Advocates Appeared

Mr. D. V. Patel, Sr. Advocate, (M/s. P. R. Naolekar, H. K. Puri and K. K. Mohan. Advocates with him), for Appellant in C. A. No. 1041 of 1968: Mr. A. K. Sen. Sr. Advocate. (M/s. S. K. Gambhir and K, P. Gupta. Advocates with him) for Respondents 1 (V) and 2: In C. A. No. 1041 of 1968: Mr. T. V. S. N. Chart and Mrs. Urmila Sirur Advocates, for L Rs of Respondent 3 (In Civil Appeal No. 1041 of 1968). Mr. D. V. Patel. Sr. Advocate. M/s. N. M. Ghatate. S. Balakrishnan and P. R. Naolekar Advocates with him), for Petitioners (In S.L.Ps.); Mr. A. .K. Sen Sr. Advocate (M/s. S. K. Mukherjee. K. P. Gupta and S. K. Gambhir Advocates with him), for Respondent No. 1 (In both the Spl. Leave Petns.): Mr. T. V. S. N. Chari and Mrs. Urmila Sirur, Advocates, for Respondent No. 2 (In both the Spl. Leave Petns.)

Judgement

BEG, J.:- The plaintiff- respondent had filed a suit in the District Judge s Court at Jabalpur claiming a declaration that a lease executed in favour of the Defendant-Appellant, M/s. Supreme General Films Exchange Ltd., (hereinafter referred to as the Company ). in respect of Sunder Vilas Theatre (now known as Plaza Talkies) by its former owners. Jiwan Das Bhatia and his sons (hereinafter referred to as the Bhatias ), is void and ineffective against the plaintiff s rights under decrees obtained in Civil Suit No. 15-A of 1954 dated,7-5-1960 and in Civil Suit No. 3-B of 1952 dated. 20-4-1954 in execution of which the Theatre had been attached. The plaintiff wanted the declaration also to make it clear that an auction purchaser, purchasing the theatre in execution of either of the two decrees, gets rights free from any obligation towards the Defendant-Appellant under the void lease.

2. The former owners of the theatre, the Bhatias, had borrowed Rupees 2,50,000/- from the Plaintiff-Respondent, a Maharaja, against the security of bales of cotton. On 29-12-1951, they executed a registered mortgage deed in respect of the Plaza Theatre in favour of the plaintiff as the price of pledged goods was insufficient to satisfy the dues. The plaintiff, unable to recover the amount due, had brought Civil Suit No, 15-A of 1954 in which a compromise decree was passed on 7-5-1960, in terms of an agreement between the parties that amounts due will be realised by the sale of Plaza theatre.

3. The Central Bank of India, another creditor of Bhatias, had brought Civil Suit No. 3-B of 1952 and obtained a decree for Rs. 1,24,000/- on 29-4-1952. Rights under this decree were assigned in favour of the plaintiff-respondent. The Plaza theatre, together with other properties of Bhatias, was attached on 4-5-1955 in the course of execution of that decree.

4. The appellant company claimed to be a lessee in occupation of the theatre where it had carried on the business of running a Cinema under an unregistered lease obtained on 27-2-1940. The lease of 1940 had expired on 10-4-1946. The company continued as a tenant holding over until the impugned lease deed of 30-3-1956 was executed. If this was a valid lease, it would have conferred. upon the company the right to be a tenant of the property under the lease for eight years from 10-2-1956 to 10-2-1964, with an option for a renewal until 10-2-1970. This lease was executed after the company had filed a suit (No, 16-A of 1954) on 20-11-l954 for the specific performance of an agreement to lease contained in a letter dated 19-7-1948. A compromise decree was passed on 24-3-1956 in this suit also. The lease deed of 30-3-1956 purported to carry out the terms of that compromise decree passed in a suit in which the plaintiff was not impleaded at all.

5. The plaintiff s case was that the lease of 30-3-1956 was void as it was struck by three statutory provisions, namely Section 52 of the Transfer of Property Act, Section 65-A of the Transfer of Property Act, and Section 64 of the Civil Procedure Code. The defendant appellant company in addition to denying the alleged rights of the plaintiff to the benefits of these