Holding

Section 5 of the Kerala Compensation for Tenants' Improvements Act, 1958, is operable only when a tenant has first established a claim for compensation under Section 4; the appellants never made such a claim and therefore are not entitled to further compensation for improvements.

Summary

The appellants' father bought property from the minor's mother (guardian) in 1939. After the minor attained majority, he sued to set aside the sale and recover possession. The trial and appellate courts dismissed his suit, but the Kerala High Court set aside those judgments, ordering the respondent to pay the sale price of Rs 4,700 and a compensation for improvements of Rs 4,164.80. During execution the appellants claimed they were tenants under s.2(d)(iii) of the Kerala Compensation for Tenants' Improvements Act, 1958 and sought re‑valuation of improvements made after 1952 under s.5 of that Act. The High Court held no claim under the Act had ever been made and that the compensation awarded was merely an agreement, not a statutory right. The Supreme Court affirmed that s.5 applies only when a tenant has first established a claim under s.4; since the appellants never did so, they could not obtain further compensation, and the appeal was dismissed. However, on equitable grounds the Court ordered the respondent to pay the appellants an additional Rs 30,000 and to take possession of the property.

Issues considered

Whether the appellants qualify as 'tenants' under s.2(d)(iii) of the Kerala Compensation for Tenants' Improvements Act, 1958 and are thus entitled to compensation for improvements.
Whether a claim for compensation under s.4 of the Act can be raised at the execution stage when no such claim was made in the original suit.
Whether the High Court's finding that the improvement compensation was a mere agreement precludes any statutory claim under the Act.

Legislation cited

Kerala Compensation for Tenants Improvements Act, 1958s. 2(d), s. 4, s. 5
Transfer of Property Act, 1882s. 51

Subjects

tenant improvement compensationKerala Compensation for Tenants' Improvements Actevictionrevaluation of improvementsequitable reliefsale of minor's propertyexecution of decree

Judgment

A SHAMMA BHAIT & ORS.
v.
T. RAMAKRISHNA BHAIT
r-•
MARCH 27, 1987

B [V. KHALID AND G.L. OZA, JJ.]

Kera/a Compensation for Tenants Improvements Act. 1958-Ss.
2(d) and 5-Tenant-Compensation for Improvement-When avail- h•
able.
_.
c The appellants' father had obtained sale of the property in ques-
lion during the minority of the respondent through his widowed
_
•,\.
-
mother, who was acting as his guardian. The respondent, on attaining
majority, filed a suit for declaration that the said sale-deed was invalid
and not binding upon him and for recovery of possession of the pro- ~
perty. The judgment and decree of the trial Court dismissing the suit
D was affirmed by the Appellate Court. In Second Appeal, the High Court
set aside the judgments of the Court below, allowed the appeal and
decreed the suit, directing recovery of possession of properties on pay-
ment of Rs.4,700 being the sale consideration and a sum of Rs.4,164
being the compensation for improvement. The Special Leave Petition
filed by the appellants was dismissed.
E i-
The respondent tiled execution, which was resisted by the appel-
!ants on the ground that the properties could not be ordered to be

F
delivered without payment of the value of improvements effected by
them subsequent to the year 1952. They also tiled an application for the
issue of a commission to revalue the improvements, claiming that they
had effected improvements to the tune of Rs.80,000. The respondent
contested this application denying that the appellants had made any
.,
~,
improvements and contended that the question of improvements had
been concluded by the judgment of the High Court in the Second
Appeal. The executing Court dismissed this petition. The District Judge
allowed the appeal filed by the appellants and set aside the order of the
G executing Court. The High Court set aside the judgment of the District
Judge and restored the order of the executing Court and directed re-
co very of the property. The High Court observed that "the sum of
Rs.4,164.8.0 was directed to be paid not because the respondents were ~
entitled to it, but because the appellant agreed to pay it."
H In the appeal to this Court, on behalf of the appellants it was

700
SHAMMA BHATT v. T,R. BHATT 701

Jo contended: (1) that the judgment of the High Court was wrong and that
i the conclusion arrived at by the High Court was as a result of confusion
A
regarding the pleadings in the case and the question of law involved; (2)
that at the trial stage an issue was struck as issue No. 8 regarding the
value of improvements which was adjudicated and the value of im-
provements was adjudged; (3) that the appeUants were tenants within the
meaning of s. 2(d) of the Kerala Compensation for Tenants Improve- B
t ·~ ments Act, 1958 (Act 29 of 1958) and that their claim for value of
improvements was made on the strength of s. 5 of the Act and, there-

