2013 Supreme(Kar) 65
KARNATAKA HIGH COURT
Jawad Rahim, J.
M/s. Kothari Inter Group Ltd., Bangalore - Appellant
Versus
M/s. Vinayaka Enterprises, Bangalore - Respondent
Regular First Appeal No. 1904 of 2012
Decided on: 28.1.2013
Advocates appeared:
Sri Sunil S. Rao for Sri S.R. Raviprakash, for Appellant;
Sri M.S. Raghavendra Prasad, for Respondent
Headnote:TRANSFER OF PROPERTY ACT, 1882 - Section 106: [Jawad Rahim, J] Notice of termination of tenancy - Termination of tenancy by virtue of the order of eviction in HRC proceedings - Finding of the Trial Court about the existence of jural relationship of landlord and tenant between the parties. Consequent to change in law, landlord could not execute the order of eviction - Subsequent suit for ejectment filed by the landlord - Decreetal of - Appealed against - Appellant continued in possession even after the eviction order in HRC proceedings - The appellant claimed that he is an unauthorised occupant and not a tenant, therefore suit for ejectment is not maintainable - Held, Tenancy is governed basically under the provisions of the Transfer of Property Act. The terms ’lessor’ and ’lessee’ are also defined under the Act. Transferor is the ’lessor’ and transferee is the ’lessee’, the price is called the premium, and the money, share, service or other things to be so rendered is called the rent. This, therefore, clarifies that when a person is inducted into the premises in consideration of the price to be paid or promised, that is monthly rent, and the owner of the premises transfers right upon such person to enjoy such property for a specific time by express or implied means. Such transferor is called ’lessor’ and the person in whose favour transfer of such right is made is called the ’lessee’. This creates jural relationship of lessor and lessee which under other special statutes like rent laws is termed as ’tenant and tenancy’. Therefore, the rights and liabilities of the lessor and lessee have to be determined only under Section 105 of the Transfer of Property Act. Such relationship in law between two individuals or juristic person in respect of immovable property is defined under Section 105 as tenancy (lease). Termination of such relationship is permissible only as envisaged under Section 106 of the Transfer of Property Act which is common law. Further held, Thus, a person having been inducted as tenant would continue to be tenant and as envisaged under Section 116 of the Evidence Act, is estopped from contending otherwise. Section 116 of the Evidence Act envisages ’No tenant of immovable property, or person claiming through such tenant shall during the continuance of the tenancy be permitted to deny that the landlord of such tenant had, at the beginning of the tenancy, as title to such immovable property; and no person who came upon any immovable property by the licence of the person in possession thereof, shall be permitted to de3ny that such person had a title to such possession at the time when such licence was given’. This provision is intended to discourage unscrupulous individuals who, having occupied the premises who has inducted him as tenant. Ofcourse Section contains the expression ’during the continuance of tenancy.’ This would mean tenancy continues till determination as required under Section 106 of Transfer of Property Act and therefore, the occupant becomes ’tenant holding over’ and cannot, by virtue of Section 116 of the Evidence Act, set-up title adverse to the landlord, like the one in this case. The jural relationship between the parties will always be decidable based on the transaction under which the person in occupation was inducted. Hence, there is no gainsaying that if an order of eviction is passed under the provisions of the special enactment like the Karnataka Rent Act, 1999 relationship of landlord and tenant ceases and thereafter the owner has to again file a suit for possession for evicting the occupant, as canvassed by the appellant in this case. The only difference is action for eviction under the Transfer of Property Act is based on termination of tenancy, whereas action for eviction under the provisions of the Karnataka Rent Act would be under provisions contained in that Act which takes care and protects the right of tenants against eviction except as provided under the special statute. On fact, held, In the instant case, the order of eviction is passed against the tenant subsequent to the decision in SHOBHA SURENDER’s case. Therefore, though validly passed by the Court having competent jurisdiction it could not be executed against the appellant consequent to which the landlord initiated action under the provisions of the Transfer of Property Act. The respondent/landlord has issued notice under Section 106 of Transfer of Property Act and terminated the tenancy. This was valid action, but the decree obtained had become a nullity as Section 31 of the Karnataka Rent Control Act, 1961, was declared as violative of Article 14 of the Constitution of India. The decision in SHOBHA SURENDER’s case makes it clear that in case filed similar to the case at hand where order of eviction was passed after 1-11-1996, the remedy to the landlord was only to file a suit for ejectment after termination of tenancy in accordance with law. The plaintiff has done that in this case.
