Holding

A decree of eviction is valid and enforceable when the lease is surrendered by the tenant, as Clause 13 of the Rent Control Order requires permission only for landlord‑initiated termination.

Summary

The appellants, landlords, sought to evict the respondent tenant under Clause 13 of the C.P. & Berar Letting of Houses and Rent Control Order, 1949, but the tenant had surrendered the lease by mutual compromise and arbitration agreements. The Supreme Court held that Clause 13 restricts only the landlord’s right to terminate a tenancy and does not require the Rent Controller’s permission when the tenant surrenders the lease under the Transfer of Property Act. The decree passed on the basis of the arbitration award was therefore valid and executable. The Court also ruled that the tenant’s failure to raise the objection earlier barred him from doing so later, invoking estoppel and constructive res judicata. Consequently, the High Court’s decision was set aside and the execution decree upheld.

Issues considered

The requirement of Rent Controller’s permission under Clause 13 when a tenant surrenders the lease.
Whether a decree of eviction based on a tenant’s surrender is void for lack of such permission.
Whether the tenant is estopped from raising the objection at a later stage.
The applicability of constructive res judicata in execution proceedings.

Legislation cited

Code of Civil Procedure, 1908s. Order 21 Rule 22
C.P. & Berar Letting of Houses and Rent Control Order, 1949s. clause 13
Transfer of Property Act, 1882s. 106, s. 111, s. 111(e), s. 111(f)

Subjects

rent controllease surrenderClause 13Transfer of Property Actexecution of decreeestoppelconstructive res judicataarbitrationcompromiselandlord-tenant law

Judgment

SMT. KAMLABAI & ORS.
A
v.
MANGILAL DULICHAND MANTRI

OCTOBER 14, 1987

B [SABYASACHI MUKHARJI AND G.L. OZA, JJ.]

C.P. and Berar Letting of Houses and Rent Control Order, 'T.
1949-cl. 13-The provision puts restriction on right of landlord to de-
termine the tenancy-Permission required under the clause is needed
only when landlord wants to terminate the tenancy.
.
c Transfer of Property Act, 1882-ss. 106 and Ill-Read with cl.
13 of the C. P. and Berar Letting of Houses and Rent Control Order
1949-cl. 13 of the Order does not restrict the tenant from surrendering
{
the lease either by specific agreement or by implication demonstrated by
conduct.
D
On 24-2-1970 the appellants filed an application under cl. 13(3) of
the C.P. and Berar Letting of Houses and Rent Control Order, 1949 for
permission to issue notice determining the respondent's lease of the
premises in question on grounds of bona fide need, subletting, etc. On
28-3-1970 both the parties made an application for recording compro-
E mise. By the terms of the compromise, the respondent expressly·admit- ~
ted the claim of the appellants for permission to terminate the tenancy,
and, surrendering his tenancy rights, undertook to vacate the premises
on or before 31-3-1974. By an order dated 31-3-1970, the Rent Control-
ler filed the proceedings observing that the matter had been compro-
mised out of court and since there was no provision for recording of
F compromise, he was treating the petition of compromise as an applica-
'
tion for filing the proceedings.
,l
On 18-2-1974 the parties entered into an arbitration agreement
wherein it was clearly mentioned that the tenancy in favour of the
respondent stood surrendered and the arbitrator should decide how
G much further time should be granted to him for vacating the premises
and what should be the quantum of damages for use and occupation
thereof beyond 31-3-1974. Pursuant to the arbitration, a further com-
promise was entered into by which time till 31-3-1977 was given for ~
vacating the premises. An award was made in terms of this compromise
on 29-3-1974 and a decree in terms of the award was passed hy the Civil
H Judge on 16-4-1974.
464
SMT. KAMLABAI v. MANGILAL 465

The respondent wrote two letters requesting for extension of time
A
to vacate the premises, firstly upto the end of December 1977, and then
upto the end of December, 1980. However, the respondent did not
vacate the premises on 3I·12· 1980 and the llPPellant applied for execu-
tion of the decree. Notice was issued, under 0.21, r.22, C.P.C. but no
cause was shown by the respondent. On 24-3-1981, an application was
made by the parties for recording of compromise to the effect that time B
for vacating the premises was extended upto 31-12-1982 as the last
chance. Accordingly, the executing court passed an order disposing of
the execution application as compromised.

The respondent did not vacate the premises on 31-12-1982. The
appellant filed a fresh application for execution on 31-1-1983. When
moves for a further compromise failed, the respondent flied objections C
claiming that the decree was a nullity and could not be executed as it
had been obtained without the prior permission contemplated under cl.
13 of the aforesaid Rent Control Order. The Civil Court, by its order
dated 1-10-1985, rejected the objections and directed the execution to
proceed. O

The respondent approached the High Court in revision but his
application was dismissed in limine. The respondent sought special
leave to appeal and this Court disposed of the matter directing the High
Court to admit the revision and hear it on merits and dispose it of in
accordance with law. The High Court allowed the revision petition. E

