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J.J. Pancholi Vs. Sridharjee and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtAllahabad High Court
Decided On
Case NumberCivil Revn. No. 129 of 1981
Judge
Reported inAIR1984All130
ActsTransfer of Property Act, 1882 - Sections 105, 106 and 111
AppellantJ.J. Pancholi
RespondentSridharjee and ors.
Appellant AdvocateRama Devi Gupta, ;Sripat Narain Singh and ;Gyan Prakash Srivastava, Advs.
Respondent AdvocateR.N. Bhalla and ;Sri Dhar, Advs.
DispositionRevision partly allowed
Excerpt:
.....can be gathered from explicit acts of the parties - held, there was an implied surrender of the lease rights by the defendants prior to the lease in favor of the company. (ii) tenant at sufferance - section 106 of transfer of property act, 1882 - tenancy of defendant no.1 terminated by notice under section 106 - tenant becomes tenant at sufferance - the status of tenant at sufferance is not more than that of a trespasser. - - the suit for ejectment was contested on the ground that the suit was bad for nonjoinder of necessary parties as other sons and daughters of kundari had not been brought on the record. in the circumstances, we find her subsequent version unreliable. we hold that he very well knew about the taking of the leases and ms conduct unequivocally shows that the old..........and two daughters. km. pushpa pancholi. defendant no. 4 and smt. hira tewari. after his death, the cinema business was carried on by defendants nos. 1, 2 and 4.5. on 23-4-1975 sri p.k. ghosh, the secretary of the chintamani ghosh trust which is managing the plaintiff deity sri kalyan kumar ghosh, defendant no. 1, sri v.k. pancholi, defendant no. 2 sri j. l. pancholi and defendant no. 4 km. pushpa pancholi floated a private limited company in the name of plaza theatres (p.) ltd. for the purpose of carrying on the cinema business. ex. 5 is the memorandum and articles of association of plaza theatres (p.) ltd. this company was duly incorporated on 14th may, 1975. ex. 4 is the certificate of incorporation.6. on 18-7-1975 the premises in suit were leased to the company. ex. 6 is the lease.....
Judgment:

O.P. Saxena, J.

1. This is a revision under Section 25 of the provincial Small Cause Courts Act against the judgment and decree dated 28-2-81 passed by the Learned II Additional District Judge. Allahabad decreeing the suit for recovery of arrears of rent, ejectment and damages for use and occupation along with interest at the rate of 12% per annum on the amount of pendente lite and future damages.

2. The dispute relates to premisesNo. 24/35 Mahatma Gandhi Marg. Allahabad, more commonly knownas Plaza Theatres. Apart fromthe accommodation in use for the cinemaon the ground floor, first floor andsecond floor, there is a residential portion in the second floor.

3. The plaintiff is the landlord of the premises in suit, Sri J. P. Pancholi was the lessee of the premises. On 29th March, 1965 a lease deed was executed whereby the premises in suit were let out to Sri J. P. Pancholi on a rental of Rupees 1100/- for a period of 10 years. The lease was to continue up to 28th March, 1975.

4. On 18-9-1974 Sri J. P. Pancholi died. He left behind three sons, Sri V.K. Pancholi, Sri J. J. Pancholi and Sri L. K. Pancholi. defendants Nos. 1, 2 and 3 respectively and two daughters. Km. Pushpa Pancholi. defendant No. 4 and Smt. Hira Tewari. After his death, the cinema business was carried on by defendants Nos. 1, 2 and 4.

5. On 23-4-1975 Sri P.K. Ghosh, the Secretary of the Chintamani Ghosh Trust which is managing the plaintiff deity Sri Kalyan Kumar Ghosh, defendant No. 1, Sri V.K. Pancholi, defendant No. 2 Sri J. L. Pancholi and defendant No. 4 Km. Pushpa Pancholi floated a Private Limited Company in the name of Plaza Theatres (P.) Ltd. For the purpose of carrying on the cinema business. Ex. 5 is the Memorandum and Articles of Association of Plaza Theatres (P.) Ltd. This Company was duly incorporated on 14th May, 1975. Ex. 4 is the Certificate of Incorporation.

