NAND RAM (D) THROUGH LRS. & ORS. versus JAGDISH PRASAD (D) THROUGH LRS. on 19 March 2020

[2020] 4 S.C.R. 1009

NAND RAM (D) THROUGH LRS. & ORS.

v.

JAGDISH PRASAD (D) THROUGH LRS.

(Civil Appeal No. 9918 of 2011)

MARCH 19, 2020

[L. NAGESWARA RAO AND HEMANT GUPTA, JJ.]

Land Acquisition Act, 1894 – Land given on lease for 20years to the defendant with a clause that plaintiff-lessor could seekejectment of the defendant-lessee from the leased premises, onlyin case the rent for one year remained in arrear – After six years,entire leased land acquired under s.4 of the Land Acquisition Act– Land Acquisition Collector determined market value of theacquired land – Dispute with regard to apportionment ofcompensation referred to the Reference Court – Lessee claimedshare in the compensation on the ground that they were deprivedof the right to retain possession of leased land for the unexpiredperiod of 14 years of the lease in their favour – Reference courtheld that the lessee had not paid rent for more than 12 months and,thus, in accordance with clause 9 of the lease deed, the lease hadcome to an end and therefore, the lessee had no right to claim ashare in the compensation payable for the land leased to them –After about two years, a part of the land acquired stood de-notifiedand the said land continued to be in possession of the lessee –Thereafter, the lessor filed suit for possession of the said land i.e.the land leased that continued in possession with the lessee postthe de-notification – Trial court decreed the suit – In appealagainst the said judgment, the lessee sought amendment of hiswritten statement asserting that the suit was barred by limitationunder Art. 66 of the Schedule to the Limitation Act – First AppellateCourt did not permit the lessee to amend the written statement butthe question of limitation was allowed to be raised on the basis ofmaterial available on record – First Appellate Court did not findany merit in the argument raised by the lessee that the awardpassed by the Reference Court operated as res judicata – FirstAppellate Court found that the plea of forfeiture was totallyinconsistent and contradictory to the averments made in theoriginal statement – High Court allowed the second appeal filed

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Aby lessee holding that the finding recorded in the award that uponnon-payment of rent for 12 months, the lease had come to an end,had attained finality – Therefore, such finding would operate asres judicata – High Court further held that period of limitationunder Art.67 of the Limitation Act is 12 years, the period for whichcommences from the date when the tenancy is determined and sinceBthe tenancy was determined in 1960, the suit filed in 1981 wasbeyond the period of limitation – Hence instant appeal – Held:The issue in the proceedings under s.30 of the Act, before theReference Court was restricted to the apportionment ofcompensation, consequent to the acquisition of the leased land –CThe issue was restricted to the payment of compensation on accountof the unexpired period of lease and issue was not the title of thelessor or the eviction of the lessee – Before the award wasannounced by the Reference Court, part of the land acquired wasde-notified – After denotification of the land, the lessee continued to be in possession and the title of the lessor as owners stoodDrestored – De-notification under s.48 of the Act is possible onlywhen possession has not been taken and the land has not beenvested in the State – Once the land was de-notified, the status ofthe parties as they existed prior to s.4 notification stood revived –Finding returned in the award of the Reference Court that the leaseEstood determined on account of non-payment of rent was a findingmade by the Reference Court for a limited purpose i.e. not to acceptthe lessee’s claim for compensation – Such finding cannot bebinding on the parties in a suit for possession based on title or asa lessor against a lessee – Limitation Act, 1963 – Art.67.

FLimitation Act, 1963: Art.67 – Suit filed within 12 years ofthe determination of the tenancy by efflux of time – The defendanthas not proved forfeiture of tenancy prior to the expiry of leaseperiod – Mere non-payment of rent does not amount to forfeitureof tenancy – It only confers a right on the landlord to seek possession – The plaintiffs filed a suit for possession against theGdefendant on the basis of determination of tenancy, such suit isgoverned by Art.67 alone – In view of this, the suit for possessionwould not be covered by Art.65 since there is a specific article i.e.Art.67 dealing with right of the lessor to claim possession afterdetermination of tenancy – The appellants-plaintiffs claimedHpossession from the defendant alleging him to be the tenant and that he had not handed over the leased property afterdetermination of the lease – Therefore, such suit would fall withinArt.67 of the Limitation Act – Such suit having been filed within12 years of the determination of lease by efflux of time, the sameis within the period of limitation.

Res Judicata: s.11 of the Code bars the subsequent Courtto try any suit or issue which has been directly and substantiallyissue in a former suit – The issue before the Reference Court wasapportionment of compensation and such issue having been decidedagainst the defendant, the reference to notice for termination oftenancy does not operate as res judicata – Therefore, the findingrecorded by the High Court that the order of the Reference Courtoperated as res judicata was clearly not sustainable – Code of CivilProcedure, 1908 – s.11.

Lease: Status of tenant – Tenant at sufferance or tenantholding over – The defendant was inducted as a lessee for a periodof 20 years – The lessor had a right to seek possession in termsof clause 9 of the lease deed – The mere fact that the lessor hadnot chosen to exercise that right will not foreclose the rights ofthe lessor as owner of the property leased – After the expiry oflease period, and in the absence of payment of rent by the lessee,the status of the lessee will be that of tenant at sufferance and nota tenant holding over – s.116 of the TP Act confers the status ofa tenant holding over on a yearly or monthly basis keeping in viewthe purpose of the lease, only if the lessor accepts the payment oflease money – If the lessor does not accept the lease money, thestatus of the lessee would be that of tenant at sufferance.

Estoppel: When lessee continued to be in possession of theland leased by way of registered lease deed and admitted theownership of the lessor before the Reference Court, it operates asestoppel against the lessee in respect of the title of the lessor.

Adverse Possession: Respondent claimed adverse possessionand claimed possession as owner against a person, who hasinducted him as tenant – The respondent was to prove hiscontinuous, open and hostile possession to the knowledge of trueowner for a continuous period of 12 years – The respondent hasnot led any evidence of hostile possession to the knowledge of trueowner at any time before or after the award of the reference Court A

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Anor he has surrendered possession before asserting hostile,continuous and open title to the knowledge of the true owner –The question of adverse possession without admitting the title ofthe real owner is not tenable.

Allowing the appeal, the CourtB

HELD: 1. The issue in the proceedings under Section 30of the Act, before the Reference Court was restricted to theapportionment of compensation, consequent to the acquisitionof the leased land. The argument was raised that the lessee hadanother 14 years of the lease period, therefore, the lesseeCclaimed compensation in lieu of the unexpired lease period. Theissue was restricted to the payment of compensation on accountof the unexpired period of lease. The issue in question was notthe title of the appellants or the eviction of the respondent. Stillfurther, the finding of the Reference Court is that the respondenthad no right to claim a share in the compensation. TheDentitlement of the appellants to claim possession from the tenantwas not an issue in the previous proceedings. Before the awardwas announced by the Reference Court, part of the land acquiredwas de-notified. Once the land was de-notified, the status of theparties as they existed prior to notification under Section 4 ofEthe Act stood revived. [Paras 23, 24] [1026-F-H; 1027-A-B]

Sajjadanashin Sayed Md. B.E. Edr. v. Musa DadabhaiUmmer [2000] 1 SCR 1095 ; Ishwer Singh v. SarwanSingh AIR 1965 SC 948 ; Syed Mohd. Salie Labbaiv. Mohd. Hanifa (1976) 4 SCC 780 : [1976] 3 SCRF721 ; Run Bahadur Singh v. Lucho Koer ILR (1885)11 Cal 301 ; Asgar & Ors. v. Mohan Varma andOthers [2019] 2 SCR 664 - referred to.