Allowing the appeal,

- HELD: The scheme of cl. 13 of the C.P. and Berar Letting of
Houses and Rent Control Order, 1949 indicates that it is meant to
protect the rights of the tenant by restricting the rights of the landlord. F
Sub-cl. (l) thereof starts with the expression "no landlord" making it
clear that it is a restriction put on the right of the landlord to determine
the tenancy. Sub-cl. (2) indicates that when a landlord seeks to obtain
permission under sub-cl. (I) he has to apply to the Rent Controller.
Sub-cl. (3) provides that the Ren! Controller shall grant permission if
he is satisfied in respect of the grounds enumerated thereunder. Thus, G
the permission which is required under cl. 13 is needed only when the
landlord wants to terminate the tenancy. It is not at all necessary if the
tenant wants to surrender the lease or terminate the ten1ancy or vacate
the premises. Clause 13 of the Order does not restrict the tenant from
surrendering the lease either by specific agreement or by implication
demonstrated by conduct. [473G-H; 474H; 475A-B] H
•
466 SUPREME COURT REPORTS (1988] I S.C.R.

{b) Section 106 of the Transfer of Property Act provides for
A
termination of the lease either by the lessor or by the lessee, and, s. 111
thereof, which lays down the various circumstances under which the
lease of immovable property comes to an end, contemplated implied
'SU!Tellder. [475F; G]

B In this case, the terms of the compromise filed on 28-3-1970 made
it clear that the tenant himself offered to vacate the premises on or
before 31-3-1974 without any recourse to any proceedings before the 'Y
Rent Control Authorities or the Civil Court. From the language of
cl. 13 of the Rent Control Order aforesaid it is plain that after this ...
compromise there remained nothing for which permission could be
granted by the Rent Controller. Thus, when the landlord sought per-
c mission, the tenant came forward offering to surrender the lease
/

thereby expressing a desire to terminate the lease from a particular -1
date. As is clear from cl. 13 aforesaid, no permission is necessary where
the tenant chooses to terminate the lease either by a notice under s. 106
or by surrender under s. Ill of the Transfer of Property Act. [476B-D l
D
The agreement of arbitration signed by the parties clearly stated
that party No. 2, namely the tenant, had surrendered his tenancy rights
and agreed to deliver vacant possession. The arbitration was entered
into on the basis of this agreement and an award was passed. The decree
was passed in terms of the award. During the proceedings before the
.f
E Civil Court no objection was raised that the decree of eviction could not
be passed as there was no permission of the Rent Controller to de-

-
termine the lease. Clearly therefore the decree which is to be executed is
not a decree for eviction on the basis of determination of lease by the
landlord bnt is a decree passed on the basis of the lease having been
determined by the tenant himself by surrender. [476G-H; 4778; 478A]
F
Shah Mathuradas Magan/al & Co. v. Nagappa Shankarappa
Malaga & Ors., A.I.R. 1976 S.C. 1565, referred to.
f---
The High Court was in error in applying the principle of 'a con-
tract contrary to public policy' to the agreement of arbitration and
G compromise filed before the Arbitrator and in arriving at the conclu-
sion that it could not be permitted. The arbitration agreement, the
compromise filed before the Arbitrator and the Award, and the decree
passed by the Court all put together clearly go to show that what was ~
referred to arbitration was not as to whether the lease was determined
or not but the period for which the tenant shonld be permitted to
H continue in possession. The lease came to an end by surrender and what
SMT. KAMLABAI v. MANGILAL 467

was evolved by the Award was an arrangement on new terms which was
A
not a contract just jo bypass cl. 13 aforesaid; for, when the lease itself is
determined nothing survives and therefore it could not he contended
that it was contrary to the provisions of cl. 13. [479A-D)

The High Court was also not right in coming to the conclusion B
that there was no surrender as possession was not handed over. The
tenancy came to an end by mutual agreement and what was sought by
arbitration as an arrangement for time on payment of damages for use
and occnpation. It did not either continue the old tenancy or start a new
one. l481B-C I

Fosterv. Robinson, [1950] All E.R. 342, referred to. c
If the tenant intended to raise the objection that the decree in
question could uot have been passed on the basis of the arbitration
Award as it was in contravention of cl. 13 aforesaid, he should have
raised it when the Award was filed in the Court and notice was served
D
on him. The tenant admittedly did not raise this obj~ction which was
open to him even when the decree was put to execution more than once.
In this view of the matter, the contention that, hy not raising this
objection earlier the respondent has lost his right to raise the objection
and is estopped from doing so, deserves to be accepted. It has already
.I, been held that the principles of constructive res judicata are applicable
even in execution proceedings. [481D-F] E

-• Mohan/al Goenka v. Benoy Kishna Mukherjee & Ors., A.I.R.
1953 S.C. 65, referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4102 F
~ of 1986.
From the Judgment and Order dated 11.9.1986 of the Madhya
Pradesh High Court in Civil Revision No. 176 of 1986.

F.S. Nariman, V.A. Bobde, Anoop V. Mehta, Shyam Mudalia G
and A.K. Sanghi for the Appellants.
-t V.M. Tarkunde, Madan Lokur, N.S. Manudhane and Subodh
Lalit for t)le Respondent.

The Judgment of the Court was delivered by H
468 SUPREME COURT REPORTS [1988] 1 S.C.R.

