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CASE NO.: Appeal (civil)  6345 of 2000

PETITIONER: M/s Kamakshi Builders

RESPONDENT: M/s Ambedkar Educational Society & Ors

DATE OF JUDGMENT: 18/05/2007

BENCH: S.B. Sinha & Markandey Katju

JUDGMENT: J U D G M E N T  

S.B. SINHA,  J :

1.      This appeal is directed against the judgment and order dated  31.12.1999 passed by the High Court of Andhra Pradesh, allowing the  appeal from a judgment and decree dated 05.09.1998 passed by the IV  Senior Civil Judge, City Civil Court, Hyderabad in O.S. No. 161 of 1989.

2.      Respondent No. 3 herein was the owner of the property which is  situated at Bagh Lingampalli, Hyderabad.  It was let out to Respondent No.  1, where an educational institution was being run on a monthly rent of  Rs.1,200/- by a deed of lease dated 16.05.1973.  The period of lease was  initially for 11 months, which expired in 1975.  Respondent No. 1, however,  did not surrender the tenancy or deliver vacant possession of the tenanted  premises to Respondent No.3.  It tendered rents  till  December 1976.  No  rent, however, was demanded by Respondent No. 3 from Respondent No.1.  Several constructions were raised by it from time to time.

3.       Respondent No. 3, however, entered into a development agreement  with the managing partner of the appellant and other persons on 01.04.1986.    A deed of partnership was executed on 21.04.1986.  Disputes and  differences having arisen between the partners, the same were referred to an  arbitrator.  An arbitration award was passed on 22.11.1987, in terms whereof  a sum of Rs.4,00,000/- was awarded in favour of  Respondent No. 3.  The  said award was made the rule of court in terms of Section 14(2) of the  Arbitration Act, 1940 by an order dated 29.02.1988.  Allegedly, by reason of  the said award, the appellant became the owner of the property.  Respondent  No. 1 was called upon to pay rents in respect of the suit property by a notice  dated 22.11.1987.  The tenancy was terminated by a notice dated  30.10.1988.  On or about 08.12.1988, Respondent No. 1, in reply to the said  notice, asked the appellant to furnish the particulars in regard to the  ownership of the suit property.  It, however, not claimed therein that it had  acquired any ownership by reason of a purported oral gift made by  Respondent No. 3 herein, as appears to be the case now.  As it failed to  vacate the premises, a suit for recovery of possession and arrears of rents  and also for damages for wrongful use and occupation of the property was  filed by the appellant.  In the written statement filed in the suit, it was, inter  alia, contended  that Respondent No. 3 herein made an oral gift in its favour  on or about 01.10.1975.  In the alternative, it was contended that it had  acquired an indefeasible title in respect of the property in question by  adverse possession.  Respondent No. 3 in its written statement supported the  case of the appellant, inter alia, denying and disputing the claim of  Respondent No. 1 herein that he made an oral gift in its favour.  

4.      In the suit, inter alia, the following issues were framed :

"I.     Whether the oral gift by the third defendant in          favour of first defendant is true and valid and

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       binding on the plaintiff ?

II.     Whether the documents relied upon by the plaintiff          are brought into existence in between the plaintiff          and third defendant in the circumstances alleged in          W.S. ?"

5.      Respondent No. 1 admittedly did not examine himself.  The suit of the  appellant was decreed.  The learned Trial Judge opined :  

i)      The  burden was on Respondent No. 1 to prove the oral gift.   