2. The High Court has relied upon the findings recordedby the Reference Court that the tenancy stood terminated soGas to deny the apportionment of the compensation in respect ofacquisition of land. The issue examined by the Reference Courtwas whether the defendant was entitled to any share ofcompensation awarded for the land acquired. Such issue wasdecided against the defendant. It is this finding that the defendantis not entitled to any share of the compensation awarded whichHoperates as res judicata in a subsequent suit and not the reasonings recorded by the Court for arriving at such a finding.[Para 25] [1027-C-D]

Union of India v. Nanak Singh AIR 1968 SC 1370:[1968] 2 SCR 887 ; Mathura Prasad Bajoo Jaiswal& Ors. v. Dossibai N.B. Jeejeebhoy (1970) 1 SCC 613: [1970] 3 SCR 830 – relied on.

3. The finding returned in the award of the ReferenceCourt that the lease stood determined on account of non-payment of rent was a finding made by the reference Court fora limited purpose i.e. not to accept the defendant’s claim forcompensation. Such finding cannot be binding on the parties ina suit for possession based on title or as a lessor against alessee. Section 11 of the Code bars the subsequent Court to tryany suit or issue which has been directly and substantially issuein a former suit. The issue before the Reference Court wasapportionment of compensation and such issue having beendecided against the defendant, the reference to notice fortermination of tenancy does not operate as res judicata. [Para27] [1028-E-G]

4. In respect of second question of law examined by theHigh Court that the plaintiff’s suit was barred by limitation isbased upon the notice produced in proceedings before theReference Court as Ex.A-3. The reference to such notice wasmade in an application for amendment of the written statementunder Order VI Rule 17 of the Code filed before the FirstAppellate Court. The First Appellate Court allowed thedefendant to raise a plea of limitation without amending thewritten statement. Thus, the notice in proceedings before theReference Court was never produced in evidence in the suit forpossession and such primary evidence was not before the Court.In terms of Section 62 of the Evidence Act, primary evidencemeans a document itself produced for inspection by the Court.Section 64 of the Evidence Act stipulates that documents mustbe proved by primary evidence except in certain cases whensecondary evidence can be led. The defendant has not led anyevidence, including secondary evidence of the alleged notice saidto be served by the plaintiffs. In the absence of primary orsecondary evidence available in the suit for possession, the A

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Areference to such notice as the starting point of limitation isclearly erroneous and not sustainable. [Para 28] [1028-H; 1029-A-C]

5. The defendant was inducted as a lessee for a period of20 years. Even if the lessee had not paid rent, the status of theBlessee would not change during the continuation of the periodof lease. The lessor had a right to seek possession in terms ofclause 9 of the lease deed. The mere fact that the lessor hadnot chosen to exercise that right will not foreclose the rights ofthe lessor as owner of the property leased. After the expiry oflease period, and in the absence of payment of rent by the lessee,Cthe status of the lessee will be that of tenant at sufferance andnot a tenant holding over. Section 116 of the TP Act confers thestatus of a tenant holding over on a yearly or monthly basiskeeping in view the purpose of the lease, only if the lessoraccepts the payment of lease money. If the lessor does notDaccept the lease money, the status of the lessee would be thatof tenant at sufferance. [Para 29] [1029-D-F]

Bhawanji Lakhamshi and Others v. Himatlal JamnadasDani and Others (1972) 2 SCC 388 : [1972] 2 SCR890 ; Badrilal v. Municipal Corpn. of Indore (1973) 2ESCC 388 : [1973] 3 SCR 15 ; R.V. Bhupal Prasad v.State of A.P and Others (1995) 5 SCC 698 : [1995] 2Suppl. SCR 658 ; Sevoke Properties Ltd. v. WestBengal State Electricity Distribution Company Ltd. AIR2019 SC 2664 ; Bisheshar Nath v. Kundan & Ors.ILR (1922) 44 All 583 ; Sheo Dulare Lal Sah v. AnantFRam & Anr. AIR 1954 All. 475 – referred to.

6. The suit of the plaintiffs filed within 12 years of thedetermination of the tenancy by efflux of time is within the periodof limitation. The defendant has not proved forfeiture of tenancyprior to the expiry of lease period. Mere non-payment of rentGdoes not amount to forfeiture of tenancy. It only confers a righton the landlord to seek possession. The appellants-plaintiffs haveclaimed possession from the defendant alleging him to be thetenant and that he had not handed over the leased property afterdetermination of the lease. Therefore, such suit would fall withinHArticle 67 of the Limitation Act. Such suit having been filed on 13[th] March, 1981 within 12 years of the determination of leaseby efflux of time on 23[rd] September, 1974, the same is withinthe period of limitation. Thus, the findings recorded by the HighCourt are clearly erroneous in law and are, thus, set aside. [Paras38, 39] [1038-G-H; 1039-A-C]

MEC India Pvt. Ltd. v. Lt. Col. Inder Maira & Ors. 80(1999) Delhi Law Times 67 ; Sidram Lachmaya, heirand legal representative of deceased LachmayaShivram Madur, heir of Original Plaintiff v. MallayaLingaya Chilaka ILR 1949 Bom 135 (FB) : (1948)SCC OnLine Bom – referred to.

7. The respondent continued to be in possession of theland leased vide registered lease deed dated 22[nd] September,1954. The respondent has admitted the ownership of theappellants before the Reference Court. Such plea operates asestoppel against the respondent in respect of the title of theappellants. However, the claim of compensation put forward bythe respondent was declined for the reason that non-paymentof rent disentitles the respondent from compensation. In thepresent proceedings, the respondent has denied his status asthat of a tenant but claimed title in himself. The respondentclaimed adverse possession and claimed possession as owneragainst a person, who has inducted him as tenant. Therespondent was to prove his continuous, open and hostilepossession to the knowledge of true owner for a continuousperiod of 12 years. The respondent has not led any evidence ofhostile possession to the knowledge of true owner at any timebefore or after the award of the reference Court nor he hassurrendered possession before asserting hostile, continuous andopen title to the knowledge of the true owner. The question ofadverse possession without admitting the title of the real owneris not tenable. [Para 41] [1039-D-G]

Uttam Chand (D) through LRs. v. Nathu Ram (D)through LRs & Ors. Civil Appeal No. 190 of 2020decided on 15th January, 2020 : (2020) SCC OnLineSC 37 – relied on.

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ACase Law Reference

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 9918of 2011D

From the Judgment and Order dated 12.11.2010 of the HighCourt of Delhi at New Delhi in RSA No.96 of 2001

K.V. Vishwanathan, Sr. Adv., Siddhartha Tanwar, Sanjay Jain,Apoorv Singhal, Adv. for the Appellants.

Harish Pandey, V.V. Gautam, Sahil Patel, Sawan Prasad, ShreeEPal Singh, Vijay K. Gupta, Mehul Gupta, Advs. for the Respondent.

The Judgment of the Court was delivered by HEMANT GUPTA, J.

1. The challenge in the present appeal is to an order passed byFthe High Court of Delhi on 12[th] November, 2010 whereby the appealfiled by the defendant was allowed and the suit for possession of landcomprising in Khasra No. 9/19 measuring 3 Bighas 11 Biswas wasdismissed.

2. The appellants-plaintiff No. 1 and plaintiff Nos. 2 to 8, as legal heirs of one Bhagwana, filed a suit for possession asserting that theyGwere owners in possession of land measuring 3 Bighas 11 Biswascomprising in Khasra No.9/19 and land measuring 1 Bigha 16 Biswascomprising in Khasra No. 9/20/2, total measuring 5 Bighas 7 Biswasin the revenue estate of Village Tatarpur, Delhi.