6. On 18-7-1975 the premises in suit were leased to the Company. Ex. 6 is the lease deed duly executed on behalf of the lessor by Sri P.K. Ghosh and Sri V.K. Pancholi, the Managing Director of the Company on behalf of the lessee. The premises in suit were let out for a period of one year on a rental of Rs. 1250/- per mensem.

7. There was loss in the running of the business of the Private Limited Com-panv and it could not continue.

8. On 14-10-76 defendant No. 1 Sri V.K. Pancholi took the lease of the premises in suit. Ex. 7 is the lease deed dated 14-10-76 executed by Sri P.K. Ghosh on behalf of the lessor and Sri V.K. Pancholi, the lessee. The premises in suit were taken for the period from1-8-1976 to 31-8-1977 on a rental of Rs. 4,375/- per mensem. On the same date the same parties executed another agreement where by Sri V.K. Pancholi agreed to pay the rent for the period from 1-4-1975 to 31-3-1970 at the rate of Rs. 3,000/- per mensem and for the period from 1-4-1976 to 31-7-1970 at the rate of Rs. 4375/- per mensem. He was allowed the benefit of paying the arrears in instalment of Rs. 1500/- per mensem.

9. On 23-9-1977 plaintiff filed the suit for recovery of Rs. 97,790/- as arrears of rent and damages for use and occupation for a period from 1-4-1975 to 31-7-1977 and interest at 12% per annum on the amount due up to 30-6-1977 eviction of the defendant and pendente lite and future damages for use and occupation at the rate of Rs. 4375/- per mensem for the period from 1-3-1977 to the date of possession. The suit was filed only against defendant No. 1, Sri V. K, Pancholi. It was said that the defendants was in arrears of vent since 1-4-1975, that a notice to quit was duly given on 20-7-1977 and that the defendant neither paid the rent nor vacated the premises in suit.

10. On 9-1-1979 defendants Nos. 2 to 4 gave application paper No. 51-Ga for being impleaded. The application was allowed on 7-7-1979. On 15-11-1979 the plaintiff gave application paper No. 41-Ga for amendment of the plaint impleading defendants Nos. 2 to 4 and making some further allegation in the plaint. The application was allowed on 14-12-1979. It was alleged that the defendants Nos. 1, 2 and 4 and one more person floated a private Limited. Company in the name of plaza Theatres (P) Ltd.. that the Company was duly incorporated on 14th May, 1975, that the defendants surrendered the lease of the premises in suit in favour of the plaintiff, that on 18-7-1975 a fresh lease was entered into between the plaintiff and the Company plaza Theatres (P) Ltd., that the Private Limited Company could not continue for long and defendant No. 1 Sri V.K. Pancholi, the Managing Director of the Company surrendered the lease in favour of the plaintiff, that on 14-10-1976 he entered into a fresh lease with the plaintiff and that as such the plaintiff filed the suit only against defendant No. 1.

11. The suit was contested by defendants NOS. 2 and 3 with the allegationsthat they inherited the rights of the lessee from their father Sri J. P. Pancholi, that they are the lessees of the premises in suit on a rental of Rs. 1100/-per mensem, that they never surrendered their lessee rights in the premises in favour of the plaintiff, that the lease deed executed by defendant No. 1 in favour of the plaintiff is collusive and not binding on the defendants, that they are not liable to pay enhanced rent at the rate of Rs. 4,375/- per mensem. that the plaintiff is entitled to get rent from 1-4-1975 onwards at the rate of Rs. 1260/-per mensem, that defendant No. 2 has got licence in his name and that he is residing with his family in the residential portion of the premises.

12. Defendants Nos. 3 and 4 Sri L. K. Pancholi and Km. Pushpa Pancholi save applications papers NOS. 67-ga dated 23-9-1980 and 50-ga dated 19-3-1980. It was prayed that their names may be deleted from the array of defendants and they may be exempted from any liability for payment of the arrears of rent and costs of the suit.

