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Supreme Court of India
Madan Mohan Singh vs Ved Prakash Arya on 5 March, 2021Author: Ashok Bhushan
Bench: Ashok Bhushan, R. Subhash Reddy
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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS.814-815 Of 2021
(arising out of SLP(C)Nos.11009-11010 of 2019)
MADAN MOHAN SINGH …APPELLANT(S)
VERSUS
VED PRAKASH ARYA …RESPONDENT(S)
J U D G M E N T
ASHOK BHUSHAN,J.
Leave granted.
2. These appeals have been filed by the appellant
challenging the judgment of the High Court of Punjab
and Haryana dated 06.12.2018 by which Regular Second
Appeal No.35 of 1997 filed by the respondent, the
defendant in suit, has been allowed, and the Regular
Second Appeal No.2610 of 2002 filed by the appellant
Signature Not Verified
has
Digitally signed by
been dismissed and the suits filed by the
MEENAKSHI KOHLI
Date: 2021.03.05
15:38:23 IST
Reason:
plaintiff-appellant have been dismissed.
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3. Brief facts of the case which are necessary to be
noted are:
The appellant due to surrender of a temporary
stall at Nehru Market was allotted Booth No.186 in
Sector 35-D, Chandigarh vide Allotment Letter dated
20.06.1972 issued by the Estate Officer, Chandigarh
Administration. The allotment specifically provided
that appellant-plaintiff has no right to transfer his
rights directly or indirectly. The appellant was
restrained from subletting the premises or any part
thereof. The building was leased out for cattle
poultry feed and for no other purpose. The appellant
entered into a partnership deed dated 18.12.1976 with
the respondent, Ved Prakash for carrying out the
business of cycle repairing etc. in partnership at
Booth No.186, Sector 35-D, Chandigarh. The
appellant’s case is that by notice dated 04.10.1979,
the respondent dissolved the partnership and
thereafter he became an employee of the appellant in
the Booth.
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4. The Estate Officer, Chandigarh passed an order
dated 09.09.1980/15.04.1982 terminating the hire-
purchase agreement of the Booth on the ground that
the premises are being used in contravention of
Allotment Letter dated 20.06.1972. The appellant
filed an application before the Chief Administrator,
Union Territory, Chandigarh questioning the order
dated 15.04.1982 praying that order be declared
illegal and wrong. The respondent, Ved Prakash filed
an application before the Chief Administrator, in the
proceedings claiming him to be occupier of the
premises, paying that he may also be made party to
the proceedings. By order dated 09.02.1984 passed
under Public Premises (Eviction of Unauthorised
Occupants) Act, 1971, the Estate Officer directed
eviction from Booth No.186. The appeal was filed by
the respondent, Ved Prakash before the Additional
District Judge, Chandigarh. In the aforesaid appeal
the appellant also appeared. The appeal was dismissed
on 10.06.1985. However, the Appellate Court observed
that Booth belonged to the appellant and the
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respondent, Ved Prakash was in possession as an
employee of the appellant.
5. The respondent, Ved Prakash has also filed Appeal
No.21 of 1984 challenging the order dated 09.09.1980
of the Estate Offider, Chandigarh issued on
15.04.1982 (cancelling the hire-purchase agreement).
The Chief Administrator, Chandigarh Administration
decided the aforesaid appeal on 13.03.1986 where the
Chief Administrator has also noticed that misuse of
the premises has been stopped, hence, the premises be
restored to hirer-the appellant and the respondent-
Ved Prakash was also held as servant of the hirer by
the Chief Administrator. The respondent also filed
Civil Writ Petition No.3115 of 1985 challenging the
order of eviction under the Public Premises Act which
was dismissed as infructuous on 14.03.1986 by the
High Court noticing that the order of resumption has
been revoked.
