1. (On difference of opinion between Venkataraman and Maharajan, JJ.) :-- The suit property which, is situated within the City of Madras originally belonged to one Murugesa Mudaliar. By a settlement deed dated 17-4-1941 he gave a life interest in it in favour of his wife Gnanambal and after her death to his daughter Kamalammal for life with the vested remainder in favour of sons of Kamalammal. Both the life interest holders Gnanambal and Kamalammal were prohibited from alienating the property or in any way encumbering the same except under certain circumstances which have not arisen in this case Gnanambal the first life estate holder leased the suit site in favour of the defendant-respondent herein sometime in the year 1950. There is a dispute as to the exact extent of the land leased but that is not material for the purpose of disposal of this case. After obtaining the lease the tenant had put up a superstructure thereon and had been in possession and enjoyment of the same. Gnanambal filed an ejectment suit No. 246 of 1962 on the file of the Court of Small Causes, Madras, against the tenant. It appears that the tenant claimed his right under Section 9 of the Madras City Tenants Protection Act, 1921 (Act 3 of 1922) (hereinafter called the Act) for purchasing the site on which he had constructed the superstructure. Pending this suit, Gnanambal died on 26-9-1963. Kamalammal was brought on record as legal representative of Gnanambal but she did not proceed with the suit and withdrew the same with liberty to file a fresh suit. Thereafter she filed an ejectment suit No. 8012/67 against the respondent here in and that suit was dismissed for lack of notice terminating the tenancy. In the meanwhile subsequent to the death of Gnanambal the respondent was paying the rent in respect of the suit site to Kamalammal. The present suit was filed by Kamalammal after notice terminating the tenancy for ejectment.
2. In this suit the Defendant-Respondent filed M. P. 1855 of 1968 under Section 9 of the Act praying for a direction to Kamalammal to sell the suit site to him. The present petition arises from this suit. It was the case of the plaintiff-petitioner herein that the tenancy created by Gnanambal came to an end with her death on 26-9-1963 that subsequent to her death at the request of the respondent she agreed and entered into a fresh agreement of tenancy on a monthly rent of Rs. 10/- and since the tenancy was subsequent to 1955 the provisions of the Act are not applicable to the same. It was the case of the Respondent that he was a tenant under Gnanambal, that after her death he was paying the rent to Kamalammal. the petitioner herein, but there was no fresh tenancy agreement between the petitioner and the respondent. It was contended by him that he continued to be a tenant under the original tenancy agreement entered into by him with Gnanambal in the year 1950 and that therefore he is entitled to the protection under the Act and has a right of purchase under Section 9 of the Act. The trial Court decreed the suit. But the lower appellate Court dismissed the suit holding that the respondent is entitled to claim a right of purchase under Section 9 of the Act. Hence the plaintiff has filed the present revision petition.
3. The matter came up for hearing before a Division Bench consisting of Venkataraman and Maharajan, JJ. Since the learned Judges have differed, the matter has been referred to me under Clause 36 of the Letters Patent. In the order of reference, the learned Judges have pointed out that the ultimate point on which they have differed was on the question whether the plaintiff Kamalammal can be directed to sell to the defendant the required extent of the land under Section 9 (3) of the Act. In addition to this point, the learned Judges have referred also the following questions and required an answer as they have differed on those points as well:
I. Is the plaintiff, who does not claim title through her mother, Gnanambal, and not bound by the tenancy agreement between Gnanambal and the defendant, bound under Section 9 of the Act to convey absolute title to the land in favour of the Defendant ?
II. Did a fresh tenancy arise between Kamalammal and the Defendant in 1963 after the death of Gnanambal either expressly or by implication of law?
III. If a fresh tenancy arose in 1963. can the defendant claim the right to purchase the required extent of land under Section 9 (3) of the Act from the plaintiff Can such a purchase pass to the defendant the plaintiff's life interest under the settlement deed of 17-7-1941. (Ex. R-l) and the vested remainder given to the plaintiff's children under the deed ?
IV. Though Gnanambal, under whom the defendant became a tenant before the relevant date under Section 1 (3) of the Act (1955), was only a life tenant under the settlement deed of 17-7-1941 will the defendant be entitled to exercise the right of purchase of the land (the existing life interest of the plaintiff and the vested remainder of her children) from the plaintiff, Kamalammal, under Section 9 of the Act, for the various reasons given by Maharajan. J. ?
