the
arguments raised by the learned counsel are that when partition
of an immovable property is to take place, Order XX Rule 18(2) of
C.P.C. will be applicable. Sub-rule (2) clearly provides that at the
time of passing of preliminary decree declaring the rights of several
parties interested in the property, the Court may give such further
directions as may be required. The Trial Court had rightly directed
all the parties to render accounts either for the rent collected by
them or for the portion in their possession for which the rent was
assessed at the rate of ₹107/- per square ft. per month. It was
pertaining to the defendant No.3(a) and the defendants Nos.15 to
19. For the portion under the control of the defendant Nos.4 & 5,

9 CM-12168-C-2017 in RSA-2761-2016 (O&M)
[2024] 7 S.C.R. 1425

Rajinder Kaur (Deceased) Through Legal Heir Usha v.
Gurbhajan Kaur (Deceased) Through Lrs Upinder Kaur and Others

which was let out, they have already furnished the accounts. It is
only the defendant No.3(a) and defendant Nos.15 to 19 who are
reluctant to do the same. A simple suit for partition is pending for
about two decades despite the direction issued by this Court, when
the matter came at the stage of interim direction, on 10.01.201210
to decide the suit within nine months.
13. Heard learned counsel for the parties and perused the relevant
referred record. As far as the percentage of shares of different co-
sharers in the property in-question is concerned, though partly sold
during the pendency of the suit, there is no dispute. As on today it
stands as under:

S. NAME OF SHARE TRIAL SUPREME COURT
NO. PARTIES COURT
1. Rajinder Kaur 25% Plaintiff • Appellant (Thr. LR
Usha) in SLP (C) No.
(Died on
12198 of 2018.
01.12.2006)
• Appellant (Thr. LR
Usha) in SLP (C) No.
12199 of 2018.
2. Gurbhajan 12.5% Defendant • R. No. 1 in SLP (C) No.
Kaur No. 1 12198 of 2018.
• R. No. 5 in SLP (C) No.
12199 of 2018.
3. Prabhsharan 12.5% Defendant • Respondent No. 2
Singh No. 2 (Thr. LRs) in SLP (C)
Sandhu No. 12198.
• Respondent No. 6
(Thr. LRs) in SLP (C)
No. 12199 of 2018.
4. SC Bhalla 1% Defendant • Respondent No. 3(a)
(impleaded No. 3(a) (Thr. LRs] in SLP (C)
on No. 12198 of 2018.
01.11.2008)
• Respondent No. 1
(Thr. LRs] in SLP (C)
No. 12199 of 2018.

10 Passed in S.L.P. (C) No. 33302 of 2011
1426 [2024] 7 S.C.R.

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5. Ajay 17% Defendant • Respondent No. 4 in
Aggarwal No. 4 SLP (C) No. 12198 of
2018.
• Respondent No. 8 in
SLP (C) No. 12199 of
2018.

6. Neelam Defendant • Respondent No. 5 in
Agarwal No. 5 SLP (C) No. 12198 of
17%
2018.
• Respondent No. 9 in
SLP (C) No. 12199 of
2018.

7. Kailash Defendant • Respondent No. 15 in
Chand Gupta No. 15 SLP (C) No. 12198 of
3%
2018.
• Respondent No. 19 in
SLP (C) No. 12199 of
2018.

8. Indu Bala 3% Defendant • Respondent No. 16 in
No. 16 SLP (C) No. 12198 of
2018.
• Respondent No. 20 in
SLP (C) No. 12199 of
2018.

9. Sahil Gupta 3% Defendant • Respondent No. 17 in
No. 17 SLP (C) No. 12198 of
2018.
• Respondent No. 21 in
SLP (C) No. 12199 of
2018.

10. Pratik Gupta 3% Defendant • Respondent No. 18 in
No. 18 SLP (C) No. 12198 of
2018.
• Respondent No. 22 in
SLP (C) No. 12199 of
2018
[2024] 7 S.C.R. 1427

Rajinder Kaur (Deceased) Through Legal Heir Usha v.
Gurbhajan Kaur (Deceased) Through Lrs Upinder Kaur and Others

11. Ankita Gupta 3% Defendant • Respondent No. 19 in
No. 19 SLP (C) No. 12198 of
2018.
• Respondent No. 23 in
SLP (C) No. 12199 of
2018.