6. The appellant being unable to take possession of
the premises, he filed Civil Suit No.77 of 1986
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impleading the respondent as sole defendant. The
appellant’s case in the suit was that possession of
Booth No.186 was given to the respondent in pursuance
of partnership deed dated 18.12.1976. It was pleaded
that after restoration of the Booth by Chief
Administrator, Chandigarh dated 04.03.1986, the
plaintiff-appellant became owner of the property and
it was further pleaded that the respondent after
dissolution of the partnership has been allowed to
use the premises as an employee. By notice dated
17.02.1986 the services of the respondent-defendant
have been terminated and the defendant was requested
to handover the vacant possession of the premises to
the plaintiff. However, the possession was never
restored to the plaintiff till date, the plaintiff
prayed for direction of mandatory injunction against
the defendant directing the defendant to restore
possession to the plaintiff of Booth No.186, Sector
35-D, Chandigarh.
7. The defendant filed a written statement. In the
written statement, the defendant pleaded that he took
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the premises on rent from the plaintiff on 18.12.1976
at a monthly rent of Rs.450/- per month. The
execution of partnership deed dated 18.12.1976 was
admitted but it was claimed as sham document. It was
further stated in para 2 of the written statement
(reply on merits) that plaintiff has never issued any
receipt for the rent and he has been refusing the
rent from October, 1982. The defendant claimed to be
a tenant. The trial court vide its judgment dated
29.02.1992 dismissed the suit. The trial court held
the defendant to be a tenant notwithstanding the fact
that defendant failed to prove any documents
pertaining to the tenancy. The execution of
partnership deed dated 18.12.1976 was accepted,
however, the trial court observed that the said
partnership deed was executed only to avoid the
prohibition in hire purchase agreement.
8. Against the order of the trial court appeal was
filed by the appellant. The First Appellate Court
vide its judgment dated 02.12.1996 allowed the appeal
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granted the decree of mandatory injunction to the
appellant-plaintiff. The First Appellate Court held
that there was no material to come to the conclusion
that defendant was tenant. The findings of the trial
court on the question of tenancy was held to be based
on surmises and conjectures. It was held that there
was no presumption of landlord and tenant. The First
Appellate Court also noticed that the respondent, Ved
Prakash appeared as DW-2 and stated that he had
maintained accounts books in the business but there
is no record regarding payment to the appellant,
accounts books were not produced in the Court.
Against the judgment of the First Appellate Court,
the Second Appeal was filed by the defendant which
was allowed by the High Court by impugned judgment
dated 06.12.2018. The High Court framed following two
questions:
‘(i) Whether the court while adjudicating upon
the dispute must go to the route of the case
and unearth the evil design by lifting the
veil ?
(ii) Whether the first appellate court, before
setting aside a judgment passed by the learned
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trial court, is required to analyse the reasons
given by the learned trial court and after
critical appraisal thereof give its own reasons
while disagreeing or setting aside the reasons
given by the learned trial court ?’
9. The High Court has held that the First Appellate
Court wrongly relied upon the order passed by the
Chief Administrator. The High Court further observed
that the First Appellate Court also misread that
before the Chief Administrator the defendant had
taken a stand that he was merely a servant, which is
against the record. The High Court has further
observed that the First Appellate Court has also
drawn adverse inference on account of the non-
production of the accounts books by the defendant.
The High Court held that entire story put forth by
the plaintiff does not appeal to the reason. A
Regular Second Appeal No.2610 of 2002 was filed by
the plaintif against the judgment refusing to grant
the mandatory injunction directing the defendant for
not using the Booth for cycle repairing. The appeal
filed by the defendant was allowed setting aside the
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decree of First Appellate Court. Aggrieved by the
aforesaid judgments, these appeals have been filed by
the plaintiff-appellant.
10. There is no dispute between the parties that
Booth No.186 was allotted to the plaintiff-appellant
by order dated 20.06.1972. The condition Nos.12, 13
and 19 which are relevant for the present case are as
follows:
“12. You will have no right to transfer your
rights under this lease directly or indirectly.
You will not sublet the premises or any part
thereof. If there is any dispute as to whether
the premises have been sublet or not the
decision of the Chief Administrator,
Chandigarh, on the point shall be binding on
the parties, no fragmentation of the building
be permissible.
13. The building shall be used only for the
purpose it is leased out cattle poultry feed
and for no other purpose.
19. The undersigned shall have full rights,
power and authority at all times to do through
his officers or servants all acts and things
which may be necessary or expedient for the
purpose of enforcing compliance with all or any
of the terms conditions and reservations herein
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contained and to recover from you the cost of
doing any such act or thing.