4. Before discussing the reasoning of the learned Judges, I would like to consider the issues with reference to the provisons of the Act and the relevant decided cases. As the relevant provisions of the Act have been quoted in extenso in the judgments of the learned Judges, I refrain from quoting the same. The Act is applicable in respect of tenancies created prior to 12-9-1955. According to the petitioner though the tenancy under Gnanambal was in the year 1950 since she had only interest in the suit site that tenancy came to an end on her death in 1963. The petitioner was not claiming any right, title or interest in the suit property under Gnanambal and her life estate is derived by her directly under the deed executed by her father and that therefore the tenancy, agreement with Gnanambal was neither valid nor could be enforced as against the petitioner. Even if the express agreement of tenancy with the petitioner subsequent to the death of Gnanambal as pleaded by her had not been established the payment of rent by the respondent and acceptance of the same by the petitioner subsequent to the death of Gnanambal amounted to a fresh tenancy and not a continuation of the earlier tenancy created by Gnanambal and that therefore the Act was not applicable. Alternatively, it was contained on behalf of the petitioner that since the tenancy under Gnanambal shall be deemed to have come to an end on her death in 1963 thereafter there was no landlord and tenant relationship which would make the respondent a tenant within the meaning of the Act. Further Gnanambal and even the petitioner were only haying life interest in the suit site and if it is to be held that there was a tenancy agreement they could be directed to sell under Section 9 only their life interest and not the full ownership in the lands which they did not possess and that the tenant who purchased the same could only get ownership in the land terminable on the death of the life estate holder.
5. The first question, therefore to be considered is whether the petitioner is bound by the tenancy agreement entered into between Gnanambal and the respondent and whether a fresh tenancy between the petitioner and the respondent could be inferred by reason of the payment of the rent by the Respondent and acceptance of the same by the petitioner. Though the first Ejectment Suit No. 246 of 1962 was filed even during the lifetime of Gnanambal, it is not known whether she terminated the tenaney before filing the suit. But the case has proceeded on the assumption that the tenancy was not for any particular period and that it continued till her death in 1963. Section 111(c) of the Transfer of Property Act provides:--
"A lease of immovable property determines--
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(c) where the interest of the lessor in the property terminates on, or his power to dispose of the same extends only to, the happening of any event by the happening of such event;"
Gnanambal had only a life interest in the suit property and as such that interest had terminated on her death. Obviously therefore, the tenancy created by Gnanambal came to an end on her death, in order to determine the legal position of the tenant subsequent to her death, it is necessary to note the provisions contained in Section 116 of the Transfer of Property Act. Under that Section, if a lessee remains in possession after the determination of the lease granted to him and the lessor or his legal representative accepts the rent from the lessee or otherwise assents to his continuing in possession, the lease is renewed from year to year or from month to month, as the case may be. Normally. on the termination of a tenancy, the lessor would be entitled to evict the tenant and obtain possession, but the lessor and the lessee may agree to enter into a fresh tenancy agreement and create new rights and liabilities. The Section implies mutual agreement between the parties to create such a fresh tenancy, if the conditions mentioned therein are satisfied. If the lessee thereafter remains in possession after the termination of the lease granted to him, he should tender the rent payable and that rent should have been accepted by the lessor or his legal representative. The tender of rent by the lessee remaining in possession after the determination of the lease implies a desire and an offer on the part of the lessee to continue as such. It was open to the lessor to reject that offer if he so chooses and demand possession, and on the failure to give possession file a suit for ejectment and recover possession. But if he chooses to accept the rent, such acceptance amounts to a consent of the lessor for the lessee continuing as such and a fresh tenancy, therefore, results under the implied agreement of the parties. Therefore, normally in all cases where the tenant holds over with the consent of the landlord, a fresh tenancy between the parties is created. The situation would be different in cases where the lessee, even after the termination of the tenancy, is entitled to continue in possession by virtue of any immunity from eviction conferred by any statutory provision. In such a case, any offer of rent by the tenant after the termination of the lease, unless there is any evidence to show a contrary intention, is in exercise of his right to remain in possession, and the acceptance of the rent by the landlord would not amount to acceptance of a fresh tenancy, because in view of the statutory protection available to the tenant, the landlord would have no option but to receive the rent. Even in cases where there is an immunity from eviction for tenant, there may be a fresh tenancy agreement entered into between the parties. In such a case, such express agreement will create a fresh tenancy from such date. The conduct of the parties may also be such as to imply a mutual agreement to create a fresh tenancy. If a new tenancy is pleaded, it will have to be decided with reference to the evidence available. In this connection, I may refer to one decision of the Supreme Court, which considered the earlier decisions. In Bhawanji v. Himatlal , the question for consideration was whether there was any fresh tenancy agreement by a lessee continuing to remain in possession paying rent, and the acceptance of the same by the lessor. The Supreme Court observed at page 821.