13. The learned trial court accepted the plaintiff's version regarding the surrender of the lease by the defendants and held that defendant No. 1 alone was the lessee of the premises in suit. He further accepted the plaintiff's version regarding the arrears of rent and liability to ejectment. He found that defendants Nos. 3 and 4 are not in possession and that defendant no. 1 is in possession of the premises in suit. As far as the possession of defendant No. 2 is concerned, he held that he is jn possession as trespasser having no right, title or interest therein. He further held that the lease of defendant No. 1 had been duly determined by a notice under Section 106 of the Transfer of Property Act. He decreed the suit for recovery of Rs. 97,790/- and pendente lite and future damages at the rate of Rs. 4375/- per mensem with costs against defendant No. 1. He decreed the suit for eviction against defendants NOS. 1 and 2. He directed that the damages for use and occupation for the period accruing after the date of the judgment would be paid by defendants 1 and 2 at the rate of Rs. 4375/- per mensem. He further directed defendant No. 2 to pay half costs of the suit to the plaintiff. Defendants 3 and 4 were exempted from the claim and the costs of the suit. Hence this revision by defendant No. 2.

14. Smt. Rama Devi Gupta, learned counsel for the applicant submitted that the trial court erred in accepting the plaintiffs' version regarding surrender. According to her the heirs of the Late Sri J. P. Pancholi never surrendered their rights of lessee in the premises in suit. Defendant No. 2 continued to remain in possession of the residential portion of the premises. He is also the Manager of the cinema. He is not bound by the lease deed dated 14th October 1976 executed by the plaintiff and defendant No. 1 Sri V.K. Pancholi. The document of surrender has not been proved and the trial court should have refused to accept the plaintiff's version in his regard and should have dismissed the suit for eviction on the ground that no notice had been served on defendant No. 2.

15. Sri Raja Ram Agarwal, learned counsel for the plaintiff opposite party submitted that the document of surrender remained in possession of defendant No. 1 Sri V.K. Pancholi who was the Managing Director of the Company. It was said that the whereabouts of Sri V.K. Pancholi are not known since October 1978 and as such the document could not be summoned or produced before the trial court. He placed reliance on the secondary evidence of P. W. 1 Sri K. K. Ghosh. He submitted that it was a case of implied surrender by conduct and a creation of new relationship of lessor and lessee between plaintiff and defendant No. 1. Defendant No. 2 is in possession of the residential portion of the premises in suit as the Manager of the cinema and his possession shall be deemed to be on behalf of defendant No. 1. He has no rights or interest of his own and is liable to be evicted along with defendant No 1.

16. We have carefully considered the submissions made before us. Section 111(f) of the T. P. Act provides for the determination of a lease of immovable property by implied surrender. If a lessee accepts a new contract of tenancy, it operates as surrender of old tenancy for a lease cannot be granted unless the old tenancy is surrendered. Such a surrender takes place by operation of law. The cases of Upendra Singh v. Megh-nath Singh, AIR 1939 Patna 598. Muhammad Ibrahim v. Bani Madhab : AIR1952Cal196 and Velu v. Lekshmi AIR1953 Trav Co. 584 may be referred to.

17. An implied surrender can be inferred from unequivocal conduct of both the parties : See para 1862 on page 362 of the law of landlord and tenant by Wood-fall 1968 edition. The case of Bundoo v. Akbar Ali, 1978, All LJ 215 (decided by one of us, Mr. Justice K. C. Agarwal) may be referred to. It was held that under Section 111 a tenant can surrender his rights expressly or impliedly. On the death of a tenant, his widow and three sons claimed themselves as the tenants of the property in dispute and the landlord also accented the said position by making a claim of rent from these persons. In view of the above it is not possible to uphold the contention that a daughter of the deceased was also one of the heirs and legal representative of the deceased and since she had not been impleaded as a party in the suit for ejection the same was liable to be dismissed.