OZA, J. This appeal arises out of the judgment passed by the ,....;
A High Court of M.P. in Civil Revision No. 176/86 dated 11.9.86.

This matter arises out of execution proceedings. This execution
case was filed by the present appellant against the non-appellant
judgment-debtor claiming relief of possession of property including
B the Cinema Theatre known as Gujanan Talkies bearing House
No. 57(209) in Ward No. 12 (new Ward No. 11) Cha!apula on 1\Tazul y
Plot No. 72, Sheet No. 53-D, Khamgaon Teh. Khamgaon Distt.
Buldhana with furniture etc. Against an order passed in this execution
in favour of the decree holder the presen< appellant, the respondent
judgment-debtor filed a revision petition before the High Court of
Bombay at Nagpur. The revision petition was rejected and against that
C order a special leave petition was filed before this Court by its order~
dated 4.3.86 in Civil Appeal No. 842 of 1986 set aside the order of the
High Court and observed that the High Court shall dispose of the
revision petition afresh after hearing parties and giving reasons in
support of the conclusions. It appears that at the time of hearing, a
D request was made by the learned counsel for the judgment-debtor
present respondent which was also supported by the counsel for the
other side for the revision being sent to some other High Court than
the High Court of Bombay at Nagpur and consequently the revision
petition was sent to the High Court of M.P. where the learned Judge of
the High Court disposed of this revision petition by the impugned ~
E judgment and after obtaining leave from this Court the present appeal
is before us.

The facts giving rise to this appeal are that the petitioners appel-
lants are the landlords and the respondent admittedly are the tenants
of the suit premises which is a cinema house alongwith furniture, fit-
F tings and other things.

On Feb. 24, 1970 the appellants-landlords filed an application
under Sec. 13(3)(i), (ii), (iii) and (iv) of the Rent Control Order for
permission to issue notice determining the respondent's le~sc over the
premises on the grounds of eviction mentioned in the application
G which were bona fide, need, subletting, arrears of rent for more than
three months and habitual default in payment of rent. This application
was filed against the five respondents, three of whom are sub-tenants. ~
On 9.3.1970, the respondent appeared and filed W.S. denying the
allegations but it was not pleaded that there was a written consent for
keeping sub-tenants which is essential under Section 13 clause 3 (iii)
H and therefore in substance Sec. 13(3)(iii) was, in effect, admitted.
SMT. KAMLABAl"v. MANGILAL [OZA, J.] 469

The case was fixed for filing of documents and was adjourned to
16.3.70. On thiS'date the'app"ellant-landlord filed 42 documents and A
the case was adjourned to 28.3.70. On this date an application was
made by both the parties for recording of compromise. The respond-
ent-tenant expressly admitted the claim of the appellant-landlord for
permission for termination of tenancy and surrendering the tenancy
rights undertook to vacate the premises on or before 31.3.1974. The B
learned Rent Controller on 31.3. 70 passed an order saying that as
there is no provision for recording of a compromise, the petition for
compromise is treated as an application for filing of the proceedings.
He therefore filed the proceedings observing that the matter has been
compromised out of the Court.

On 25.6. 1970 there was a partition between the three landlords C
and the property in dispute fell to the share of Shri Vallabhdas Mohta.

On 18.2.1974 an agreement was arrived at between the parties
for referring the tnatter to the arbitration wherein it was clearly
mentioned that the tenancy in favour of the respondent tenant stands D
surrendered and the Arbitrator should decide how much further time
should be granted to the respondent-tenant for vacating the premises
and what should be the quantum of damages for use and occupation
beyond 31.3.1974 which was the agreed date for delivery of possession
in their earlier compromise. It is contended by the appellant that this
agreement for referring the matter to the Arbitrator clearly showed 1:
that the parties agreed that the tenancy stands surrendered and is
substituted by an arrangement for continuance of possession. It
appears that in pursuance of the arbitration a further compromise was
entered into by which time till 31.3.1977 was given for vacating the
premises and the compensation for use and occupation was fixed at
Rs.1300 plus taxes and on 29.3.1974 an award was made in terms of F
this compromise and on the basis of this award Civil Judge, Senior
Division, Khamgaon by his order dated 16.4.1974 passed a decree in
terms of the award in Civil Suit 95/74 after notice to the parties who
were represented by counsel.

On 29.12.76 respondent wrote a letter requesting for extension G
of time to vacate upto.the end of December, 1977 on the ground that
his amount was blocked with the Distributors of films. On 18.12.77
respondent wrote another letter for extension of time for a longer
period as the amount could not be realised during the short period and
agreeing to vacate the premises positively by the end of December,
~- H
470 SUPREME COURT REPORTS [1988] 1 S.C.R

A On 10.7.1978 the partition waseffected between themembers of
the HUF of Shri Vallabhdas Mohta. On 27.4.79 Vallabhdas Mohta
was elevated to the Bench. As the respondent did not vacate as per
their assurances on 31.12. 1980 the present appellant filed an execu-
tion case No. 11/81 for execution of the decree. Notice was issued
under order 21 Rule 22 of C.P.C. but no cause was shown by the
B respondent and on 24.3.81 an application was made by the parties for
recording of compromise to the effect that time for vacating the pre-
mises is extended upto 31.12-.1'82 as the last chance. On 24.3.81 the
executing court passed an order disposing of the Execution Application
as compromised.