14. No dispute has been raised regarding partition of the property by
the Trial Court by any of the co-sharers. It is not a matter of dispute
that in terms of law laid down by this Court in Resident’s Welfare
Association and Another vs Union Territory of Chandigarh
and Others11 interpreting the 1960 Rules, there cannot be partition
of property by metes and bounds at Chandigarh. Hence, the only
solution was for sale of property by way of auction. This was the
decree passed by the Trial Court, which was not challenged by any
of the co-sharers on this issue.
15. It has now come on record that defendant No.3(a), who purchased
1% share from the defendant No.3, is in possession of half portion
of the ground floor which according to him has not been let out.
Another half portion of the ground floor is stated to be in possession
of the respondents-defendant Nos.15 to 19, who purchased 15%
shares from the defendant Nos.6 to 9 during the pendency of the
civil suit and are utilizing the same for their own business. Defendant
Nos.4 & 5 are stated to be in control of the first and second floor of
the property which are under the tenancy of different tenants. They
do not have any grievance against the direction issued by the Trial
Court regarding rendition of accounts of the rent collected by them.
In fact, they have already rendered the accounts.
16. The effect of the judgment of the High Court is that the co-sharers in
the property to the extent of 16% are not liable to render accounts.
17. Firstly, we deal with the issue regarding rendering of accounts by
the defendant No.3(a), who had stepped into the shoes of defendant
No.3 as he had purchased his share during the pendency of this
suit. It is not in dispute that the defendant No.3 was owing only 1%
of the share in the property in question, whereas he had possession
of a substantial part thereof and handed over the possession of the
same to the defendant No.3(a).

11 [2023] 1 SCR 601 : (2023) 8 SCC 643 : 2023 INSC 22
1428 [2024] 7 S.C.R.

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18. Defendant No.3(a), when appeared as a witness before the Trial
Court for his examination-in-chief, filed affidavit dated 01.06.2012.
He admitted that he had stepped into the shoes of defendant No.3,
having purchased his share by way of a registered sale deed dated
02.06.2006. In paragraph 8 of the affidavit, he stated that he had
inducted five tenants in the property, namely Sushma Kanwar,
Santosh Chauhan, Deepak Sagar, Inder Pal and Gurusharan
Singh. The monthly rent received therefrom was ₹1,500/-, ₹1,000/-,
₹1,500/-, ₹1,000/- and ₹800/-, respectively was also mentioned. This
information was furnished by the defendant No.3(a) in compliance
with an order passed by the Trial Court on 04.04.2006, the relevant
parts thereof as contained in paras 23 and 26 of the said order are
extracted below:
“23. ………In the eventuality of the partition, the plaintiff
and the other co-owners shall be entitled to a share in the
rent and profits so, it will be in the fitness of the things if
the defendant No.3 is directed to keep the proper accounts
of the amount so realized by him regarding the property
in question. He is hereby directed accordingly.
xxx xxx xxx
26. As a result of the above detailed discussions, both the
applications are disposed of accordingly. The application
for receiver stands dismissed and the application under
Order 39 rule 1 & 2 r/w 151 CPC stands disposed of
with the directions to defendant No.3 and the remaining
defendants to keep the proper accounts of the amount so
realized by them regarding the property in dispute, like rent
etc., and in case, the defendant No.3 lets out the demised
premises to anyone after obtaining the possession, he will
intimate the court in advance with complete particulars of
the person and will also intimate such person that he will
be bound by the final outcome of the partition proceedings,
and defendant No.3 and the other co-owners will not create
any kind of charge on the property in dispute, so as that
the rights of the parties after partition can be protected.”
18.1. To put the record straight with reference to the amount of rent
claimed to have been received by the defendant No.3(a), it is
relevant to refer to the fact that the learned Additional District
Judge vide order dated 24.05.2010 had appointed the receiver.
[2024] 7 S.C.R. 1429

Rajinder Kaur (Deceased) Through Legal Heir Usha v.
Gurbhajan Kaur (Deceased) Through Lrs Upinder Kaur and Others

