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PETITIONER: SUBHASH CHANDRA

       Vs.

RESPONDENT: MOHAMMAD SHARIT AND ORS.

DATE OF JUDGMENT19/12/1989

BENCH: SHARMA, L.M. (J) BENCH: SHARMA, L.M. (J) RAMASWAMI, V. (J) II

CITATION:  1990 AIR  636            1989 SCR  Supl. (2) 534  1990 SCC  (1) 252        JT 1989  Supl.    401  1989 SCALE  (2)1374

ACT:     Indian  Evidence  Act, 1872:  Section  116--Doctrine  of estoppel-Tenant’s denial of landlord’s title--Permissibility of--Title  derived by subsequent landlord can be  challenged but title of original landlord cannot be challenged.     M.P. Accommodation Control Act, 1961: Section  12--Evic- tion--Plea of estoppel by tenant--Permissibility of.

HEADNOTE:     The  respondents  claimed to be the owners of  the  suit property by virtue of a registered sale deed in their favour by  one Navinchand, who had purchased the property from  his predecessor-in-interest  Smt.  Raj Rani  on  11.8.1952.  The appellant’s father Misri Lal was her tenant.     In  1959 a suit was filed by Navinchand for eviction  of Misri  Lal, which was resisted by the tenant on  the  ground that  Smt. Raj Rani had earlier transferred the house  to  a Trust  and as such she could not later convey any  title  to Navinchand. The Trial Court rejected the defence, and passed a  decree  against  Misri Lal. Misri Lal  filed  an  appeal. During its pendency, the parties resolved their dispute,  by entering  into  a compromise. A deed Ext. P. 20  creating  a fresh  lease  in  favour of Misri Lal  under  Navinchand  as lessor, was executed w.e.f. 1.12.1962. A compromise petition Ex.  P.  21 was filed and the case decreed in terms  of  the compromise Ex. P. 22 Misri Lal continued to occupy the house till he died in 1972 leaving behind his son, the appellant.     A  fresh dispute started after Navinchand sold the  suit property  to the respondents-plaintiffs on 4.1.73, who  gave notice  of  the  sale to the appellant on  14.3.73.  As  the appellants refused to recognise them as owners, the respond- ents  terminated the tenancy and filed a suit for  ejectment against  the appellants. This suit was resisted on the  same old  plea  that Smt. Raj Rani having  transferred  the  suit property  to  a Trust was not competent  to  retransfer  the property  to Navinchand the vendor of the  respondents.  The trial  court  disbelieved the defence version  holding  that although  Smt. Raj Rani had executed a trust deed  in  1936, but  the same was not acted upon and that the trust did  not appear to have come into existence. The suit was accordingly decreed.

