29 April 2005
Supreme Court
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HANS RAJ BANGA Vs RAM CHANDER AGGARWAL

Bench: ASHOK BHAN,A.K. MATHUR
Case number: C.A. No.-000642-000642 / 2003
Diary number: 14099 / 2002
Advocates: Vs GHAN SHYAM VASISHT


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CASE NO.: Appeal (civil)  642 of 2003

PETITIONER: Hans Raj Banga

RESPONDENT: Ram Chander Aggarwal

DATE OF JUDGMENT: 29/04/2005

BENCH: ASHOK BHAN & A.K. MATHUR

JUDGMENT: J U D G M E N T

BHAN, J.

       This appeal by grant of leave has been  filed against the judgment and order dated  22.03.2002 passed by the High Court of Delhi  at New Delhi in Regular First Appeal No.280 of  1982.  By the impugned order the High Court  has allowed the appeal and set aside the  judgment and decree for possession of the suit  property and damages passed by the Trial Court  in favour of the plaintiff-appellant.

FACTS

       Premises in dispute is an evacuee property  i.e. shop No.114, New Qutab Market, New Delhi,  a Government Built Property in terms of Rule  2(d) of the Displaced Persons (Compensation  and Rehabilitation) Rules, 1955 and forms part  of the compensation pool within the meaning of  Section 14 of the Displaced Persons  (Compensation and Rehabilitation) Act, 1954  (for short "the Act")  

       Bhagwan Das, father and predecessor-in- interest of the defendant-respondent who was  not a displaced person filed C.W.P. No.458-D  of 1958 in the Circuit Bench of the Punjab and  Haryana High Court at Delhi seeking transfer  of shop No.114, in his favour on the ground  that the same was allotted to him with effect  from 10.05.1956 by the Department and he has  been regularly paying rent for the same and  prayed that the same be transferred in his  favour, instead of selling it in public  auction to any other person.  Shri M.S.  Chadha, Settlement Commissioner, Ministry of  Rehabilitation filed the counter affidavit on  behalf of the Department and took the stand  that the Qutab Market was constructed by the  Ministry of Rehabilitation and the same forms  part of the compensation pool within the  meaning of Section 14 of the Act to be  transferred on ownership basis to displaced  persons only.  It was also stated that these  shops were offered as a temporary measures to  squatters (Bhagwan Dass, predecessor-in-

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interest of the respondent) as an alternative  accommodation as they were occupying the land  before the construction of the market but the  same could not be transferred/sold to Shri  Bhagwan Dass a squatterer or to any other  squatter who was not a displaced person.   Similarly, certain other persons had also  filed writ petitions.  C.W.P. No.438-D of 1958  and other connected matters were disposed of  by an order dated 21.09.1960 wherein it was  agreed by the Department that if the  Department decides to sell the shop in  question by auction, whether public or  private, or by calling tenders, the occupier  of the shop will also be given equal  opportunity to give his bid or tender, as the  case may be, and the bid or tender of the  occupier will be considered on merits along  with other bidders or tenderers, if any.                  An advertisement was issued on 28.12.1960  in the papers inviting tenders for the sale of  the various shops located in different markets  by tender.  Appellant submitted his tender  along with draft  No.03260/2 dated 4.1.1961  for Rs.350/- drawn on Union Bank of India,  Karol Bagh, New Delhi towards 5% earnest  money.  Appellant’s tender being the highest  was accepted and the remaining price was  adjusted against the verified claim of the  appellant as per Section 8 of the Act.   Bhagwan Dass did not participate in the sale  proceedings conducted consequent to the order  dated 21.09.1960 passed by the High Court in  C.W.P. No. 438-D of 1958.  Sale certificate  duly confirmed under the rules was issued in  favour of the appellant in respect of shop  No.114, New Qutab Road Market, New Delhi.   Lease deed was also issued on 17.10.1963 and  the same was registered on 22.02.1964 by the  Sub. Registrar.  By mistake in the lease deed  the property was mentioned as 114, New  Rajinder Nagar instead of 114, New Qutab Road  which was corrected by a supplementary lease  deed dated 28.02.1967.  In the supplementary  lease deed it was mentioned that the area sold  to the appellant was shop No.114, New Qutab  Road and not 114, New Rajinder Nagar which had  been mentioned in the lease registered on  22.02.1964.  One of the conditions of sale as  per advertisement was that if any of the  properties is under the occupation of the  allottees or unauthorised occupants the  purchaser will be entitled to received the  rent from the tenants.  

