DR. H. K. SHARMA versus SHRI RAM LAL on 28 January 2019

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[2019] 1 S.C.R.

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DR. H. K. SHARMA

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SHRI RAM LAL

(Civil Appeal Nos. 1237-1238 of 2019)

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JANUARY 28, 2019

[ABHAY MANOHAR SAPRE ANDDINESH MAHESHWARI, JJ.]

Uttar Pradesh Urban Buildings (Regulation of Letting, Rentand Eviction) Act, 1972:

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s.21(1)(a) – Application under – Seeking eviction on theground of bona fide need – Maintainability of, challenged by thetenant/lessee on the ground that relationship of lessor-lessee/Dlandlord-tenant had ceased to exist as the parties had entered intoagreement to sale/purchase of the suit house – Prescribed Authoritydismissed the application agreeing with the plea of thetenant/lessee – Appellate Court also affirmed the view of PrescribedAuthority – In Writ Petition, High Court set aside the orders of thePrescribed Authority and appellate Court and allowed theEapplication for eviction – On appeal, held: As per s.111(e) and (f)of the Transfer of property Act lease can be determined by expressor implied surrender – The conditions of the sale agreement do notmake out a case of express or implied surrender – Therefore, saleagreement did not result in termination of the tenancy and henceFapplication was maintainable – The finding of High Court as regardsbona fide requirement, being question of fact, needs no interference –Transfer of Property Act, 1882 – s.111(e) and (f).

Dismissing the appeals, the Court

HELD: 1.1 A lease of an immovable property is a contractbetween the lessor and the lessee. Their rights are governed bySections 105 to 117 of Transfer of Property Act (TP Act) readwith the respective State Rent Laws enacted by the State. Section111 of the TP Act deals with the determination of lease. Clauses(a) to (h) set out the grounds on which a lease of an immovable G

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property can be determined. Clauses (e) and (f) provide that alease can be determined by an express surrender; in case, thelessee yields up his interest under the lease to the lessor bymutual agreement between them whereas Clause (f) providesthat the lease can be determined by implied surrender. [Paras28, 29 and 30][554-G-H; 555-A-B]

1.2 None of the conditions set out in the sale agreement13.05.1993 can be construed for holding that the parties intendedto surrender the tenancy rights. A fortiori, the parties did notintend to surrender the tenancy rights despite entering into anagreement of sale of the tenanted property, as necessary provisionto that effect was not made by providing a specific clause in theagreement. On the other hand, the conditions set out in theagreement do not make out a case of express surrender underclause (e) or implied surrender under clause (f) of Section 111 ofthe TP Act. [Paras 33, 34][555-G-H; 556-A-B]

1.3 Thus, the tenancy in question between the parties didnot result in its determination as contemplated under Section111 of TP Act due to execution of the agreement dated 13.05.1993between the parties for sale of the suit house. [Para 38][557-C]

1.4 The respondent (lessor) was rightly held entitled to filean application against the appellant (lessee) under Section 21(1)(a)of the Uttar Pradesh Urban Buildings (Regulation of Letting, Rentand Eviction) Act, 1972 and seek the appellant’s eviction fromthe suit house after determining the tenancy in question. [Para39][557-D]

Shah Mathuradas Maganlal & Co. v. NagappaShankarappa Malage & Ors. (1976) 3 SCC 660 :

[1976] 3 SCR 789 – relied on.

R. Kanthimathi & Anr. v. Beatrice Xavier (Mrs.) (2009)9 SCC 339 – distinguished.

2. The question as to whether the respondent has madeout a case of his bona fide need for his residence and the membersof his family as contemplated under the Rent Act, being a questionof fact, the finding recorded by the High Court on this question A

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Adoes not call for any interference in the present appeal. It isbinding on this Court. Even otherwise, there is no good groundto interfere in the finding for the reason that the respondent beinga landlord and a retired man has every right to live in his housewith his family. Therefore, there is no perversity in the finding ofthe High Court on this issue. [Para 41][557-F-G]B

Case Law Reference

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From the Judgment and Order dated 03.10.2017 and 17.07.2017of the High Court of Uttarakhand at Nainital in Recall Application No.871Dof 2017 in Writ Petition (MS) No.396 of 2016 and in Writ Petition (MS)No.396 of 2016 respectively.

Jitendra Mohan Sharma, Sr. Adv., Ajit Sharma, Pranshu Kaushal,Asutosh Senger, Sanchit Garga, Advs. for the Appellant.

Narender Hooda, Sr. Adv., Dr. Monika Gusain, Hariom Yaduvanshi,EAdvs. for the Respondent.