18. The above case was followed in the case of Smt. Madhubala v. Smt. Budhiya : AIR1980All266 . One Kundan was the tenant of the property in suit. After his death Smt. Budhiya and son Hari Ram continued to reside in the premises. The landlord save a notice under Section 106 of the T. P. Act to the mother and the son. The suit for ejectment was contested on the ground that the suit was bad for nonjoinder of necessary parties as other sons and daughters of Kundari had not been brought on the record. The trial court decreed the suit and rejected plea of non-joinder. The lower appellate court allowed the appeal and dismissed the suit for eject-ment on the ground of non-joinder of the other brothers and sisters of Hari Ram. In the second appeal reliance was placed on the case of Bundoo v. Akbar Ali. It was held (para 12) :--

''The principle laid down in the case of Bundoo and Ramesh Chand Bose (supra) (1978 All LJ 215 and : AIR1977All38 ) is not disputed. These cases will, however, not conclude the matter as the question of implied surrender was not considered in both these cases. The view taken by the lower appellate court that the suit is bad for non-ioinder of other heirs of Kundan is clearly erroneous in law.'

19. Sri J. P. Pancholi was a lessee of the premises in suit in pursuance of the lease dated 29th March, 1965. Thelease was for a period of 10 years. Sri J. P. Pancholi, however, died on 18-9-1974. Defendants NOS. 1. 2 and 4 continued the cinema business until the floating of the Private Limited Company on 23rd April 1975 vide Ex. 5. Defendant No. 3 had no concern with the cinema business and he had nothing to do with the lease either during the lifetime or after the death of his father. Defendants Nos. 1, 2 and 4 shall be deemed to have continued in possession as lessees holding over with the assent of the lessor till the formation of the Plaza Theatres (P.) Ltd. Ex. 5 is the Memorandum and Articles of Association of Plaza Theatres (P.) Ltd. paragraph 129 provided that Sri V.K. Pancholi shall function as the Managing Director. Ex. 4 is the Certificate of Incorporation. Ex. 6 is the lease dated 18th July 1975 executed by defendant No. 1 Sri V.K. Pancholi as the Managing Director of the Plaza Theatres (p.) Ltd. in favour of the plaintiff for a period of one year from 18th July1975. The plaintiff's case is that it was in June 1975 that the defendants expressly surrendered the lease in favour of the plaintiff and it was after this that a new lease dated 18th July 1975 was executed by defendant No. 1 in favour of the plaintiff.

The original document of surrender could not be produced as it was in possession of Sri V.K. Pancholi who was the Managing Director of the Plaza Theatres (P.) Ltd. Co. The fact, however, remains that the defendants Nos. 1. 2 and 4 promoted the Private Limited Company and defendant No. 1 Sri V.K. Pancholi obtained a fresh lease . from the plaintiff as the Managing Director of the Company. D. W. 2 Sri J. J. Pan-choli was one of the Directors of the Company. He stated that he was one of the promoters and Sri V.K. Pancholi was the Managing Director. It is difficult to accept his version that he did not surrender the old lease when he his brother and sister formed a Company for carrying on the cinema business. His statement shows that the plaintiff filed a suit against Sri V.K. Pancholi, the Managing Director of the Company, that he did the pairvi of the case and that it was compromised. He admitted that Sri V.K. Pancholi. as the Managing Director of the Company, surrendered the tenancy. Ex. 7 is the lease dated 14-10-1976 executed by Sri V.K. Pan-choli in his individual capacity in favour of the plaintiff.

As the Manager of the cinema business, carried on bv Sri V.K. Pancholi after the closure of the Company, he should have known that a fresh lease had been executed by Sri V.K. Pancholi. It is not his case that he and Sri V.K. Pancholi jointly ran the business after the closure of the Company. Without any interest in the business except as a Manager, he could not be interested in the lease at the rate of Rs. 4375/- per mensem. He lived in the residential portion as a Manager and neither sought an apportionment nor paid any rent.