11. It is also admitted that a partnership deed dated
18.12.1976 was executed both by the plaintiff and the
defendant under which deed it was decided and agreed
mutually to carry out the business of cycle repairing
etc. in Booth No.186. It is relevant to notice that
the execution of partnership deed was not disputed by
the defendant, Ved Prakash but his case was that he
took premises on rent at the rate of Rs.450/- per
month on 18.12.1976. The partnership document was
termed as sham document by the defendant. In
paragraph 2 of the plaint, the plaintiff has made
pleading, which was replied in para 2 of the written
statement, which are as follows:
“Para 2 of the Plaint: That after the taking
possession of the said booth the plaintiff
earlier started running business under the name
and style of M/s Prakash Cycle Store in
partnership with the defendant and partnership
deed was duly executed between the parties on
18.12.1976. Copy of the partnership deed is
attached.
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Para 2 of written statement: Para 2 of the
plaint as stated is wrong and denied. It is
stated that the defendant took the demised
Premises on rent from the plaintiff on the
18.12.1976 at a monthly rent of Rs.450/- per
month. The said partnership deed dated the
18.12.1976 was executed. It was a sham document
executed only to save the plaintiff from the
rigours of clause 12 of the Allotment Order
dated 20.06.1976 in favour of the plaintiff,
which lays down that in case of sub-tenancy the
booth may be resumed. In fact, the execution of
this partnership deed was one of the pre-
conditions laid down by the plaintiff for
renting out the demised premises to the
defendant. Even since the 18.12.1976 the
defendant has been in exclusive possession as a
tenant and has been paying rent at the rate of
Rs.450/- per month. The plaintiff has never
issued any receipt for the rent received. The
plaintiff has now been refusing rent since
October, 1982.
12. As noted above, the premises was resumed by the
Estate Officer by order dated 09.09.1980 which was
issued on 15.04.1982 on the ground that premises is
not being used for the purpose for which it was
granted but it was being used for cycle repairing.
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Against the order dated 09.09.1980 the respondent
himself filed an Appeal No.21 of 1984 where the
plaintiff-appellant had also appeared and claimed
that the defendant is only a servant of the
plaintiff. The Chief Administrator allowed the appeal
holding that misuse having stopped the allotment be
restored to hirer, Madan Mohan Singh. The Chief
Administrator also after considering the arguments of
the parties came to the conclusion that Ved Prakash
was a servant of the hirer. The relevant observations
of Chief Administrator are as follows:
“….At the outset the counsel for the
appellant has stated that the misuse has been
stopped and that the premises in question are
now being used for running a shop for the sale
of poultry and cattle feed etc. The
representative of the Estate Officer has
admitted the factum of the removal of the
misuse by the appellant. Sh. Kaushal has argued
that the appellant has no locus standi for
filing this appeal because the appellant is
merely a servant of the hirer Sh.Madan Mohan
Singh. In support of his contention he has
produced before me a copy of the judgment of
the Additional Distt. Judge, Chandigarh who
dismissed the appeal of Shri Ved Prakash
holding the view that the appellant was in
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possession of the said premises not as a tenant
or licencee but only as an employee. …… The
consideration of argument put forward by Sh.
Kaushal and that of the evidence adduced before
me by him lead me to conclude that the
appellant being a servant of the hirer has no
cause of action to agitate the impugned order.
Leaving this matter aside and adverting to the
main issue involved in this case, I find that
the misuse which was the basis for the passing
of the impugned order has been removed and the
booth is being used for the purpose for which
it was sold. I, therefore, do not find any
justification to deprive the hirer of this
booth to hold back this property. In this back
ground the allotment of the booth is restored
to its hirer Sh. Madan Mohan Singh. Since the
booth had been put to misuse the amount of
forfeiture shall stand and should be paid
within thirty days reckonable from the date of
issue of this order.
Announced in the presence of the parties.
Chandigarh Dated the, Chief Administrator”
th
4 March, 1986 Chandigarh Administration
Dated : 13.03.86.”