- ~
fore, they are entitled to the value of improvements; and (4) that the
value of improvements has to be ascertained under the Act on the
execution side and their claim cannot be defeated by flourishing the
judgment.of the High Court and the dismissal ofthe S. L .P.
c
I
1 Dismissing the Appeal,

HELD: 1. The suit was filed in 1952. At that time there was no
enactment available for the defendant to claim value of improv~ments.
Neither in the original written statement nor in the additional written D
statement dated 15.11.1954, did the defendants claim the value of im-
provements under the Act. Though at the execution stage a plea was
raised under s. 5 of Act 29 of 1958, but in the Judgment in the Second
·~· Appeal No. 464 of 1964 dated 27.11.1969, the Division Bench decided
that no claim for improvements was made either under s. 51 of the
Transfer of Property Act or under s. 4 of Act 29 of 1958. Moreover, the E
'
High Court also found that no objection was taken by the appellants in
the lower Appellate Court or before the High Court to the finding that
-... In case of eviction the defendant would be entitled to Rs.4,164.8.0. as
compensation. This judgment was rendered when Act 29 of 1958 had
~) already come into force. Against this judgment a special leave petition
; .
was filed and dismissed. Thus, there is a concluded finding against the F
appellants that they were not entitled to anything more than the value of
improvements decreed by the trial Court. [706H; 707 A-CJ

2. Section 5 comes into operation only when a defendant against
whom a snit for eviction is instituted establishes a claim for compensa-

·-1 tion under the Act. The Judgment of the High Court rendered in 1969 G
has clearly held that the value of improvement awarded was not under
s. 4 of the Act but was an amount agreed by the plaintiff. The appellants
cannot succeed and have not succeeded in satisfying this Court that they
ever made a claim for compensation under s. 4 of the Act and succeeded
in such a claim. Therefore, their further claim for getting the improve-
ments revalued cauuot be accepted. [707E-G) H
702 SUPREME COURT REPORTS [1987] 2 S.C.R.

A 3. The question whether a person who came into possession of the
properties of a minor could be brought within the definition o:F 'tenant'
ins. 2(d)(iii) will have to be considered in an appropriate case. [707G-H]

4. Purely on an equitable basis, tbe respondent shall pay to the
appellants a sum of Rs.30,000 in addition to the amount decreed. On
B such payment the appellants shall deliver the property to th1e respon-
dent. The respondent shall be at liberty to withdraw the amounts
. deposited by the appellants in the trial court pursuant to the order of
I
this Court, it' not already withdrawn. [709B-C] -~

CIVIL APPELLATE JURISDICTION: Civil Appeal No.
C 383(N) of 1973.

From the Judgment and Order dated 7.3.1972 of the High Court
of Kerala in S.A. No. 549 of 1971.

G. Viswanath Iyer and Narayan Nettar for the Appellants.
D
T.S. Krishnamurthy Iyer, Vijay Kumar Verma and Madho
Moolchandani for the Respondent.

The Judgment of the Court was delivered by

E KHALID, J. The appellants are the defendant in 0.S. 55 of 1952
in the Sub-Court, Mangalore. Their father had obtained sale of the
property involved in this appeal by a document dated 28-4-1939,
executed by the widowed mother of the respondent-plaintiff who was a _.\(
I
minor, aged six years, she acting as his guardian. After he attained
majority, he filed a suit for a declaration that the said sale deed was
F invalid and was not binding upon him and for recovery of possession
thereof. The Trial Court dismissed the suit. In appeal, the appellate
court confirmed the decree and Judgment of the Trial Court. In second
appeal, the High Court of Kerala, by its Judgment, dated 27-11-1969,
set aside the Judgments of the Courts below, allowed the appeal and
decreed the suit. The decree directed recovery of possession of the
G properties on payment of the sum of Rs.4,700 being the sale considera- \
.,.....
tion and a sum of Rs.4, 164 being the compensation for improv•ements.