3. The land measuring 1 Bigha 19 Biswas out of KhasraHNo. 9/19 and 16 Biswas out of Khasra No. 9/20/2, in total measuring 2 Bighas 15 Biswas was taken on lease for 20 years commencing from23[rd] September, 1954 till 22[nd] September, 1974 on payment of Rs.235/- per year by Jagdish Prasad, the defendant. It was agreed betweenthe parties that it will not be open to the plaintiff-lessor to seek ejectmentof the defendant-lessee from the leased premises, however, if the rentfor one year remained in arrear, then the lessor would have the rightto eject the lessee. The relevant conditions read as under:

“7. Before the expiry of said lease it shall not be within the rightsof the lessor i.e., party of the First Part to seek ejectment ofparty of the second part from the leased premises.

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9. If rent for one year remains in arrears, then in that eventualitythe lessor i.e., party of the First Part will have the right to ejectthe lessee i.e., party of the Second Part from the property leasedand the party of the Second Part will remove all his malba fromthe land leased and deliver vacant possession to the party of theFirst Part.”

4. The entire leased land was acquired pursuant to the notificationdated 24[th] August 1959 under Section 4 of the Land Acquisition Act,1894[1]. The Land Acquisition Collector determined a sum ofRs. 28,284.85 as the market value of the land acquired including thesuper structure upon it. A dispute arose with regard to apportionmentof compensation and the same was referred to the Reference Court.In such proceedings, three sets of claims were raised, one by theappellants as owners of the land, another by Ram Chand and JagdishPrasad, as lessee of the land and certain other persons in occupationof the hutments on the land acquired. The defendant-respondentclaimed apportionment of compensation in lieu of his lease-hold rightsby raising a claim under Section 30 of the Act. The relevant paras fromsuch claim petition filed by the defendant read as under:

“1. That Shri Nand Ram and Shri Bhagwana sons of LakhiRam were the owners of land comprised in KhasraNos. 9/19 and 9/20/2 situated at Mauza Tatarpur, DelhiState.

2. That the said Shri Nand Ram and Shri Bhagwana leasedout land measuring 1 bigha 19 biswa out of Khasra No.

1 for short, ‘Act’

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A9/19 and 16 biswa out of Khasra No.9/20/2 to ShriJagdish Prasad s/o Shri Daurilal, resident of Tatarpurthe claimant herein for a period of twenty years by leasedeed dated 22.9.54 and registered on 11.10.54.”

5. The respondent-defendant claimed share in the compensationBfor 2 Bighas 15 Biswas of land on the ground that they were deprivedof the right to retain possession of that land for the unexpired period of14 years of the lease in their favour, which was for 20 years in total.The Reference Court framed the following issues to determine the claimof rival claimants:

C“1. Whether Jagdish and Ram Chand mentioned at ItemsNo.27 and 28 are entitled to any share of thecompensation awarded for land measuring 2 Bighas and15 Biswas which was on lease with them and if so, tohow much?

D2. Whether Nand Ram and Bhagwana have any lien onRs.2263.20 for the structure belonging to Jagdish andRam Chand. If so, in what manner and to what extent?

3. Whether the Jhugis on the land measuring 2 Bighas and15 Biswas leased out in favour of Jagdish were built byEDharam Chand etc. at their own expenses and they areentitled to receive the compensation in respect of theirJhuggis?

4. Relief.”

F6. The learned Additional District Judge, in such reference, inits award dated 21[st] October, 1961 (Ex.PW1/12), held that therespondent had not paid rent for more than 12 months and, thus, inaccordance with clause 9 of the lease deed, the lease had come to anend. Therefore, the defendant had no right to claim a share in thecompensation payable for the land leased to them. The Reference CourtGheld as under:

“8. Jagdish Chand as R.W.4 has admitted that he did not payany rent to Nand Ram and Bhagwan after the receipt of thenotice for acquisition of the land. Nand Ram as A.W.2 has staterent has not been paid to him for two years and that he servedHa notice also on the lessee. Under clause 9 of the lease deed Ex.A/15, the lease is to come to an end in case rent is not paidfor 12 months. From the evidence on the record it is provedthat Ram Chand and Jagdish have not paid rent for more than12 months and thus in accordance with clause 9 of the lease deedtheir lease had come to an end and therefore they have no rightto claim a share in the compensation payable for the land leasedout to them. I decide this issue against Jagdish Prasad and RamChand.”

7. It may be stated that a part of the land acquired, comprisingin Khasra No.9/19 was de-notified vide notification dated 18[th] June,1961 under Section 48(1) of the Act. Such land, measuring 1 Bigha 19Biswas continued to be in possession of the defendant-lessee i.e.respondent herein.

8. Thereafter, the plaintiffs served a notice dated 12[th] February,1981 claiming possession of the land comprising the aforementionedKhasra No. 9/19, measuring 1 Bigha 19 Biswas, i.e. the land leasedthat continued in possession with the defendant post the de-notification.The suit was filed by the plaintiffs on 13[th] March, 1981. In the writtenstatement filed by the defendant, it was asserted that the land whichwas in possession of the defendant did not form a part of the allegedlease deed and that the defendant was in possession of this land in hisown legal right. The defendant contended that if the plaintiffs had anyright in the land in possession of the defendant, then the defendant hadbecome the owner of the land in question by adverse possession. Itwas pleaded as under:

“10. That the land in possession of defendant does not lie in thealleged khasra no. and is not covered by any alleged lease deed.Without prejudice to this plea in alternative it is submitted thatthe lease, if any, has already come to an end, about more than22 years back, and defendant is owner in possession in his ownrights.”

9. The learned trial court decreed the suit after evidence wasled by the parties. The certified copy of the original lease deedwas produced as PW1/1 in respect of Khasra No. 9/19 and KhasraNo.9/20. The notice regarding termination of lease as well as therevenue record was produced to prove the ownership of the plaintiffs-appellants. The trial court also referred to the award passed by theReference Court (Ex.PW1/12) wherein the defendant-respondent had ABC

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Aclaimed himself to be a tenant. The learned trial court returned thefollowing findings:

“Thus, the entire available record proves, conclusively that theplaintiffs are the owners of the suit land and that the suit landfalls in Khasra No.9/19 Village Tatarpur, Delhi as the land in suitBis no longer under acquisition, and neither is the land in possessionof the D.D.A. as is indicated by Ex.PW1/13. DW2 has beenunable to deny that there has been a notification for issuance ofdenotification of acquisition of Khasra No.9/19 Village Tatarpur,Delhi Ex.PW1/12, Ex.PW5/1, Ex.PW1/13, are all indications ofadmissions by the defendant that the plaintiffs are owners of theCsuit land and that the defendant was a lessee of the same undera registered lease deed dt.22.9.54 under Nand Ram andBhagwana.

Thus, issue No. 3 is decided in favour of the plaintiff and it ishereby held that the land in suit falls in Khasra No.9/19 VillageDTatarpur, Delhi and that the plaintiffs are the owners of the same,as mere receipt of compensation for acquisition of land whichhas been denotified from acquisition does not in any manner makethe plaintiff any less the owners of the land in suit. In any eventthe plaintiffs are certainly the landlords of the land in suit in termsEof Ex.PW1/14 the lease deed, executed between Bhagwana andNand Ram, and the defendant, and execution thereof having beenadmitted in the claim of the defendant in Ex.PW5/1.”