20. Defendant No. 3 Sri L. K. Pancholi gave an application paper No. 67-ga to the effect that he had no concern whatsoever either with the lease of the premises in suit or with the cinema business and that he gave the landlord in writing that he had no interest in the tenancy rights of the premises in suit and if by any implication of law any right accrued to him, he never claimed the same.

21. Defendant No. 4 gave an application paper No. 56-ga in which it was said that she and her brothers surrendered the lease of the premises in suit in favour of the plaintiff and thereafter a fresh lease was executed in favour of the Plaza Theatres (P.) Ltd. that as the Company could not carry on the business, it surrendered the lease in favour of the plaintiff and that thereafter defendant No. 1 Sri V.K. Pancholi alone obtained the lease. Defendant no. 4 Km. Pushpa poncholi subsequently disowned the application. Reference may be made to para 20 of her application paper No. 93-Ka. It was said that during the continuance of the suit Sri V.K. Pancholi had obtained her signatures on some blank papers and it appeared that he gave those papers to the pairo-kar of the plaintiff who defrauded the court by using the same without her knowledge and consent. The. truth is. however, otherwise. Paper No. 21-ga is the joint power of three lawyers, namely. Sri Ram Charan Das, Sri Radha Pandey and Sri P.N. Srivastava filed on behalf of defendants 2 to 4. This power was filed along with application paper No. 51-ga whereby defendants 2 to 4 had applied for being impleaded. Paper No. 42-ga dated 7-12-1979 is theapplication by Km. Pushpa Pancholi informing the court that she retained Sri P.N. Srivastava alone as her counsel. This application was signed by Km. Pushpa Pancholi and Sri P.N. Srivastava. On 3-80 (sic) the application paper No. 56-ga was moved under the signatures of Km. Pushpa Pancholi and Sri P.N. Srivastava. Advocate. Her subsequent version appears to have been set up as an afterthought to get over the admission of surrender of tenancy made in paper No. 56-ga. In the circumstances, we find her subsequent version unreliable.

22. There is thus the conduct of defendants 2 and 4 which shows that the defendants had surrendered the old lease in favour of the plaintiff.

23. The conduct of defendant No. 2 in promoting a new Company in the name of Plaza Theatres (P.) Ltd. for running the cinema business and acquiescing in the taking of a new lease by defendant No. 1 Sri V.K. Pancholi as the Managing Director of the Company and also in the taking of a new lease by defendant No. 1 Sri V.K. Pancholi along after the surrender of the lease in favour of the Company as the Managing Director, shows that the old lease had been surrendered. He was closely associated with the cinema business as a Director of the Plaza Theatres (P.) Ltd. during the period the business was carried on by the Company and also as the Manager of the cinema business carried on by Sri V.K. Pancholi alone and we are unable to accept his plea of ignorance regarding the leases obtained by Sri V.K. Pancholi. We hold that he very well knew about the taking of the leases and Ms conduct unequivocally shows that the old lease had been surrendered.

24. We are thus of the opinion that the trial court rightly held that there was an implied surrender of the lessee rights by the defendants prior to the lease in favour of the Company.

25. Smt. Rama Devi Gupta next submitted that the trial court has held that defendant No. 2 is a trespasser and as such the suit for possession could not be filed on the small cause side. Sri Raia Ram Agarwal urged that after the amendment of Article 4 of second Schedule of provincial Small Cause Courts Act, by U. P. Act No. XXXVII of 1972. a suit by a lessor for the eviction of a lessee from a building after the deter-mination of his lease and for recovery of compensation for use and occupation of that building could be filed on the small cause side.

26. The plaintiff filed the suit originally against defendant No. 1 and defendants Nos. 2 to 4 were impleaded on their request. After the surrender of the old lease by the defendants a lease had been granted in favour of the company and thereafter in favour of defendant No. 1 alone. His tenancy was duly determined by a notice under Section 106 of the T. P. Act, He became a tenant at sufferance thereafter. A tenant at sufferance is no better than a trespasser. Defendant No. 2 was the Manager of Plaza Theatres. The business was run by defendant No. 1 alone. Defendant No. 2 was in permissive possession of the residential accommodation as the Manager of the Cinema. As he was in possession with the permission of defendant No. 1, the sole tenant, his possession was also that of a trespasser. A suit for eviction of the tenant and any one in possession on his behalf after a notice under Section 106 of the T. P. Act lies on the small cause side. We are unable to accept the contention of Smt. Rama Devi Gupta and hold that the suit was maintainable on the small cause side.

