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1972 Supreme(P&H) 83
PUNJAB & HARYANA HIGH COURT
P.C.Pandit, J.
Takhat Singh
Versus
Prem Chand
Second Appeal No. 1483 of 1964,
Decided On : MARCH 24, 1972
The intention of the parties is a crucial factor in determining whether a merger of tenancy and ownership rights has occurred.
Headnote:
TENANCY RIGHTS - MERGER - TRANSFER OF PROPERTY ACT, SECTION 111(D) - LOCUS STANDI - BENAMI TRANSACTION - EAST PUNJAB URBAN RENT RESTRICTION ACT - SALE OF PROPERTY - PARTITION - INTENTION TO MERGE RIGHTS.
Fact of the Case:
The dispute arose from the sale of a shop divided into two portions, numbered 6456A and 6457, owned by Deep Chand and Mitter Sain in equal shares. Prem Chand was a tenant of Shop No. 6457, while Takhat Singh was a tenant of Shop No. 6456A. Mitter Sain sold his half share in both shops to Siri Kishan Dass, Prem Chand's brother-in-law, while Deep Chand sold his half share to Takhat Singh. Takhat Singh filed a suit for possession by partition of his half share in the shops, alleging that the sale to Siri Kishan Dass was a benami transaction and that Prem Chand was the real purchaser.
Finding of the Court:
The trial court held that Siri Kishan Dass was a benamidar for Prem Chand and that Prem Chand's tenancy rights in Shop No. 6457 merged with his ownership rights in the half share he purchased. The lower appellate court reversed the finding on the issue of locus standi, holding that the plaintiff had no right to raise the plea of benami. However, it affirmed the finding that Prem Chand's tenancy rights remained unaffected by the purchase.
Issues: 1. Whether the plaintiff had locus standi to raise the plea of benami transaction and challenge the sale in favor of Siri Kishan Dass? 2. Whether Prem Chand's tenancy rights in Shop No. 6457 merged with his ownership rights in the half share he purchased?
Ratio Decidendi: 1. The court held that the plaintiff had locus standi to raise the plea of benami transaction, as the sale affected his rights as a tenant in the property. 2. The court held that Prem Chand's tenancy rights in Shop No. 6457 did not merge with his ownership rights in the half share he purchased, as he intended to keep his tenancy rights alive. The court relied on the principle that merger occurs only when the intention to merge is clear and not otherwise.
Final Decision: The court dismissed the appeal, holding that Prem Chand's tenancy rights remained unaffected by the purchase of the half share in the property.
1. The dispute in this second appeal relates to a shop, situate in Ambala City. It appears that it was divided into two portions, which had been given separate numbers by the Municipal Committee of that place. The smaller portion was numbered 6456A, while the bigger portion bore No. 6457. This shop was owned by Deep Chand and his brother Mitter Sain in equal shares. Shop No. 6456-A was given on rent to Takhat Singh by the said owners. Similarly, Prem Chand was in possession of Shop No. 6457 as a tenant under the owners. Prem Chand filed an application before the Rent Controller for fixing the fair rent of his shop and also under Section 10 of the East Punjab Urban Rent Restriction Act for carrying out certain repairs etc., in the said shop. This application was still pending, when in the meantime, the owners decided to dispose of this property. Accordingly, on 25th October, 1961, Mitter Sain entered into an agreement for sale of his half share in the shop with Prem Chand and on 30th October, 1961, by a registered deed, he actually sold his share to Siri Kishan Dass, brother-in-law of Prem Chand, for Rupees 2,000/-. Similarly on 26th October, 1961, Deep Chand made an agreement with Takhat Singh to sell his half share in the said shop to him and on 30th October, 1961, he sole the same to him for Rs. 2,000/-. In July, 1962, Takhat Singh brought a suit, out of which the present second appeal has arisen, against Prem Chand and Siri Kishan Dass, defendants Nos. 1 and 2, for possession by partition of his half share in the shops, bearing Nos. 6456A and 6457. His allegations were that the real purchaser of the other half in the said two shops was Prem Chand, but the sale deed had been got executed by him in favour of his brother-in-law Siri Kishan Dass in order to harm the plaintiff. The agreement of sale was also effected by Mitter Sain in favour of Prem Chand and the sale consideration was also paid before the Sub Registrar by defendant No. 1. Siri Kishan Dass was merely a Benamidar for defendant No. 1. As Prem Chand had started making alterations and additions in the property to the prejudice of the plaintiff, that had necessitated the filing of the suit.
2. The suit was resisted by both the defendants. Prem Chand admitted that he was a tenant of the shop bearing No. 6457, but he denied that he had purchased the half share in the two shops from Mitter Sain. According to him, it was Siri Kishan Dass, who had bought the share of Mitter Sain in the said two shops. He pleaded that he being the tenant under the original owners of the property, could not be ejected therefrom otherwise than in due course of law in accordance with the provisions of the East Punjab Urban Rent Restrict Act. Siri Kishan Dass filed a separate written statement, in which he stated that it was he, who had purchased the half share in the two shops from Mitter Sain. According to him, Prem Chand was not a necessary party to the suit. He averred that the plaintiff could not under the law take the plea that he was merely a Benamidar.
3. On the pleadings of the parties, the following issues were framed:-
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"1. Is defendant No. 2 a Benamidar for defendant No. 1? If it is so, what is its effect?
2. Has the plaintiff no locus standi to raise the plea of Benami as referred to in issue No. 1?
3. Whether the plaintiff can obtain actual possession as against the tenant?
4. If issue No. 1 is proved, where the defendant still retains his character as a tenant of the property and its effect?
5. Has the plaintiff no locus standi to file the suit as per preliminary objection in para No. 3 of the written statement of defendant No. 2?
6. Is the property in dispute incapable of partition and its effect?
7. What are the shares of the parties in the property in dispute?"
4. The trial Judge, under issue No. 1, held that the shop in dispute was in fact purchased by Prem Chand and the sale-deed was not executed in the name of Siri Kishan Dass, who was a Benamidar for defendant No