       Bhagwan Dass died in the year 1962.  Since  neither Bhagwan Das, predecessor-in-interest  of the respondent nor the respondent or any  other legal heir of Bhagwan Dass had paid any  rent from the inception of the tenancy, a  demand notice was issued to the respondent  under Section 21 of the Act for recovery of  the rent for the period 8.8.1955 to 27.02.1961  i.e. till the date of sale of the shop to the

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appellant.

       Appellant filed the suit for possession of  Shop No. 114, New Qutab Road and recovery of  damages for unauthorised use and occupation of  the property against the respondent on 26th of  July, 1973.  The respondent filed the written  statement on 3rd of May, 1978 which was later  on amended on 31st of October, 1981 and  resisted the suit on the ground that the  appellant was not the owner of the property as  the same could not be transferred to the  appellant by way of sale.  That the Joint  Hindu firm M/s. Bhima Mal Dina Nath of which  he was a member was the tenant in the premises  since 8.8.1955 by virtue of Ext. D-1 letter of  allotment and Ext. D-3 terms of tenancy.  It  was pleaded by him that the rent of the shop  was Rs.19.80 and not Rs.40/- per month as  demanded.  In the alternative, it was pleaded  that he was entitled to adjust the sum of  Rs.4,186.83 paid by him as house tax.

       After the filing of the suit, Shri B.P.  Aggrawal, brother of the respondent and a  legal heir of Late Bhagwan Singh filed an  application before the Regional Settlement  Commissioner for supply of documents relating  to the tenancy of Bhagwan Das in respect of  Shop No. 114.  On 23rd of February, 1978, a  petition under Section 24 of the Act was filed  by the respondent along with other legal heirs  of Bhagwan Das seeking quashing of the sale  made in favour of the appellant with  consequent relief of sale afresh in favour of  the legal representatives of Bhagwan Das.  It  was alleged that the respondent came to know  about the sale in favour of the appellant for  the first time on 17th of February, 1978.  This  petition was dismissed by the Deputy Chief  Settlement Commissioner exercising the powers  of Chief Settlement Commissioner on 5.7.1978  thereby upholding sale and transfer of the  shop in favour of the appellant.  Aggrieved  against this order, respondent filed a  revision petition before the Central  Government under Section 33 which was  dismissed on 25th of November, 1978.  Being  aggrieved by the passing of these orders,  respondent along with other heirs of Bhagwan  Das filed CWP No. 396/1979 in the High Court  of Delhi seeking quashing of the orders and  the sale made in favour of the appellant with  consequential relief of sale afresh in their  favour.  High Court dismissed the writ  petition on 9.4.1979, aggrieved against which  respondent filed SLP(C) No. 10765/1979 in  which leave was granted and the same was  registered as Civil Appeal No. 615/1982.  The  respondent got the C.A. No. 615/1982 dismissed  as withdrawn and as a consequence thereof the  sale made in favour of the appellant and the  orders passed by the authorities and the High  Court rejecting the respondent’s challenge to  the sale made in favour of the appellant

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attained finality.   

After the conclusion of these proceedings,  the trial court in the suit filed by the  appellant on 26th of July, 1973 which was re- numbered as Suit No. 781/1976 framed the  following issues/additional issues:-

"1.     Whether plaintiff is the owner of the  suit property?

2.      Whether suit is properly valued for  purposes of Court fee and  jurisdiction?  If not, what is the  proper valuation?

3.      Whether plaintiff is entitled to any  damages?  If no, at what rate; for  what period and to what amount?

4.      Whether the defendants of M/s. Bhima  Mal Dina Nath, alleged Joint Hindu  Family, is a tenant of the suit  premises as alleged in the written  statement, if so, to the what effects?

5.      Whether the suit is time barred?

6.      Whether the Civil Court has no  jurisdiction to entertain the suit and  decide the suit?

7.      Relief.

Additional Issues

1.      Whether the sale of the property in  dispute in favour of the plaintiff by  the Ministry of Rehabilitation is a  nullity as alleged by the defendants  in the amended written statement? OPD.

