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CASE NO.: Appeal (civil)  336 of 2004

PETITIONER: Pramod Kumar Jaiswal and Others

RESPONDENT: Bibi Husn Bano and Others

DATE OF JUDGMENT: 03/05/2005

BENCH: CJI R.C. Lahoti

JUDGMENT: J U D G M E N T  

R.C. Lahoti, CJI.

I have gone through the judgment proposed by brother  P.K. Balasubramanyan, J.  I find myself in agreement with the  conclusion arrived at by him and also with the reasonings  assigned by him excepting for his opinion formed on the case of  Nalakath Sainuddin v. Koorikadan Sulaiman (2002) 6 SCC  1, with which opinion I have not been able to pursuade myself to  agree and in that regard I am constrained to record my separate  opinion.  

       The decision of two-Judges Bench of this Court in Indra  Perfumery v. Moti Lal & Ors. (1969) 2 SCWR 967 was not  brought to the notice of the two-Judges Bench deciding  Nalakath Sainuddin’s case (supra); else the former decision  would have certainly received consideration of the Court in the  latter case.  I propose to deal with these two cases.

       With respect to the learned Judges who decided Indra  Perfumery’s case (supra), I have certain comments to offer on  the case.  It is a brief judgment which does not deal with the law  in-depth.  The impact of Section 109 of the Transfer of Property  Act has not been considered.  The doctrine of merger, well- accepted and well-established, has also not received the  consideration of the Court in its expanse and then applied to the  facts of the case.  A very brief statement of law is to be found  contained in para 4 thereof and therein the Court has said that  Section 111(d) of the Transfer of Property Act has no  application, unless the interest of the lessor and the lessee in the  whole of the property is vested in the same person.  The Court  has gone on to observe that the appellant is the ’owner’ of the  house and  is also a ’tenant’ of a part of the house of which the  respondents were tenants from Mohd. Shafi.   

       If one were to agree with the principle so propounded,  certain anomalous consequences will follow, as can be  demonstrated.  The facts of  Indra Perfumery’s case show  that M was the owner of the house which was let out in its  entirety to T.  T sub-let a part of the house to IP, the sub-tenant.   IP purchased the interest of M, the owner, in the whole of the  property and, therefore, IP stepped into the shoes of M.  If M  would have filed a suit for recovery of possession against T on  determination of the latter’s lease, then, in that suit T would  have been impleaded as a defendant and IP could also have  been joined as additional defendant being a sub-tenant in

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possession of a part of the tenanted premises.  Whether IP was  joined as a party to the suit or not, the estate vesting in IP being  subordinate to the estate of T, in the execution of decree of  eviction passed against T, M would have been entitled to evict T  and IP both.  Ever since the date of purchase by IP, M can  neither determine the tenancy of T nor file a suit for eviction  against him as he has lost the title in the property which title has  come to vest in IP.  The only person who can determine the  tenancy and claim recovery of possession is IP inasmuch as the  whole of the interest in whole of the property has come to vest  in IP by purchase.  Now, if IP were to file a suit for eviction  against T, would IP, the plaintiff also join IP itself as an  additional defendant?  Or, would it be the requirement of law  that IP, in its capacity as sub-tenant, must first deliver  possession to T, the tenant and then, the tenant must deliver  possession to IP itself in its capacity as owner?  This is what will  follow if we were to agree with the observation made by the  learned Judges in Indra Perfumery case (supra) that, "the  appellant is the owner of the house, it is also a tenant of a part  of the house of which the respondent are tenants from Mohd.  Shafi".

       The conclusion drawn in Indra Perfumery’s case (supra)  would have been different if only the attention of the learned  Judges would have been invited to Section 109 of the Transfer of  Property Act and the doctrines of ’statutory attornment’ and of  ’merger’ with all the ramifications.  This was done in Nalakath  Sainuddin’s case.  It has been clearly held on a detailed  examination of all the relevant statutory provisions and the  doctrine of merger : -  

(i)     that merger is founded on the principle that two estates  \026 one larger and one smaller cannot \026 and need not \026  coexist, if the smaller estate can in equity, and must in  law, sink or merge into the larger estate. One cannot be  an owner and sub-lessee both at the same time.  The  smaller estate of sub-tenancy shall sink or drown into  the larger estate of ownership as the two cannot co- exist;

(ii)    that Section 109 of the TP Act does away with the need  for consensual attornment.  The attornment is brought  about by operation of law.  The limitation on the right of  the landlord against splitting up of the integrity of the  tenancy, inhering in the inhibitions of his own contract,  does not visit the assignee of the part of the reversion.   The severance of the reversion and the assignment of  the part so severed do not need the consent of the  tenant. [See \026 Mohar Singh (dead) by LRs v. Devi  Charan & Ors., (1988) 3 SCC 63]

       Ownership of the property which is the subject matter of  tenancy is certainly a larger estate than the tenancy itself and  naturally larger than the sub-tenancy.  If the sub-tenant  acquires the entire interest of the owner in the whole of the  estate forming the subject matter of sub-tenancy, the sub- tenancy merges into ownership and the estate of sub-tenant  stands enlarged into that of a full owner.  The sub-tenant cannot  be the owner and the sub-tenant both at the same time.  Of  course, the situation would have been different if the sub-tenant  would not have acquired the entire estate of the owner or the  ownership interest in the entire estate forming subject matter of  sub-lease, as was the case in Badri Narain Jha & Ors. v.  Rameshwar Dayal Singh & Ors. AIR 1951 SC 186 or in  Shaikh Faqir Bakhsh v. Murli Dhar & Ors. AIR 1931 PC 63.   

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In the case of Nalakath Sainuddin the sub-tenant had  acquired not a share only of the landlord-owner’s estate nor an  ownership in only a part confined to sub-tenancy premises; what  he had acquired under the deed dated 12-9-1988 was the full  ownership in the entire premises.  The right of reversion, vesting  in the erstwhile owners, had come to vest fully and entirely in  the sub-tenant.

In my humble opinion Indra Perfumery case (supra) was  not correctly decided and does not lay down the correct law.   Subject to this much opinion only, which I am placing on record  as my view and which is in divergence with the view expressed  by my learned brother P.K. Balasubramanyan, J., I am in  agreement that the appeal has no merit and deserves to be  dismissed confirming the order of the High Court.