The receiver visited the spot (property in question) and informed
that none of the tenants as pointed by defendant No.3(a)-S.C.
Bhalla was occupying the premises. The Trial Court in its order
passed on 27.02.2012 found that the documents (rent notes as
were available in the record of the Trial Court)12 produced by
defendant No.3(a)-S.C. Bhalla showing tenancy of the portion
of the building in his possession has doubt of genuineness
thereof. It was also noticed that the plaintiff was ready to pay
₹1,50,000/- per month as rent for the portion in possession of
defendant No.3(a)-S.C. Bhalla. Hence, it would not be possible
that he would rent out the same @ ₹5,800/- per month. Be that
as it may, this matter will require examination by the Trial Court
in the course of passing the final decree.
19. As far as defendant Nos.15 to 19 are concerned, admittedly they
are purchasers of the property from defendant Nos.6 to 9 during the
pendency of the suit. It is claimed by them that they are carrying
on their own business in the portion in their possession and have
not let out the same to anyone. Hence, not generating any income
therefrom by way of letting out the property. The First Appellate
Court held that they are owners to the extent of 15% share in the
property and are stated to be in possession of front half portion on
the ground floor of the show-room (property in question), stated
to be about 1,050 sq. ft. The First Appellate Court had accepted
their contention, relieving them from liability to render accounts on
the ground that they are in possession of the suit property to the
extent of their ownership, a fact yet to be determined. The value of
the portion of different floors of the suit property may be different,
hence, the value of shares.
20. As noticed earlier, the issue raised by the plaintiff seeking partition of
the joint property before this Court is only with reference to rendition
of accounts by the defendant No.3(a) and defendant Nos. 15 to 19.
The opinion expressed by the High Court in the impugned judgment,
that both of them are not liable to render any accounts, deserves
to be set aside.

12 (i) Dated 10.10.2008 executed between S.C. Bhalla [D-3(a)] and Deepak Rai
(ii) Dated 15.10.2008 executed between S.C. Bhalla [D-3(a)] and Santosh Chauhan
(iii) Dated 18.10.2008 executed between S.C. Bhalla [D-3(a)] and I.P. Sharma
(iv) Dated 24.10.2008 executed between S.C. Bhalla [D-3(a)] and Gursharan Singh
(v) Dated 24.10.2008 executed between S.C. Bhalla [D-3(a)] and Sushma Kanwar
1430 [2024] 7 S.C.R.

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20.1. As far as defendant No.3(a) is concerned, as noticed above, he,
being in possession of part of the property on the ground floor,
had claimed that he had let out that to five tenants @ ₹5,800/-
per month. When the receiver was appointed, defendant No.3(a)
wanted to deposit with him the rent collected from tenants.
The receiver refused to accept the rent. An application filed by
the defendant No.3(a)-S.C. Bhalla before the Trial Court for a
direction to the receiver to receive a cheque dated 25.08.2011
for ₹87,000/- was disposed of with the observation that the
receiver had rightly refused to receive the alleged rent as
the alleged tenancies created by S.C. Bhalla were found to
be prima facie not genuine. He shall be bound to render the
accounts at the time of partition as observed by the High Court
in its order dated 08.08.2011. The reference can be made to
the order dated 27.02.2012 passed by the Trial Court while
disposing of the applications filed by the receiver and the
defendant No.3(a).
21. Since it is the admitted case of the defendant No.3(a) himself that he
had rented out a portion of the property and collected rent therefrom,
there was no good reason for the High Court to have absolved him
from rendition of accounts. However, this is with a rider as the plea
sought to be raised by the defendant No.3(a) regarding rent notes
produced by him were prima facie found to be sham transactions, as
the market rate of the rent of the portion in control of the defendant
No.3(a) was much more at that time. Even plaintiff offered ₹1,50,000/-
per month. Hence, Trial Court will have to hold an inquiry on this
aspect and fix appropriate rent to which the defendant No.3(a) would
be liable to contribute to the common kitty for appropriation amongst
all the co-sharers.
21.1. As far as the argument raised by the learned counsel for the
defendant No.3(a)-S.C. Bhalla regarding application filed in the
High Court offering to hand over possession of the property
in his possession is concerned, as annexed in the present
paper book at page No.343, the application was traced out
from the record and the same bears No.CM-12168-C-2017
in RSA-2761-2016. It is evident from the order passed by the
High Court dated 30.01.2018 that the aforesaid application was
directed to be heard with the main case. Meaning thereby that
the defendant No.3(a) may not be serious about the prayer
[2024] 7 S.C.R. 1431