2.      Whether a Civil Court has got no  jurisdiction to go into the validity  or otherwise of the sale?

3.      Whether Union of India is a necessary  party?  If so, what is the effect of  not joining it?"      

Trial Court decided all the issues in  favour of the appellant.  Appellant was held  to be the owner of the suit property.  Suit  was held to be property valued for the purpose  of court fee and jurisdiction.  Regarding  Issue No. 3, it was held that the appellant  was entitled to damages which were quantified  at Rs.3,600/-.  It was held under issue No. 4  that M/s. Bhima Mal Dina Nath, the alleged  Joint Hindu family was not the tenant of the  suit premises and in Issue No. 5, it was held

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that the suit was within limitation.   Regarding Issue No. 6, it was held that the  Civil Court has the jurisdiction to entertain  and decide the suit.  Additional Issues 1 and  2 were not pressed by the respondent.  Trial  Court came to the conclusion that the  documents relied upon by the respondents to  establish tenancy were manipulated and even as  per these documents it stood established that  the respondents and their predecessors-in- interest had never paid any rent from the  inception of the tenancy, as a result of  which, a demand notice Ext. D-6 towards the  arrears of rent was issued to the respondent  for the period 8.8.1955 to 27.7.1961 i.e. till  the date of sale of the suit property to the  appellant.  As the respondent had failed to  pay the rent agreed upon, the tenancy created  in his favour stood terminated.  Trial Court  also came to the conclusion that the  respondent was not entitled to the benefit of  Section 29 of the Act.  It was held that since  there was no relationship of landlord and  tenant, the Civil Suit was maintainable.  In  view of the findings recorded, the Trial Court  decreed the suit and the appellant was given a  decree for possession of the suit property and  damages in the sum of Rs.3,600/- for  unauthorised use and occupation of the suit  property by the respondent.

       Aggrieved against the judgment and  decree passed by the Trial Court, respondent  filed Regular First Appeal in the High Court  of Delhi at New Delhi which was numbered as  RFA No. 250/1982.  High Court accepted the  appeal and set aside the judgment and decree  passed by the Trial Court.  It came to the  conclusion that as per compromise arrived at  in CWP No. 438-D/1958 filed by Bhagwan Das,  the Department could sell the property only by  way of public auction and not by any other  mode.  Since in the present case, the sale was  made in favour of the appellant by inviting  tenders the same was not valid.  The High  Court further held that the Trial Court fell  in error in giving undue weight to the  unexhibited documents marked as ‘PX’ and ‘PY’.   That Ext. ‘PX’ pertained to Shop No. 114, New  Rajinder Nagar and not to a shop in New Qutab  Road.  The supplementary lease Deed executed  in the natue of corrigendum, substituted the  words "114, New Qutab Road" in place of 114,  New Rajinder Nagar, was rejected as these  documents were not put to Mr. S.B. Lal, PW 4,  a Clerk of the Office of the Rehabilitation  Department and DW 6 when they appeared in the  witness Box.  The High Court also came to the  conclusion that the property was not an  evacuee property.  It was further held that  Section 29 of the Act was not applicable to  the facts of the present case and that the  respondent was a tenant of the suit property.

Learned counsel for the parties have been

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heard at length.  With their help we have gone  through the findings recorded by the High  Court as well as the Trial Court and the  evidence on record.   

The High Court has erred in holding that  as per orders passed by the High Court in the  Writ Petition No. 438-D/1958 filed by Bhagwan  Das, the property could be sold only by way of  public auction and not by any other mode.  The  High Court on 21st of September, 1960 on a  concession made by the Department of  Rehabilitation passed the order in CWP 438-D  of 1958 in the following terms:-

"A compromise has been arrived at  between the petitioner and  respondents in this case to the  effect that if the Government  decides to sell the shop in  question by auction, whether  public or private, or by calling  tenders, the petitioner will also  be given equal opportunity to give  his bid or tender, as the case may  be, and that the bid or tender of  the petitioner will be considered  on merits along with other bidders  or tenderers, if any."