"A distinction should he drawn between a tenant continuing in possession after the determination of the term with the consent of the landlord and a tenant doing so without his consent. The former is a tenant at sufferance in English Law and the latter a tenant holding over or a tenant at will. In view of the concluding words of Section 116 of the Transfer of Property Act, a lessee holding over is in a better position than a tenant at will. The assent of the landlord to the continuance of possession after the determination of the tenancy will create a new tenancy. What the section contemplated is that on one side there should be an offer of taking a new lease evidenced by the lessee or Sub-lessee remaining in possession of the property after his term was over and on the other side there must be a definite consent to the continuance of possession by the landlord expressed by acceptance of rent or otherwise".
In meeting an argument that the assent of the lessor alone, and not that of the lessee was material for the purpose of Section 116 of the Transfer of Property Act, the Supreme Court further observed:
"Learned Counsel for the appellants argued that whenever rent is accepted by a landlordfrom a tenant whose tenancy has been determined, but who continues in possession, a tenancy by holding over is created. The argument was that the assent of the lessor alone and not that of the lessee was, material for the purposes of Section 116, We are not inclined to accept this contention. We have already shown that the basis of the Section is a bilateral contract between the erstwhile landlord and the erstwhile tenant, if the tenant has the statutory right to remain in possession, and if he pays the rent, that will not normally be referable to an offer for his continuing in possession which can be converted into a contract by acceptance thereof by the landlord. We do not say that the operation of Section 116 is always excluded whatever might be the circumstances under which the tenant pays the rent and the landlord accepts it. We have earlier referred to the observations of this Court in Ganga Dutt Murarka v. Kartik Chandra Das, regarding some of the circumstances in which a fresh contract of tenancy may be inferred. We have already held the whole basis of Section 116 of the Transfer of Property Act is that, in case of normal tenancy, a landlord is entitled, where he does not accept the rent after the notice to quit, to file a suit in ejectment and obtain a decree for possession, and so his acceptance of rent is an unequivocal act referable only to his desire to assent to the tenant continuing in possession. That is not so where Rent Act exists; and if the tenant says that landlord accepted the rent not as statutory tenant but only as legal rent indicating his assent to the tenants continuing in possession, it is for the tenant to establish it. No attempt has been made to establish it in this case and there is no evidence, apart from the acceptance of the rent by the landlord, to indicate even remotely that he desired the appellants to continue in possession after the termination of the tenancy. Besides, as we have already indicated, the animus of the tenant in tendering the rent is also material. If he tenders the rent as the rent payable under the statutory tenancy, the landlord cannot, by accepting it as rent, create a tenancy by holding over. In such a case the parties would not be id idem and there will be no consensus."
It follows, therefore, that where there is a statutory immunity from eviction and there is no evidence to show that the parties intended to create a fresh tenancy, the provisions of Section 116 of the Transfer of Property Act could not be invoked in support of a fresh tenancy on the termination of the earlier tenancy.