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535     On appeal, the first appellate court reversed the  above finding  and held that the defendant could not  be  estopped from challenging the title of the plaintiffs.     In second appeal, the High Court reversed the decree  of the First Appellate Court, and held that the defendants were estopped from challenging the decree, Ext. P. 22 which would bind  the parties since it was founded on a compromise,  and not  on  an  adjudication by the court on  the  question  of title.  It  also  observed that the statement  made  in  the compromise petition Ex. P. 21 in the earlier suit  supported the  case of the plaintiffs independently of the  compromise decree and that the defence plea had to be rejected in  view of the deed Ext. P. 20 creating a fresh lease.     In the appeal to this Court, it was contended on  behalf of the appellant that having regard to the limited scope  of a second appeal under section 100 C.P.C., the High Court was not justified in setting aside the finding of the  Appellate court on the question whether the property had been alienat- ed  in  1936  in favour of the trust  or  not,  that  having reached  a conclusion against the defendant on the basis  of the lease deed Ex. P. 20, the compromise petition Ex. P.  21 and  the  compromise decree Ext. P. 22, it should  not  have proceeded to decide the dispute relating to title on  merits on the basis of evidence.     It  was  further  contended  that  the  appellant/tenant cannot be estopped from challenging the derivative title  of the  plaintiffs  as he was not inducted into  the  house  by them. Dismissing the appeal, the Court,     HELD:  1.  The doctrine of estoppel  ordinarily  applies where the tenant has been let into possession by the  plain- tiff. Where the landlord had not himself inducted the tenant into  the disputed property and his rights are founded on  a derivative title, for example, as an assignee, donee,  vend- ee, heir, etc., the position is a little different. [539D]     2.  A  tenant already in possession  can  challenge  the plaintiff’s claim of derivative title showing that the  real owner  is  somebody else, but this is subject  to  the  rule enunciated  by section 116 of the Evidence Act,  which  does not permit the tenant during the continuance of the tenancy, to deny that his landlord had at the beginning of the tenan- cy a title to the property. The rule is not confined in  its application  to cases where the original landlord brings  on action for eviction. [539E] 536     3. A transferee from such a landlord also can claim  the benefit,  but  that will be limited to the question  of  the title  of the original landlord at the time when the  tenant was  let in. So far as claim of having derived a good  title from  the original landlord is concerned, the same does  not come under the protection of the doctrine of estoppel and is vulnerable  to a challenge. The tenant is entitled  to  show that  the  plaintiff has not as a matter of fact  secured  a transfer  from  the original landlord or  that  the  alleged transfer  is ineffective for some other valid reason,  which renders  the transfer to be non-existent in the eye of  law. [539F-G]     4.  In a case where the original landlord had the  right of  possession  and  was, therefore, entitled  to  induct  a tenant in the property but did not have any power of  dispo- sition,  the tenant can attack the derivative title  of  the transferee-plaintiff  but not on the ground that the  trans- feror-landlord who had initially inducted him in  possession did not have the right to do so. Since the impediment in the

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way  of a tenant to challenge the right of the  landlord  is confined to the stage when the tenancy commenced, he is  not forbidden to plead that subsequently the landlord lost  this right. These exceptions, however, do not relieve the  tenant of his duty to respect the title of the original landlord at the time of the beginning of the tenancy. [539H; 540A-B]     5.  The tenancy under section 116 does not begin  afresh every  time the interest of the tenancy or of  the  landlord devolves upon a new individual by succession or  assignment. [541E]     6. In the instant case, the acquisition of title by  the plaintiffs  from  Navinchand, if he be presumed  to  be  the rightful  owner,  is not impugned, that is,  the  derivative title  of  the plaintiffs is not under challenge.  What  the appellant  wants is to deny their title by  challenging  the title of their vendor Navinchand which he is not entitled to do. [540D]     7.  The appellant in the instant case does  not  contend that  Navinchand  had subsequently lost his  title  or  that there  is any defect in the derivative title of  the  plain- tiffs.  His  defence  is that Navinchand  did  not  own  the property at all at any point of time, and this he cannot  be allowed to do. He cannot be permitted to question his  title at  the time of the commencement of the tenancy  created  by Ext. P. 20. [541F]     Kumar  Krishna  Prasad Lal Singha Deo v.  Baraboni  Coal Concern  Ltd.  &  Ors., AIR 1937 P.C. 252;  Mangat  Ram  and Another  v. Sardar Meharban Singh and Others, [1987]  4  SCC 319; D. Satyanara- 537 yana v.P. Jagdish, [1987] 4 SCC 424 and Tej Bhan Madan v. 11 Addl.  District  Judge  & Ors., [1988] 3  SCC  137,  distin- guished.

JUDGMENT:     CIVIL APPELLATE JURISDICTION: Civil Appeal No. 10030  of 1983.     From the Judgment and Order dated 6.9.1983 of the Madhya Pradesh High Court in S.A. No. 475 of 1977. A.B. Rohtagi and S.K. Gambhir for the Appellant. V.M. Tarkunde and S.V. Deshpandey for the Respondents. The Judgment of the Court was delivered by     SHARMA, J. This appeal is directed against the decree of the Madhya Pradesh High Court for eviction of the  appellant from  a house after holding him to be the respondents’  ten- ant.  The appellant denied the title of the  plaintiffs  and their case that he has been in possession of the property as their tenant. The trial court accepted the plaintiffs’  case and passed a decree in their favour, which was set aside  on appeal  by the first appellate court. The decision  was  re- versed  by the High Court in second appeal by  the  impugned judgment.     2.  Admittedly the house which was in possession of  the defendant’s  father  Misri Lal as a tenant belonged  to  one Smt.  Raj Rani who sold the same on 11.8.1952 to the  plain- tiffs’ predecessor-ininterest, Navinchand Dalchand. In  1959 a  suit for his eviction was filed by Navinchand, which  was resisted on the ground that Smt. Raj Rani had earlier trans- ferred  the house to a trust and she, therefore,  could  not later  convey any title to Navinchand. The trial  court  re- jected  the defence and passed a decree against which  Misri Lal  filed an appeal. During the pendency of the appeal  the parties resolved their dispute amicably. Misri Lal  accepted

