1. The dispute in this second appeal relates to a shop, situate in Ambala City. It appears that it was divided into two portions, which had been given separate numbers by the Municipal Committee of that place. The smaller portion was numbered 6456A, while the bigger portion bore No. 6457. This shop was owned by Deep Chand and his brother Mitter Sain in equal shares. Shop No. 6456-A was given on rent to Takhat Singh by the said owners. Similarly, Prem Chand was in possession of Shop No. 6457 as a tenant under the owners. Prem Chand filed an application before the Rent Controller for fixing the fair rent of his shop and also under Section 10 of the East Punjab Urban Rent Restriction Act for carrying out certain repairs etc., in the said shop. This application was still pending, when in the meantime, the owners decided to dispose of this property. Accordingly, on 25th October, 1961, Mitter Sain entered into an agreement for sale of his half share in the shop with Prem Chand and on 30th October, 1961, by a registered deed, he actually sold his share to Siri Kishan Dass, brother-in-law of Prem Chand, for Rupees 2,000/-. Similarly on 26th October, 1961, Deep Chand made an agreement with Takhat Singh to sell his half share in the said shop to him and on 30th October, 1961, he sole the same to him for Rs. 2,000/-. In July, 1962, Takhat Singh brought a suit, out of which the present second appeal has arisen, against Prem Chand and Siri Kishan Dass, defendants Nos. 1 and 2, for possession by partition of his half share in the shops, bearing Nos. 6456A and 6457. His allegations were that the real purchaser of the other half in the said two shops was Prem Chand, but the sale deed had been got executed by him in favour of his brother-in-law Siri Kishan Dass in order to harm the plaintiff. The agreement of sale was also effected by Mitter Sain in favour of Prem Chand and the sale consideration was also paid before the Sub Registrar by defendant No. 1. Siri Kishan Dass was merely a Benamidar for defendant No. 1. As Prem Chand had started making alterations and additions in the property to the prejudice of the plaintiff, that had necessitated the filing of the suit.
2. The suit was resisted by both the defendants. Prem Chand admitted that he was a tenant of the shop bearing No. 6457, but he denied that he had purchased the half share in the two shops from Mitter Sain. According to him, it was Siri Kishan Dass, who had bought the share of Mitter Sain in the said two shops. He pleaded that he being the tenant under the original owners of the property, could not be ejected therefrom otherwise than in due course of law in accordance with the provisions of the East Punjab Urban Rent Restrict Act. Siri Kishan Dass filed a separate written statement, in which he stated that it was he, who had purchased the half share in the two shops from Mitter Sain. According to him, Prem Chand was not a necessary party to the suit. He averred that the plaintiff could not under the law take the plea that he was merely a Benamidar.
3. On the pleadings of the parties, the following issues were framed:--
'1. Is defendant No. 2 a Benamidar for defendant No. 1? If it is so, what is its effect?
2. Has the plaintiff no locus standi to raise the plea of Benami as referred to in issue No. 1?
3. Whether the plaintiff can obtain actual possession as against the tenant?
4. If issue No. 1 is proved, where the defendant still retains his character as a tenant of the property and its effect?
5. Has the plaintiff no locus standi to file the suit as per preliminary objection in para No. 3 of the written statement of defendant No. 2?
6. Is the property in dispute incapable of partition and its effect?
7. What are the shares of the parties in the property in dispute?'
4. The trial Judge, under issue No. 1, held that the shop in dispute was in fact purchased by Prem Chand and the sale-deed was not executed in the name of Siri Kishan Dass, who was a Benamidar for defendant No. 1. Under issue No. 2, his finding was that since the said sale affected the plaintiff's rights, he was entitled to show the real character of the said transaction, even though he was not a party to that sale. As regards issue No. 3, it was held that the question as to whether the plaintiff could obtain actual possession of his half share in the two shops as against the tenant, would be determined during the execution proceedings. Under issue No. 4 his finding was that so far as the half share in the property was concerned, there was a merger of the rights of Prem Chand as an owner and a tenant, but there could not be a merger in respect of the portion, of which he was not the owner. His character as a tenant with respect to the remaining property, other than his share therein, would not be affected, he being a tenant of more than half share in the entire shop, which was as already mentioned above, divided into two portions. Under issue No. 5, the finding was that the plaintiff had locus standi to file the suit. As regards issue No. 6, it was held that it would be for the Local Commissioner, who would be appointed to partition the property, to consider as to whether or not it was capable of partition. Under issue No. 7, it was conceded that the plaintiff and defendant No. 1 were entitled to one-half share each in the property. As a result of these findings, the learned judges passed a preliminary decree for partition against both the defendants. It was directed that the shops would be partitioned into two equal shares and one Mr. Brij Bhushan Gupta was appointed a Commissioner for effecting the partition and it was stated that it would be for him to consider 'whether it would be at all desirable to effect the partition or auction of a share would be more convenient'. The defendants were also burdened with the costs of the suit.