10. In appeal against the said judgment and decree, the defendantmoved an application under Order VI Rule 17 of the Civil ProcedureFCode, 1908[2] to amend his written statement and asserted that the suitwas barred by limitation under Article 66 of the Schedule to theLimitation Act, 1963[3]. The defendant asserted that the lease had cometo an end when a notice for forfeiture of termination of the lease dated23rd September, 1954 was issued by the plaintiffs which is Ex.A-3 inthe proceedings before the Reference Court. In reply to suchGapplication, the stand of the plaintiffs was that the termination of tenancyis not possible vide the said notice in view of Sections 111 and 106 ofthe Transfer of Property Act, 1882[4] as the lease is said to be terminated 2 for short, ‘Code’

3 for short, ‘Limitation Act’

H4 for short, ‘TP Act’

w.e.f. 23[rd] September, 1959 whereas the notice is required to be servedfor at least 15 days’ time expiring on the last date of tenancy month.The learned First Appellate Court did not permit the defendant to amendthe written statement but the question of limitation was allowed to beraised on the basis of material available on record.

11. The learned First Appellate Court affirmed the findingsrecorded by the trial court. It did not find any merit in the argumentraised by the defendant that the award passed by the Reference Court(Ex.PW1/12) produced by the appellants operated as res judicata. TheFirst Appellate Court found that the plea of forfeiture was totallyinconsistent and contradictory to the averments made in the originalstatement. Further, that the plea of limitation was nothing but aningenuity of the counsel for the defendant.

12. Thereafter, the defendant preferred a second appeal. TheHigh Court framed the following two substantial questions of law:

“1. Whether the judgment rendered by the Land AcquisitionCourt on 21[st] August, 1961 (Ex.PW-1/12) operates asres judicata between the parties as regards the title ofthe suit property?

2. If the first question is answered in the negative, whetherthe suit filed by the Respondent for possession is barredby time?”

13. The High Court allowed the second appeal holding that thefinding recorded in the award (Ex.PW1/12) that upon non-payment ofrent for 12 months, the lease had come to an end, had attained finality.Therefore, such finding would operate as res judicata. The High Courtheld as under:

“17. Ex.PW1/12 having been rendered by a court of competentjurisdiction had returned a finding that the lease between theparties stood determined as rent since the last 12 months hadnot been paid by the appellant/defendant. Reference to the noticedated 13.9.1960 terminating the lease had also been made. Thereis no dispute to this factual submission which is even otherwisea part of the record. In these circumstances, it cannot be saidthat this finding Ex.PW1/12 was only an incidental or obiterobservation made by the Land Acquisition Court/ADJ which isnot binding on the parties. Ex.PW1/12 had while adverting to the A

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Anotice dated 13.9.1960 categorically held that lease between theparties stood determined in terms of clause 9.”

14. The High Court further held that period of limitation underArticle 67 of the Limitation Act is 12 years, the period for whichcommences from the date when the tenancy is determined. Since theBtenancy was determined on 23[th] September, 1960, the suit filed on13[th] March, 1981 was beyond the period of limitation.

15. Mr. Vishwanathan, learned senior counsel for the appellantsraised two-fold arguments. First, that Harpal Singh, one of the plaintiffs,died on 4[th] December, 1997 during the pendency of the appeal beforeCthe First Appellate Court. Since his legal representatives were notbrought on record, the appeal stood abated. Consequently, the HighCourt could not have entertained the second appeal and reversed thejudgment and decree passed by the First Appellate Court. Second, thatclause 9 of the lease did not mean that if the rent for one year was notpaid, the lease will stand terminated but only that the lessor would getDa right to eject the lessee. It was further argued that the defendanthad not placed on record the pleadings of the previous litigation whichalone would determine whether the subsequent proceedings were barredby the principles of res judicata. It was argued that the issue beforethe Reference Court was restricted to the entitlement of payment ofEcompensation on acquisition of lease hold rights. The right of thelandlord to claim possession was not a subject matter of reference norcould it be a subject matter of such reference. Therefore, the decisionof the Reference Court was neither res judicata nor constructive resjudicata within the meaning of Explanation IV to Section 11 of theCode.F

16. It was also argued that the suit was within the period oflimitation as neither Article 67 nor Article 66 would be applicable butthat the plaintiffs had a right to seek possession under Article 65 of theLimitation Act, which confers a right on the plaintiffs to seek possessionfrom a person who is in possession, by virtue of his title. It is for theGdefendant to prove that his possession is open, continuous anduninterrupted so as to ripen the adverse possession into ownership. Itwas argued that the defendant had not denied the tenancy prior to thefiling of the present suit for possession. Since the defendant continuedto be in possession after the expiry of lease without any payment ofHrent, the possession of the defendant was not that of a tenant holding NAND RAM (D) THR. LRS. v.JAGDISH PRASAD (D) THR. LRS. [HEMANT GUPTA, J.]

over but that of a tenant at sufferance. In terms of Section 116 of theTP Act, the acceptance of rent by the appellants will alone create anew tenancy or the status of the tenant as tenant holding over. It wasopen to the appellants to seek eviction on account of the non-paymentof rent, but the possession of the respondent could not ripen into titleas his possession was that of a tenant at sufferance. It was, thus, arguedthat the possession of the defendant was merely permissive possessionunder a lease deed, therefore, the plea of adverse possession was notavailable to the defendant.

17. The defendant-respondent contended that in the award ofthe Reference Court (Ex.PW1/12), there was a finding to the effectthat the lease stood determined. The reliance is placed upon the findingsrecorded by the High Court that the tenancy stood terminated vide noticedated 13[th] September, 1960 (sic 23[rd] September, 1960). Therefore, theperiod of limitation commenced from the date of the notice terminatingthe lease or in any case from the date of the award of the ReferenceCourt, thus, the suit filed by the plaintiffs was barred by limitation.

18. We have heard the learned counsel for the parties. Thequestion that is required to be examined is as to which Article of theLimitation Act would be applicable in the present case i.e. Article 65,as asserted by the appellants or Articles 66 or 67, as asserted by therespondent and that from which date the period of limitation wouldcommence. For convenience, the Articles are reproduced hereunder:

Description of SuitPeriod ofTime from whichlimitationperiod begins to run65.For possession of immovableTwelveWhen the possession ofproperty or any interestyearsthe defendant becomestherein based on title.adverse to the plaintiff.66.For possession of immovableTwelveWhen the forfeiture isproperty when the plaintiffyearsincurred or the conditionhas become entitled tois broken.possession by reason of anyforfeiture or breach ofcondition.67.By a landlord to recoverTwelveWhen the tenancy ispossession from a tenant.years determined.

19. Section 111 of the TP Act provides for determination of leasein the eventualities mentioned therein. Section 111 of the TP Act readsthus:

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A“111. Determination of lease. - A lease of immoveable propertydetermines- (a) by efflux of the time limited thereby:

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B(g) by forfeiture; that is to say, (1) in case the lessee breaksan express condition which provides that, on breachthereof, the lessor may re-enter; or (2) in case the lesseerenounces his character as such by setting up a title ina third person or by claiming title in himself; or (3) thelessee is adjudicated an insolvent and the lease providesCthat the lessor may re-enter on the happening of suchevent; and in any of these cases the lessor or histransferee gives notice in writing to the lessee of hisintention to determine the lease; (h) on the expiration of a notice to determine the lease, orDto quit, or of intention to quit, the property leased, dulygiven by one party to the other.”