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the  title of Navinchand and a deed, Ext. P. 20, creating  a fresh  lease  in  favour of Misri Lal  under  Navinchand  as lessor, was executed with effect from 1.12.1962. The  appeal was  disposed of by recording this fact and stating  further that  the arrears of rent had been paid off. The  compromise petition and the decree have been marked in the present suit as  Ext. P-21 and Ext. P-22. Misri Lal continued  to  occupy the  house till he died in 1972 leaving behind his son,  the present  appellant,  as his heir and  legal  representative. Navinchand sold the suit property to the plaintiffs-respond- ents  on  4.1.1973, who sent a notice to  the  appellant  on 14.3.1973. Since the 538 appellant refused to recognise them as owners of the  house, another notice terminating the tenancy was served in January 1976  and  the present suit was filed in June  of  the  same year.     3. The appellant resisted the claim in the plaint on the same old plea which his father Misri Lal had  unsuccessfully taken in the earlier suit, namely, that Smt. Raj Rani having transferred  the disputed house to a trust in 1936  was  not competent  to  re-transfer it to  Navinchand  Dalchand,  the vendor of the plaintiffs-respondents. The trial court disbe- lieved  the defence version holding that although  Smt.  Raj Rani had executed a trust deed in 1936, but the same was not acted  upon and the trust does not appear to have come  into existence. On appeal the first appellate court reversed  the finding  and  further held that the defendant could  not  be estopped from challenging the title of the plaintiffs.     4.  It has been the case of the appellant that the  con- sent of Misri Lal to the compromise in the earlier suit  was obtained by force, but the plea was not substantiated by any evidence, and it has been pointed out by the High Court that the appellant admitted in his deposition that to his  knowl- edge  no  force had been used against Misri  Lal.  The  High Court further rightly rejected the argument that the decree, Ext. P. 22, would not bind the parties since it was  founded on  a compromise and not on an adjudication by the court  on the  question  of title. The court also  observed  that  the statements  made in the compromise petition, Ext. P. 21,  in the  earlier suit support the case of the  plaintiffs  inde- pendently of the compromise decree, and further, the defence plea  has  to be rejected in view of the deed, Ext.  P.  20, creating  a fresh lease. These findings were sufficient  for the  disposal of the appeal but the High Court proceeded  to consider  the  question whether Smt. Raj Rani  had  in  fact transferred the suit house in favour of a trust, and decided the issue against the appellant.     5.  The grievance of Mr. Rohatagi, the  learned  counsel for  the appellant, that in view of the limited scope  of  a second  appeal under s. 100 of the Code of Civil  Procedure, the High Court was not justified in setting aside the  find- ing  of  the  first appellate court on the  question  as  to whether the property had been alienated in 1936 in favour of the trust or not is well founded. After the court reached  a conclusion  against the defendant on the basis of the  lease deed,  Ext. P. 20, the compromise petition, Ext. P. 21,  and the  compromise decree, Ext. P. 22, it should not have  pro- ceeded to decide the dispute relating to title on merits  on the basis of the evidence. However, this error cannot help 539 the  appellant  unless he is able to successfully  meet  the effect of Ext. P. 20, Ext. P. 21 and Ext. P. 22.     6.  It  has been strenuously contended by  Mr.  Rohatagi that the principle that a tenant is estopped from  challeng-