The Judgment of the Court was delivered by ABHAY MANOHAR SAPRE, J. 1. Leave granted.F2. These appeals are directed against the final judgment and ordersdated 03.10.2017 in Recall Application No.871 of 2017 in W.P.(MS)No.396 of 2016 and dated 17.07.2017 in W.P.(MS) No.396 of 2016 passedby the High Court of Uttarakhand at Nainital.

3. In order to appreciate the short controversy involved in theseGappeals, few relevant facts need mention infra.

4. The appellant is the “opposite party” whereas the respondentis the “applicant” in the original application out of which these appealsarise.

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DR. H. K. SHARMA v. SHRI RAM LAL[ABHAY MANOHAR SAPRE, J.]

5. The respondent (applicant) is the owner of house bearingNo.5A, Court Road, Nardev Shastri Road, Dehradun comprising of fourrooms, one kitchen, two verandahs and two galleries. The respondenthas let out a portion of this house consisting of three rooms, one kitchen,latrine-bathroom, one store and two verandas (hereinafter referred toas the “suit house”) to the appellant on a monthly rent of Rs.750/- as perthe tenancy agreement dated 22.07.1985 entered into between them.

6. On 28.04.2008, the respondent filed an application under Section21(1) (a) of the U.P. Urban Buildings (Regulation of Letting Rent andEviction) Act, 1972 (hereinafter referred to as “the UP Act”) againstthe appellant (opposite party) before the Prescribed Authority (CivilJudge) Sr. Division, Dehradun seeking his eviction from the suit house.

7. The eviction was sought on the ground of respondent’s bonafide need for his residence and also the members of his family. Therespondent alleged that he has retired from the services and has noother suitable house of his own where he can live and, therefore, requiresthe suit house for his personal residence as also for the residence of themembers of his family.

8. The appellant (opposite party) contested the application by filingthe written statement. While denying the ground of bona fide need, itwas contended that the appellant has entered into an agreement on13.05.1993 with the respondent for purchase of the suit house andpursuant thereto he has also paid huge amount to the respondent. It wascontended that since the parties have already entered into an agreementof sale/purchase of the suit house, the relationship of landlord/tenantbetween them has ceased to exist and now it no longer subsists and hascome to an end.

9. It was also contended that consequent upon the execution ofthe agreement between the parties for the purchase of the suit house,the appellant is no longer in possession of the suit house as tenant but isnow in possession as a purchaser of the suit house in part performanceof the agreement dated 13.05.1993 qua the respondent.

10. In other words, it was contended that the relationship of landlordand tenant between the parties has come to an end and now the samestood converted into the new relationship of buyer and seller of the suithouse. It was, therefore, contended that the application filed by the A

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Arespondent under Section 21(1) (a) of the UP Act against the appellantfor his eviction from the suit house is not maintainable and, therefore, itis liable to be dismissed on this short ground.

11. The Prescribed Authority by order dated 03.11.2010 dismissedthe respondent’s application and held that since the parties entered intoBan agreement dated 13.05.1993 for sale of the suit house, the appellantwas not required to pay any monthly rent to the respondent inasmuch asaccording to him the relationship of the landlord and tenant between theparties has come to an end. He also decided the issue of bona fideneed against the respondent and in appellant’s favour.

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12. The respondent felt aggrieved and filed an appeal before theAppellate Court. By order dated 19.12.2015, the Appellate Courtdismissed the appeal and affirmed the order of the Prescribed Authority.The respondent (applicant) felt aggrieved and filed the writ petition underArticle 227 of the Constitution of India before the High Court ofUttarakhand at Nainital.D

13. By impugned order dated 17.07.2017, the High Court allowedthe writ petition and set aside the order of the Appellate Court and thePrescribed Authority. The appellant felt aggrieved and filed recallapplication. The High Court by order dated 03.10.2017 dismissed theErecall application.

14. The High Court held that mere agreement to sell the suit housewould not result in termination of landlord-tenant relationship betweenthe parties unless there is a stipulation in the agreement itself to thateffect. It was also held that since the agreement in question relied on byFthe appellant (opposite party) is not a registered agreement, he is notentitled to raise the plea of part performance based on Section 53-A ofthe Transfer of Property Act, 1882 (for short “the TP Act”) against therespondent. The High Court further held that the respondent being anold man has every right to live in his house in the last leg of his life andmore so when he has no other house of his own in the city and, therefore,Ghe has made out a case of bona fide need for his residence as also forthe members of his family.

15. It is against these two orders of the High Court, the oppositeparty, i.e., the tenant has filed these appeals by way of special leave inthis Court.H

DR. H. K. SHARMA v. SHRI RAM LAL[ABHAY MANOHAR SAPRE, J.]

16. So, the short question, which arises for consideration in theseappeals, is whether the High Court was justified in allowing therespondent’s application filed under Section 21(1) (a) of the UP Act.