       It is clear from the reading of the order  that the Department had the option to sell the  suit property either by auction, public or  private, or by calling the tenders.  In the  present case, the Department sold the property  by inviting tenders.  An advertisement was  issued in the newspapers inviting tenders, in  response to which the appellant filed his  tender which was accepted being the highest.   Bhagwan Das did not file a tender in response  to the advertisement.  The finding recorded by  the High Court is factually incorrect.  The  High Court has erred in holding that the sale  was bad in law having been made  in  contravention of the order passed by the High  Court in CWP No. 438-D/1958.  The Department  had the option to sell the property either by  auction, public or private or by calling the  tenders.  It was left to the Department to  choose either of the two modes and the  Department sold the property by inviting the  tenders as per the undertaking given by it to  the High Court.  The sale has been made as per  order passed by the High Court by inviting  tenders, the same is valid and the finding  recorded by the High Court to the contrary  cannot be sustained being factually incorrect.   

The bid by way of tender given by the  appellant being the highest was accepted.  He  paid the entire sale consideration.     The sale  was confirmed in his favour and the  Sale

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Certificate was issued.  Since the property  was sold on leasehold basis, the lease Deed  was executed on 17th October, 1963 which was  registered on 22nd February, 1964.   The  appellant became the owner of the property,  the moment full price of the property was paid  and the title of the property passed on to him  from the day of the confirmation of the sale  and the issuance of sale certificate.  The  High Court, in our view, erred in holding that  the issue of ownership was not concluded in  the earlier proceedings instituted by the  respondents before the Rehabilitation  Authorities, the Writ Petition in the High  Court and the Appeal in this Court.  It also  erred in holding that only the question of  validity of sale was involved in the earlier  proceedings and not of ownership.   It failed  to appreciate that the valid sale confers both  the title and the ownership rights in the  purchaser.  After the rejection to the  challenge to the sale Deed up to this Court,  the appellant became the owner of the property  in dispute and it cannot be said that even  though the sale has been upheld the appellant  did not become the owner of the property.  The  view taken by the High Court is against the  law laid down by this Court in Bishan Paul Vs.  Mothu Ram, AIR 1965 SC 1994 and also against  the fundamental principle of jurisprudence as  it is an established fact that a valid sale  confirmed by the authorities confers title as  well as ownership rights in the purchaser.   Valid sale of property and ownership are  inseparable and the moment the price is paid  and sale is confirmed the purchaser becomes  the owner.  In Bishan Paul’s case (supra), it  was held:-       "It seems to us that the matter  must be considered on general  principles.   In this case the  highest bid was of the respondent  and he paid the full price before  the sale in his favour was  confirmed.  The sale certificate,  though issued later, mentioned the  date of the confirmation of the  sale in his favour.  The tenant  was asked to attorn to the  purchaser from the date of  confirmation of sale and thus  possession was also delivered on  that day.  Title, therefore, was  not in abeyance till the  certificate was issued but passed  on the confirmation of sale.  The  intention behind the rules appears  to be that title shall pass when  the full price is realised and  this is now clear from the new  form of the certificate reproduced  in Jailmal’s case, 66 Pun LR 99:  (AIR 1964 Punj 99).  No doubt till  the price is paid in full there is

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no claim to the property, but it  seems somewhat strange that a  person who has paid the price in  full and in whose favour the sale  is also confirmed and who is  placed in possession should only  acquire title to the property from  the date on which a certificate is  issued to him.  There may  conceivably be a great deal of  time spent before the certificate  is granted.  In this case the  tenant was told to attorn from  October 3, 1956 because nothing  remained to be done except the  ministerial acts of issuing the  certificate and getting it  registered.  Therefore, so far as  title was concerned, it must be  deemed to have passed and the  certificate must relate back to  the date when the sale became  absolute."

       The High Court also erred in holding that  the property was not an evacuee property.   High Court recorded this finding in one line  by observing, "It was not an evacuee  property".  No reasons have been recorded for  coming to this finding.  No issue was framed  in the suit on this point.   Property was  being treated and dealt with as evacuee  property throughout.  Respondent in the  earlier proceeding did not take the stand that  the property was not the evacuee property, on  the contrary he treated the property to be a  part of "compensation pool" which is evident  from the fact that the respondent filed the  revision petition under Sections 24 and 33 of  the Act by treating the property to be an  evacuee property.  The Department in CWP No.  458-D/1958 filed by the Bhagwan Das,  predecessor-in-interest of the respondent had  taken a firm stand that the property formed  part of the "compensation pool" within the  meaning of Section 14 of Displaced Persons  (Compensation and Rehabilitation) Act, 1954.     The finding recorded by the High Court is  bereft of any reasons whatsoever, against the  record and the findings recorded in the  earlier round of litigation.  The same  deserves to be set aside.