27. Smt. Rama Devi Gupta next submitted that as the lease was of a running Cinema business, the suit was not triable on the small cause side. She placed reliance on the case of Pooran Chand v. Prabat Kumar : AIR1979All58 . In that case reliance was placed on two Supreme Court decisions. In the case of Uttam Chand v. S. M. Lalwani : AIR1965SC716 . the Supreme Court considered the definition of 'accommodation' as given in Sec. 3(a)(y) (3) of the M. P. Accommodation Control Act and held that a lease of Dall Mill Building could not be said to be in respect of an 'accommodation' as defined in the Act, In the case of Dwarka Prasad v. Dwarka Das : [1976]1SCR277 the Supreme Court considered the definition of 'accommodation' as given in Section 2 (aa) of U. P. Act 3 of 1947 and held that a lease in respect of a lucrative theatre with expensive cinema equipment could not be in respect of 'accommodation' as defined in the Act. Sri Raia Ram Agrawal submitted that all these cases are distinguishable as in this case there was no lease of a running Cinema business and the costly cinema equipment in thenature of projector, generator and screen were not the subject matter of lease. He referred to the lease deed Ex. 7 in support of his contention.

28. We have carefully considered the submissions made before us and we find merit in the submission of Sri Raja Ram Agarwal. There was no lease of the costly cinema equipment namely the projector, the generator and the screen. Applying the test of 'dominant intention of the parties' it would appear that there was only a lease of cinema building and not a lease of 'a lucrative theatre with expensive cinema equipment' as in the case of Dwarka Prasad (supra) or 'the right to run the Cinema New Taj Talkies' as in the case of Pooran Chand. These cases are obviously distinguishable. The suit for eviction could be filed on the small cause side and we are unable to accept the contention of Smt. Rama Devi Gupta.

29. Smt. Rama Devi Gupta lastly submitted that defendant No. 2 was not a party to the lease deed Ex. 7 dated 14-10-1976 and he could not be saddled with the liability of payment of damages for use and occupation at the enhanced rate of Rs. 4375/- per month. According to the averments made in para 18 of the written statement fled by defendant no. 2. the plaintiff could not claim more than Rs. 1260/- per mensem. It was said that the trial court should have fixed the liability of defendant No. 2 for damages for use and occupa-tion for the period after the judgment at the rate of. Rs. 1260/-. In the stay order passed on 27-3-1981 this Court granted a conditional stay of the eviction of defendant No. 2. After adiusting the sum of Rs. 23,383/- paid by Cheques, defendant No. 2 was directed to deposit Rs. 66075/- as damages for use and occupation for the period from 1-4-1975 to 31-3-1931 and Rs. 1260/- per mensem for the neriod from 1-4-1981 onwards. Plaintiff was permitted to withdraw the amount deposited. Defendant No. 2 has regularly made the deposit and we consider it but just and proper that defendant No. 2 should be made liable to pay damages for use and occupation at the rate of Rs. 1260/- per mensem.

30. No other point was pressed.

31. The revision is partly allowed. The judgment and decree passed by the trial court are modified to the extent that apart from the amount deposited by defendant No. 2 and withdrawn or withdrawable by the plaintiff in pursuance of the stay order dated 27-3-1981, the defendant No. 2 would be liable for damages for use and occupation for the period, following the period up to which the deposit has been made, at the rate of Rs. 1260 per mensem. Defendants Nos. 1 and 2 are given two months time to vacate the premises. The rest of the judgment and decree are confirmed. The stay order is vacated. The costs of the revision shall be easy.


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