16A. Heard Mr. Jitendra Mohan Sharma, learned senior counselfor the appellant and Mr. Narender Hooda, learned senior counsel forthe respondent.

17. Mr. Jitendra Sharma, learned senior counsel for the appellantwhile assailing the legality and correctness of the impugned order hasessentially argued one point.

18. Placing reliance on the decision reported in R. Kanthimathi& Anr. vs. Beatrice Xavier (Mrs.) [(2000) 9 SCC 339], learnedcounsel contended that the High Court erred in allowing the applicationfiled by the respondent against the appellant.

19. It was his submission that the issue raised by him in support ofhis submission remains no longer res integra and stands decided by thedecision rendered in the case of R. Kanthimathi (supra) in appellant’sfavour.

20. Learned counsel elaborated his submission by contending thatthe moment the landlord and the tenant enters into an agreement of sale/purchase of the tenanted property while subsistence of the tenancy andthe tenant pursuant to such agreement pays part consideration to thelandlord towards sale price of the tenanted premises, the relationship oflandlord and tenant comes to an end and ceases to exist, i.e., it results intermination of the tenancy agreement ipso facto and in its place bringsinto existence a new relationship between the parties, namely, that ofthe purchaser and the seller of the tenanted premises.

21. It was his submission that it is for this reason, the applicationfiled by the respondent as landlord of the tenanted premises to seek theappellant’s eviction as his tenant from the suit house was whollymisconceived and not maintainable for want of any subsisting relationshipof landlord-tenant between them. It was, therefore, rightly dismissed bythe Prescribed Authority and the Appellate Authority but wrongly allowedby the High Court by the impugned order.

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22. In reply, learned counsel for the respondent (applicant-landlord)supported the impugned order and contended that no case is made tointerfere in the impugned order.

23. Having heard the learned counsel for the parties and on perusalof the record of the case, we find no merit in these appeals.B

24. The question, which arises for consideration in these appeals,is when the lessor and the lessee enters into an agreement for sale/purchase of the tenanted premises where the lessor agrees to sell thetenanted premises to his lessee for consideration on certain conditions,whether, as a result of entering into such agreement, the Jural relationshipCof lessor and the lessee in relation to the leased property comes to anend and, if so, whether it results in determination of the lease.

25. In other words, the question that arises for consideration iswhen the lessor enters into an agreement to sell the tenanted property tohis lessee during the subsistence of the lease, whether execution of suchDagreement would ipso facto result in determination of the lease andsevere the relationship of lessor and the lessee in relation to the leasedproperty.

26. In our considered opinion, the aforementioned question has tobe decided keeping in view the provisions of Section 111 of the TP ActEand the intention of the parties to the lease - whether the parties intendedto surrender the lease on execution of such agreement in relation to thetenanted premises or they intended to keep the lease subsistingnotwithstanding the execution of such agreement.

F27. Chapter V of the TP Act deals with the leases of Immovableproperty. This chapter consists of Section 105 to Section 117.

28. A lease of an immoveable property is a contract between thelessor and the lessee. Their rights are governed by Sections 105 to 117of TP Act read with the respective State Rent Laws enacted by theGState.

29. Section 111 of the TP Act deals with the determination oflease. Clauses (a) to (h) set out the grounds on which a lease of animmoveable property can be determined.

30. Clauses (e) and (f) with which we are concerned here providethat a lease can be determined by an express surrender; in case, thelessee yields up his interest under the lease to the lessor by mutualagreement between them whereas Clause (f) provides that the leasecan be determined by implied surrender.

31. This Court in the case of Shah Mathuradas Maganlal &Co. vs. Nagappa Shankarappa Malage & Ors., (1976) 3 SCC 660considered the scope of clauses (e) and (f) of Section 111 of the TP Actand laid down the following principle in Para 19 as under.

“19. A surrender under clauses (e) and (f) of section 111 ofthe Transfer of Property Act, is an yielding up of the termof the lessee’s interest to him who has the immediatereversion or the lessor’s interest. It takes effect like acontract by mutual consent on the lessor’s acceptance ofthe act of the lessee. The lessee cannot, therefore,surrender unless the term is vested in him; and thesurrender must be to a person in whom the immediatereversion expectant on the term is vested. Impliedsurrender by operation of law occurs by the creation of anew relationship, or by relinquishment of possession. It thelessee accepts a new lease that in itself is a surrender.Surrender can also be implied from the consent of the partiesor from such facts as the relinquishment of possession bythe lessee and taking over possession by the lessor.Relinquishment of possession operates as an impliedsurrender. There must be a taking of possession, notnecessarily a physical taking, but something amounting toa virtual taking of possession. Whether this has occurredis a question of fact.

