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1966 Supreme(All) 39
Allahbad High Court
JAGDISHSAHAI,W.BROOME
Shanker Lal - Appellant
Versus
Narendrs Bahadur Tandon - Respondent
Decided On : 02/17/1966
G.N. Kunjru and A.N. Kaul, for Appellants; K.C. Saxena, for Respondent,
Headnote:
PRE-EMPTION - LEASE - PERMANENT LEASE - FORFEITURE CLAUSE - DISSOLUTION OF LESSEE COMPANY - REVERSION OF LEASEHOLD RIGHTS TO LESSOR - LIQUIDATOR'S AUTHORITY TO EXECUTE SALE DEED - ESTOPPEL - TRANSFER OF PROPERTY ACT, S. 53-A.
Fact of the Case:
The Patel Mills Ltd. granted a permanent lease of a plot of land to Hulas Chand and Bilas Chand in 1930. In 1932, Hulas Chand and Bilas Chand sold their rights in the plot to Budh Sen and Jia Lal. Jia Lal died in 1943 and his heirs transferred their rights to Jugal Kishore. Budh Sen had already transferred his rights to Jugal Kishore, who became the owner and lessor of the entire plot. Shankar Lal and Pyare Lal, the appellants, filed a suit for pre-emption in 1944 and obtained possession of the plot in 1945. The Patel Mills Ltd. went into voluntary liquidation in 1939 and Sri Ram Gopal Mehra was appointed as the Liquidator. The Banaras Bank Limited, being the largest creditor of the Patel Mills Ltd., entered into an agreement for the sale of the entire assets of the Patel Mills Ltd., including the leasehold rights over the plot in dispute, to the Banaras Bank Limited. On 4th May 1939, a meeting of the creditors of the Patel Mills Ltd. was held to consider the final report of the Liquidator, stating that the entire assets of the Patel Mills Ltd. including the lease-hold rights in the plot in dispute had been transferred to the Banaras Bank Ltd. for a sum of Rs. 70,000. The report of the Liquidator was accepted in the meeting and was sent to the Registrar, Joint Stock Companies for registration. It was registered on 9th September 1939. On 1st March 1940, the Banaras Bank Ltd. went into Liquidation. The Official Receiver, who took charge of the assets of the Banaras Bank Ltd., not finding a properly stamped and registered deed of transfer of the lease-hold rights of the plot in dispute, called upon Sri. Mehra, the Ex-Liquidator of the Patel Mills Ltd. to execute a proper document of sale. Sri Mehra did so on 28th January 1941 by executing a properly stamped registered sale deed in favour of the Banaras Bank Ltd. (under liquidation). On 9th March 1943 the Official Liquidator Banaras Bank Ltd., transferred the leasehold rights over this plot to Sri Narendra Bahadur Tandon, respondent. Suit No. 54 of 1946 which has given rise to this special appeal, was filed by Shanker Lal and Pyare Lal, the appellants, against Narendra Bahadur Tandon, the respondent, for possession over the plot in dispute, on the allegation that the lease-hold rights in favour of the Patel Mills Ltd . had come to an end and the land had reverted to the proprietor that is the lessor.
Finding of the Court:
1. That in the case of a permanent lease, the lessor's rights could not revert to the lessor and they stood escheated to the Government. 2. Sri. Mehra was competent to execute the sale-deed on 28th January 1941 even though he had ceased to be the Liquidator of the Patel Mills Ltd. with effect from 9th December 1939 as a consequence of the dissolution of the aforesaid Mills. 3. The plaintiff-appellants were estopped from obtaining possession over the plot in dispute on account of certain representations made, on which the defendant-respondent or his predecessor in interest had acted. 4. That the suit was barred by S. 53-A of the Transfer of Property Act.
Issues: 1. Whether in the case of a permanent lease, on the death of the lessee, without leaving any heirs or successors, the lease-hold rights would revert to the lessor or would escheat to the Government. 2. Whether Mr. Mehra was competent to execute the sale deed on 28th January 1941 transferring the rights of the lessee in the land in dispute to the Banaras Bank Ltd. 3. Whether the plaintiffs-appellants were estopped from obtaining possession over the plot in dispute on account of any alleged representations made. 4. Whether the suit giving rise to this appeal is barred by the provisions of section 53-A of the Transfer of Property Act.