ii)     There was no reason for it not to disclose thereabout in its reply to the  notice issued by the appellant.   iii)    No declaration was filed by Respondent No. 1 before the Urban Land  Ceiling Authority in the year 1976.   iv)     A purported letter written by Respondent No. 3 confirming the oral  gift had not been produced.   v)      Although constructions were raised by it on the suit premises, in none  of the applications, the right to make constructions was based on the  ownership of the property derived by reason of the oral gift.   vi)     No disclosure was made in regard to the ownership of the property, in  the  return filed by it before the Registrar under the Societies  Registration Act.   vii)    No resolution had been passed by the Governing Body accepting  alleged oral gift.   viii)   No special quota or any reservation in the institution run by  Respondent No. 1-Society for Muslims, having  been made, the plea  of oral gift cannot be believed. ix)     No display on any board was  made  mentioning that the property was  gifted to Respondent No.1-Society.   x)      No mutation was effected pursuant to or in furtherance of the alleged  oral gift on 01.10.1975.   xi)     The witnesses of the purported oral gift being DW-2, DW-3 and DW- 4, being the Chairman of the Respondent No.1-society, his P.A. and a  Chartered Accountant and friend of DW-2 respectively, no reliance  can be placed upon their evidence.   xii)    Plea of purported oral gift was made for the first time only in the  written statement.   xiii)   No gift tax was paid in respect of the said purported gift either by  Respondent No. 3 or by Respondent No.1.     xiv)    Had Respondent No. 1 any intention to make any gift, ordinarily it  would have been presumed to do so in favour of the minority Muslim  Societies.   xv)     No explanation had been offered by Respondent No. 1 as to why it  paid rent upto October 1976.  xvi)     In none of the letters addressed by Respondent No. 1 to the  University Grants Commission, Osmania University, Urban Land  Ceiling Authority, Registrar of Cooperative Societies, Municipal  Corporation of Hyderabad, the factum of the alleged deed of gift was  disclosed. xvii)    The purported reply sent to the notice marked as Ex. A4 had  not  been disclosed.   xviii)    For proving the oral gift Respondent No. 1 should have examined  Respondent No.3.

xix)    Respondent No. 1 had not been able to show that it had acquired title  by adverse possession.   

6.      The High Court, however, by reason of the impugned judgment  reversed the said judgment holding :   

i)      There was no reason as to why there was no demand to pay rent          from Respondent No.1 for a period of ten years.  

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ii)     No explanation was offered as to why Respondent No. 1was asked          to deliver vacant possession of the property only in the year 1987          and a suit was filed only in the year 1989.   iii)    As Respondent No. 1 constructed a large number of structures on the  schedule property upon obtaining necessary permission from the  Municipal Corporation, Hyderabad and has been paying taxes  thereupon and having informed thereabout to various authorities like  University Grants Commission, Osmania University, Government of  Andhra Pradesh, no explanation was offered from Respondent No. 3  as to why he had been keeping silence for the period upto his entering  into agreement with the appellant as a partner and  allowing an award  to be passed by the learned Arbitrator.   iv)     Acquiescence on the part of Respondent No. 3 would give rise to a  presumption that Respondent No. 1 had been allowed to raise  construction, which must have been done pursuant to the oral gift of  the property.   v)      The reasoning of the trial court that donor being a Muslim would not  have gifted it to an institution belonging to other community cannot  be accepted.  It was not necessary for Respondent No. 1 to inform  about the said oral gift to various authorities including the University  Grants Commission.   vi)     The findings of the learned Trial Judge disbelieving the case of  Respondent No. 1 are based on surmises and conjectures.   vii)    Non-examination of Respondent No. 3 would give rise to an adverse  inference as burden of proof lay  to show lay on him to show that he  had not made any oral gift having regard to his conduct apart from the  oral testimony that Respondent No.1 has paid rent to Respondent No.  3 till 1976.   viii)   No materials was produced to show that in fact such rent was tendered  after 1975.   

7.      As regards the claim of Respondent No. 1 that it had perfected its title  by adverse possession, it was held that although a tenant cannot claim  adverse possession so long as he continues to be a tenant, but once his  tenancy is determined, his possession would be adverse to that of the owner.