6. In this case, we have the following facts: Gnanambal filed a suit in ejectment even during her lifetime. The tenant filed an application under Section 9 of the Tamil Nadu City Tenants (Protection) Act 1922, claiming a right of purchase of the suit site. Certainly, therefore, the tenant had shown his desire to exercise his right to continue in possession under the Act, Therefore, even if the tenancy had been terminated during the lifetime of Gnanambal, and Gnanambal continued to receive the rent after the termination of the tenancy, the relationship between Gnanambal and the tenant subsequent to the determination could not be said to arise under a fresh tenancy agreement. The position will be the same if the tenant had paid any rent to any legal representative of Gnanambal.. So far as Kamalambal is concerned it is an a fortiori case. As I have already pointed out, Kamalammal does not claim any right through her mother Gnanambal, but she claims it independently under the grant made by her father. The question, therefore, is whether the payment of rent by the defendant subsequent to the death of Gnanambal and acceptance of the rent by the petitioner would amount to a fresh tenancy. I am unable to accept the contention of the learned counsel for the petitioner that this amounted to a fresh tenancy agreement between the petitioner and the respondent. As already stated the tenant was claiming the right under the Tamil Nadu City Tenants (Protection) Act, 1922 to purchase the site even during the lifetime of Kamalammal. In fact, even in the petition filed by Kamalammal, the petitioner herein, in Ejectment Suit No. 8012 of 1967, the Respondent had claimed the right of purchase under Section 9, though the Suit was ultimately dismissed for lack of notice terminating the tenancy. In these circumstances, the Respondent would not have consciously offered the amount as by way of rent in order to create a new tenancy. Even if the petitioner had accepted the amount as rent as if under a new tenancy agreement, since parties could not be said to be id idem on the respective characters on which they are paying the rent and receiving it, there could not be any fresh tenancy between the petitioner and the respondent after the death of Gnanambal. I am, therefore, of the opinion that there was no fresh tenancy agreement, express or implied between the petitioner and the Respondent subsequent to the death of Gnanambal.
7. The next point that will have to be considered is whether the rights under the tenancy could have been claimed against the petitioner herein as she was not the person who granted the lease. The relevant portion of Section 2 (4) of the Tamil Nadu City Tenants (Protection) Act which defines "tenant" reads as follows:
" 'Tenant' in relation to any land--
(i) means a person liable to pay rent in respect of such land, under a tenancy agreement express or implied, and
(a) any such person as is referred to in Sub-clause (i) who continues in possession of the land after the determination of the tenancy agreement."
The respondent in this case was a person liable to pay the rent under the tenancy agreement between Gnanambal and himself. That tenancy agreement had come to an end but he continues in possession of the land after the termination of the tenancy agreement. On a plain reading of the Section, the respondent would satisfy the definition in Section 2 (4) of the Tamil Nadu City Tenants (Protection) Act, 1922. Venkataraman. J., was of the view that the tenancy agreement referred to in this clause was one with a landlord as defined in Section 2 (b) of the Act, and unless the landlord, who tries to evict the tenant, is the same person, who entered into the tenancy agreement or his legal representative, the provisions of Section 2 (4) would not apply to such a person. With great respect to the learned Judge, I am unable to agree with this view. Though Section 2 (4) (ii) (a) of the Act refers to "any such person as is referred to in Sub-clause (i)", it is descriptive of the original character as a tenant under a tenancy agreement and the later portion of the clause relates to such a person continuing in possession of the land after the determination of the tenancy agreement. Subsequent to the determination of the tenancy agreement, there would not be any liability to pay "rent". Much less the same is payable under the tenancy agreement, express or implied. If therefore, the construction placed by Venkataraman J. is to be adopted even where the right is claimed as against the landlord who originally created the tenancy, the tenant would not be able to satisfy the definition "after the determination of the tenancy agreement". Further, the Section itself does not require that the tenancy agreement should be with the landlord against whom the right is claimed. Section 3, which provides for payment of compensation on ejectment, does not also require that the right should be claimed only as against the landlord. It only states that every tenant shall on ejectment, be paid as compensation the value of any building, which may have been erected by him. This section does not say that he will be entitled to compensation for the value of the building only as against the landlord. Any person trying to evict him would be liable to pay the compensation to him provided the tenant had entered into possession under a lawful tenancy agreement and continued to remain in possession after the determination of the tenancy agreement. Though the definition of the word "tenant" requires a legally valid tenancy agreement for entering into possession and making him liable to pay the rent, once he becomes a tenant under a tenancy agreement created before the Act, whoever be the person who tries to evict him would be liable to pay the compensation. In a way, this view is supported by a decision of this Court in Abdul Khadir v. Rajagopala Pandaravar 1956-1 MLJ 34. That was a case arising under the Tanjore Tenants and Pamayal Protection Act, 1952. "Cultivating tenant or "tenant" is defined in that Act as meaning "a person who contributes his own physical labour on that of the members of his family in the cultivation of any land belonging to another, under a tenancy agreement, express or implied, and includes the heirs of such person, but shall not include a mere intermediary or his heirs," "Land owner" is defined in Section 2 (g) of the Act as meaning "the owner or other person deriving rights under him, who lets land for cultivation by a tenant and includes the assignees, heirs, other legal representatives of such owner or person deriving rights under him." The question for consideration was whether a receiver appointed in a summary suit who had leased the lands, will come within the definition of the landlord, and the person, who had taken the lease a tenant entitled to the benefits under the Act. Considering the question whether they are the cultivating tenants or not with reference to the requirement of holding under a tenancy agreement, express or implied, the learned Judges observed that it only means that the tenants are not cultivating as trespassers or as owners. They were also of the view that the definition does not require that such tenancy agreement must be with the land owner as defined in Section 2 (g). In support of their view, they also relied upon a decision in K. P. A. D. Charities Nachiarkoil v. Chinnaswami .