20. In a judgment reported as Sajjadanashin Sayed Md. B.E.Edr. v. Musa Dadabhai Ummer[5]this Court held that if a matter wasonly “collaterally or incidentally” in issue and decided in an earlierEproceeding, the finding therein would not ordinarily be res judicata ina latter proceeding where the matter is directly and substantially in issue.This Court found that the statement of law delineated by Mulla[6] is thecorrect one, that if the issue was “necessary” to be decided foradjudicating on the principal issue and was decided, it would have tobe treated as “directly and substantially” in issue and if it is clear thatFthe judgment was in fact based upon that decision, then it would beres judicata in a latter case. Such is the test for deciding into whichcategory a case falls. One has to examine the plaint, the writtenstatement, the issues and the judgment to find out if the matter wasdirectly and substantially in issue (Ishwer Singh v. Sarwan Singh[7]Gand Syed Mohd. Salie Labbai v. Mohd. Hanifa[8] ). Which matters aredirectly in issue and which are only collaterally or incidentally in issue, 5 (2000) 3 SCC 3506 15 Edn., P. 1047 AIR 1965 SC 948H8 (1976) 4 SCC 780

must be determined on the facts of each case. A material test to beapplied is whether the court considers the adjudication of theissue material and essential for its decision.

21. This Court in Sajjadanashin Sayed approved a decision bythe Privy Council reported as Run Bahadur Singh v. LuchoKoer[9] wherein claim of rent from a tenant on the basis survivorship ofJoint Hindu Family property was raised by “c” brother of the deceased.Two issues were framed in such suit (1) whether the deceased alonereceived the whole rent of the property in his lifetime, or whether therent was received by him jointly with his brother C; (2) whether anyrent was due and if so, how much was due from B. The finding on thefirst issue was that the deceased alone received the whole rent in hislifetime. Subsequently, C sued the widow for declaration that he andhis brother were joint, and he claimed the property by right ofsurvivorship. The question arose whether the deceased and C were jointor separate. The earlier finding was held not res judicata inasmuchas the matter was not “directly and substantially” in issue in the earliersuit. It was in issue in the earlier suit only “collaterally or incidentally”,as it did not cover the entire question of C’s title but related merely tothe joint or separate receipt of rent.

22. In Asgar & Ors. v. Mohan Varma and Others[10], thepredecessors-in-interest of the appellant relied upon the sale of landby M/S K. J. Plantations. The predecessor-in-interest of M/s. K. J.Plantation was the lessee for a period of 75 years vide lease deed dated25[th] November, 1897. The lease expired by efflux of time in 1972. Inthe meantime, the land was transferred by the lessee to differentpersons. The High Court held the assignees were tenants at sufferanceand were not entitled to any estate or property. Before this Court, theargument was raised that they were entitled to remain in possessionuntil the compensation was paid for the improvements made in termsof provisions of Kerala Land Conservancy Act, 1957. Such claim wasresisted by the land owners inter alia on the ground that the lease hadcome to an end, therefore, the assignees from the lease were tenantat sufferance and the finding in proceedings under Order XXI Rule 97of the Code would operate as res judicata. This Court held as under:

9 ILR (1885) 11 Cal 301 : 12 IA 23 (PC)

10 Civil Appeal No. 1500 of 2019 decided on 05.2.2019

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A“40. We are not inclined to decide this question on apriori consideration, for the simple reason that under the CPC,both res judicata (in the substantive part of Section 11) andconstructive res judicata (in Explanation IV) are embodied asstatutory principles of the law governing civil procedure. Thefundamental policy of the law is that there must be finality toBlitigation. Multiplicity of litigation ensures to the benefit,unfortunately for the decree holder, of those who seek to delaythe fruits of a decree reaching those to whom the decree ismeant. Constructive res judicata, in the same manner as theprinciples underlying res judicata, is intended to ensure thatCgrounds of attack or defence in litigation must be taken in oneof the same proceeding. A party which avoids doing so does itat its own peril. In deciding as to whether a matter might havebeen urged in the earlier proceedings, the court must askitself as to whether it could have been urged. In decidingwhether the matter ought to have been urged in the earlierDproceedings, the court will have due regard to the ambit ofthe earlier proceedings and the nexus which the matter bearsto the nature of the controversy. In holding that a matterought to have been taken as a ground of attack or defencein the earlier proceedings, the court is indicating that theEmatter is of such a nature and character and bears such aconnection with the controversy in the earlier case that thefailure to raise it in that proceeding would debar the partyfrom agitating it in the future.”

(emphasis supplied)

F23. The issue in the proceedings under Section 30 of the Act,before the Reference Court was restricted to the apportionment ofcompensation, consequent to the acquisition of the leased land. Theargument was raised that the lessee had another 14 years of the leaseperiod, therefore, the lessee claimed compensation in lieu of theunexpired lease period. The issue was restricted to the payment ofGcompensation on account of the unexpired period of lease. The issuein question was not the title of the appellants or the eviction of therespondent. Still further, the finding of the Reference Court, asreproduced above, is that the respondent had no right to claim a sharein the compensation. The entitlement of the appellants to claimHpossession from the tenant was not an issue in the previous proceedings.

24. Before the award was announced by the Reference Court,part of the land acquired was de-notified. After denotification of theland, the respondent continued to be in possession and the title of theappellants as owners stood restored. De-notification under Section 48of the Act is possible only when possession has not been taken andthe land has not been vested in the State. The effect of de-notificationis that the land comprising Khasra No. 9/19 was never deemed to beacquired. Once the land was de-notified, the status of the parties asthey existed prior to notification under Section 4 of the Act stoodrevived.

25. The High Court has relied upon the findings recorded by theReference Court that the tenancy stood terminated so as to deny theapportionment of the compensation in respect of acquisition of land.The issue examined by the Reference Court was whether the defendantwas entitled to any share of compensation awarded for the landacquired. Such issue was decided against the defendant. It is thisfinding that the defendant is not entitled to any share of thecompensation awarded which operates as res judicata in a subsequentsuit and not the reasonings recorded by the Court for arriving at sucha finding. In a judgment reported as Union of India v. Nanak Singh[11],it has been held that what operates as res judicata is the decision andnot the reasons given by the Court in support of the decision.

26. In another judgment reported as Mathura Prasad BajooJaiswal & Ors. v. Dossibai N.B. Jeejeebhoy[12], a three-Judge Benchof this Court held that the previous decision on a matter in issue aloneis res judicata, the reasons for such decision are not res judicata.This Court held as under:

“5… A decision of a competent Court on a matter in issue maybe res judicata in another proceeding between the same parties:the “matter in issue” may be an issue of fact, an issue of law, orone of mixed law and fact. An issue of fact or an issue of mixedlaw and fact decided by a competent Court is finally determinedbetween the parties and cannot be re-opened between them inanother proceeding. The previous decision on a matter in issuealone is res judicata: the reasons for the decision are notres judicata. A matter in issue between the parties is the right 11 AIR 1968 SC 1370

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Aclaimed by one party and denied by the other, and the claim ofright from its very nature depends upon proof of facts andapplication of the relevant law thereto. A pure question of lawunrelated to facts which give rise to a right, cannot be deemedto be a matter in issue. When it is said that a previous decisionis res judicata, it is meant that the right claimed has beenBadjudicated upon and cannot again be placed in contest betweenthe same parties. A previous decision of a competent Court onfacts which are the foundation of the right and the relevant lawapplicable to the determination of the transaction which is thesource of the right is res judicata. A previous decision on a matterCin issue is a composite decision: the decision on law cannot bedissociated from the decision on facts on which the right isfounded. A decision on an issue of law will be as res judicata ina subsequent proceeding between the same parties, if the causeof action of the subsequent proceeding be the same as in theprevious proceeding, but not when the cause of action is different,Dnor when the law has since the earlier decision been altered bya competent authority, nor when the decision relates to thejurisdiction of the Court to try the earlier proceeding, nor whenthe earlier decision declares valid a transaction which is prohibitedby law.”E

27. Thus, the finding returned in the award of the ReferenceCourt (Ex. PW1/12) that the lease stood determined on account of non-payment of rent was a finding made by the reference Court for a limitedpurpose i.e. not to accept the defendant’s claim for compensation. Suchfinding cannot be binding on the parties in a suit for possession basedFon title or as a lessor against a lessee. Section 11 of the Code bars thesubsequent Court to try any suit or issue which has been directly andsubstantially issue in a former suit. The issue before the ReferenceCourt was apportionment of compensation and such issue having beendecided against the defendant, the reference to notice for terminationof tenancy does not operate as res judicata. Therefore, the findingGrecorded by the High Court that the order of the Reference Courtoperates as res judicata was clearly not sustainable. The firstsubstantial question of law has been, thus, wrongly decided.