8.      Appellant is, thus, before us.          9.      Mr. Dushyant A. Dave, learned Senior Counsel appearing on behalf of  the appellant, would submit :

i)      The High Court committed a serious error in passing the impugned  judgment insofar as it failed to take into consideration that  Respondent No. 3 being admittedly the owner of the property, the  burden lay on Respondent No. 1 who had alleged an oral gift was  made in its favour, and it having failed to prove the same, assuming  that Respondent No. 3 did not demand rent or did not take step  therefor, Respondent No. 1 cannot be said to have proved its case. ii)     The question of Respondent No. 1 acquiring any title by adverse  possession would not arise, as  at all material point of time, it was a  tenant.

10.     Mr. K. Parasaran, learned Senior Counsel appearing on behalf of  Respondent No. 1, would, on the other hand, submit :

i)      The burden of proof lay heavily on Appellant to prove the oral gift  was made by examining the donor i.e. Respondent No. 3 in the suit  and in any event, as it was incumbent on him to examine himself  inasmuch he having supported the case of the appellant must also be  held to be plaintiff.   ii)     Although DW-2, one of the attestors of the oral gift in his cross- examination stated that he had written a letter of thanks to Respondent  No.3  for his generous donation, non-production thereof would not  give rise to an adverse inference, inasmuch as had the Respondent No.  3 gone into the witness box, a suggestion would have been put to him

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in regard thereto.   iii)    The learned Trial Judge committed a serious error in opining that  Respondent No. 1 should have displayed the factum of oral gift on  any board, such a conduct,  Mr. Parasaran would contend, is very  artificial and unnatural.   iv)     Although,  no application for mutating the name of Respondent No. 1  was filed, the same was not sufficient to negative the gift, particularly  in the context of other surrounding circumstances.   v)      The learned Judge applied different standards by making observation  that Respondent No. 1 had not made any declaration before the Urban  Land Ceiling Authorities about the gift and no minutes thereabout had  been produced, as the appellant or Respondent No. 3 should have  produced records of declaration before the Urban Land Ceiling  Authorities,  particularly having regard to the fact that the burden of  proof in that behalf was on the appellant as it filed a suit for  ejectment.  vi)     Assumption of the learned Trial Judge that Respondent No. 3 being a  Muslim would have gifted the property to some minority institution is  based on conjectures. vii)    The Trial Court has also committed a serious error in drawing adverse  inference against Respondent No. 1 for not issuing any letter to the  University Grants Commission, Osmania University, Urban Land  Ceiling Authorities, Registrar of Cooperative Society, Municipal  Corporation of Hyderabad, as there was no occasion therefor.   

11.     The learned counsel would contend that having regard to  the  provisions contained in Article 67 of the Limitation Act, the suit was barred  by limitation.  The deed of lease,  being for a period of  11 months, expired  on 16.07.1974 and limitation would be deemed to run from the said date.   

12.     In this connection, our attention has also been drawn to the evidence  of PW-1, who was the Managing Partner of the appellant, which reads thus :

       "Just one or two months prior to execution of  A.10, I came into contact with D.3.  I do not remember  the persons who introduced D.3 to me\005I came to know  through D.3 that D.1 is tenant.  On the date D.3 was  introduced to me, he informed that D. 1 is not paying the  rents for the last 10 years\005"

13.     As it was known to the said witness that Respondent No. 1 had not  been paying rents even before the partnership deed was entered into, the  appellant would be presumed to have no knowledge that Respondent No. 1  had been in possession of the property in assertion of his title by not paying  rents.  As Respondent No. 1 was in possession for a period of more than 12  years, it must be held to have acquired title by prescription.

14.     Respondent No. 3 was admittedly the owner of the property. As his  ownership had not been disputed, the burden was on Respondent No. 1 to  prove his title.  It has, as noticed hereinbefore, claimed title : (i) by reason of  an oral gift; and (ii) by adverse possession.

15.     The  case that the oral gift was made on 01.10.1975 was specifically  made out.  The witnesses to the said oral gift were members of the  Governing Council, his Personal Assistant and a Chartered Accountant, who  admittedly was a friend of DW-2.

