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PETITIONER: P. VEERAPPA

       Vs.

RESPONDENT: M.A. MOHAMMED AMANULLA

DATE OF JUDGMENT04/12/1995

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. PARIPOORNAN, K.S.(J)

CITATION:  1996 SCC  (1) 415        JT 1995 (9)   356  1995 SCALE  (7)336

ACT:

HEADNOTE:

JUDGMENT:                          O R D E R      Leave granted.      We have heard the counsel on both sides. This appeal is filed against the order dated September 23, 1991 made by the Karnataka High  Court in  C.R.P. No.3019/87.  The facts  are clearly not in dispute. They are stated as under:      The appellant  was a tenant prior to 1959. In 1959, the appellant had  entered into an agreement with the respondent to purchase  the premises  for some consideration. Since the appellant claimed  that the  respondent was  not willing  to perform his  part of  the contract,  he laid  the  suit  for specific performance.  In the  suit, the  parties ultimately had compromised  the  dispute  and  agreed  to  enhance  the consideration to  a sum  of Rs.38,000/-/- payable within the specific time. Unfortunately, the appellant had not paid the amount within the agreed time which put an end to the rights asserted by the appellant under the contract.      When an  application for  eviction under  Section 21 of the Karnataka  Rent Control  Act was  filed,  the  appellant raised preliminary objection that his tenancy rights had got merged in  his right  as an  agreement-holder and  he was in possession of  the suit-premises  as an agreement-holder and not as  a tenant  and thereby  he disputed  the title of the respondent. The appellant sought for a decision by the Civil Court in  that behalf.  The Controller  negatived it and the High Court  by the  impugned order  affirmed the  same. Thus this appeal by special leave.      It is contended by Mrs. Kiran Suri, learned counsel for the appellant  that the  tenancy rights  which the appellant had prior  to 1959  stood  merged  with  the  rights  as  an agreement-holder. The appellant was always ready and willing to perform  his part of the contract and was entitled to the benefit of  Section 53-A  of the  Transfer of  Property Act, 1882. The tenancy rights thereby stood merged with the right as an  agreement-holder and that, therefore, the application

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for eviction did not lie. The Rent Control Court under those circumstances had  no jurisdiction to go into that question. We find no force in that contention.      So long  as the  agreement subsists,  it is settled law that the  lesser right  of tenancy  stood merged with larger rights accrued under the agreement. But unfortunately in the compromise itself  it was  recognised that the appellant was to pay arrears of rent till the date of compromise. In other words, the  appellants recognised  the reversion to his pre- existing rights  as tenant  upto the date of the compromise. In other  words, subject  to compliance  of the terms of the contract, his  tenancy rights  continued. The terms have not been complied with and the agreement came to amend. Thereby, the  appellant’s  pre-existing  rights  as  a  tenant  stood revived and  the appellant  and the respondent were bound by the relationship of landlord and tenant. Therefore, the Rent Controller was  entitled  to  proceed  with  the  matter  in accordance with  law. We  do not  say any  further since the matter is  pending before  the Rent  Controller. It would be open to  the appellant to raise all the defences open to him in the Rent Control proceedings.      The appeal is accordingly dismissed. No costs.