28. In respect of second question of law examined by the HighCourt that the plaintiff’s suit was barred by limitation is based uponHthe notice dated 23[rd] September, 1960 produced in proceedings before

the Reference Court as Ex.A-3. The reference to such notice was madein an application for amendment of the written statement under OrderVI Rule 17 of the Code filed before the First Appellate Court. TheFirst Appellate Court allowed the defendant to raise a plea of limitationwithout amending the written statement. Thus, the notice (Ex.A-3) inproceedings before the Reference Court was never produced inevidence in the suit for possession and such primary evidence was notbefore the Court. In terms of Section 62 of the Evidence Act, primaryevidence means a document itself produced for inspection by the Court.Section 64 of the Evidence Act stipulates that documents must beproved by primary evidence except in certain cases when secondaryevidence can be led. The defendant has not led any evidence, includingsecondary evidence of the alleged notice said to be served by theplaintiffs. In the absence of primary or secondary evidence availablein the suit for possession, the reference to such notice as the startingpoint of limitation is clearly erroneous and not sustainable.

29. The defendant was inducted as a lessee for a period of 20years. The lease period expired on 23[rd] September, 1974. Even if thelessee had not paid rent, the status of the lessee would not change duringthe continuation of the period of lease. The lessor had a right to seekpossession in terms of clause 9 of the lease deed. The mere fact thatthe lessor had not chosen to exercise that right will not foreclose therights of the lessor as owner of the property leased. After the expiryof lease period, and in the absence of payment of rent by the lessee,the status of the lessee will be that of tenant at sufferance and not atenant holding over. Section 116 of the TP Act confers the status of atenant holding over on a yearly or monthly basis keeping in view thepurpose of the lease, only if the lessor accepts the payment of leasemoney. If the lessor does not accept the lease money, the status ofthe lessee would be that of tenant at sufferance. This Court in thejudgments reported as Bhawanji Lakhamshi and Others v. HimatlalJamnadas Dani and Others[13], Badrilal v. Municipal Corpn. ofIndore[14] and R.V. Bhupal Prasad v. State of A.P and Others[15] andalso a judgment in Sevoke Properties Ltd. v. West Bengal StateElectricity Distribution Company Ltd.[16 ] examined the scope of 13 (1972) 1 SCC 388

14 (1973) 2 SCC 388

15 (1995) 5 SCC 698

16 Civil Appeal No. 3873 of 2019 decided on 11.04.2019

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ASection 116 of the TP Act and held that the lease would be renewedas a tenant holding over only if the lessor accepts the payment of rentafter the expiry of lease period. This Court in Bhawanji Lakhamshiheld as under:

“9. The act of holding over after the expiration of the term doesBnot create a tenancy of any kind. If a tenant remains in possessionafter the determination of the lease, the common law rule is thathe is a tenant on sufferance. A distinction should be drawnbetween a tenant continuing in possession after the determinationof the term with the consent of the landlord and a tenant doingso without his consent. The former is a tenant at sufferance inCEnglish Law and the latter a tenant holding over or a tenant atwill. In view of the concluding words of Section 116 of theTransfer of Property Act, a lessee holding over is in a betterposition than a tenant at will. The assent of the landlord to thecontinuance of possession after the determination of the tenancyDwill create a new tenancy. What the section contemplates is thaton one side there should be an offer of taking a new leaseevidenced by the lessee or sub-lessee remaining in possessionof the property after his term was over and on the other sidethere must be a definite consent to the continuance of possessionby the landlord expressed by acceptance of rent orEotherwise.….”

30. The same view was reiterated in Badrilal v. MunicipalCorpn. of Indore, as well. In R.V. Bhupal Prasad, this Court heldthat possession of the licencee on the expiry of the licence period wasthat of a tenant at sufferance and was liable to ejectment in due courseFof law. His possession was not legal nor lawful. He may remain inpossession until he is ejected in due course in execution of the decreein the suit filed by the respondent. His possession cannot be consideredto be settled possession. The Court held as under:

“8. Tenant at sufferance is one who comes into possession ofGland by lawful title, but who holds it by wrong after thetermination of the term or expiry of the lease by efflux of time.The tenant at sufferance is, therefore, one who wrongfullycontinues in possession after the extinction of a lawful title. Thereis little difference between him and a trespasser. In Mulla›sHTransfer of Property Act (7th Edn.) at page 633, the position of tenancy at sufferance has been stated thus: A tenancy atsufferance is merely a fiction to avoid continuance in possessionoperating as a trespass. It has been described as the least andlowest interest which can subsist in reality. It, therefore, cannotbe created by contract and arises only by implication of law whena person who has been in possession under a lawful title continuesin possession after that title has been determined, without theconsent of the person entitled. A tenancy at sufferance does notcreate the relationship of landlord and tenant. At page 769, it isstated regarding the right of a tenant holding over thus: The actof holding over after the expiration of the term does notnecessarily create a tenancy of any kind. If the lessee remainsin possession after the determination of the term, the commonlaw rule is that he is a tenant on sufferance. The expression“holding over” is used in the sense of retaining possession. Adistinction should be drawn between a tenant continuing inpossession after the determination of the lease, without theconsent of the landlord and a tenant doing so with the landlord›sconsent. The former is called a tenant by sufferance in thelanguage of the English law and the latter class of tenants is calleda tenant holding over or a tenant at will. The lessee holding overwith the consent of the lessor is in a better position than a meretenant at will. The tenancy on sufferance is converted into atenancy at will by the assent of the landlord, but the relationshipof the landlord and tenant is not established until the rent waspaid and accepted. The assent of the landlord to the continuanceof the tenancy after the determination of the tenancy wouldcreate a new tenancy. The possession of a tenant who hasceased to be a tenant is protected by law. Although he may nothave a right to continue in possession after the termination ofthe tenancy, his possession is juridical.

13. In view of the settled position of law, the possession of theappellant is as tenant at sufferance and is liable to ejectment indue course of law. But his possession is not legal nor lawful. Inother words, his possession of the theatre is unlawful or litigiouspossession. The appellant may remain in possession until he isejected in due course in execution of the decree in the suit filedby the respondent. His possession cannot be considered to be AB

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Asettled possession. He is akin to a trespasser, though initially hehad lawful entry.”

31. Sevoke Properties Ltd. was a case where the respondentcontinued in possession after the expiry of lease period which endedon 24[th] May, 1996. A suit for possession was filed without serving aBnotice under Section 106 of the TP Act. The stand of the defendantwas that he was a tenant holding over. Such argument was not acceptedand it was held that after the expiry of lease period in terms ofunregistered document of lease, the possession of the respondent wasthat of a tenant at sufferance. In view thereof, as owners, the appellantswere entitled to possession of the land in terms of Article 65 of theCLimitation Act as the possession of respondent was that of a tenant atsufferance.