On 31.12.82 the respondent did not vacate and hand over posses-
C sion. Consequently on 31.1.1983 a fresh application for execution was
filed by the appellant bearing No. 4/83 alongwith four documents. On
29.9.1983 respondent filed another application requesting for record-
ing a compromise that the time is further extended upto 30.6.1984.
This application was signed only by two of the appellants and in sub-
D stance there was no effective compromise but in the application the
respondent stated that the matter has been settled. The appellant filed
a reply on 20.10.83 denying the settlement and saying that it was only a
tentative suggestion but was not finally settled. On 26.12.83 the
respondent filed objections claiming that decree is a nullity and can
not be executed. On 21.1.84' a rejoinder was filed replying to the
E objections raised by the respondents and on 17.4.84 the appellant filed
an application praying to the Court to decide the objections as a pre-
liminary question.

On 1.10.85 Civil Court rejecting the objections filed by the
respondents directed the execution to proceed and on 4.10.1985 on the
F request of the respondent granted 10 days stay in execution. On
14.10.85 a revision application wa~ filed by the respondent in the High
Court and on 15.10.85 this revision was dismissed by the Bombay High
Court in limine after hearing both the parties but granted one month's
time staying the execution to approach this Court. SLP was filed
before this Court on 23.10.85 but in the meantime on 15.11.85 one
G month's time granted by the High Court expired. The respondent
moved the trial court (executing court) and executing court granted a
week's time. On 19.11.85 the respondent also moved the High Court
for further extension of time but the prayer was rejected by the High
Court and ultimately on 30.11.85 decree was executed through the
process of the Court and possession was taken from the respondent.
H On 9.12.85 in the SLP, this Court passed an order that the appellant be
SMT. KAMLABAI v. MANGILAL [OZA, J.] 471

put in possession to run the business of the Cinema house. The respon- A
dent was permitted to take away his machinery and other things but it
was directed that the appellant will not create any interest in favour of
the third party during the pendency of th~ matter. Consequently bet-
ween 28.12.85 and 30.12.85 the respondent removed all his machi-
neries and other sundry articles. This Court on 4.3.86 granted special
leave and disposed of the viatter finally and remitted it to the High B
Court to admit. the revision petition and hear it on merits and dispose it
of in accordan,ce with law and on request made by the parties the
matter was sent to the M.P. High Court. The property was given in
possession of the receiver although in between the petitioners had
installed and put up a new screen. It was also observed by this Court
that the revision petition will be disposed of within three months. C
Thereafter the revision petition was disposed of by the M.P. High
Court by the impugned judgment against which the present appeal is
filed.

It was contended by learned counsel for the appellant that the
C.P. & Berar Letting of Houses and Rent Control Order, 1949 is a D
regulatory order and controls the action of the landlord in certain
aspects only. According to him Sec. 2 sub-clause 6 read with Sec. 2
sub-clause 5 and Sec. 13(1)(a) and (b) shows that it was meant for
restricting eviction in specific circumstances by fettering the right of
~ the landlord to terminate the tenancy under Sec. 106 of the Transfer of
Property Act with the permission of the Rent Controller. But accord- E
ing to the learned counsel so far as tenant is concerned no permission is
necessary and the tenant may terminate the tenancy by giving a quit
• notice under Section 111 of the Transfer of Property Act or may sur-
render the tenancy rights by mutual agreement under Sec. 111(e) or
surrender impliedly under Sec. lll(f) and such termination may be
lawfully done by the tenant even before, during or after the proceed- F
.--\_ ings under clause 13 of the Order and so far as this right of the tenant is
concerned, according to the learned counsel, no permission is
necessary.

In accordance with the compromise where the tenant declares his
intention to surrender the tenancy it is unnecessary for the landlord to G
pursue the proceedings under clause 13 as the tenant agrees to go and
. ~ thheref?re once tdheftenant e.xpr~sses tfhe de sire to surrender the tenancy
t ere IS no nee or termination o the 1ease by the landlord under
Sec .. 106. Consequently the compromise petition in this case filed
before the Rent Controller rendered the proceedings for permission
unnecessary. In the face of the compromise it appears that if the view H
472 SUPREME COURT REPORTS [1988) I S.C.R.

taken by the Rent Controller is not correct then in substance the order
A
indicates that he granted permission for surrender of the tenancy and it
is only in that context that he could pass an order for filing of the
application as once the lease is surrendered the question of determin-
ing the lease does not arise and it was contended that this conclusion is
the direct result of the recitals in the compromise and the order passed
B by the Rent Controller. According to the learned counsel it could only
be understood to mean two things i) that the lease stands surrendered
and therefore the need of permission to determine does not arise or
that as the tenant expresses his desire to surrender the lease stands
terminated and therefore the question of permission does not arise or
as the tenant expresses the desire to surrender the Rent Controller
c files the proceedings thereby impliedly permitting the determination
of lease by surrender. In either of the event, according to the learned
counsel, in the face of the order passed by the Rent Controller the
objections raised by the judgment-debtor in execution could not be
sustained.