       High Court erred in not appreciating that  the matter with regard to the validity of the  sale in favour of the appellant had been  decided between the parties in the earlier  proceedings and the decision attained finality  up to this Court.  The respondent could not be  permitted to canvass against this issue again  in the present suit.  The grounds of challenge  to the ownership of the respondent in the  present case is the same which was taken by

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him in the earlier proceedings under Sections  24 and 33 of the Act and the Writ Petition and  the Appeal in this Court.  Since the decision  had already been rendered in favour of the  appellant on the point, the respondent was  estopped in the law from challenging the sale  made in favour of the appellant and his  ownership on the same grounds in the present  case.                  An allottee of the custodian is not the  tenant of the custodian.  This is clear from  the definition of the word "allotment" in  Section 2(a) of The Administration of Evacuee  Property Act, 1950.  This definition is in the  following terms:-

"S.2(a): "allotment" means the grant  by a person duly authorized in this  behalf of a right of use of  occupation of any immoveable evacuee  property to any other person, but  does not include a grant by way of  lease;"

       It is clear from this definition that the  allottee is not a lessee but is merely a  licensee of the Department.  On the disposal  of the property under The Displaced Persons  (Compensation and Rehabilitation) Act, by  auction or otherwise, the allottee of the  custodian or the occupier of the premises  becomes the tenant of the transferee.    Section 29 which is a special provision  enacted to give protection from ejectment to  the class of persons or class of property to  be notified under clause (2) of Section 29.   Under section 29 a deeming provision is  introduced whereby such allottee becomes  tenant of the transferee which was held by it  immediately before the transfer.  Section 29  reads as under:-

" S. 29 (1)  Where any person to whom  the provisions of this section apply,  is in lawful possession of any  immovable property of the class  notified under sub-section (2), which  is transferred to another person under  the provisions of this Act, then,  notwithstanding anything contained in  any other law, such person shall,  without prejudice to any other right  which he may have in the property, be  deemed to be a tenant of the  transferee on the same terms and  conditions as to payment of rent or  otherwise on which he held the  property immediately before the  transfer :

       Provided that notwithstanding

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anything contained in any such terms  and conditions, no such person shall  be liable to be ejected from the  property during such period not  exceeding two years as may be  prescribed in respect of that class of  property, except on any of the  following grounds, namely:-

       (a) that he has neither paid  nor tendered the whole amount of  arrears of rent due after the date  of the transfer within one month  of the date on which a notice of  demand has been served on him by  the transferee in the manner  provided in Section 106 of the  Transfer of Property Act, 1882;

       (b) that he has, without  obtaining the consent of the  transferee in writing-   (i)     sublet or otherwise  parted with the  possession of the whole  or any part of the  property, or (ii)    used the property for a  purpose other than the  purpose for which he was  using it immediately  before the transfer;

       (c)  that he has committed any  act which is destructive of, or  permanently injurious to, the  property.   

(2)  The Central Government may, from  time to time by notification in the  Official Gazette, specify the class of  persons to whom, and the class of  immovable property in the compensation  pool, other than agricultural land, in  respect of which, the provisions of  this section shall apply and in  issuing any such notification the  Central Government shall have regard  to the following matters, that is to  say,-          (a)  the length of the period  for which any such persons may have  been in lawful possession of the  property;

   (b)  the difficulty of obtaining  alternative accommodation;

   (c)  the availability of any  other suitable residential  accommodation for the use of the  transferee; and

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   (d)  such other matters as may  be prescribed."