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ing the title of his landlord is not available to the  land- lord’s  transferee in absence of attornment by  the  tenant. Reliance  was placed on Kumar Krishna Prosad Lal Singha  Deo v. Baraboni Coal Concern Ltd., and Others, A.I.R. 1937  P.C. 252;  Mangat  Ram and Another v. Sardar Meharban  Singh  and Others, [1987] 4 SCC 319; D. Satyanarayana v. P. Jagdish,  [ 1987]  4  SCC 424 and Tej Bhan Madan v.  11  Addl.  District Judge  and  Others,  [1988] 3 SCC 137, and  a  passage  from Halsbury’s Laws of England 4th Edn. Vol. 16, Paragraph 1628. The learned counsel strenuously contended that the appellant tenant  cannot be estopped from challenging  the  derivative title  of  the plaintiffs as he was not  inducted  into  the house  by them. He relied upon the comments of Sarkar on  s. 116 in his book on the Indian Evidence Act.     7.  It is true that the doctrine of estoppel  ordinarily applies where the tenant has been let into possession by the plaintiff.  Where the landlord has not himself inducted  the tenant  in the disputed property and his right, are  founded on  a derivative title, for example, as an assignee,  donee, vendee,  heir, etc., the position is a little  different.  A tenant  already in possession can challenge the  plaintiff’s claim  of  derivative title showing that the real  owner  is somebody else, but this is subject to the rule enunciated by s. 116 of the Evidence Act. The section does not permit  the tenant, during the continuance of the tenancy, to deny  that his landlord had at the beginning of the tenancy a title  to the property. The rule is not confined in its application to cases  where  the  original landlord brings  an  action  for eviction.  A transferee from such a landlord also can  claim the benefit, but that will be limited to the question of the title  of the original landlord at the time when the  tenant was let in. So far claim of having derived a good title from the  original landlord is concerned, the same does not  come under  the  protection of the doctrine of estoppel,  and  is vulnerable  to a challenge. The tenant is entitled  to  show that  the  plaintiff has not as a matter of fact  secured  a transfer  from  the original landlord or  that  the  alleged transfer  is ineffective for some other valid reason,  which renders  the transfer to be non-existent in the eye of  law. By way of an illustration one may refer to a case where  the original  landlord  had  the fight of  possession  and  was, therefore,  entitled to induct a tenant in the property  but did not have any power of disposition. the tenant in such  a case  can  attack the derivative title  of  the  transferee- plaintiff but not on 540 the  ground that the transferor-landlord who  had  initially inducted him in possession did not have the right to do  so. Further  since  the  impediment in the way of  a  tenant  to challenge the right of the landlord is confined to the stage when  the tenancy commenced, he is forbidden to  plead  that subsequently the landlord lost this right. These exceptions, however,  do not relieve the tenant of his duty  to  respect the title of the original landlord at the time of the begin- ning of the tenancy.     8.  Coming to the facts of the present case, it  may  be recalled  that fresh tenancy had been created in  favour  of Misri Lal, father of the present appellant, under Navinchand by  deed Ext. P. 20, and this fact was fully established  by the  decree, Ext. P. 22. The appellant, in the shoes of  his father,  is  as much bound by these documents as  Misri  Lal was,  and he cannot be allowed to deny the  relationship  of landlord  and tenant between Navinchand and himself. It  has not  been  the case of the appellant that  Navinchand  later lost the title or that he had transferred the same to anoth-