5. Against this decision, two appeals were filed one by Prem Chand and the other by Siri Kishan Dass before the learned Additional District Judge, Ambala. The learned Judge came to the conclusion that the plaintiff, not being a party to the sale-deed in favour of Siri Kishan Dass, had no locus standi to raise the plea that defendant No. 2 was a Benamidar for defendant No. 1. A third party, according to the learned Judge, could not take up this point. In view of this finding on issue No. 2, the learned Judge was of the view that the question of his deciding issue No. 1 did not arise, but still in order to avoid a remand, he gave his decision on issue No. 1 as well and affirmed the finding of the Court below thereon and held that defendant No. 2 was a Benamidar for defendant No. 1. As regards issue Nos. 3 and 4, his decision was that in view of his finding on issue No. 2, the question of the merger of the rights of tenancy of Prem Chand with his rights of ownership did not arise. Even if it be assumed that Prem Chand was in fact the real purchaser of the property, yet unless it was shown that he intended to merge his tenancy rights with his rights of ownership, his former rights could also be deemed to have remained alive and separate from his latter rights. The burden of proof, according to the learned Judge, was on the person, who alleged merger of the rights of tenancy with those of ownership and there was no evidence on the record of this case to show that Prem Chand had ever showed any intention to merge his rights of tenancy with his ownership rights in the half share of the property, which was purchased by him subsequently. The result, according to the learned Judge, was that his rights of tenancy remained separate from his rights of ownership in the half share of the shop, even after it was purchased by him from Mitter Sain. It was conceded before the learned Judge by the counsel for Prem Chand that the Plaintiff had a right to get his share of property partitioned, but while doing so, the rights of tenancy of Prem Chand had to remain intact. The learned Judge also found that no case had been made out for burdening the defendants with costs of the suit. As a result of these findings, the two appeals were partly accepted and the judgment and decree of the trial Court were modified and the plaintiff was granted a preliminary decree for possession of half share of the property in dispute by partition with a direction that the rights of tenancy of Prem Chand defendant No. 1 would remain unaffected. The parties were left to bear their own costs throughout. Against this decision, the present second appeal has been filed by Takhat Singh.
6. The first question for decision in this case is whether the plaintiff had no locus standi to raise the plea regarding the Benami nature of the sale made by Mitter Sain in favour of Siri Kishan Dass and urge that the vendee was Benamidar for Prem Chand.
7. This question, which was covered by issue No. 2, was decided in favour of the plaintiff by the trial court by observing:
'The counsel for the defendant has urged that the question of sale as between the co-defendants is a matter of their concern, with which the plaintiff has nothing to do. So far as the defendant's interests are concerned, it is correct that they can treat the sale in favour of anybody they choose to but if the sale affects the plaintiff's rights, I do not see why he is not entitled to show the real character of the document. x x x x x
Parties to a document are debarred from saying that the document is in fact different from one it purports to be but third persons are not.'
8. It may be stated that the learned Judge in making these observations did not rely either on some statutory provision or any decided case bearing on the point. The learned Additional District Judge, on appeal, had, however, reversed this finding of the trial Court by referring to two decisions--one of the Madras High Court and the other by the Supreme Court. The learned Judge had, in his judgment, clearly stated that no authority taking a different view had been cited at the bar by the counsel for the plaintiff.
9. In Ramaswamy Chettiar v. Adaikkammai, AIR 1960 Mad 341, Ramaswami, J., after referring to a number of decisions, at page 343 observed:--
'Thirdly there are cases where the real owner chooses to allow the benamidar to figure as the owner and there is no controversy between them but third parties defendants raise the plea of benami. In such cases it has been held that such persons should not be allowed to challenge the benamidar's position.
The sum and substance of all the decisions is that if the real owner repudiates the benamidar and asserts his own rights, different considerations arise and he is to be added as co-plaintiff but a sale deed cannot be challenged by a person who is no party to it when apart from the untrue recital as to consideration there was no other flaw in the transaction. In other words, unless a benami transaction is manifestly illegal or fraudulent or opposed to public policy no third party is entitled to question the title of the benamidar.'