16.     It is expected of a person who has obtained title by reason of an oral  gift; Hiba although permissible in law, but a heavy burden lay on him to  prove the same.  Respondent No. 1 is an educational society.  It was running  an institution on the suit property.  It was, therefore, expected of it that it  would insist on execution of a registered deed of gift.            17.     It may be true that, as a defendant, it was not required to examine

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Respondent No. 3 herein , who had been siding with the plaintiff by calling  him as a witness by getting summons to depose in the court.  There cannot  be any doubt whatsoever that only by reason of the fact that Respondent No.  3 did not get himself examined for one reason or the other, the same would  mean that Respondent No. 1 discharged its burden.  The learned Trial Judge  did not place reliance on depositions of the witnesses examined on behalf of  the Respondents to prove oral gift as they were interested persons.  The High  Court did not deal with the matter.  The learned Trial Judge analysed the  evidences brought on record by the parties.  So far as the appreciation of  evidence based on oral evidence is concerned, the learned Trial Judge  having had the occasion to notice the demeanour of the witnesses,  was the  best judge to arrive at a finding in regard to their reliability or  trustworthiness.  The High Court did not deal with the matter, ordinarily it  could not have even done so [See Raj bir Kaur and Another v. S. Chokesiri   & Co. (1988) 1 SCS 19].  

18.     It may be true, as has been contended by Mr. Parasaran, that conduct  of the parties would be relevant, but what would be more relevant is the  conduct of a party, who from his status of a tenant acquires the status of the  owner of the property.  Acquisition of such ownership by way of gift and,  thus, wholly without consideration, is not expected of a society registered  under the Societies Registration Act.  Not only that it was  acknowledged  such donation to the donor by issuing an appropriate letter in that behalf  (which is said to have been done).  DW-2 although stated before the court  that such a letter had been written, the same  had not been proved.   

19.     Mr. Parasaran himself has relied upon a decision of this Court in  Gopal Krishnaji Ketkar v. Mamomed Haji Latif & Others [1968 (3) SCR  862]  wherein this Court laid down the law in the following terms :

"\005Even if the burden of proof does not lie on a party,  the Court may draw an adverse inference, if he withholds  important documents in his possession which can throw  light on the facts at issue.  It is, in or opinion, a sound  practice for those desiring to rely upon a certain state of  facts to withhold from the Court the best evidence which  is in their possession which could throw light upon the  issues in controversy and to rely upon the abstract  doctrine of onus of proof\005:  

20.     The said decision has been noticed by this Court in subsequent  decisions in Punit Rai v. Dinesh Chaudhary [(2003) 8 SCC 204] and  Citibank N.A. etc. v. Standard Chartered Bank and Others etc. [(2004) 1  SCC 12]

21.     As the said letter has not been produced, the inference which could be  drawn therefrom is that either DW-2 did not tell the truth that such a letter  was written and/or an adverse inference could be drawn that had the said  letter been produced, the same would have gone against the interest of  Respondent No. 1.  In making an oral gift by an owner of the property in  favour of his tenant apart from it being wholly unlikely, actual delivery of  possession is imperative.  There is nothing on record to show that at any  point of time, Respondent No. 3 had delivered the possession of the  premises in question to Respondent No. 1.  Respondent No. 1 being a tenant,  continued to be a tenant.  Its status as a lessee on its own showing merged  into a  higher status.  At what point of time such status was changed been a  relevant fact.  It was within the special knowledge of Respondent No. 3  The  onus lay heavily on him to prove the same.  It failed to discharge its burden.

22.     The learned Trial Judge cannot be said to have committed any error in  noticing the fact that Respondent No. 1 on its own showing did not file any  application for mutation of its name before the Revenue authorities.  It, even  did not take any step to let  others know about its change of status, be it the  revenue department, or be it other authorities with which it was dealing,

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namely, the University Grants Commission, Government of Andhra Pradesh,  Osmania University, or even Municipal Corporation of Hyderabad. An  application for mutation of one’s name in the revenue records by the  parties  although would not by itself confer any title, but then a presumption in  regard to the nature of possession can be drawn in that behalf.  Had such an  application been filed by Respondent No. 1 before the concerned authorities,  at least it could have been shown that it had claimed possession on its own  right, not as a tenant.