32. It is in the light of the aforementioned legal principle, thequestion involved in this case has to be examined.

33. Perusal of Agreement to Sell dated 13.05.1993 (Annexure P-1) shows that though the agreement contains 9 conditions but none ofthe conditions provides much less in specific terms as to what will be thefate of the tenancy. In other words, none of the conditions set out in theagreement 13.05.1993 can be construed for holding that the partiesintended to surrender the tenancy rights.

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A34. Afortiori, the parties did not intend to surrender the tenancyrights despite entering into an agreement of sale of the tenanted property.In other words, if the parties really intended to surrender their tenancyrights as contemplated in clauses (e) or (f) of Section 111 of the TP Actwhile entering into an agreement to sell the suit house, it would havemade necessary provision to that effect by providing a specific clauseBin the agreement. It was, however, not done. On the other hand, we findthat the conditions set out in the agreement do not make out a case ofexpress surrender under clause (e) or implied surrender under clause (f)of Section 111 of the TP Act.

C35. It is for this reason, the law laid down by this Court in the caseof R. Kanthimathi (supra) has no application to the facts of this caseand is, therefore, distinguishable on facts. Indeed, it will be clear frommere perusal of para 4 of the said decision quoted hereinbelow:

“4. As aforesaid, the question for consideration is, whetherDthe status of tenant as such changes on the execution of anagreement of sale with the landlord. It is relevant at thisjunction first to examine the terms of the agreement of sale.The relevant portions of the agreement of sale records thefollowing:

E“I the aforesaid Mrs. Beatrice Xavier hereby agree out myown free will, to sell, convey and transfer the property toyou Mrs. R. Kanthimathi wife of Mr. S. Ramaswami, 435Trichy Road, Coimbatore for a mutually agreed saleconsideration of Rs.25,000/-.

FI shall be proceeding to Coimbatore and shall execute thesale deed and present the same for admission andregistration before the Registering Authority, accepting andacknowledge payment of the balance of consideration ofRs. 5000/- (Rupees five thousand only) at the time ofregistration and shall complete the transaction of sale andGconveyance as the property demised has already beensurrendered to your possession.” (Emphasis in Original)

36. The words highlighted in italics of the agreement were construedby Their Lordships for holding that these italicized words in the agreementclearly indicate that the parties had really intended to surrender theirH

tenancy rights on execution of the agreement of sale and bring to an endtheir jural relationship of the landlord and tenant.

37. As observed supra, such is not the case here because we donot find any such clause or a clause akin thereto in the agreement dated13.05.1993 and nor we find that the existing conditions in the agreementdiscern the intention of the parties to surrender the tenancy agreementeither expressly or impliedly.

38. In the light of the foregoing discussion, we are of the consideredopinion that the tenancy in question between the parties did not result inits determination as contemplated under Section 111 of TP Act due toexecution of the agreement dated 13.05.1993 between the parties forsale of the suit house and the same remained unaffected notwithstandingexecution of the agreement dated 13.05.1993

39. A fortiori, the respondent (lessor) was rightly held entitled tofile an application against the appellant (lessee) under Section 21 (1) (a)of the UP Act and seek the appellant’s eviction from the suit house afterdetermining the tenancy in question.

40. Before parting, we make it clear that we examined the termsof the agreement dated 13.05.1993 only for deciding the question as towhether the execution of agreement, in any manner, resulted indetermination of the existing tenancy rights between the parties in relationto the suit house in the context of the TP Act and the UP Act and notbeyond it.

41. Coming to the next question as to whether the respondent hasmade out a case of his bona fide need for his residence and the membersof his family as contemplated under the UP Act, suffice it to say, it beinga question of fact, the finding recorded by the High Court on this questiondoes not call for any interference in this appeal. It is binding on thisCourt. Even otherwise, we find no good ground to interfere in the findingfor the reason that the respondent being a landlord and a retired man hasevery right to live in his house with his family. Therefore, there is noperversity in the finding of the High Court on this issue.

42. In the light of the foregoing discussion, we concur with thereasoning and the conclusion arrived at by the High Court in the impugnedorder. It does not call for any interference.

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558SUPREME COURT REPORTS

A43. The appeals thus fail and are accordingly dismissed.

44. The appellant is, however, granted three months’ time to vacatethe suit house subject to the appellant furnishing usual undertaking in thisCourt within two weeks from the date of this order and paying entirearrears of rent upto date including three months rent to be paid in advanceBto the respondent to enable him to remain in possession for a period ofthree months from the date of this order. The arrears of rent, as directed,be paid by the appellant to the respondent within one month from thedate of this order.

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Kalpana K. Tripathy

Appeals dismissed.

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