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Kuppa Bai Vs. A. Rajagopal Nadar and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtChennai High Court
Decided On
Reported in(1969)2MLJ541
AppellantKuppa Bai
RespondentA. Rajagopal Nadar and anr.
Cases ReferredIn Natesan Mudaliar v. S.B.K.P.K. Bhajana Matam
Excerpt:
- m. natesan, j.1. the second appeal and civil revision petition are by the plaintiff, for vacant possession of land within the limits of the city, for arrears of rent, damages for use and occupation and incidental reliefs, from the 1st defendant in the suit, whose tenancy has been terminated by a notice to quit, and from the 2nd defendant who claimed under the 1st defendant. the land as a vacant site had been leased by the plaintiff to the 1st defendant's husband in 1953. the 1st defendant's husband had put up a superstructure on the land and was running a firewood business there. the first defendant's husband died during his tenancy and the 1st defendant continued in occupation convenanting with the plaintiff for a lease for a period of three years. this agreement for lease between the.....
Judgment:

M. Natesan, J.

1. The second appeal and civil revision petition are by the plaintiff, for vacant possession of land within the limits of the City, for arrears of rent, damages for use and occupation and incidental reliefs, from the 1st defendant in the suit, whose tenancy has been terminated by a notice to quit, and from the 2nd defendant who claimed under the 1st defendant. The land as a vacant site had been leased by the plaintiff to the 1st defendant's husband in 1953. The 1st defendant's husband had put up a superstructure on the land and was running a firewood business there. The first defendant's husband died during his tenancy and the 1st defendant continued in occupation convenanting with the plaintiff for a lease for a period of three years. This agreement for lease between the plaintiff and the 1st defendant is found recorded in the unregistered, document Exhibit A-8 dated 26th February, 1956. The earlier lease is also by an unregistered rental agreement between the plaintiff and the 1st defendant's husband, Exhbit A-1 dated 25th February, 1953. Under Exhibit A-9 dated 5th May, 1960, the plaintiff issued notice to the 1st defendant terminating her tenancy with the 25th May, 1960. The plaintiff claimed arrears of rent due till then. Under Exhibit B-5 dated 15th June, 1960, Mr. J.S. Vedamanikkam, Advocate as acting under instructions from the 1st defendant intimated the plaintiff that she would be vacating the premises by 30th June, 1960, and would pay the arrears of rent amounting to Rs. 190 deducting the advance with the plaintiff. As the trial, the first defendant attempted to disown Exhibit B-5. But the Additional City Civil Judge, on appeal, has found that Exhibit B-5 had been issued on behalf of the 1st defendant and it would bind her. The learned Judge holds that there was a surrender of the lease and the tenancy of the 1st defendant had been terminated. Before delivery of vacant possession, under Exhibit A-7 dated 22nd June, 1960, the 1st defendant conveyed her leasehold interest in the property along with the superstructure to the 2nd defendant in the. suit. The 2nd defendant, in the circumstances, claimed benefits under the Madras City Tenants' Protection Act III of 1922, (hereinafter referred to as the Act). He filed I.A. No. 1229 of 1960 in the trial Court under Section 9 of the Act for a direction to the plaintiff to sell the suit land to him for a price to be fixed by the Court. The claim of the 2nd defendant to the benefits under the Act is the substantial question for consideration in this case.

2. The trial Court, having regard to the fact that there was variation in the rent when the 1st defendant agreed for a tenancy in February, 1956, held that there was a new tenancy and therefore, the defence under the Madras City Tenants' Protection Act as amended in 1955 was not available. Rejecting the petition under Section 9 of the Act, the trial Court decreed the suit for possession with rent and damages for use and occupation. The second defendant preferred and Appeal, A.S.No. 217 of 1952, against the decree in the suit, and C.M.A. No. 41 of 1962 against the order on the application under Section 9 of the Act. It is important to notice here that the 1st defendant Was not made a party to the appeals. In the appellate Court it was contended for the plaintiff, relying on the decision of this Court in Madhava Rao Naidu v. Sri Gangadareswarar Temple : AIR1947Mad125 , that as the 2nd defendant claimed under the 1st defendant by an assignment for the leasehold right subsequent to the termination of the tenancy under Exhibit A-9 the 2nd defendant was not a tenant within the meaning of the City Tenants' Protection Act and therefore he was not entitled to the benefits of the Act. Rejecting this contention, the learned City Civil Judge observed that, as the leases were by unregistered documents, they could not be looked into even to ascertain the date of commencement of the lease. Therefore, he said, it could not be contended that the tenancy of the 1st defendant which was continued under Exhibit A-8 was validly terminated with 25th May, 1960, by Exhibit A-9. The learned City Civil Judge found that the lease was duly terminated only by Exhibit B-5 whereunder the 1st defendant surrendered the tenancy. In that view, finding further that there was no fresh tenancy after the death of the 1st defendant's husband, the 2nd defendant was held entitled to the benefits of the Act. The appeal against the rejection of the application under Section 9 of the Act was allowed. Following, the appeal against the decree for possession was dismissed. The second appeal has been filed against the decree in the suit and the Civil Revision Petition, against the order on the application under Section 9 of the Act.