On 15-9-1970, the decree-holder, respondent herein, filed
R.E.P. 68/70 in the Sub-Court, Kasargod, depositing the amount due
under the decree of the High Court and praying for delivery of the
H properties from the possession of the Judgment debtors, the appel-
SHAMMA BHATT v. T.R. BHATT [KHALID, J.l 703

• !ants. Execution was resisted by the appellants on the ground that no A
l delivery could be ordered without payment of the value of improve-
ments effected by them subsequent to the year 1952. They also filed
R.E.A. No. 146/70 for the issue of a commission to re-value the im-
provements, claiming that they had effected improvements to the tune
of Rs.80,000. The respondent contested this application, denied that
the appellants had made any improvements and contended that the B
~ . question of improvements had been concluded by the Judgment of the
High Court in the second appeal. The executing Court dismissed this

- ;.- petition. Aggrieved by this order, the appellants filed an appeal before
the District Judge, Tellicherry, who allowed the appeal by his Judg-
ment dated 12th April, 1971 and set aside the order of the executing
Court. The matter was taken to the High Court by way of Execution c
j Second Appeal. A Division Bench of the Kerala High Court, on a
~ reference from a learned Single Judge, set aside the Judgment of the
District Judge by its Judgment dated 7-3-1972 and restored the order
of the Subordinate Judge and directed recovery of the property. The
appellants, moved the High Court for grant of certificate of fitness,
which prayer was declined and hence have filed this appeal, by special D
leave.

.-t· The suit was filed by the plaintiff within three years of his attain-
ing majority alleging that the assignee took advantage of the ignorance
and helpless condition of the plaintiff's mother, who was a young
widow and that there was neither legal necessity nor pressure from the E
'
estate for effecting the sale. He averred in the plaint that there was a
partition decree in his favour in which he had been allotted these
)I.. properties with outstanding amounting to Rs.5,300 and mesne profits
to the extent of Rs. l,549 which were sufficient to discharge the debts
'), due by the estate. The entire immovable properties belonging to the
plaintiff, including the family residential house, were alienated. The F
High Court in second appeal on the trial side held that the alienation
was not something which a man of ordinary prudence would have
effected, had the properties been owned by him and thus held it not
binding on the plaintiff. The learned Judges of the Division Bench
then considered the question of the defendant's right for compensation
for improvements, if any, effected. This claim was denied. In the G
-1 written statement filed by the defendant, as noted by the High Court,
all that was claimed was that improvements had been effected to the
' tune of Rs.4,000. But no specific claim was made for compensation in
the event of eviction. The High Court also noted that the averment
regarding improvements was itself made in the context of denying that
the property would have fetched Rs.11,000 at the time of sale. In the H
704 SUPREME COURT REPORTS [1987] 2 S.C.R.

A additional written statement filed by the defendant a claim was made
that improvements to the value of Rs.11,168 had been effected after
the sale date and that under any circumstances, the defendants were
entitled to just and adequate compensation for them. The Division
Bench adverting to this aspect of the case held against the appellants
with the following observation:
B
"The basis of the claim has not been stated anywhere, and
no averments of fact necessary for attracting section 51 of
I
the Transfer of Property Act or Section 4 of the Kerala Com-
v~ -
pensation for Tenants' Improvements Act, 1958, have been
made. Hence, the claim for value of improvements would
appear to be unsustainable. However, no objection has
c been taken by the appellant in the lower appellate court or
in this Court to the finding of the trial court that in case of
eviction, the defendants would be entitled to Rs.4,164.8.0
as compensation for improvements."

D It was with these observations regarding improvements that the appeal
was allowed and the suit for recovery decreed.

When the matter reached the High Court in second appeal on the
execution side the matter was heard by another Division Bench of the
Kerala High Court. The Division Bench relied upon the following
E observation in the Judgment of the Division Bench on the original side
and declined relief of value of improvements to the appellants, with
the following observation:

The Division Bench considered the question of value of
improvements in paragraph 9 of the Judgments and Unnikrishna
F Kump, J. who spoke for the Division Bench has stated in unequivocal
terms:

"Hence, the claim for value of improvements would appear
to be unsustainable. However, no objection has been taken
by the appellant in the lower appellate court or in this
G Court to the finding of the trial court that in case of evic- ,,_..
\

tion, the defendants would be entitled to Rs.4, 164,8.0. as
compensation for improvements."