JUDGMENT
Jawad Rahim, J.
This is a defendant's appeal against the order of eviction in as No. 1879/2009, on the file of City Civil Judge, Bangalore.
2. Heard Sri. Sunil S. Rao, learned Counsel for the appellant and learned Counsel Sri. Rajendra Prasad for the respondent/plaintiff Perused the records in supplementation thereto.
3. From what the learned Counsel on both sides have adverted to and also manifest from the records, the factual matrix is:
a) The respondent filed a suit against appellant seeking judgment and decree to eject him and also for a judgment and decree in a sum of Rs.1,44,000/- to be recovered from him with interest at 21 % per annum being the arrears of rent and also for damages of Rs.50 per sq.ft. per calendar month on 1700 sq.ft from 29.1.2009.
b) In support of it, it averred, it is a partnership firm represented by Managing Partner- C.R. Janardhan and S.A. Aswathanarayana Setty, who owned Vinayaka Tower, situated at No.1/1, First Cross, Gandhinagar, Bangalore, which is a multistoried commercial complex. The appellant is one of the tenants, who occupied second floor on monthly rent exclusive of water charges, electricity charges, lift and other maintenance charges.
c) It is alleged, the appellant is a chronic defaulter in payment of rent and also other charges towards water and electricity charges. The plaintiff also averred for the past 12 years he has committed defaults in payment of rent and other arrears causing harassment and loss to it. The plaintiff also alleged that he has sublet the premises to the following:
1) Rockwell Housing Ltd.,
2) Barclays Credit Ltd.,
3) Isotex Taray Polyester Ltd.
4) Kothari business housing Ltd.
5) Kothari Inter Gold
6) Paxal Chemical
7) Metro Diamond Export Ltd.
and has derived monetary benefit from them, thereby making illegal gain which is to plaintiffs detriment. They also alleged that during 24.5.2009, plaintiff terminated tenancy as the appellant failed to pay the rent and to evict him from the premises which notice has been duly served. Since he failed to comply with the demand made therein, they initiated HRC proceedings in HRC No. 1982/90 in the Court of Small Causes, Bangalore, which petition was decreed as he committed default in payment of rent. The order passed under Section 29 of the Karnataka Rent Act, 1999 attained finality, in view of its confirmation by this Court in HRRP 431/1997 dated 1.4.1997. The plaintiff also referred to the fact that judgment and decree in HRC 1982/90 was put in execution in Execution Petition No. 1985/1998, but executing Court dismissed it as not enforceable in view of the amendment of provisions of Section 31 of the said Act. Consequent to change in the position of law, plaintiff was forced to initiate fresh action and in this regard terminated his tenancy by a statutory notice under Section 106 of the Transfer of Property Act on 22.12.2008. Since he failed to comply with the demand in the notice, it initiated proceeding in O.S. No. 1879/2009.
d) In response to the suit summons, appellant entered contest and filed written statement admitting his tenancy under plaintiff, but described the plaintiff as a nodal rent collecting agency between the owner and defendant. It is further alleged that actually the defendant was inducted by one Venkatasubbaiah Shetty, who had instructed him to pay rent to plaintiff and that he followed these instructions. He denied the jural relationship of tenant and landlord between plaintiff and himself and based such defence on the plea that there was no documentation of lease.
e) Alternatively, he took up defence that the suit was bad for non-joinder of necessary parties viz., Venkatasubbaiah Shetty, his alleged landlord. He further contended that the suit was barred by the provisions of Indian Partnership Act, as the firm is unregistered.
f) Next contention was that the rent payable by him was only Rs.7800/- p.m. in respect of the land measuring 1700 sq. ft. He further contended Venkatasubba Shetty had leased out to hi
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