3. In this Court, Mr. M.S. Venkatarama Ayyar, learned Counsel for the plaintiff, would contend for application of the decision in Madhava Rao Naidu v. Sri Gangadareswarat Temple : AIR1947Mad125 . It is submitted that the unregistered documents could be looked into for ascertaining the date of commencement of the tenancy. Reference is made to Mulla's Indian Registration Act, 6th Edition, where at page 171, it is stated that an unregistered agreement of lease, though inadmissible as evidence of the lease for want of registration, may be received in evidence to prove the date of taking possession, or to prove the date of termination of the possession of the lease. The proposition is questioned by Mr. Gopalaswami Ayyangar, learned Counsel appearing for the 2nd defendant. There is another aspect of the case to be considered which affects the claim of the 2nd defendant to be a tenant under the Act. It raises a pure question of law on the statute and I shall take that up for consideration first.

4. Admittedly, the 2nd defendant claims to be an assignee of the leasehold right with superstructure under Exhibit A-7 dated 22nd June, 1960. Whether the tenancy of the 1st defendant had been duly terminated by Exhibit A-9 with 25th May, 1960 or not, the 2nd defendant admittedly got an assignment of whatever right the 1st defendant had, on 22nd June, 1960. On that date, the definition of the term ' tenant' in Section 2 (4) of the Act ran thus:

' Tenant' means tenant of land liable to pay rent on it, every other person deriving title from him, and includes persons who continue in possession after the termination of the tenancy.

5. The 2nd defendant, as a person deriving title from the 1st defendant manifestly was a tenant under that definition of the term ' tenant '. But this definition underwent a change by Madras Act XIII of 1960 which received the assent of the President on the 19th of July, 1960 and which was published in Fort St. George Gazette on 27th July, 1960. The substituted definition of the term ' Tenant ' runs thus:

'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

(ii) includes:

(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, and

(b) the heirs of any such person as is referred to in Sub-clause (i) or Sub-clause (ii) (a); but does not include a sub-tenant or his heirs.

6. This new definition of the term ' tenant' has excluded from the definition of tenant a person deriving title from a tenant. Under the new definition heirs of the tenant are specifically mentioned as tenants, but not a sub-tenant and his heirs. While the prior definition included every other person deriving title from a tenant, the amplitude of the provision taking in both heirs of a tenant and assignees from him, the new definition specifically includes only the heirs of a tenant. The significance of omission of an assignee from a tenant in the new definition cannot be over looked. The Act came in to give protection to tenants who had constructed buildings on land leased in the hope that they would not be evicted so long as they pay fair rent for the land. The mischief that was intended to be remedied by the Act was primarily to protect such tenants. Apparently, the Legislature felt that the privilege granted was being misused by speculators and so decided to continue the benefit of the Act to tenants proper and tenants who entered on land under tenancy agreement express or implied and continued on the land after expiration of the tenancy and heirs of such tenants. Evidently, the Legislature does not want a tenant to profit on a privilege granted, in violation of the fundamental rights of the owner of the land and at his expense; the Legislature would limit it to the equity and needs of the tenant. Under the definition of the term ' tenant' as it stands, the 2nd defendant cannot claim to be a tenant. The suit in this case was instituted on 22nd August, 1960, after repeal of the old definition and the amended definition had come into force. The 2nd defendant filed his petition under Section 9 of the Act on 22nd December, 1960. On the language of the statute he is not a person entitled to make a claim under Section 9. The question is whether, in the circumstances, the 2nd defendant could claim the benefits of the Act. The 1st defendant is nowhere in the picture, a part from the fact that she has purported to part with whatever right she had in favour of the 2nd defendant. The trial Court decreed the plaintiff's suit and dismissed the application of the 2nd defendant. In the appeals against the decree in the suit and order in the application, the 1st defendant was not made a party. So far as the first defendant is concerned, she is bound by the decision given in the trial Court. No doubt, the 1st defendant has been made a party in this Court. But that cannot in the least, advance her interest or fortify the second defendant's claims. The dispute has to be decided as between the plaintiff and the 2nd defendant who alone were parties in the lower appellate Court, where the decree was reversed.