Rajinder Kaur (Deceased) Through Legal Heir Usha v.
Gurbhajan Kaur (Deceased) Through Lrs Upinder Kaur and Others

made in the application. It is further evident from the fact
that at the time of the final argument of the appeal again the
prayer made in the application was not pressed as there is
no discussion on the same and the issue was not raised by
defendant No.3(a) thereafter.
21.2. The High Court misdirected itself in recording the finding that
the defendant No.3(a)-S.C. Bhalla, being in self-occupation of
the part of the property, being a co-sharer, will not be liable to
render any accounts to arrive at such a conclusion. Reference
was made to the fact that his vendor (defendant No.3-Bhupinder
Singh) has contested litigation with the tenant (defendant
No.10-M/s. H.M. Traders) and spent huge amount thereon.
But the fact remains that the defendant No.3(a)-S.C. Bhalla
has purchased the property from defendant no.3-Bhupinder
Singh after it had already been vacated by the tenant and he
was handed over vacant physical possession thereof.
22. As far as defendant Nos.15 to 19 are concerned, there is no dispute
that the portion in their possession has not been rented out to any
third party. But it is also a fact admitted by them that they are carrying
their own business in the portion in their possession. They have
been absolved from rendering account on the ground that the portion
in their possession is to the extent of their share in the property.
However, this issue has not been determined by any authority. The
fact remains that the defendant Nos.15 to 19 are carrying on their own
business in the property in question in their possession and earning
therefrom. Had their business been carried on in a rented premises,
they would have certainly paid some rent. In case, during the course
of proceedings for passing of final decree, the Court determines that
the defendant Nos.15 to 19 were in actual physical possession of
the property in question to the extent of their share, they may not
be liable to contribute any amount in the kitty and subsequently will
not be entitled to any share from the total amount in the kitty coming
out of the amount collected from other portion of the property i.e.
85%. However, in case it was found that they are in possession of
portion more than their share, there can be two options; either they
contribute to the common kitty for the entire portion of the property
in their possession and then get share therefrom or they may be
held liable to contribute to the common kitty for the property in their
possession beyond their share and subsequently they will not be
1432 [2024] 7 S.C.R.

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entitled to any share from the common kitty. However, such an option
will have to be exercised by the defendant Nos.15 to 19 before
assessment of the rent, to be paid by the aforesaid defendants and
not after the rent has been assessed by the Trial Court.
23. The appeals are accordingly allowed. The impugned judgments
passed by the High Court are set aside. There shall be no order as
to costs. It is directed that the defendant No.3(a)-S.C. Bhalla and
defendant Nos.15 to 19, namely, Kailash Chand Gupta, Indu Bala,
Sahil Gupta, Pratik Gupta and Ankita Gupta, respectively shall be
liable to render accounts and/or liable to contribute rent as assessed
by the Trial Court during the course of passing of final decree for
the portions in their respective possession. This Court has already
elaborated the course which needs to be adopted in para ‘22’
hereinabove insofar as defendant Nos.15 to 19 are concerned.
24. It is further clarified that after the sale of the property if any of the
co-sharers fail to contribute any amount to the common kitty for
distribution amongst all the co-sharers as determined by the Trial
Court, the distribution of the amount so collected after the sale of
the property shall be reduced to that extent from the share of that
co-sharer.
25. We may notice here that the suit for partition was filed way back
in the year 2005. The matter is pending at the stage of passing of
preliminary decree for the last about two decades that too in a case
where the share of the parties is not in dispute. The only dispute
was with reference to rendition of accounts by two of the co-sharers.
Issues regarding whom have been dealt with in this Judgment we
direct the Trial Court to expedite the proceedings and dispose of
the same within a period of nine months from the date of receipt
of this order.

Result of the case: Appeals allowed

†
Headnotes prepared by: Divya Pandey