8. I am, therefore, of the opinion that in order to claim the benefits under the provisions of the Act, the tenant need not have entered into a tenancy agreement with the person who actually sues to evict him. It is enough if he had entered into the possession of the land under a lawful tenancy agreement.
9. The next question that arises for consideration is as to whether the respondent is entitled to the benefits under Section 9 of the Tamil Nadu City Tenants (Protection) Act. and if so, what is the quantum of interest that he would be entitled to be conveyed. Since the respondent-tenant in this case would be entitled to a compensation under Section 3 of the Act, and a suit against him for ejectment has been instituted, he would, in my opinion, be entitled to purchase the land as provided under that Section. Of course, the Section requires that the suit should have been instituted or proceedings under Section 41 of the Presidency Small Cause Courts Act, 1882, taken by the "Landlord". The "Landlord" is defined to mean "any person owning any land, includes every person entitled to collect the rent of the whole or any portion of the land", The petitioner as a life estate holder is entitled to collect the rent in respect of the land. It is pertinent to point out that his right to collect the rent need not be by virtue of any tenancy agreement between him and the tenant, as would be clear from a reading of the definition itself. Therefore, the petitioner would be liable to be directed to convey to the tenant the extent of the land for which the price was fixed. But the more important question is what is the quantum of, interest that could be conveyed or directed to be conveyed under that provision.
10. Sub-section (3) of Section 9 of the Act requires the Court to pass an order "directing the conveyance of the land by the landlord to the tenant", of the extent of the land for which the price was fixed. There is an Explanation to this provision, which defines the "land", and that reads as follows:--
"Explanation.-- "Land" means the interest of the landlord in the land and all other interests which he can convey under any power and includes also the full interest which A trustee can convey under the power possessed by him to convey trust property when necessity exists for the same or the alienation of the property is for the benefits of the estate or trust .
What is conveyed, therefore, is that interest of the landlord and all other interests which ho can convey under any power, but not the absolute interest in the land itself. On a plain reading of Sub-section (3) of Section 9, I have no doubt that what that section requires to be conveyed and what the Court could direct to convey is the interest of the landlord in the land, and not anything more or less. This is clearly in consonance with the general law that no man can transfer a greater right or interest than he himself possesses. The section also is not concerned with the rights of the original landlord, who entered into the tenancy agreement with the tenant. The order of the Court directs only the landlord, who is a party to the proceeding and, therefore, whatever right the landlord, who is a party to the proceeding, could convey, that entire interest alone could be directed to be conveyed, and that is the plain meaning of the Explanation. It might be that the original landlord, who entered into the tenancy agreement, had only a limited interest, but the landlord, who filed the suit for ejectment, is the absolute owner. In such a case the Court could direct the entire interest of the landlord in the land to be conveyed to the tenant. If the original tenancy agreement was with a person having an absolute interest in the property, but the person who filed the ejectment suit is a limited owner, in such a case, the Court could direct only the limited interest of the landlord who was before it, and not the absolute interest, to be conveyed. It is true that the price fixed for the land is to be the lowest market value prevalent within three years preceding the date of the order, and it would be grave injustice to require the tenant to pay the market value while an order could be made only to pass a limited interest of the landlord in the land. The tenant is not entitled to complain, because knowing fully well that he might get only a limited interest so long as the limited owner is alive, and on the opening of the reversion, the purchaser is liable to be evicted. If a person with full knowledge of the limited right of his landlord enters into a tenancy agreement and files an application for purchase under Section 9 of the Act, knowing full well that he could get only a limited interest under the purchase if he chooses to apply for the purchase, the courts cannot help such a person and direct conveyance of absolute interest merely on the ground that he would have to pay the market value. I am generally in respectful agreement with !he view of Venkataraman, J., that what could be conveyed under Section 9 (3) of the Act in the instant case is the life interest of the petitioner and not the full ownership in the land itself and even the Court has no jurisdiction to direct the conveyance of the absolute interest. It is, therefore, unnecessary for me to refer all the series of cases fully and elaborately discussed by the learned Judge.