D It was also contended that delivery of physical possession by the
tenant to the landlord is not a pre-requisite for an effective and valid
surrender under Section lll(e) and (f). It is only a circumstance from
which an implied surrender may be inferred as it is also one of the
modes of implied surrender. Similarly actual delivery of possession is
also not essential for the determination of lease as according to him, }..
E the plain language of Sec. 111(e) and (f) of Transfer of Property Act
does not indicate that delivery of possession is an essential requisite of
surrender.

According to the learned counsel compromise and subsequent
extension of time by mutual consent ultimately shows the respondent-
F tenant's conduct that at every stage the original position of surrender '
of his tenancy rights was accepted and admitted and still after securing }--.
about 12 years on the basis of such con1promises this objection has
been raised ultimately as according to the learned counsel, the objec-
tion to the executability of the decree or its validity should have been
raised at the earliest moment as is clear that this decree of 1974 on the
G basis of compromise of 1970 is not questioned for all these years but is
questioned for the first time in 1983 and repeatedly the judgment-
debtor respondent having accepted the position and got further time ~·
extended by either compromise or otherwise clearly indicates that he
accepted this position and therefore he is estopped from raising such
an objection at this stage. Learned counsel for the respondent on the
H other hand contended that clause 13( 1) of the Order clearly provides
SMT. KAMLABAI v. MANGILAL [OZA, J.) 473

that no lease could be determined without the permission of the Rent A
Controller and therefore when on the basis of the compromise in 1970
the Rent Controller passed an order filing the application, it is clear
that no permission was granted and according to him after that a
number of compromises have been entered into but as initially the
lease has not been determined with the permission of the Rent Con-
troller the decree for eviction could not be said to be in accordance B
with Clause 13 and on this basis the objection filed by the respondent
judgment-debtor are fully justified. Learned counsel for both the
parties on the questions involved referred to series of decisions of High
Courts and of this Court in support of their contentions.

Even learned counsel for the respondent could not contend that
' even if a tenant intend to terminate the lease, a permission under C
~ Section 13 was necessary nor it was contended that even if a tenant
intended to surrender the lease he could not do so without the previous
permission of the Rent Controller under Clause 13. In fact clause 13 of
the Order puts restriction on the rights of the landlord to terminate the
tenancy and seek evic!Jon. It is because of this that sub-clause 3 of D
clause 13 of this order provides for grounds on the basis of which a
permission for determining the lease could be granted. A perusal of
this Sec 13 of the Order therefore indicates that restriction has been
imposed on the right of the landlord to seek eviction by determining
the lease of the tenant and that could only to be done on specific
,1., grounds specified in clause 3 with the previous permission of the Rent E
Controller.

"13(1) No landlord shall, except with the previous written
permission of the Controller-

(a) xx xx xxx F

(b) where the lease is determinable by efflux of the time
limited thereby, require the tenant to vacate the house by
process of law or otherwise if the tenant is willing to con-
tinue the lease on the same terms and conditions." ·

The scheme of this Order clearly indicates that it is meant to protect
the rights of the tenant by restricting the rights of the landlord. It
initiaily puts an embargo on the right of a landlord to determine the
lease, if he so chooses. But it does not restrict the tenant to surrender
the lease either by specific agreement or by an implication demons-
trated by conduct and it will be therefore necessary to examine the H
474 SUPREME COURT REPORTS [1988] I S.C.R.

proceedings which started with the application of the appellant-
A
landlord for permission under clause 13, the reply filed by the
respondent-tenant, compromise petition filed by both the parties and
ultimately an order passed by the,Rent Controller and it is in fact the
interpretation of this order which is really material for the decision of
• this matter as the sole ground challenging the execution is that this
ll decree of eviction is obtained without the prior permission under
clause 13 of the Order, the decree can not be executed and in our
opinion therefore it is in this context that the order passed by the
executing-court which rejected the objections of the judgment-debtor
respondent and the High Court of M.P. which allowed the revision
petition and allowed the objections filed by the judgment-debtor has
to be examined.'
c
The executing court by its order dated 1.10.85 considered the
question including the question of estoppel raised by the appellant
j
. decree-holder, the learned Court came to the conclusion that after the
compromise and orders of the Rent Controller in Original Suit No.
D 5174 was 1 filed in which the decree was passed which is now being
. executed. It was held that the tenant respondent did riot raise this
objection in the suit and that the suit could not be filed as there is no
previous permission of the Rent. Controller in accordance with Clause
13 of the Order. It also shows that the first execution i.e. Execution
No. 11/1981 was filed and notice was served on the judgment-debtor ......
E the decree was not challenged by the judgment-debtor on the ground '
that it was obtained without the permission of the Rent Controller. In
this view of the mailer the executing court rejected the objections
holding that if after the passing of the decree it was put to execution on
number of occasions when the judgment-debtor instead of raising an
objection .. only pleaded for time and time was extended again and
F again. Ultimately after 11 years for the first time this objection the
"· .judgment-debtor could not raise,: the executing court rejected the· 'y-
objections filed by the objector judgment-debtor. 1 •
--~ .