13. We may notice one more finding rendered by the
Additional District Judge in appeal filed by the
respondent against the order passed for eviction
under the Public Premises (Eviction of Unauthorised
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Occupants) Act. The appeal was dismissed by the
Additional District Juge on 10.10.1985. However, in
paragraph 4 the Additional District Judge has made
the following observation:
“4. I have heard and have perused the file. A
perusal of the file shows that the booth
belonged to Shri Madan Mohan Singh. The said
Madan Mohan Singh appeared before the Estate
Officer and produced the record to show that
the appellant was in possession of the premises
as his employee. This position was found to be
true by the Estate Officer. Even thereafter a
notice was issued to Shri Ved Prakash which was
served on him. In appeal a copy of the original
affidavit has been placed on the file by the
landlord to show that the appellant agreed to
work on the premises as an employee on salary
of Rs.320/- P.M. In view of the position it
becomes clear that the appellant is not in
possession of the premises in his own right
either as a tenant or a licencee. Rather his
possession is only as an employee.”
14. We have noticed Clause 19 of the Allotment Order
in which, it is the Estate Officer, Chandigarh
Administration who has full rights, power and
authority for the purpose of enforcing compliance
with all or any of the terms, conditions of allotment
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dated 20.06.1972. It is further relevant to note that
Booth was resumed by the Estate Officer by order
dated 09.09.1980 (issued on 15.04.1982) on the ground
of uses of the premises not for cattle poultry feed
but cycle/autorickshaws repairing. The Chief
Administrator in his judgment dated 13.03.1986, which
order was passed in appeal filed by the defendant
against the resumption order, has observed after
hearing the argument of hirer that the respondent is
only a servant of the hirer. The above observation
and finding of the Chief Administrator cannot be
wished-away by the defendant as irrelevant. The High
Court while referring to the order of the Chief
Administrator has only observed that the Appellate
Court has misread that defendant had taken a stand
that he was merely a servant, which is against the
record. When the Administrator has noted the case of
the parties and came to the conclusion that defendant
was a servant of the hirer, those findings cannot be
said to be against the record. The specific findings
of the Chief Administrator are “The consideration of
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argument put forward by Sh. Kaushal and that of the
evidence adduced before me by him lead me to conclude
that the appellant being a servant of the hirer has
no cause of action to agitate the impugned order”.
Further the Chief Administrator has held that there
is no justification to deprive the hirer of the
Booth. In view of the order of Chief Administrator
dated 13.03.1986, the appellant-plaintiff was clearly
entitled to the possession and user of the Booth but
when the possession was not handed over by the
defendant to the appellant, he had to file the suit
for mandatory injunction.
15. The defence which was taken by the defendant
before the trial court by filing written statement
and by appearing in the evidence was that he is a
tenant of the premises which was let out to him on
18.12.1976 at the rate of Rs.450/- per month.
16. We may first notice the finding of the trial
court by which trial court held that defendant was
tenant of the premises. The trial court framed the
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Issue No.4, “whether the defendant is a tenant” ? The
trial court while answering Issue No.4 recorded the
following finding:
“Therefore, the defendant has to be held to be
a tenant in respect of the booth in question
notwithstanding the fact that the defendant
failed to prove any documents pertaining to the
tenancy. Therefore, this issue is also decided
in favour of the defendant and against the
plaintiff.”
17. The categorical finding recorded by the trial
court is that the defendant failed to prove any
documents pertaining to the tenancy. The tenancy is a
relationship which is created between two parties.
The agreement of tenancy can be both by writing or
oral. Even if there is oral agreement of tenancy, the
Court has to look into the circumstances and
intention of the parties and other material to
conclude as to whether there was any tenancy or not.
The present is not a case where defendant claimed any
rent agreement. The defendant has come up with a case
that he is paying rent at the rate of Rs.450/- per
month. Defendant in his written statement has stated
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that plaintiff has never issued any rent receipt.