7. Mr. Gopalaswami Ayyangar contends that, even without the inclusive definition, an assignee from a tenant is a tenant and could claim benefits of the Act. A lease, it is argued is a transfer of interest in land, and under Section 108 (j) of the Transfer of Property Act, the lessee is conferred a right to transfer either absolutely or by way of mortagage or sub-lease his interest in the property. But Section 108 (j) of the Act itself postulates that the lessee shall not, by reason only of such transfer, cease to be subject to any of the liabilities attaching to the lease. A lessee cannot, by his unilateral act of assigning his interest in the leasehold, put an end to his contractual obligations. He does not cease to be a tenant. The privity of contract is only between the lessor and the lessee who has entered into the contract of lease, and it continues until relinquished. When there is assignment of leasehold right to which the lessor is not a party, there is only privity of estate between the lessor and the assignee. That is because of the interest in the land which the lessee gets under the lease. The liability of the lessee ceases only when the lessor releases the. lessee and accepts the assignee as his tenant. Mere notice by the lessee or the assignee of the assignment does not, by itself, put in end to the agreement between the lessor and the lessee and bring about a contractual tenancy between the lessor and the assignee. In C. E. Treasurer v. S. P. B. Tyabji : AIR1948Bom349 , (Chagla, C.J. and Bhagavathi, J., as he then was) with reference to an assignment of monthly tenancy, on the contention that the lessor could not terminate the tenancy without giving notice to the assignee, Chagla, C.J., observed

It is important to note that a monthly tenancy is determined by a notice given by a lessor to the lessee, and therefore by reason of the assignment this contractual term in the tenancy agreement was not and could not be affected. The right remained in the lessor to put an end to his tenancy by giving proper and valid notice. I do not see why there was any obligation on the lessor to give a notice to the assignee. He was not his tenant, there was no contractual obligation between him and the assignee, the privity of estate did not necessitate the giving of a notice to him. His right to give a notice arose under the contract to his own tenant, and notwithstanding the assignment, the lessee continued to be his lessee and, in my opinion, it was perfectly competent to the lessor to terminate the monthly tenancy by giving a proper and valid notice to the lessee... the obligation to handover possession of the property on the determination of the tenancy was not upon the assignee but upon the lessee.

8. As the relationship of landlord and tenant is based on a contract, an assignee from the tenant does not ipso facto by virtue of the assignment, become tenant of the landlord. His claim is only under the lessee and his liability to the lessor is solely on the privity of estate. It is only by reason of the special definition of; tenant' under the Act prior to its amendment in 1960, that an assignee from a tenant could claim benefits of the Act. By express words the definition of ' tenant' was made to include every other person deriving title from a tenant. But the new definition of ' tenant' in 1960 does not include such a person. Manifestly he is not a person liable to payment of rent for the land under a tenancy agreement, express or implied. The essential requirement for a person to be a tenant under the amended definition is that there must be a contract of tenancy, express or implied. Other than such a tenant proper, only a tenant whose term has expired and heirs of a tenant are included in the new definition of ' tenant'. The definition puts, beyond doubt, that a person claiming under a tenant will not be entitled to the benefits of the Act. When the suit in ejectment was filed, the 2nd defendant was not a ' tenant' entitled to the benefits of the Act. It is only a tenant as defined in the Act against whom a suit in ejectment has been instituted, that is entitled under Section 9 of the Act to apply to the Court within one month after the service on him of summons for an order directing the landlord to sell the land for a price to be fixed by the Court.

9. Mr. Gopalaswami Ayyangar would contend that a broad and wide interpretation should be given to the word ' tenant' in the Act, as it is a beneficient legislation and the mere fact that the old definition has been repealed and a new definition substituted should not necessarily result in limiting the ordinary and popular connotation of the word ' tenant'. If as contended by Counsel a tenant, for the purpose of the Act, can include also an assignee from him without specific provision in that regard we must find some explanation for the Legislature having, in the original Act, made the word ' tenant' include persons claiming under a tenant. We cannot readily accede to the contention of learned Counsel that the words are surplusage. In Ditcher v. Deri son (1857) 11 Moore P.C. 325, the principle is thus stated:

It is good rule in jurisprudence that one who reads a legal document whether public or private, should not be prompt to ascribe should not, without necessity or some sound reason, impute to it tautology or superfluity, and should be rather at the outset inclined to suppose every word intended to have some effect of what remains of the Act.