___ In f~'Ct\the basic question is'as to what is the restriction put 7-
because of Sec. 13 of the C.P. & Berar Rent Control Order. As this
G Section has been quoted above it is ve'ry clear that it starts with no
landlord and it is this which makes it clear that it is a restriction put on
the right of landlord to proceed with tbe determination of the tenancy ~
, and for that purpose it is necessary that he should obtain the permis-
sion of the Rent Controller. Sub-clause 2 of this Section again indi-
cates that when a landlord seeks to obtain permission under sub-sec. 1
H .then he will have to apply to the Rent Controller.
SMT. KAMLABAI v. MANGILAL [OZA, J;[ 475

r Sub-clause 3 of this Section thereafter provides that the Rent
Controller shall grant permission if he is satisfied in respect of grounds A
enumerated as sub-clauses of clause 3 of Section 13. The scheme of this
Section therefore clearly indicates that the permission which is re-
quired under Sec. 13 is only needed when the landlord wants to termi-
nate the tenancy. It is not at all necessary if the tenant wants to surren-
der the lease or terminate the tenancy or vacate the premises. Section B
106 of the Transfer of Property Act reads as under:-
'y
"106. In the absence of a contract or local law or usage to
the contrary, a lease of immoveable property for agricul-
tural or manufacturing purposes shall be deemed to be a
lease from year to year, terminable, on the part of either
..... lessor or lessee, by six months, notice expiring with the end c
~-- of a year of the tenancy, and a lease of immoveable pro-
perty for any other purpose shall be deemed to be a kase
from month to month, terminable, on the part of either
lessor or lessee, by fifteen days' notice expiring with the
end of a month of the tenancy. D

Every notice under this section must be in writing,
signed by or on behalf of the person giving it, and either be
sent by post to the party who is intended to be bound by it
or be tendered or delivered personally to such party or to
one of his family or servants, at his residence, or (if such E
tender or delivery is not practicable) affixed to a conspicu-

.. ous part of the property."

This provides for termination of the lease and it is clear that the lease
could be determined either by the lessor or by the lessee and it is only
when the lease is determined by the lesser i.e. landlord that provisions F
of Section 13 of the C.P. & Berar Rent Control Order is attracted but
~- not otherwise.

Section 111 of the Transfer of Property Act provides for various
circumstances when the lease of immovable property comes to an end.
It contemplates surrender, implied surrender and it is in this context G
that the compromise filed before the Rent Controller deserves to be
looked at. This compromise was filed before the Rent Controller on
-+ 23.3.70. The relevant clause of this compromise reads:

"(b) The applicants assure and hereby undertake not to
evict N .A. 2 before 31st March, 1974. The Applicant No. 2 H
476 SUPREME COURT REPORTS [1988] 1 S.C.R.

shall vacate the premises on or before that day without
A recourse to any procedure to be followed either before
Rent Control Authorities or the Civil Court." "'
It is therefore clear that the tenant himself offered to vacate the pre-
mises on or before 31st March, 1974 without any recourse to any
B proceedings before any Tribunal. It therefore clearly appears from this
compromise that the tenant agreed to surrender the lease and further
agreed to hand over possession on or before 31st March 1974. It is in
this context that if language of Sec. 13 is examined, it is plain that after
this compromise there remained nothing for which permission could
be granted by the Rent Controller. The permission is necessary if the
landlord wants to terminate the tenancy on any one of the grounds
c available under the provisions of Section 13 and before granting such r-
permission the Rent Controller has to satisfy himself about the exis-
tence of the grounds. In this case when landlord sought permission the
tenant came forward offering to surrender the lease thereby the tenant
--\
expressed a desire to terminate the lease from a particular date and as
0 is clear from the language of Section 13 that no permission is necessary
where the tenant chooses to terminate the lease either by a notice
under Sec. 106 or by surrender under Sec. 111 of the Transfer of
Property Act and under these circumstances therefore the order pas-
sed by the Rent Controller filing this compromise appears to be just
and fair. It appears that the Rent Controller took the view that as the
E tenant himself has offered to surrender and determine the lease by ,A
surrender the question of permission does not arise.

In 1974, Civil Suit No. 5/74 was filed before the Civil Judge and
an agreement of arbitration was filed before the Court. In this agree- '
ment of arbitration the first clause is very material which reads as
F under:
I
"Whereas Party No. 2 had surrendered his tenancy rights .J-...-
and had agreed to deliver vacant possession of the follow-
ing property to landlord party No. 1 and"

G It is signed by the landlord and the tenant and it is clearly stated that
party No. 2 had surrendered his tenancy rights and had agreed to
deliver vacant possession. It is on the basis of this arbitration agree-
ment that the matter was before the Arbitrator where the compromise +-
was filed which is the basis of the award and on the basis of the award a
decree was passed by the Court of Civil Judge, Khamgaon Senior
H Division in Regular Civil Suit No. 95/74. During the proceedings in
SMT. KAMLABAI v. MANGILAL [OZA, J.] 477

this suit it is clear that no objection was raised that a decree for evic- A
tion could not be passed as there was no permission of the Rent Con-
troller to determine the lease. On the contrary the arbitration agree-
ment itself started with the condition that the tenant had already sur-
rendered his tenancy rights as is clear from the clause quoted above.
Clause 2 incorporated in the compromise filed before the Arbitrator
reads as under: B

"" '
"(2) That Party No. 2 shall pay Rs 1301 (Rs Thirteen
hundred and one only) per month as damages from
1.4.1974 and shall also pay all the present and future taxes,
including house tax and naial rent, regularly every month
in advance. The quant11m of damages is agreed between the
parties only 11pto the agreed date of vacation, after which c
Party No. 1 will he entitled to damages on the basis of the
then matket rate."