10. In Sree Meenakshi Mills Ltd. Madurai v. Commr. of Income-tax Madras, AIR 1957 SC 49, it was held at page 67, that the question regarding the Benami transaction of a sale could arise between a party to a deed and another who is eo nominee not a party to it but claims to be beneficially entitled to the properties conveyed by the said deed.
11. It would, thus, be seen that both the authorities, referred to above, do support the respondents. Learned counsel for the appellant before me also could not cite any ruling taking a different view and supporting the observations of the trial Court. As at present advised, therefore, I would affirm the finding of the lower Appellate Court on this point.
12. In view of this finding, undoubtedly, no other question will arise for decision in this case. But assuming for the sake of argument that it be held that the plaintiff had locus standi to raise the plea that the sale in favour of Siri Kishan Dass was Benami and the real purchaser of the property was Prem Chand, then the other question has to be determined as to whether or not it was a fact that Siri Kishan Dass was only a Benamidar for Prem Chand.
13. This, undoubtedly, is a question of fact and the Courts below have given a concurrent finding, after referring to the evidence produced on the point and the circumstances of the case, that defendant No. 2 was a Benamidar for defendant No. 1. This finding has not been shown to be vitiated by any error of law and the same is, consequently, binding in second appeal.
14. After it is held that Siri Kishan Dass was only a Benamidar and the real purchaser of the property was Prem Chand, the next question that would call for decision would be as to what would be the effect of this finding on the case. There is no denying the fact that Prem Chand was a tenant of a larger portion of the shop in question, whereas he had purchased only half share therein. Under these circumstances, would his tenancy rights in the property come to an end after the sale in his favour? Learned counsel for the appellant submitted that after the sale the tenancy rights of Prem Chand would be determined by virtue of the provisions of Sections 111(d) of the Transfer of Property Act, which read:
'A lease of immovable property determines:-- x x x x x (d) in case the interests of the lessee and the lessor in the whole of the property become vested at the same time in one person in the same right.'
15. The trial Judge, as already mentioned above, was of the view that so far as the half share in the property was concerned, there was a merger of the rights of Prem Chand as an owner and a tenant, but there could not be a merger in respect of the portion for which he was not an owner and to that extent, he still retained his character as a tenant of the property. That character, according to him, was not affected by the sale in question. The learned Additional District Judge, however, came to the conclusion that unless it was shown that Prem Chand intended to merge his rights of tenancy with those of ownership in the property, his tenancy rights would be deemed to have remained alive and separate from his right of ownership. He was further of the opinion that in the present case, there was no evidence on the record to show that Prem Chand ever had any intention to merge his rights of tenancy with his rights of ownership in his half share in the property.
16. The principle of merger, undoubtedly, is derived from the provisions of Section 111(d) of the Transfer of Property Act, which have been quoted above. In the first place, it is common ground that the whole of the Transfer of Property Act as such has not been applied to the State of Punjab. In any case, the provisions of this section have not been made applicable to this State. Secondly, even if this provision can be availed of by the plaintiff, yet the present case would not be covered by it, for, admittedly, the interests of the lessee and the lessor in the whole of the property have not become vested at the same time under one person in the same right. I am saying this, because, concededly Prem Chand was a tenant in more than half share of the property, while he had purchased only half share therein. Moreover, it is not a case where somebody was a tenant of the whole property and he had subsequently purchased the same. In other words, he was not a tenant of both the shops (Nos. 6456-A and 6457) and he had not bought them from Deep Chand and Mitter Sain. Thirdly, it has to be held as to what the intention of Prem Chand was at the time of purchase of the half share in the property, when he was a tenant in more than his share therein. The question to be answered, in these circumstances, would be as to whether he intended to keep his tenancy rights alive when he acquired the ownership rights in the property. A Division Bench of this Court in M/s. Gian Chand Sham Chand v. M/s. Rattan Lal Kishen Kumar, 1963 Cur LJ 377, held:
'That Section 111 of the Transfer of Property Act has no application to this State and the provisions of this section have never been applied as a rule of equity, justice or good conscience.
The result, therefore, would be that in case where merger is pleaded apart from the provisions of Section 111 of the Transfer of Property Act, it will have to be determined in each case as to what was the intention of the owner of the bigger estate. Did he intend to keep the smaller estate alive or did he intend at the time when he acquired the bigger estate that the smaller estate should merge and be wiped out?.'