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er  person, nor does the appellant say that there  has  been any  defect  in  the sale-deed executed  in  favour  of  the present plaintiffs. In other words, the acquisition of title by  the plaintiffs from Navinchand, if he be presumed to  be the rightful owner, is not impugned, that is, the derivative title  of  the plaintiffs is not under challenge.  What  the appellant  wants is to deny their title by  challenging  the title  of their vendor Navinchand which is not  entitled  to do.     9.  None  of the decisions relied upon  by  Mr.  Rohtagi assists  him.  On  the other hand, the  judgments  in  Kumar Krishna Prosad Lal Singha Deo v. Baraboni Coal Concern  Ltd. and  Others,  AIR 1937 PC 25 1 and Tej Bhan Madan  v.  Addl. District  Judge  and Others, [1988] 3 SCC  137,  demonstrate that the plea of estoppel of the plaintiffs is well founded. The  Privy Council Case arose out of a suit for  realisation of  royalties  due on Coal raised by  the  lessee  defendant company. The original lease was granted by the father of the plaintiff,  the  Raja of Panchkote, in favour of  one  Radha Ballav  Mukherjee. The defendant was sued as  assignee.  The original lease contained a clause giving the lessor a charge for  royalties upon the collieries and its plant  which  was sought  to be enforced. Since there was some  dispute  about the ownership of the colliery, the defendant company by  way of abundant caution obtained a second assignment from anoth- er  source,  being the Official  Assignee.  The  plaintiff’s claim was denied by the company on the grounds that (i)  his father  the Raja was not the owner of the colliery  and  the company was in possession of the colliery as a lessee on the strength of the other assignment from the Official Assignee, 541 and  (ii)  the company, being merely a transferee  from  the original lessee Radha Ballav Mukherjee and not being  itself the original lessee, could not be estopped from  challenging the  Raja’s or his son’s title. While rejecting the  defend- ant’s stand the Privy Council observed thus:               "What  all  such persons  are  precluded  from               denying is that the lessor had a title at  the               date  of the lease and there is  no  exception               even for the case where the lease itself  dis-               closes the defect of title. The principle does               not  apply to disentitle a tenant  to  dispute               the derivative title of one who claims to have               since become entitled to the reversion, though               in  such cases there may be other  grounds  of               estoppel,  e.g., by attornment, acceptance  of               rent,  etc.  In this sense it is  true  enough               that  the principle only applies to the  title               of  the landlord who "let the tenant  in"  ’as               distinct from any other person claiming to  be               reversioner.  Nor does the principle apply  to               prevent a tenant from pleading that the  title               of  the original lessor has since come  to  an               end." The  expression  "derivative title" was  referrable  to  the plaintiff, and the Privy Council concluded by observing that the  case  did  not raise any difficulty as  there  was  "no dispute  as  to  the plaintiff’s  derivative  title".  While rejecting the argument on the basis that the company was not the original lessee and being merely an assignee was free to challenge the lessor’s title, it was said that "the  tenancy under  s. 116 does not begin afresh every time the  interest of  the tenant or of the landlord devolves upon a new  indi- vidual  by succession or assignment." The  circumstances  in the  case  before  us are similar. The  appellant  does  not

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contend  that Navinchand had subsequently lost his title  or that  there  is any defect in the derivative  title  of  the plaintiffs.  His defence is that Navinchand did not own  the property at all at any point of time, and this he cannot  be allowed to do. He cannot be permitted to question his  title at  the time of the commencement of the tenancy  created  by Ext. P. 20.     10.  In  Tej Bhan Madan v. 11 Addl. District  Judge  and Others, [1988] 3 SCC 137, the question was whether there was a  disclaimer  of the landlord’s title on the  part  of  the appellant-tenant  so as to incur forfeiture of the  tenancy. The  premises in question originally belonged to one  Shamb- hoolal Jain, who died leaving behind his wife, two sons  and a  daughter by the name of Mainawati. The property was  sold in  execution of a money decree and was purchased by  Maina- wati  in 1956. Mainawati conveyed the property to one  Gopi- nath Agarwal and the 542 appellant  who  was  in possession as  tenant  attorned  the tenancy  in his favour. Subsequently Gopinath sold the  same in  favour of the third respondent, Chhaya Gupta,  and  both Gopinath and Chhaya Gupta asked the appellant to attorn  the tenancy in favour of Chhaya Gupta. The appellant declined to do so and challenged not only the title of Chhaya Gupta  but also  the validity of the sale in favour of  Gopinath.  This led to the filing of the case for his eviction on the ground of disclaimer. It is significant to note that the foundation of  the proceeding for ejectment was the appellant’s  denial of  the  title of Gopinath in whose favour  he  had  earlier attorned  the tenancy, and not the challenge of the  deriva- tive  title of the third respondent. Overruling  the  objec- tions  of  the appellant, a decree for eviction  was  passed against him and his writ petition before the High Court  was dismissed. In this background he came to this Court and made an  argument similar to the one pressed in the  case  before us.  Rejecting  the appellant’s point, this  Court  observed thus:               "The stance of the appellant against the third               respondent’s  title was not on the  ground  of               any  infirmity or defect in the flow of  title               from  Gopinath,  but on the  ground  that  the               latter’s  vendor--Mainawati  herself  had   no               title.  The  derivative  title  of  the  third               respondent  is not denied on any ground  other               than  the  one that the  vendor,  Gopinath--to               whom  appellant had attorned--had  himself  no               title,  the  implication of which is  that  if               appellant  could  not have  denied  Gopinath’s               title  by  virtue of the  inhibitions  of  the               attornment,  he could not question  third  re-               spondent’s title either. Appellant did himself               no service by this stand." The case is clearly against the appellant. The above passage as  also  the last sentence in paragraph 4 of  the  judgment which  is mentioned below also indicates as to what  can  be termed  as a derivative title which a tenant may be free  to challenge:               "But  the appellant-tenant declined to  do  so               and assailed not only the derivative title  of               the third respondent to the property but  also               the validity of the sale in favour of Gopinath               himself."     11. In D. Satyanarayana v. P. Jagdish, [1987] 4 SCC 424, the Court was dealing with one of the exceptions to the rule of estoppel which permitted a sub-tenent:

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543               "to  show that since the date of  the  tenancy               the  title of the landlord came to an  end  or               that  he  was  evicted by  a  paramount  title               holder or that even though there was no actual               eviction  or dispossession from the  property,               under a threat of eviction he had attorned  to               the paramount title holder. The  facts were that the appellant was a sub-tenant  of  the tenantrespondent  and  the landlord served a notice  on  him terminating  the  tenancy of the  tenant-respondent  on  the ground  of  unlawful  subletting.  The  appellant  thereupon attorned in favour of the paramount title holder and started paying  the  rent  directly to  him.  The  tenantrespondent, thereafter,  commenced the eviction proceeding and a  decree was  passed  which was challenged before this Court  by  the appellant-tenant.  After  enunciating the  general  rule  of estoppel under s. 116 of the Evidence Act the Court  pointed out the exception where a tenant is evicted by the paramount title  holder  and is thereafter reinducted by him  under  a fresh  lease. Extending this exception to the  tenant’s  ap- peal, it was held that the rule applied where the tenant can show:               "That even though there was no actual eviction               or  dispossession from the property,  under  a               threat  of  eviction he had  attorned  to  the               paramount title holder." The  decision is patently not applicable to the case  before us.  In Mangat Ram and Another v. Sardar Meharban Singh  and Others,  [1987] 4 SCC 319, the principle decided was  stated in the following words:               "The  estoppel contemplated by s. 116  is  re-               stricted  to the denial of title at  the  com-               mencement of the tenancy and by implication it               follows  that  a tenant is not  estopped  from               contending  that the title to the  lessor  had               since come to an end." The  Lahore case is also clearly distinguishable. After  the death  of  the lessor her daughters claimed  rent  from  the tenants. The tenants disputed their derivative title and the court  held  that though the tenants would not  dispute  the title  of the mother at the commencement of the lease,  they were  entitled  to  challenge the derivative  title  of  the plaintiffs  and  that the daughters had to  prove  that  the property  was Sridhan of their mother which  they  inherited under the Hindu Law. The principle was correctly  enunciated there, but that does not help 544 the  appellant at all. To the same effect are the  following observations  in Halsbury’s Laws of England 4th  Edn.,  Vol. 16, paragraph 1628 relied upon by Mr. Rohatgi:               "Thus although an assignee of the lessor is to               all intents and purposes in the same situation               as the lessor, and takes the benefit of and is               bound  by a lease by estoppel, the  lessee  is               not estopped from showing that the lessor  had               no such title as he could pass to the  assign-               ee,  or  that the person claiming  to  be  the               assignee is not in fact the true assignee."               (emphasis supplied) The  significance  of the words which have  been  underlined above has to be appreciated for correctly understanding  the principle enunciated.     11.  For the reasons mentioned above, we hold  that  the appeal has no merit and is accordingly dismissed with costs.

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N.V.K.                                         Appeal   dis- missed. 545