23.     The High Court although noticed the lease came to an end in the year  1975 and if from the said date or at least from the date of purported oral gift  allegedly made in its favour by Respondent No.1.  Any change in the nature  of its position occurred, it was expected of it to accept the same by its  conduct.  Why it would pay rent to Respondent No. 3 till October 1976 has  not been explained.

24.     Acquiescence on the part of Respondent No. 1, as has been noticed by  the High Court, did not confer any title on Respondent No. 1.  Conduct may  be a relevant fact, so as to apply the procedural law like estoppel, waiver or  acquiescence, but thereby no title can be conferred.

25.     It is now well-settled that time creates title.    

26.     Acquisition of a title is an inference of law arising out of certain set of  facts.  If in law,  a person does not acquire title, the same cannot be vested  only by reason of acquiescence or estoppel on the part of other.

27.     It may be true that Respondent No. 1 had constructed some buildings;  but it did so at its own risk.  If it though that despite its status of a tenant, it  would raise certain constructions, it must have taken a grave risk. There is  nothing on record to show that such permission was granted.  Although  Respondent No. 1 claimed its right, it did not produce any document in that  behalf.  No application  for seeking such permission having been filed, an  adverse inference in that behalf must be drawn.

28.     It may be true that Respondent No. 3 herein should have examined  himself and the learned Trial Judge committed a serious error in drawing an  adverse inference in that behalf as against Respondent No. 1.  It was,  however,  so done keeping in view the fact that Respondent No. 3 was  evidently not interested in the property in view of the fact that it had suffered  a decree.  For all intent and purport, even if the submission of Mr. Parasaran  is accepted that the appellant is claiming is claiming only by reason of an  award, he has transferred the property in his favour.  He received a valuable  consideration in terms of the award.  We are not concerned with the validity  thereof.  Non-examination of Respondent No. 3 indisputably would give rise  to a presumption, as has been held by this Court in Sardar Gurbaksh Singh v.  Gurdial Singh [AIR 1927 PC 23], Martand Pandharinath Chaudhari v.  Radhabai Krishnarao Deshmukh [AIR 1931 Bombay 97], and The  Ramanathapuram Market Committee, Virudhunagar v. East India Corpn.  Ltd., Madurai [AIR 1976 Madras 323] and Vidhyadhar v. Manikrao and  Anr. [(1999) 3 SCC 573], but by reason of presumption alone, the burden is  not discharged.  A title is not created. 29.     A claim of title by prescription by Respondent No. 1 again is not  tenable.  It based its claim on a title.  It had, therefore, prima facie, no  animus possidendi.

30.     Reliance placed by Mr. Parasaran on Article 67 of the Limitation Act  is also not apposite.  It is a special provision.  It would apply in a case where  a tenant has ceased to be a tenant in terms of the provisions of the Andhra  Pradesh (Rent and Eviction Control) Act.  A tenant continues to be a tenant  despite termination of tenancy.  Article 67 would not be attracted in a case  where a tenant remains a statutory tenant.  In a case of this nature, Article 65  would apply.  As the claim of Respondent No. 1 was based  on a title, the  onus was on him to prove the same.  Respondent No. 1 failed to discharge  the same and, therefore, the learned Trial Judge, in our opinion, has

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committed no error in passing a decree in favour of the plaintiff.