17. Similarly, in a Supreme Court decision in Jyotish Thakur v. Tarakant Jha, AIR 1963 SC 605, it was observed:
'While the union of the superior and subordinate interests will not automatically cause a merger, merger will be held to have taken place if the intention to merge is clear and not otherwise. In the absence of any express indication of intention, the Courts will proceed on the basis that the party had no intention to merge if it was to his interest not to merge and also if a duty lay on him to keep the interests separate. In deciding the intention of the party the Court will have regard also to his conduct.'
18. On the question of intention, the learned Additional District Judge has found that there was no evidence on the record to show that Prem Chand ever showed any intention to merge his rights of tenancy with his ownership rights in the half share of the property, which was purchased by him later on and that being so, his rights of tenancy remained separate from his rights of ownership in even that share of the property, after its purchase from Mitter Sain. The onus of proving that there was such a merger, was on the plaintiff, who was so alleging. Needless to say that a person is presumed to intend that which is for his benefit and in the present case, it was to the advantage of Prem Chand that he should keep his tenancy rights in more than half share in the property alive and distinct from his ownership rights in half of the shop in question. This apart, there is positive evidence on the record that his intention was not to merge the two rights. The agreement to purchase this property was entered into by him on 25th October, 1961, Mitter Sain, as already mentioned above, but the sale deed was executed in favour of his brother-in-law Siri Kishan Dass on 30th October, 1961. He did not purchase the property in his own name, presumably because he intended to safeguard his tenancy rights and keep them distinct and separate, because he knew that if he himself bought the property, an argument might be raised by the plaintiff that after the said purchase, his two rights had merged under Section 111(d) of the Transfer of Property Act. It was perhaps with that intention that the sale was purposely made in favour of his brother-in-law Siri Kishan Dass. I would, therefore, agree with the finding given by the learned Additional District Judge that Prem Chand intended to keep his tenancy rights alive, when he acquired ownership rights in the property and those rights have to remain unaffected, even when the plaintiff gets a preliminary decree for possession of his half share in the property by partition. It is, however, understood that the tenancy rights can be put an end to in due course of law in accordance with the provisions of the East Punjab Urban Rent Restriction Act.
19. Learned Counsel for the appellant relied on a Single Bench decision of this Court in Ram Sarup v. Chanan Singh, 1964 Punj LJ 49, where it was held:
'A tenant settled by one of the co-sharers on joint land can by no stretch of imagination become ipso facto the tenant of the other co-sharers, however, it is open to the other co-sharers to adopt such tenant by their own act or conduct. Where the tenant was settled by one of the co-sharers on the joint land and the joint land was partitioned, held, partition decree binds the tenant as much as it binds his landlord, and such tenant is liable to be evicted in execution of the partition decree.'
20. In the first place, this authority has no application to the facts of the present case. Secondly, it would be noticed that in this ruling, the tenant was settled by one of the co-sharers on the joint land, but, in the instant case, Prem Chand was inducted on the premises by both the owners of the shop, namely, Deep Chand and Mitter Sain.
21. Learned counsel also referred to a Single Bench decision of the Rajasthan High Court in Bhoori Lal v. Gehri Lal, AIR 1967 Raj 22, where it was observed:
'A merger of interest as envisaged in Section 111(d) of Transfer of Property Act is brought about when any estate or property becomes vested at the same time in the same person in the same right. In such a case a smaller interest has been carved out of a larger interest and at a subsequent stage the interest so carved out and the remaining interests out of the original subsequently stand combined in the hands of one person so that the two interests put together fall in one piece to constitute the old interest in its entirety. The underlying principle is that a person cannot at the same time be a lesser and lessee of the same property.'
22. This decision again is of no assistance to the appellant, because, among other things, Prem Chand was a lessee of a larger portion of the shop, while he had purchased only half share therein.
23. Reference was then made to a Bench decision of the Allahabad High Court in Reoti Saran v. Hargu Lal, AIR 1964 All 542.
24. This authority again does not apply to the present case, because, apart from anything else, therein the tenant had purchased the entire property of which he was the tenant, which is not the position in the case in hand.
25. In view of what I have said above, I would dismiss this appeal, but in the circumstances of this case, however, leave the parties to bear their own costs in this Court as well.
26. Appeal dismissed.