11. It may also be seen that whatever be the case, the tenant would be entitled to be paid the full value of the building on ejectment. This is a right available against every landlord irrespective of the quantum of interest of that landlord. But in the case of Section 9 of the Act, an option is given to the tenant to exercise the right of purchase. He is not bound to exercise that right. Since it is only at his option that right is exercised, he could not plead any inequity in paying the market value for purchasing a limited right. With respect, I am therefore unable to agree with Maharajan, J., that any injustice or absurdity arises by making such a construction. It is true that the legislature can confer power on a Court to sell a larger title than what the landlord himself possesses, but neither the language of the provision in Section 9 (3) nor any rule of interpretation warrants such a power to the Court under that provision. I have absolutely no doubt that what could be conveyed under Section 9 is the interest of the landlord, who is before the Court, and not the absolute interest in the land itself.
12. Accordingly, I answer the points referred to in the reference as follows: No fresh tenancy arises between Kamalammal and the defendant in 1963 after the death of Gnanambal, either expressly or by implication of law. The defendant will be entitled to exercise the right of purchase of the land from the plaintiff under Section 9, but the interests that could be conveyed by the petitioner is only her life interest in the suit property, and not the full and the absolute title in the land itself.
(After the expression of the opinion of V. Ramaswami J., this case coming on for final hearing before Venkataraman and Maharajan JJ., the following order of the Court was delivered by Venkataraman J.)
The answers of the third Judge, V. Ramaswami J., have come to us. Following the majority opinion of Maharajan J., and V. Ramaswami J. we decide under Clause 36 of the. Letters Patent that Krishnan Nair, the petitioner in M. P. No. 1855 of 1968 in Eject Suit No. 163 of 1968 on the file of Small Cause Court, Madras, who is the respondent before us in the civil revision petition is entitled to exercise the right of purchase of the land under Section 9 of the City Tenants Protection Act, 1922, from Kamalammal, plaintiff in the suit. But following the opinion of Venkataraman J. and V. Ramaswami J. we decide that the interest that could be conveyed by the plaintiff is only her own life interest in the property which she derived under the settlement deed dated 17-4-1941 (Ex. R. 1) and not the full and absolute title in the land itself.
13. V. Ramaswami J. has expressed the opinion that Krishnan Nair has to pay the value for the full and absolute title in the land itself, even though he can get only the life interest of the plaintiff. We observe that this is not one of the questions we referred to him. With great respect we are unable to accept his opinion. Once it is found that the property which can be directed to be conveyed for the purpose under Section 9 of the Act read with the explanation is only the life interest of Kamalammal, it is but logical and reasonable that the tenant should pay only for that life interest and nothing more. Accordingly, we remit the petition to the court of Small Causes, Madras. The trial Judge will determine the value of the life interest of Kamalammal and dispose of M. P. 1855 of 1968 in accordance with law.
14. If Krishnan Nair does not want to purchase merely the life interest of Kamalammal, it will be open to him to exercise the right under Section 3 of the Act, namely, to require Kamalammal to pay for the superstructure which Krishnan Nair has erected. We decide accordingly. We may add that it is gratifying to note that Sri Balaswami, learned counsel for Kamalammal, has stated that Kamalammal is prepared to pay Krishnan Nair the value of the superstructure.
15. The parties will bear their own costs in Eject Appeal No. 23 of 1970 before the Chief Judge of the Court of Small Causes and in this court. Costs in the trial court will be in the discretion of the trial Judge.