Thus, present is not a case where there was any rent
receipt filed by the defendant in support of his
claim of tenancy. The defendant himself appeared as
DW-2. In cross-examination following statement was
made by DW-2:
“No rent note was written in December, 1976
regarding booth in question. I have no receipt
in my possession with regard to payment of
rent. I maintain books of account in the
regular course of business with regard to the
business being carried out in the shop. I
cannot produce the account books with regard to
the business being done in the shop. I have not
maintain any account with regard to payment of
rent to the plaintiff. I have sent the rent by
money order to the plaintiff, but the plaintiff
never received any money order and I cannot
produce any receipt of the money order vide
which the plaintiff would have accepted the
rent with regard to the premises.”
18. This court had laid down in C.M. Beena and
another vs. P.N. Ramachandra Rao, 2004 (3) SCC 595,
that conduct of the parties before and after the
creation of relationship is relevant for finding out
their intention.
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19. When there is no evidence of taking premises on
rent and it is admitted by DW-2 that he had not
maintained any record of accounts of payment of rent,
there is no base for holding that relationship of
landlord and tenant is proved. The trial court
itself has held that defendant had failed to prove
any documents pertaining to tenancy. The First
Appellate Court, thus, has rightly come to the
conclusion that findings of the trial court that the
defendant is a tenant is based on the surmises and
conjectures.
20. One more fact to be noticed is that the defendant
claimed his tenancy with effect from 18.12.1976. On
18.12.1976, admittedly partnership deed was signed
both by the plaintiff and defendant which was before
the Court. The defendant had not denied the execution
of partnership deed but he wanted to wish-away the
partnership deed saying that it was a sham document
to save the hirer from rigours of clause 12 of the
Allotment Order. When the parties signed a document
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and entered into a partnership deed, they cannot wish
away the consequences which flow from the signing of
deed. The plaintiff having categorically denied the
tenanacy and there being no evidence with regard to
the tenancy, we do not find any error in the judgment
of the First Appellate Court that defendant was not a
tenant of the premises. We do not find any error in
the judgment of the First Appellate Court holding
that defendant was not a tenant of the premises.
21. When Clause 12 of the Allotment Letter as noted
above prohibits the hirer from subletting the
premises or any part thereof, it is the decision of
the Chief Administrator which shall be binding on the
parties. The relevant portion of Clause 12 in this
regard is “You will not sublet the premises or any
part thereof. If there is any dispute as to whether
the premises have been sublet or not the decision of
the Chief Administrator, Chandigarh, on the point
shall be binding on the parties”. As noted above,
Chief Administrator in its order dated 04.03.1986
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which was passed in the appeal filed by the defendant
himself, has concluded that the Ved Prakash-defendant
(respondent herein) was a servant of the hirer. The
said decision by clause 12 is final between the
parties and it is not open for the defendant to plead
contrary to the above. Both the trial court and the
High Court have erred in not taking in consideration
Clause 12 and finding of the Chief Administrator in
its order dated 04.03.1986. The finding of the Chief
Administrator dated 04.03.1986 which was passed after
the order of the Estate Officer cannot be wished away
by the defendant nor can be ignored while deciding
the question as to whether the premises were sublet
to the defendant or not.
22. We may also notice that the High Court while
deciding the Regular Second Appeal filed by the
defendant has also decided Regular Second Appeal
filed by the appellant-plaintiff which arose from
the Suit No.77 of 1986 filed by the plaintiff
seeking relief for permanent and mandatory
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injunction, restraining the defendant from using
the Booth No.186 for cycle repairs. The Regular
Scond Appeal No.2610 of 2002 filed by the
plaintiff-appellant has also been dismissed. In
view of our decision that Suit No.77 of 1986 filed
by the appellant deserved to be decreed and had
rightly been decreed by the First Appellate Court,
the judgment of the High Court in RSA No.2610 of
2002 is of no avail.
23. In view of the foregoing discussions, we allow
these appeals and restore the judgment of the First
Appellate Court dated 02.12.1996. The Estate
Officer, Chandigarh Administration shall ensure
that the appellant is immediately put in possession
of the premises of Booth No.186. It shall be open
for the appellant to take appropriate proceedings
to recover the damages and mesne profit for the use
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of premises by the defendant. The appeals are
allowed with costs.
………………….J.
( ASHOK BHUSHAN )
………………….J.
( R. SUBHASH REDDY )
New Delhi,
March 05, 2021.
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