We may in passing on also observe that the appellant had filed an
application for special leave against the first Judgment in second
H appeal, which was dismissed. The claim of value of improvements was
SHAMMA BHATT v. T.R. BHATT (KHALID, J.J 705

rejected by the Division Bench with the following observation: A

"The sum of Rs.4, 164.8.0 was directed to be paid, we
repeat, not because the respondents were entitled to it,
but because the appellant agreed to pay it."
B
It is with these materials that the present claim of the appellants
for value of improvements has to be considered. We may indicate at
this stage itself that the Commissioner appointed at the instance of this
Court, assessed the value of improvements at Rs.1,00,031.40, by his
report dated 12-10-1972. The learned counsel for the appellant made a
forceful plea that the Judgment of the High Court was wrong and that .
the conclusion arrived at by the High Court was as a result of a confu- c
sion regarding the pleadings in the case and the question of law
.I involved. He stated that at the trial stage an issue was struck as issue
No. 8 regarding the value of improvements. This question was
adjudicated and the value of improvements was adjudged after due
consideration of this issue. His further submission is that the appel-
D
lants were tenants within the meaning of Section 2(d) of the Kerala
Compensation for Tenants Improvements Act, 1958 {Act 29 of 1958),
and that the claim for value of improvements was made on the strength
of Section 5 of the Act. He relied upon a Division Bench ruling in
Veerasikku Gounder v. Kurian,1 in support of his contention that the
appellants were tenants and were entitled to the value of improve-
E
ments.

The property is situated in the old South Kerala District which
formed part of the then Madras Presidency. At the time the suit was
filed, there was no enactment in force in that area, enabling persons in
possession of property belonging to another to claim value improve-
F
ments in a suit for recovery of possession. The area, where the pro-
perty in dispute is situated, became part of Kerala when the said State
was formed. When Act 29 of 1958 was enacted, there were two enact-
ments in existence, applicable to the Travancore Cochin and the
Malbar Area, regarding the claims for improvements for tenants in
possession. They are the Travancore Cochin Compensation for G
Tenants Improvements Act, 1956 and the Malbar Compensation for
Tenants Improvements Act, 1899. Both these Acts were repealed
when Act 29 of 1958 was enacted. Section 2( d) of the new Act defines
'tenant', the relevant portion of which reads as follows:

"2(d) 'tenant' with its grammatical variations and cognate H
706 SUPREME COURT REPORTS [1987] 2 S.C.R.

A expression includes-

(i) ........

(ii) ....... .

B (iii) a person who comes into possession of land be-
longing to another person and makes improvements
thereon in the bona fide belief that he is entitled to
make such improvements."

The appellants contention is that they satisfy this definition and that,
C therefore, they are entitled to the benefit of this Act. Section 4 deals
with the entitlement to compensation for improvements for te.nants for
the improvements made by them, or their predecessor-in-interest on
eviction. Section 5 states that when in a suit for eviction instituted
against the tenant the plaintiff succeeds and the defendant establishes
a claim for compensation due under Section 4 for improvements, the
D Court shall ascertain the amount of compensation and shall pass a
decree for payment of the amount so found due to the tenants. Sub-
section 3 of this section gives an additional right to such tenants for
value of improvements effected after the decree by evaluation. We
read the section for a correct understanding of the same:

E "5(3) The amount of compensation for improvements
made subsequent to the date upto which compensation for
improvements has been adjudged in the decree and the
re-valuation of an improvement, for which compensation
has been so ad judged, when and in so far as such re-
valuation may be necessary when reference to the condi-
F tion of such improvements at the time of eviction as well as
any sum of money accruing due to the plaintiff subsequent
to the said date for rent, or otherwise, in respect of the
tenancy, shall be determined by order of the court execut-
ing the decree and the decree shall be varied in accordance
with such order."
G
It is basing on this Section that the claim is made for value of improve-
ments by the appellants.

The suit was filed in 1952. At the time there was no enactment
available for the defendant to claim value of improvements. Neither in
H the original written statement nor in the additional written statement
SHAMMA BHATI v. T.R. BHATI [KHALID, J.] 707

dated 15-11-1954, did the defendants claim the value of improvements A
i under the Act. It is true that at the execution stage a plea was raised
under Section 5 of Act 29 of 1958. But it is necessary to remember that
in the Judgment in the Second Appeal No. 464 of 1964, the Division
Bench decided on 27-11-1969, that no claim for improvements was
made either under Section 51 of the Transfer of Property Act or under B
Section 4 of Act 29 of 1958. Moreover, the High Court also found that

' 1 no objection was taken by the appellants in the lower appellate court
or before the High Court to the finding that in case of eviction the

- .,., defendant would be entitled to Rs.4, 164.8.0 as compensation. This
Judgment was rendered when Act 29 of 1958 had already come into
force. Against this Judgment this Court was moved by filing a special
leave petition and that was dismissed. Thus, there is a concluded find- c
ing against the appellants that they were not entitled to anything more
~ than the value of improvements decreed by the trial Court.