       Under sub-Section (1) of Section 29, a  person in lawful possession of any immovable  property notwithstanding anything contained in  any other law and without prejudice to any  other right which he may have in the property  by a deemed fiction becomes the tenant of the  person to whom the property is transferred on  the same terms and conditions as to the  payment of rent or otherwise on which the  property was held by him immediately before  the transfer.  Protection granted under  Section 29(1) is not absolute and as per  proviso is limited for a period of two years.   Even during the period of two years such a  person could be evicted if the grounds  mentioned in clauses (a), (b) and (c) to  Section 29(1) came into operation.  Question  as to whether an allottee becomes a tenant, or  not, will depend on the question whether the  same falls within the purview of Section 29 of  the Act.  Section 29(2) of the Act provides  that the Central Government may from time to  time by a notification in the Official Gazette  specify the class of persons to whom, and the  class of immovable property in the  compensation pool, other than agricultural  land, in respect of which, the provisions of  this Section shall apply and that the Central  Government shall, while issuing such  notification, keep in mind the matters  mentioned in clauses (a), (b), (c) and (d) of  sub-Section (2).

       In exercise of the powers given under  Section 29(2), the Central Government issued a  notification SRO 2219.  Under this  notification, provisions of Section 29 had  been made applicable to the following classes  of persons:-

"1.     Every person, against whom no  arrears of rent in respect of the  property in his lawful possession  are outstanding at the date of  transfer of property.

2.      Every person, against whom any  arrears of rent in respect of the  property in his lawful possession  are outstanding at the date of the  transfer of the property, but who  has paid up such arrears within  sixty days of such date.

3.      Every displaced person having a  verified claim against whom any  arrears of rent in respect of the  property in his lawful possession

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are outstanding at the date of the  transfer of the property, but such  arrears of rent do not exceed the  amount of compensation payable to  him.

4.      Every displaced person having a  verified claim against whom arrears  of rent in respect of the property  in his lawful possession exceeding  the amount of compensation payable  to him are outstanding at the date  of transfer of the property, but who  after adjustment of the compensation  against such arrears pays up the  balance of the arrears within sixty  days of the date of such  adjustment."    

       Bhagwan Das admittedly was not a displaced  person and, therefore, not covered under  categories 3 and 4 of the notification.  He  would also not fall under categories 1 and 2  as admittedly he did not pay the arrears of  rent due within 60 days of the transfer.  This  is clear from the fact that Department had  issued demand notice Ext. D-6 much after the  transfer of the property, in the year 1970, to  the respondents to pay the arrears of rent  from 8.8.1955 i.e. from the inception of the  tenancy till its sale in favour of the  appellant on 27.7.1961.

       Learned counsel for the respondent then  contended that the respondent or his  predecessor-in-interest did not either have  the notice or the knowledge of the transfer of  the property in favour of the appellant and,  therefore, the period of 60 days should be  counted from the date of acquiring the  knowledge of this fact by the respondent in  the year 1978.  This contention cannot be  accepted because of the clear provision of the  notification which requires payment of the  arrears within 60 days of the date of  transfer.  Bhagwan Das, predecessor-in- interest, of the respondent knew that the  property is likely to be sold and because of  this, he filed the Writ Petition(C) No. 438-D  of 1958 seeking a mandamus directing the  Department to permit him to participate in the  sale of suit property being the  occupant/tenant of the same.  The writ  petition was allowed and Bhagwan Dass was  permitted to participate in the sale of the  suit property which was to be held either by  open auction or by inviting tenders.  The  Department had issued advertisement in  different newspapers inviting tenders.   Bhagwan Dass did not respond to the  advertisement and submit his tender. Assertion  made by the respondent that the Bhagwan Dass  did not come to know about the advertisement

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inviting tenders for the sale of the property  or that he did not come to know about the sale  of the property in favour of the appellant  cannot be accepted.  Knowledge of this fact  would be personal to Bhagwan Dass and there is  nothing on record to show that Bhagwan Dass  did not come to know about the sale of the  suit property in favour of the appellant.   Bhagwan Dass died in the year 1962.   On  27.7.1961 the payment was required to be made  within 60 days from the date of sale, i.e.,  upto 27.09.1961.  Since Bhagwan Dass did not  fulfil the condition of payment of rent within  60 days from the date of the sale he did not  become the tenant of the appellant.   Respondent being the successor-in-interest of  Bhagwan Dass would acquire/inherit whatever  Bhagwan Dass possessed.  As Bhagwan Dass did  not become the tenant of the appellant the  respondent being the successor-in-interest of  Bhagwan Dass would also not become the tenant  of the appellant.

       For the reasons stated above, the appeal  is accepted.  The judgment and decree passed  by the High Court is set aside and that of the  trial Court is restored.  There will be no  order as to costs.