2007 (5) TMI 657 - SC - Indian Laws

Lease Deed Ruled as Tenancy at Will; Plaintiff's Claim Barred by Limitation; Appeal Dismissed Without Costs.

The court determined that the lease deed dated 30.9.1921 was not a perpetual lease but a tenancy at will, allowing the lessor to resume the land at any ... Challenged the judgment and decree of the High Court - resumption of the leased land for contravention of the terms of lease - Claim for possession - issued notice u/s 80 of the Code of Civil Procedure - illegal and unauthorized dispossession - suit for a declaration - mesne profits, costs and other appropriate reliefs - (i) Whether the lease under deed - Ex.P1 dated 30.9.1921, is a perpetual lease - HELD THAT:- Essential ingredients of a lease are : (a) There should be a transfer of a right to enjoy an immovable property; (b) Such transfer may be for a certain term or in perpetuity; (c) The transfer should be in consideration of a premium or rent; (d) The transfer should be a bilateral transaction, the transferee accepting the terms of transfer. The deed dated 30.9.1921 does not specify any duration, but permits the lessee to hold the land forever subject to the right of the lessor to resume the land by giving one month's notice. There is no grant in perpetuity. The right of the lessor to resume the land by giving a month's notice, is unconditional at the absolute will and discretion of the lessor, whenever he desires. The learned Counsel for appellant submitted that courts have taken the view that existence of a mere provision for forfeiture for non-payment of rent or other specified breach, in a deed granting permanent lease, will not make the lease non- permanent. Such line of decisions, may not assist the appellant as a provision for determination of the lease for a specified breach, is in no way comparable to reservation of an absolute right to resume at will without assigning any reason, in a lease without consideration. We, therefore, affirm the finding that Ex.P1 is not a lease in perpetuity. We, however, desist from examining the further question whether the lease itself was invalid for want of consideration, as such a contention was not raised in the written statement nor urged before the trial court or High Court. (ii) Whether the plaintiff's father did not secure any manner of right, title or interest in the suit property, as the sale certificate in his favour was not followed by a registered deed of transfer - It is well settled that when an auction purchaser derives title on confirmation of sale in his favour, and a sale certificate is issued evidencing such sale and title, no further deed of transfer from the court is contemplated or required. In this case, the sale certificate itself was registered, though such a sale certificate issued by a court or an officer authorized by the court, does not require registration. Section 17(2)(xii) of the Registration Act, 1908 specifically provides that a certificate of sale granted to any purchaser of any property sold by a public auction by a civil or revenue officer does not fall under the category of non testamentary documents which require registration under Sub-section (b) and (c) of Section 17(1) of the said Act. We therefore hold that the High Court committed a serious error in holding that the sale certificate did not convey any right, title or interest to plaintiff's father for want of a registered deed of transfer. (iii) Whether the transfer of leasehold interest in favour of plaintiff's father was void, for want of notice to lessor and consent of the lessor - Only transfers in violation of Condition IV are void. No penal consequence is specified for failure to comply with Condition V. Therefore, it is not possible to hold that the auction sale of the leasehold right in favour of Bhowrilal was void for want of notice to the lessor. (iv) Whether the plaintiff was forcibly dispossessed in September 1975 and entitled to a decree for possession and (v) Whether the suit was barred by limitation - It is clear that the case of plaintiff that he was forcibly dispossessed from the suit land in September, 1975 is an afterthought to grab defence land. As plaintiff has failed to prove forcible dispossession and the documents disclose that the land was resumed in terms of the lease dated 30.9.1921 without any protest from the plaintiff, he is not entitled to the relief of possession, even if such dispossession was within twelve years before the date of suit. Apart from merits, the claim for possession is also clearly barred by limitation as the suit was filed on 21.8.1987 and plaintiff was lawfully dispossessed several years prior to 1975. If at all there is any dispute or issue was pending, that was relating to the claim for compensation and plaintiff had to seek arbitration in that behalf by establishing that structures were lawfully put up with the permission of the lessor and the nature and extent of such structures. But no such request was made for arbitration. No such relief is claimed in the plaint. At all events by 1987, there was no surviving claim for compensation and no request could even be made for reference to arbitration. The plaintiff - appellant is not therefore entitled to any relief. Conclusion - Though the judgment of the High Court may be erroneous in regard to certain issues of fact, we find that the final decision of the High Court to dismiss the suit was correct and just and does not call for interference. We, therefore, affirm the decision of the High Court dismissing the suit. The appeal is, accordingly, dismissed. Parties to bear their respective costs. Issues Involved:1. Whether the lease under deed dated 30.9.1921 is a perpetual lease.2. Whether the plaintiff's father secured any right, title, or interest in the suit property without a registered deed of transfer following the sale certificate.3. Whether the transfer of leasehold interest in favor of the plaintiff's father was void due to lack of notice to and consent from the lessor.4. Whether the plaintiff was forcibly dispossessed in September 1975 and entitled to a decree for possession.5. Whether the suit was barred by limitation.Issue-wise Detailed Analysis:Re: Point (i)The court analyzed Section 105 of the Transfer of Property Act, 1882, which defines a lease and its essential ingredients. The lease deed dated 30.9.1921 was examined, revealing that it did not specify any duration but allowed the lessee to hold the land forever, subject to the lessor's right to resume the land with one month's notice. The court concluded that the lease was not in perpetuity but rather a tenancy at will, given the lessor's absolute discretion to resume the land at any time without assigning any reason, and the absence of consideration. The court affirmed the finding that the lease was not perpetual but did not examine the validity of the lease for lack of consideration as it was not raised earlier.Re: Point (ii)The plaintiff produced a registered sale certificate dated 29.8.1941, which confirmed the sale of the leasehold right in the suit property to Bhowrilal, the plaintiff's father. The court held that once a sale in a public auction is confirmed, the title vests in the purchaser, and no further deed of transfer is required. The sale certificate itself was registered, and under Section 17(2)(xii) of the Registration Act, 1908, such certificates do not require registration. The court found that the High Court erred in holding that the sale certificate did not convey any right, title, or interest to the plaintiff's father for want of a registered deed of transfer.Re: Point (iii)Condition IV of the lease deed required notice to the lessor for any transfer of the leasehold interest, and Condition V required a report of devolution by succession or operation of law. The court found that only transfers violating Condition IV were void, and no penalty was specified for non-compliance with Condition V. Therefore, the auction sale of the leasehold right in favor of Bhowrilal was not void for lack of notice to the lessor.Re: Points (iv) and (v)The plaintiff claimed he was forcibly dispossessed in September 1975 and sought possession based on this claim. However, his evidence was insufficient to prove forcible dispossession. The plaintiff's letters from 1976 to 1981 did not mention forcible dispossession but referred to the resumption of the land by the defendants and sought compensation. The court inferred that the land had been resumed in accordance with the lease terms long before September 1975, and the plaintiff's claim of forcible dispossession was an afterthought. As the plaintiff failed to prove forcible dispossession and the suit was filed more than twelve years after the alleged dispossession, the claim for possession was barred by limitation. The court also noted that any dispute regarding compensation should have been resolved through arbitration, which the plaintiff did not pursue.ConclusionThe court found that while the High Court's judgment contained errors regarding certain factual issues, the decision to dismiss the suit was correct and just. The appeal was dismissed, and each party was ordered to bear their respective costs.