A similar clause in the agreement and consequent decree go to show
that as lease was surrendered and a new arrangement was substituted D
under which the respondent continued in possession and agreed to
hand over possession up to 31.3. 77.

Thereafter there was no objection that could be raised to the
passing of this decree for eviction and thereafter when possession was
not given as provided for in this decree upto 31.3. 77 further time was E
sought and ultimately in spite of repeated extension of time the posses-
sion was not handed over till 31. U.80 an execu(ion case was filed
• which was No. 11/81 and notice was issued under Order 21Rule22. In
response to this notice again an application was made for recording of
compromise for grant of time till 31.12.82 as a last chance and on
24.3.81 the executing court passed an order disposing of the execution F
on the basis o{ the compromise permitting time upto 31.12.82. But
when possession was not delivered even on 31.12.82 an execution was
filed on 31.1.83 bearing No. 4/83 out of which the present appeal
arises.

It is clear that from the beginning in 1970 when the compromise G
was filed before the Rent Controller the tenant has admitted to have
surrendered the tenancy rights and thereby determined the lease by
surrender. This was again reaffirmed when second time the arbitration
was entered into and on the basis of that arbitration agreement, an
award was passed on the basis of a compromise, and a decree was
passed in terms of the award. Clearly the11efore the dauee which is to H
478 SUPREME COURT REPORTS [1988] 1 S.C.R.

be executed is not a decree for eviction on the basis of determination of
A
the lease by the landlord but is a decree passed on the basis of lease
having been determined by the tenant himself by surrender which has
been stated by the tenant on number of occasions in categorical terms.

In Shah Mathuradas Magan/al and Co. v. Nagappa Shankarappa
8 Malaga and Others, AIR 1976 S.C. 1565 this Court had the occasion to
examine the question of surrender and it was observed as under:

"A surrender clause (e) and (f) of Section 111 of the Trans-
fer of Property Act, is an yielding up of the term of the
lessee's interest to him who has the immediate reversion of
the lessor's interest. It takes effect like a contract by mutual
c consent on the lessor's acceptance of the act of the lessee.
The lessee cannot, therefore, surrender unless the term is
vested in him; and the surrender must be to a person in
whom the immediate reversion expectant on the term is
vested. Implied surrender by operation of law occurs by the
D creation of a new relationship, or by relinquishment of pos-
session. If the lessee accepts a new lease that in itself is a
surrender. Surrender can also be implied from the consent
of the parties or from such fact as the relinquishment of
possession by the lessee and taking over possession by the
lessor."
E
It appears that the learned Judge of the High Court felt that
when originally a compromise was filed before the Rent Controller it
was not in accordance with Sec. 13. In fact Sec. 13 contemplates a "'
permission for determination of the lease but where the tenant agrees
to determine the lease himself by mutual consent the question of
f permission does not arise. Apart from it, it has not been noticed that in
the reply filed before the Rent Controller the subletting is not disputed
and it is not pleaded by the tenant the judgment-debtor now the
respondent that the sub-lease was with the written consent of the
landlord as is required and in this view of the matter the order of the
Rent Controller could even be interpreted to mean that permission
G was granted but apart from it as the order itself states that the matter is
filed apparently because the Rent Controller felt that as the tenant
himself has agreed to determine the lease on a particular date there is
no question for grant of permission and it is here it appears that the
learned Judge fell into the error.

H Thereafter the learned Judge of the High Court has examined
SMT. KAMLABAl v. MANGJLAL (OZA, J.] 479

the agreement of arbitration and the compromise filed before the A
Arbitrator, and had applied the principle of a contract contrary to the
public policy and on that basis have come to the conclusion that this
could not be permitted. Here again it appears that the learned Judge
has committed an error. Apparently the arbitration agreement, the
compromise filed before the Arbitrator and the Award and the decree
passed by the Court all put together clearly go to show that what was B
referred to the Arbitration was not as to whether the lease is deter-
mined or not but what was referred was the period for which he should
be permitted to cogtinue in possession. The determination of lease was
agreed between the parties as it was even agreed earlier. The only
question therefore was grant of time on the new terms and conditions
which were to be determined by the Arbitrator. Thus, in fact the lease C
came to an end by surrender and what by the Award was evolved was
an arrangement on new terms and this therefore does not appear to be
any contract just to bypass Section 13, as when the lease itself is
determined nothing survives and therefore it could not be contended
that it was contrary to provisions of Section 13.
D
In Foster v. Robinson, [1950] 2 All E.R. 342 a question more or
less similar, as is before us, came for consideration. In that case the
question of surrender although the tenant continued to be in posses-
sion was considered. It was observed as under:

"The landlord, a farmer, was the owner of a cottage. E
Shortly after the 1914-1918 war the defendant's father was