31.     In Smt. Shakuntala S. Tiwari v.  Hem Chand M. Singhania [(1987)  3  SCC 211], whereupon Mr. Parasaran placed strong reliance, this Court was  considering a case where termination of tenancy in terms of Sections 12 and  13 of the Bombay Rent Act stood admitted.  The question of applicability of  Articles 66 and 67 of the Limitation Act was considered from that end.  It  was held:-

"12.    If that is so then on the strict grammatical  meaning Article 67 of the Limitation Act would be  applicable.  This is indubitably a suit by the landlord  against the tenant to recover possession from the  tenant.  Therefore the suit clearly comes within  Article 67 of the Limitation Act.  The suit was filed  because the tenancy was determined by the  combined effect of the operation of Sections 12 and  13 of the Bombay Rent Act.  In this connection, the  terms of Sections 12 and 13 of the Bombay Rent Act  may be referred to.  At the most it would be within  Article 66 of the Limitation Act if we hold that  forfeiture has been incurred by the appellant in view  of the breach of the conditions mentioned in Section  13 of the Bombay Rent Act and on lifting of the  embargo against eviction of tenant in two.  Article  66 or Article 67 would be applicable to the facts of  this case; there is no scope of the application of  Article 113 of the Limitation Act in any view of the  matter.  Sections 12 and 13 of the Bombay Rent Act  co-exist and must be harmonized to effect the  purpose and intent of the legislature for the purpose  of eviction of the tenant.  In that view of the matter  Article 113 of the Limitation Act has no scope of  application.  Large number of authorities were cited.   In the view we have taken on the construction of the  provisions of Articles 67 and 66 of the Limitation  Act and the nature of the cause of action in this case  in the light of Sections 12 and 13 of the Bombay  Rent Act, we are of the opinion that the period of  limitation in this case would be 12 years.  There is  no dispute that if the period of limitation be 12  years, the suit was not barred."          32.     The said decision has no application in the facts and circumstances of  the present case as there is nothing to show that after the expiry of  period  envisaged in the lease and despite the fact that the respondent itself had been  paying/tendering monthly rent, there had been final determination of the  tenancy pursuant whereto the respondent was required to hand over the  vacant possession to the landlord.  Nothing has been brought on record to  show that the landlord has served any notice directing the tenant to handover  vacant possession upon valid termination of the lease.  

33.     In Devasahayam (Dead) By Lrs. v.  P. Savithramma and Others  [(2005) 7 SCC 653], whereto our attention has again been drawn, this Court  came to the conclusion that the civil court had no jurisdiction to try the suit  covered by the rent control legislation.   No such contention had, however,  been raised.  The question which as to whether the Civil Court would have   jurisdiction to determine a matter must fall for consideration of the trial  court.  An issue in that regard should have been framed.  In this case, the  respondents have raised a plea of title in itself, the question in regard to the  jurisdiction of the Civil Court has not been raised, presumably in view of the  fact,  that ultimately the civil court was bound to determine the question  whether the defendant/respondent No. 3 made an oral gift or not being a  complicated question, could not have gone into in a suit under the Rent  Control Act.  In any event,  such a question having not been raised, we are of

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the opinion that the same should not be permitted to be raised before us for  the first time.    

34.     The plea in regard to lack of jurisdiction of the Civil Court has been  raised for the first time in the Written Submissions filed by the respondents  and not even by the learned counsel while making oral submission.

35.     In Sohan Singh and Ors. v. General Manager, Ordnance Factory,  Khamaria, Jablapur and Ors. [AIR 1981 SC 1862], this Court noted the  following in this regard :

       "We think that the view taken by the High Court on the  facts of this case is not correct because the jurisdiction of  the labour court was not challenged by the respondents in  that court."  

36.     In Nagubai Ammal and Others v.  B. Shama Rao and Others [AIR  1956 SC 593], this Court made a distinction between a proceeding which is  collusive and one which is fraudulent.  Respondents have never questioned  the validity of the Award and the decree.  No issue was framed in that  behalf.  It is not a case where the suit can be dismissed on the ground of  there being a collusive proceeding between defendant No. 3 and plaintiff.   

37.     For the reasons aforementioned, the impugned judgment cannot be  sustained, which is set aside accordingly.  The appeal is allowed.  No costs.