32. The Division Bench of Allahabad High Court in a judgmentreported as Bisheshar Nath v. Kundan & Ors.[17] examined a somewhat similar question where the period of lease was three years videDa lease deed dated 19[th] July, 1892 but the lessee remained in possessionthereafter. The suit was filed on 18[th] June, 1919 i.e. after the expiryof 12 years from the determination of the lease. The High Courtconsidered Article 139 of the First Schedule of the Limitation Act, 1908which is now equivalent to Article 67 of the First Schedule of theLimitation Act. The Court held as under:E

“…It seems to me on the facts of this case that the tenancy wasdetermined on the 19th of July, 1895. It has not been proved thatany new tenancy was created. By holding over without payingrent, it seems to me that the defendants became what is knownas tenants by sufferance. Their position in English law has beenFsummed up in Addison’s Law of Contract, 10th edition, page618 in the following words:—“The difference, therefore, betweena tenancy-at-will and what is called a tenancy by sufferance isthat in the one case the tenant holds by right and has an estateor term in the land, precarious though it may be, and therelationship of lessor and lessee subsists between the parties; inGthe other, the tenant holds wrongfully and against the will andpermission of the lord and has no estate at all in the occupiedpremises. When the tenancy at sufferance has existed for twenty(now twelve) years, the landlord’s right of entry is barred by statute, and the tenant becomes the absolute and complete ownerof the property.” So far as the question of limitation is concerned,the law in India is not different, in my opinion, although it maynot be good law to hold that a tenant holding over is in adversepossession to his landlord. In my opinion this view is supportedby Chandri v. Daji Bhau [(1900) I.L.R., 24 Bom., 504.], wherethe facts were similar, and which case was followed in FarmanBibi v. Tasha Haddal Hossein [(1908) C.L.J., 648.]. In myopinion the suit was clearly barred under article 139 of theLimitation Act. I would, therefore, dismiss this appeal with costs.”

33. In a separate but concurring opinion by Justice Stuart, it washeld that a tenant who has been let into possession cannot deny hislandlord’s title, however defective it may be, so long as he has notrestored possession by surrender to his landlord. It was held that theplaintiff is the land holder and the defendants are tenants by sufferance.It was held so:

“…Their Lordships of the Privy Council say: “A tenant who hasbeen let into possession cannot deny his landlord’s title, howeverdefective it may be, so long as he has act openly restoredpossession by surrender to his landlord.” That clearly is the law,but does it in any way affect the present case? I think it doesnot. The defendants cannot be permitted to deny the plaintiff’stitle. They have foolishly denied it but they cannot be permittedto do so. The plaintiff is undoubtedly the land-holder and thedefendants are tenants by sufferance, but once having recognizedthat the tenants are so estopped, the fact still remains that thesuit has been instituted beyond the period of limitation allowedby the law. In these circumstances I accept the view of mylearned brother and would dismiss this appeal.”

34. The Division Bench of Allahabad High Court in a judgmentreported as Sheo Dulare Lal Sah v. Anant Ram & Anr.[18] examinedan appeal arising out of a suit for possession against the defendantswho were inducted as tenants for a period of one year. However, thetenants did not make any payment of rent. In a suit for possession, aplea was taken that the suit is barred by limitation. The plaintiffs fileda suit on the basis of title without any averment that defendants wereindicted as tenants except to the effect that the vendor of the plaintiff 18 AIR 1954 All. 475

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Ahas executed a rent note and that the defendants have denied the titleof the plaintiff, therefore, they are liable for ejectment. The Court heldthat in terms of Section 108(q) of the TP Act, the lessee had a duty toput the lessor into possession of the property. If he did not do so, hewas merely a tenant whose lease had expired and who had continuedto remain in wrongful possession of the property on the expiry of theBlease. It was open to the landlord to regularise the position by givinghis assent to the continuance of possession and in that situation,provisions of Section 116 of the TP Act would apply. The Court heldas under:

“10. Taking up the third point first, on the expiry of a lease forCa period, Section 108(q) of the Transfer of Property Act imposesa duty on the lessee to put the lessor into possession of theproperty. Sahib Dayal, therefore, on the expiry of the period ofone year fixed under the lease was bound to put Sri Krishna Dasin possession of the property in accordance with the provisionsDof Section 108(q) of the Transfer of Property Act. If he did notdo so, he was merely a tenant whose lease had expired and whohad continued to remain in wrongful possession of the propertyon the expiry of the lease. It was open in such a case to thelandlord to regularise the position by giving his assent to thecontinuance of possession and in that case the provision ofESection 116 of the Transfer of Property Act would apply and thelessee would, in accordance with the provisions of that section,become a month to month tenant.”

35. It was further held that in order to create a tenancy atsufferance the tenant should have lawfully entered into possession inFrecognition of the landlord’s superior title and should have continued toremain in possession in the same right after the termination of thetenancy without asserting any title hostile to that of the landlord. TheCourt held as under:

“12. In order to create a tenancy at sufferance the tenant shouldGhave lawfully entered into possession in recognition of thelandlord’s superior title and should have continued to remain inpossession in the same right after the termination of the tenancywithout asserting any title hostile to that of the landlord andwithout his assent or dissent. The continuance in possessionHshould be due to the laches of the owner in not asking for payment of the rent or vacation of the premises or taking overpossession of the property. In Corpus Juris Secundum, Vol. 51,p. 780, 175, it is pointed out that:

“The holding of a tenant at sufferance is the most shadowyestate recognized at common law, and practically the onlydistinction between such a tenant’s holding and the possessionof a trespasser is that the land-owner may, by hisacquiescence, at any time base on the tenancy at sufferancethe relation of landlord and tenant, which he cannot establishat law against a mere trespasser, and that the tenant cannotbe subjected to an action in trespass before entry or demandfor possession.”

The law thus enunciated is in line with the provisions of Section116 of the Transfer of Property Act (No. 4 of 1882) whichpointed out that:

“If a lessee or under-lessee of property remains in possessionthereof after the determination of the lease granted to thelessee, and the lessor or his legal representative accepts rentfrom the lessee or under-lessee, or otherwise assents to hiscontinuing in possession, the lease is, in the absence of anagreement to the contrary, renewed from year to year, or frommonth to month, according to the purpose for which theproperty is leased as specified in S. 106.”

36. The Full Bench of Bombay High Court in a judgment reportedas Sidram Lachmaya, heir and legal representative of deceasedLachmaya Shivram Madur, heir of Original Plaintiff v. MallayaLingaya Chilaka[19] rightly held that ‘it is a well recognised constructionof the Limitation Act that when there is a specific article dealing witha specific subject, that article is to be applied in preference to a generaland residuary article’. The Full Bench was examining the question asto whether the possession of the tenant is adverse to the landlord uponthe expiration of the tenancy period merely because the tenant has notpaid rent. The second question examined was whether in a suit basedupon title by a landlord against his ex-tenant, whether Article 139 orArticle 144 is applicable. In such suit filed by the tenant, the claim wasthat the title of his landlord had extinguished under Section 28 of theLimitation Act, 1908. The Court held as under:

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“Now, there can be no doubt that on the determination of thetenancy on June 11, 1925, the plaintiff became a tenant atsufferance, if we might make use of an English expression, or atrespasser. Although his possession was originally lawful, and heentered by lawful demise, at the termination of the tenancy hispossession became wrongful and he became a trespasser.Therefore on the determination of the tenancy the right wouldarise in the landlord to recover possession from him of theproperty and the period of limitation would be governed by article139 of the Indian Limitation Act.