In the Judgment under appeal also the High Court has reiterated
the fact that the appellants were being paid the amount mentioned
D
above not because they were entitled to it, but because the appellant
agreed to pay it. The learned counsel for the appellants Shri G. Vish-
wanatha Iyer tries to over-come the finality of this Judgment with the
contention that the value of improvements has to be ascertained under
-~ the Act on the execution side and his claim cannot be defeated by
flourishing the Judgment of the High Court and the dismissal of the E
S.L.P. We find it difficult to accept the appellant's case. Section 5
comes into operation only when a defendant against whom a suit for
eviction is instituted establishes a claim for compensation under the
Act. The Judgment of the High Court rendered in 1969 has clearly
-.... held that the value of improvement awarded was not under Section 4
of the Act but was an amount agreed by the plaintiff. The appellants
'), cannot succeed and have not succeeded in satisfying us that they ever
F
made a claim for compensation under Section 4 of the Act and sue-
ceeded in such a claim. Therefore their further claim for getting the
improvements revalued cannot be accepted.

We do not wish to pronounce upon the question whether a
G
person like the appellants who came into possession of the properties
'"1 ·of a minor through his young widowed mother could be brought within
the definition of tenant in Section 2(d)(iii). This matter will have to be
considered in an appropriate case and the correctness of the decision
of the Kerala High Court brought to our notice by the appellant's
counsel tested then. The appeal has only, therefore, to be dismissed. H
708 SUPREME COURT REPORTS [1987] 2 S.C.R.

A However, we feel that some equity has to be worked out in this
case. This Court issued notice in the S.L.P. on 20-6-1972. On 1-9-1972
stay of operation of decree was granted, and an opportunity was given
to enable the.parties to come to a compromise. On 18-9-1972, this
Court directed a Commissioner to be appointed to assess the value of
improvements which were made subsequent to the date upto which the
B compensation for improvements had already been adjudged. It was
pursuant to this direction that a report was submitted showing the
value of improvements at more than a lakh of rupees. On 23-2-1973,
this Court granted special leave and stayed the operation of the decree
on condition that the appellants deposit a sum of Rs.5,000 each year in
the Trial Court and permitting the respondents to withdraw the same
C on furnishing security. On April 1, 1980, this Court passed an order as
follows:-

"Counsel on both sides, after arguments were heard in
substantial measure, agreed with us that this was a case
pre-eminently fit for settlement. The question of Jaw raised
D is a ticklish one and the consequences will be 'all or no-
thing'. The suggestion which appears to be acceptable to
counsel on both sides is one of two alternatives, the option
to choose being left to the respondent, since he has won in
the High Court. The alternatives are:

E (a) the appellant is to pay a sum of Rs.50,000 to the
respondent in addition to the respondent being entitled to
withdraw an amount of Rs.30,000 plus Rs.8,000 and odd
-
lying in deposit to the credit of the suit. In this event the
appeal will stand allowed and the property will be kept by
the appellant as owners of the property;
F
(b) alternatively, the respondent will pay to the
appellant a sum of Rs.50,000 and the appellant will be
further entitled to withdraw a sum of Rs.30,000 plus
Rs.8,000 now lying in deposit to the credit of the suit.
Thereupon the appellant will surrender possession forth-
G with to the respondent. The property be kept in the same
condition as it is now. Post the matter on Tuesday i.e.
8-4-80."

When the matter came before us for hearing, we asked the
H counsel whether a compromise was possible. We found that the parties
were not agreeable for a compromise. The appellants have been in
SHAMMA BHATT v. T.R. BHATT [Kl;IALID, J.] 709

possession of the properties ever since 1934 and have been en joying A
the income therefrom. It is true that they have effected improvements
to the property. That being so, we feel that the appellants should not
be left without any compensation for the improvements effected. We
make this observation purely on an equitable basis. We direct the
respondents to pay to the appellants a sum of Rs.30,000 in addition to B
the amount decreed. On such payment the appellants shall deliver the
property to the respondents. The r~spondents will be at liberty to
withdraw the amounts deposited by the appellants in the Trial Court
pursuant to the orders of this Court if not already withdrawn.

A.P.J. Appeal dismissed.

-