10. In Maxwell on Interpretation of Statutes, nth Edition, page 37, it is stated:

Where a part of an Act has been repealed it may, although not of operative force, still be taken into consideration in construing the rest, for it is part of history of the new Act. Thus, where an Act which imposed a duty on racehorses, cab horses and all other horses and was specifically repealed as records race horses, race horses were thereafter regarded as ' being outside the Act, although the remaining words would obviously have included them.

11. It follows that even if it is possible by an extended connotation of the word ' tenant' to include an assignee from a tenant, that premises is questioned, it is manifest that the intention of the Legislature by the amendment is to exclude the assignee from the benefits of the Act.

12. Mr. Gopalaswamy Ayyangar next contended that the 2nd defendant's claim must be considered in the light of the well settled rule of law that existing rights are not deemed to be destroyed by a statute, unless there be express words or plain implication to that effect. It is urged that prior to the Amending Act XIII of 1960 the 2nd defendant was recognised as a tenant under the Act. The right that he could have claimed then under the principal Act should not be taken away by the amendment as to so interpret the Act would be so give a retrospective effect to the amendment. Reference was made to the decision of the Supreme Court in Gopala Rao v. Seetharamamma : [1965]3SCR122 , wherein it is pointed out that ' it is a well-recognised rule that a statute should be interpreted, if possible, so as to respect vested rights and such a construction should never be adopted if the words are open to another construction.' That was a case where a right of maintenance of illegitimate sons and concubine vested in them on the death of the putative father in 1948, long before the commencement of the Hindu Adoption and Maintenance Act, 1956. What has to be determined here is whether the benefits the assignee from a tenant could claim are rights which could be said to have become vested in him. It is provided, by Section 8 of the Madras General Clauses Act which deals with the effect of repealing an Act and which applies unless as reserved in Section 4 of the Act a contrary intention appears, that where an Act repeals any other enactment, the repeal shall not affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed. Here, we have a repeal of the former definition and simultaneous substitution of a new definition. For securing to the suitor rights under the law before the repeal and fresh enactment, we have to examine (1) whether the new enactment shows an intention to affect the operation of Section 8 of the General Clauses Act, and (2) whether the right or privilege has become vested in the suitor before the repeal. We must find that the right or privilege claimed is one that has been acquired, accrued or become vested prior to the repeal, for it to survive the repeal. The presumption against retrospective operation of statute is only in respect of what are compendiously referred to as vested rights.

13. The distinction between what rights or privileges are preserved as vested, what are accrued rights or privileges and what are not so considered and preserved' on, the repeal of an existing law, is often subtle. In my opinion, the mere option which a person may have under a law to acquire a right or liberty which he may or may not at his choice exercise, cannot be construed as a right acquired or accrued. I cannot conceive of a citizen's right to the continued existence of rights granted under the law, in the gross, to use a convenient phrase. A new law cannot always be solely prospective in its operation. In great many cases, it is certain to affect existing rights and still more existing expectations. Only existing rights which have become vested are preserved. If existing expectations under the laws in force are also to be preserved in tact by the presumption against retrospectivity, then for generations new laws may have to be kept in abeyance. This aspect applies particularly to laws concerning property of a permanent and continuing nature, such as immovable property which one time or other must come within the ambit of every change in the law relating to it.

14. The principle of the distinction is better expounded by illustrative case law. In West v. Gwynne L.R. (1911) 2 Ch.Div. 1, in a lease made before the commencement of the conveyancing and law of property Act, 1892, there was a covenant not to assign without consent Under Section 3 of the Act of 1892, the Legislature prevented the exaction of a fine by a lessor for giving the lessee his consent to assign. On the lessor in 1909, refusing permission to the lessee to under-lease a part of the premises, except under a condition that the lessor should receive for himself one half of the surplus rental that may be obtained by the lessee over and above the rent originally fixed, the lessee commenced an action for a declaration that the lessor was not entitled to impose the condition. Cozens-Hardy, M. R. rejecting the lessee's claim, said.

'Restrospective operation' is an inaccurate term. Almost every statute affects rights which would have been in existence but for the statute.... Section 3.... provides that in future unless there is found an express provision authorising it, there shall be no right to exact a fine. I doubt whether the power to refuse consent to an assignment except upon the terms of paying a fine can fairly be called a vested right or interest.'