Ratio Decidendi: 1. In the case of a permanent lease, on the death of the lessee, without leaving any heirs or successors, the lease-hold rights would revert to the lessor and not escheat to the Government. 2. Mr. Mehra was not competent to execute the sale deed on 28th January 1941 transferring the rights of the lessee in the land in dispute to the Banaras Bank Ltd. as he had ceased to be the Liquidator of the Patel Mills Ltd. with effect from 9th December 1939 as a consequence of the dissolution of the aforesaid Mills. 3. The plaintiffs-appellants were not estopped from obtaining possession over the plot in dispute on account of any alleged representations made. 4. The suit giving rise to this appeal is not barred by the provisions of section 53-A of the Transfer of Property Act as the plaintiffs-appellants are pre-emptors and not bound by any act of the liquidator Sri. Mehra.
Final Decision: Appeal allowed with costs, set aside the judgment of Bishambar Dayal, J. as also those of the first appellate court and the trial court and decree the suit of the plaintiffs-appellants with costs.
JAGDISH SAHAI, J. :- This special appeal by leave granted by Bishambhar Dayal, J. is directed against his judgment dated 31-12-1959 dismissing with costs Second Appeal No. 485 of 1952, filed by the appellants, Shanker Lal and Pyare Lal, sons of one Lala Kundan Lal Agarwal. The facts giving rise to this special appeal in short are :
In the City of Saharanpur lies the disputed plot (plot bearing Khasra No. 766 of Khewat No. 171). This plot belonged to Hulas Chand and Bilas Chand. In May 1930 these persons granted a permanent lease of this plot to the Patel Mills Ltd., who were to pay Rs. 75/- per year as rent. In the terms of the lease it was provided that the lease could use it for any purpose including the construction of building and that it would not be liable for ejectment, except that in the case of non-payment of rent for three consecutive years, the lease could be forfeited.
On 1st November 1932 Hulas Chand and Bilas Chand sold their rights in the plot in dispute to Budh Sen and Jia Lal, Jia Lal died on 27th April 1943 and his heirs on 11th May 1943 transferred their rights in favour of Jugal Kishore. Before this Budh Sen had already transferred his rights in favour of Jugal Kishore, with the result that he became the owner and lessor of the whole plot in dispute. Shankar Lal and Pyare Lal, the appellants, filed a suit for pre-emption in 1944 which was decreed, on 30th August 1945 they obtained possession over the plot in dispute through the court. Patel Mills Limited went into voluntary liquidation and Sri Ram Gopal Mehra, an Advocate of Saharanpur, was appointed as the Liquidator. Banaras Bank Limited being the largest creditor of the Patel Mills Limited, Sri Mehra entered into negotiations for the sale of the entire assets of the Patel Mills Ltd. To the Banaras Bank Ltd. And on 23rd February 1933 executed an agreement for sale of the entire assets of the Patel Milk Ltd., including the leasehold rights over the plot in dispute, in favour of the Banaras Bank Limited. On 4th of May 1939 a meeting of the creditors of the Patel Mills Ltd. Was held to consider the final report of the Liquidator, stating inter alia that the entire assets of the Patel Mills Ltd. Including the lease-hold rights in the plot in dispute had been transferred to the Banaras Bank Ltd. For a sum of Rs. 70,000 which sum had been received by the Liquidator from the Banaras Bank Ltd. The report of the Liquidator was accepted in the meeting and was sent to the Registrar, Joint Stock Companies for registration. It was registered on 9th September 1939. On 1st March 1940, the Banaras Bank Ltd. Went into Liquidation. The Official Receiver, who took charge of the assets of the Banaras Bank Ltd., not finding a properly stamped and registered deed of transfer of the lease-hold rights of the plot in dispute, called upon Sri. Mehra, the Ex-Liquidator of the Patel Mills Ltd. To execute a proper document of sale. Sri Mehra did so on 28th January 1941 by executing a properly stamped registered sale deed in favour of the Banaras Bank Ltd. (under liquidation). On 9th March 1943 the Official Liquidator Banaras Bank Ltd., transferred the leasehold rights over this plot to Sri Narendra Bahadur Tandon, respondent. Suit No. 54 of 1946 which has given rise to this special appeal, was filed by Shanker Lal and Pyare Lal, the appellants, against Narendra Bahadur Tandon, the respondent, for possession over the plot in dispute, on the allegation that the lease-hold rights in favour of the Patel Mills Ltd . Had come to an end and the land had reverted to the proprietor that is the lessor. The suit was contested on several pleas including that of the bar of estoppel, the non-impleadment of necessary parties, the bar of limitation and the plea that the suit was barred by Ss. 171 and 183 of the Indian Companies Act. The learned Munsif of Saharanpur, who tried the suit, dismissed it with costs on 7-10-1948. The plaintiff-appellants appealed to the District Judge of Saharanpur.