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Our Court almost consistently has taken the view that in a caseby a landlord against a tenant it is art. 139 that applies, the firstcase which might be looked at is Kantheppa v. Sheshnppa,[(1897) 22 Bom. 893.] a decision of Sir Charles Farran, ChiefJustice, and Mr. Justice Candy. There at p. 897 Sir CharlesFarran says:

“We are inclined to think that the termination of the period ofa fixed lease where nothing further occurs, is the time fromwhich limitation begins to run against the landlord within themeaning of article 139 of the limitation Act.”

The expression “where nothing further occurs” is obviously withreference to s. 116 of the Transfer of Property Act, because itis open to the landlord on the expiration of the tenancy of acceptrent from the tenant or otherwise assent to his continuing inpossession and thereby create a fresh lease under the provisionsof that section. But if the landlord neither accepts rent norotherwise assents to the continuing of the possession of thetenant, then it is clear that the tenancy expires, limitation beginsto run against the landlord under art. 139 and his right to obtainpossession from his tenant would be barred after the period of12 years.

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As we have taken the view that a suit by a landlord against hisex-tenant is always governed by art. 139 and as we haveindicated earlier in the judgment that the question whether hispossession is adverse or not does not arise, we answer question No. 2 submitted to us as follows: art. 139. And with regard toquestion No. 1 our answer, with respect to the learned Judgeswho have referred this question to us, is that on the view wehave now taken the question does not arise.”

37. In another judgment by a Single Bench of the Delhi HighCourt reported as MEC India Pvt. Ltd. v. Lt. Col. Inder Maira &Ors.[20], it has been held that in terms of Section 108(q) of the TP Act,a lessee continues to be liable to the lessor till possession has beenactually restored to the lessor. The continuing in possession of thelessee is expressive of his continuing stand that the tenancy, in whateverform, continues. It was held as under:

“40. Section 108(q) thus ensures that a lessee continues to beliable to the lessor till possession has been actually restored tothe lessor and a semblance of relationship subsists till thatcontingency takes place. His continuing in possession isexpressive of his continuing stand that the tenancy, in whateverform, continues. It is said that he does not hold it adversely tothe landlord only till he has unequivocally renounced his statusas a tenant and asserted hostile title, but even that appears to bedoubtful, for in law his possession remains permissive till it hasbeen actually restored to the landlord.

41. In law there is presumption in favour of the continuity ofthe tenancy and against the possession of the tenant becomingadverse. Furthermore, the doctrine of tenant estoppel, whichcontinues to operate even after the termination of the tenancy,debars a tenant who had been let into possession by a landlord,from disputing the latter’s title or pleading adverse possession,without first openly and actually surrendering possession of thetenanted premises and restoring them to the landlord.

42. A tenant who upon determination of the tenancy does notdeliver up possession to the landlord as required by Section108(q), cannot be heard to say that he is not a tenant—be heone at sufferance or be he one from month-to-month. Therefore,unless the landlord is actually put into possession, the premisesremain under a tenancy, which unless assented to by the landlord,has the character of one at sufferance.

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A43. Thus, a tenant at sufferance is one who wrongfully continuesin possession after the extinction of a lawful title and that atenancy at sufferance is merely a legal fiction or device to avoidcontinuance in possession from operating as a trespass. A tenantremaining in possession of the property after determination ofthe lease does not become a trespasser, but continues as a tenantBat sufferance till possession is restored to the landlord. Thepossession of an erstwhile tenant is juridical and he is a protectedfrom dispossession otherwise than in due course of law. Although,he is a tenant, but being one at sufferance as aforesaid, no rentcan be paid since, if rent is accepted by the landlord he will beCdeemed to have consented and a tenancy from month-to-monthwill come into existence. Instead of rent, the tenant at sufferanceand by his mere continuance in possession is deemed toacknowledge both the landlord’s title and his (tenant’s) liabilityto pay mesne profits for the use and occupation of the property.

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44. To sum up the legal position or status of a lessee whose leaseDhas expired and whose continuance is not assented to by thelandlord, is that of a tenant at sufferance. If, however, the holdingover has been assented to in any manner, then it becomes thatof a tenant from month-to-month. Similar, i.e. from month-to-month, is the status of a lessee who comes into possession tinderEa lease for a period exceeding one year but unregistered. Heholds it not as a lessee for a fixed term, but as one from month-to-month or year-to-year depending on the purpose of the lease.If upon a tenant from month-to-month (or year-to-year) and ineither of the aforesaid two contingencies, a notice to quit isserved, then on the expiry of the period, his status becomes of aFtenant at sufferance. Waiver of that notice, or assent in any formto continuation restores to him his status as a tenant from month-to-month, but capable, of once again being terminated with theexpiry of any ensuing tenancy month.”

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38. Thus, the suit of the plaintiffs filed within 12 years of theGdetermination of the tenancy by efflux of time is within the period oflimitation. The defendant has not proved forfeiture of tenancy prior tothe expiry of lease period. Mere non-payment of rent does not amountto forfeiture of tenancy. It only confers a right on the landlord to seekpossession. The plaintiffs have filed a suit for possession against thedefendant on the basis of determination of tenancy, such suit is governedHby Article 67 alone.

39. In view of the above, the suit for possession would not becovered by Article 65 since there is a specific article i.e. Article 67dealing with right of the lessor to claim possession after determinationof tenancy. The appellants-plaintiffs have claimed possession from thedefendant alleging him to be the tenant and that he had not handed overthe leased property after determination of the lease. Therefore, suchsuit would fall within Article 67 of the Limitation Act. Such suit havingbeen filed on 13[th] March, 1981 within 12 years of the determination oflease by efflux of time on 23[rd] September, 1974, the same is within theperiod of limitation. Thus, the findings recorded by the High Court areclearly erroneous in law and the same cannot be sustained and are,thus, set aside.

40. Though, Mr. Vishwanathan has argued that the first appealstood abated as the legal representatives of one of the deceasedrespondents was not impleaded but we find that it is not necessary todecide such question as on merits, we have found the claim of theplaintiffs to be meritorious.

41. The respondent continued to be in possession of the landleased vide registered lease deed dated 22[nd] September, 1954. Therespondent has admitted the ownership of the appellants before theReference Court. Such plea operates as estoppel against therespondent in respect of the title of the appellants. However, the claimof compensation put forward by the respondent was declined for thereason that non-payment of rent disentitles the respondent fromcompensation. In the present proceedings, the respondent has deniedhis status as that of a tenant but claimed title in himself. The respondentclaimed adverse possession and claimed possession as owner againsta person, who has inducted him as tenant. The respondent was to provehis continuous, open and hostile possession to the knowledge of trueowner for a continuous period of 12 years. The respondent has not ledany evidence of hostile possession to the knowledge of true owner atany time before or after the award of the reference Court nor he hassurrendered possession before asserting hostile, continuous and opentitle to the knowledge of the true owner. The question of adversepossession without admitting the title of the real owner is not tenable.Such question has been examined by this Court in Uttam Chand (D)through LRs. v. Nathu Ram (D) through LRs & Ors.[21].

21 Civil Appeal No. 190 of 2020 decided on 15th January, 2020 : 2020 SCC OnLineSC 37

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A42. In view of the said fact, we find that the High Court erredin law in holding that the suit is barred by limitation in terms of Article66 of the Limitation Act, therefore, the order passed by the High Courtis clearly erroneous and is not sustainable in law. The same is set asideand the suit is decreed by restoring the decree of the First AppellateCourt. Accordingly, the appeal is allowed.B

Devika Gujral

Appeal allowed.

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H