- engaged to work for the landlord on his farm, and at the
time of that engagement and in consequence of his employ-
ment the cottage was let to the defendant's father at a rent
of £ 3.5.s a half year. Shortly before May 1946, the de-
fendant's father, owing to age and infirmity, gave up work, p
and in that month there was made between him and the
landlord a verbal agreement whereby the existing tenancy
was to cease·, the landlord was not to charge rent any more,
and the defendant's father was to be allowed to live in the
cottage for the remainder of his life rent free. On Jan. 15,
1950 the defendant's father died. The defendant, a daugh- G
ter of the deceased, had lived with him in the ...,ttage for a
number of years and was residing there at the date of his
death. The landlord informed the defendant that it was his
intention to sell the cottage, but that she could continue to
reside there rent free until Apr. 6, 1950. On Feb. 18, 1950,
letters of administration were granted to the defendant H
480 SUPREME COURT REPORTS [1988) 1 S.C.R.

who refused to leave the cottage, claiming that at the date
A of his death her father was still a contracfoal tenant under
the original tenancy and that tenancy was now vested in her.

The question on the facts quoted above was examined and in plain
language it was observed:
B
"The question in the present case is whether on the facts as '""!'
found by the learned county court judge there are circum-
stances which prevent the tenant from asserting that the old
relationship has been superseded by the new. Put in its
simplest form, if there is a new arrangement which the
tenant represents by his conduct that he is asserting, then ~
c he is estopped from denying that the landlord was capable
of entering into the new arrangement, and, if the µew
arrangement could not be entered into if the old agreement
subsisted, it follows that the tenant is equally prevented
from denying that the old agreement has gone."
D
And having so found it was further held:

"Havh1g so found, I can see no ground why the transaction
should not have the result the parties intended it should
have. I think it amounts to this, that the determination of )..
E the former tenancy was equivalent to delivery up of posses-
sion under that tenancy and then a resumption of posses-
sion under a new transaction immediately afterwards. I
think, to use the language of Cockburn, C.J. in Oastler v.
Henderson (6) (2 Q.B.D. 578) there was a virtual taking of
possession. If the key had been handed over and then been
F handed back the next minute that would have symbolised \...
the delivery up and the grant of possession and I cannot }"
think that it vitally matters that performance was not gone
through. That is the effect of a surrender by operation of
law in such a case as the present and the learned Judge has
so found, and, there being evidence to support that finding,
G we would not be justified in differing from his conclusion as
to fact, and, if not, it seems to me the conclusions which I
have stated necessarily follow. The whole question is: Was ~
the old contractual tenancy determined? Was it determined
as the result of surrender by operation of law? The learned
county court judge found that it was, and I think that is a
H finding supported by the evidence without any misdirectiOI)
SMT. KAMLABAI v. MANGILAL [OZA, J.J 481

in law and that this appeal should be dismissed." A

It is thus clear that when the parties surrendered the tenancy and
substituted by a fresh arrangement merely because technically the pos-
session was not handed over is of not much consequence. Apparently
in the present case also by mutual agreement the tenancy came to an
end, and by arbitration what was sought was an arrangement for time B
on payment of damages for use and occupation. Admittedly it did not
either continue the old tenancy or started any new one. This substitu-
tion of new arrangement and the determination of the old by mutual
agreement clearly indicates that the tenant surrendered his tenancy
rights and the court below was not right in coming to the conclusion that
the surrender is no there as possession was not handed over. c

The next question which is of some importance is about raising of
the objections at the earlier stage. Admittedly when the award was
filed in the court, notice was served and no objection was raised. If the
tenant intended to raise the objection that this decree on the basis of ,D
the award could not be passed as it was in contravention of Sec. 13 of
the Rent Act and therefore was absolutely without jurisdiction. Such
an objection could have been raised there and then. The tenant admit-
tedly did not raise this objection which was open to him. In this view of
the matter, the contention on behalf of the appellant about the con-
structive res-judicata also is of some significance. This question of E
constructive res judicata in execution proceedings came before this
Court in Mohan/al Goenka v. Benoy Kishna Mukherjee and others,
AIR 1953 S.C. 65. In this decision following the earlier decision of the
Privy Council, this Court ruled that the principles of constructive res-
judicata will be applicable even in execution proceedings.
F
It is also clear that if when the decree was passed on the basis of
award and notice was issued to the judgment-debtor respondent no
such objection was raised. It is also clear that the decree was put in
execution on more than one occasions and this objection was for the
first time raised only in 1983. In this view of the matter also the conten-
tion of the learned counsel for the appellant that by not raising this G
objection earlier the judgment-debtor has lost his right to raise this
objection and he is estopped, deserves to be accepted, although in the
light of what we have discussed earlier, it is not necessary. to go into
this question, having come to the conclusion on the first question
against the respondent.
H
482 SUPREME COURT REPORTS [ 1988] 1 S.C.R.

A In the light of the discussion above therefore the judgment pas-
sed by the High Court can not be maintained. The appeal is therefore
allowed. The judgment passed by the High Court is set aside and that
passed by the executing court is maintained. In the circumstances of
the case the parties are directed to bear their own costs.
B H.L.C. Appeal allowed.