Kennedy, L.J. ' I do not think that an enactment which prevents the lessor from availing himself of the lessee's covenant not to assign without licence as an indirect instrument of profit falls properly within the category of enactments which take away either vested rights or the legal character of a past transaction,, or which impair an existing contract.

15. The decision of the Judicial Committee in Director of Public Works v. Ho Po Sang (1961) 2 All E.R. 712, is another case which may be usefully referred to here. That case in substance held that liberty to apply for a right is not itself an accrued tight or privilege. Under an Ordinance, a Grown lessee who had to demolish existing buildings in the occupation of tenants for developing the site by erecting buildings, could recover vacant possession of the premises after securing a re-building certificate from the Director of Public Works. The proposal of the Director to grant a re-building certificate was subject to an appeal to the Governor-in-Council who had asbolute discretion in the matter. When the proposal for the grant of a rebuilding certificate was pending before the Governor-in-Council, the relevant provisions of the ordinance which enabled the grant of re-building certificate were repealed. Notwithstanding the repeal of the provisions, the Governor-in-Council directed the grant of a re-building certificate and the certificate was accordingly issued by the Director of Public Works. The tenants questioned the validity of the grant. Even after the repeal of the provisions, the Grown lessee could, no doubt, recover vacant possession under the remaining sections of the ordinance, but subject to his paying compensation. The Judicial Committee held that the Crown lessee, on the date when the provisions relating to the grant of a re-building certificate were repealed, had no accrued right or privilege within Section 10 (c) of the Hong Kong Interpretation Ordinance which corresponds to Section 8 of the Madras-General Clauses Act and Section 38 of the English Interpretation Act. The question mooted whether the Grown lessee possessed the same right which he had prior to the repeal. Though the certificate was granted before the repeal, the procedure had reached a stage where it can be properly said that the lessee could expect the certificate as it turned out ultimately. At any rate he was entitled to have the matter considered by the Governor-in-Council and a decision given. In that context, it was observed:

Was the lessee, therefore, possessed on 9th April, of the 'right' (or privilege) within the meaning of the Interpretation Ordinance? In their Lordships'' view the entitlement of the lessee in the period prior to 9th April to have the petitions and cross-petition considered was not such a 'right'. On 9th April, the lessee was quite unable to know whether or not he would be given a re-building certificate, and, until the petitions and cross-petition were taken into consideration by the Governor-in-Council, no one could know. The question was open and unresolved. The issue rested, in the future. The lessee had no more than a hope or expectation that he would be given a rebuilding certificate, even though he may have had grounds for optimism as to his prospects. It is to be observed that, under Section 10 (e) a repeal is not to affect any investigation, legal ' proceeding or remedy ' in respect of any such rights. The right referred to is the right mentioned in Section 10 (c) i.e., a right acquired or secured under a repealed enactment. This part of the provisions in para (e) of Section 10 does not and cannot operate unless there is a right as contemplated in para (c). it may be, therefore, that under some repealed enactment, a right has been given but that, it, respect of it, some investigation or legal proceeding is necessary. The right is then unaffected and preserved. It will be preserved even if a process of qualification is necessary. But there is a manifest distinction between an investigation in respect of a right and an investigation which is to decide whether some right should or should not be given. On a repeal, the former is preserved by the Interpretation Act.

16. The basis of the decision was that the Grown lessee had only taken procedural steps in the hope of being able to obtain a re-building certificate, but that at the time of the repeal, he had no accrued right, as judicially defined. This case is, no doubt, distinguishable on its facts as an instance where the acquisition of an enforceable right depended on the absolute discretion of an outside authority.

17. The case Abbot v. The Minister for Lands L.R. (1895) App. Cas. 425, is relevant in the context of the present case and to the point. In that case, the appellant who had been granted Crown Land in fee simple effected a conditional purchase under Section 22 of the Crown Lands Alienation Act, 1861, of an adjoining land. In 1884, the Crown Lands Act of that year was passed and Crown Lands Act of 1861 and the Act which amended it were repealed, subject to a saving clause in respect of rights accrued and obligations incurred or imposed under or by virtue of any of the repealed enactments. The appellant contended that, in right of his earlier conditional purchase, he had a right to make additional conditional purchases under the repealed enactments, and that that was a right accrued at the time when the Crown Lands Act, 1884 was passed. Notwithstanding the repeal, the appellant contended, that right remained unaffected. Apart from the finding against the appellant on. the relevant provisions of the repealed statutes, the Judicial Committee rejected the contention that the power to take advantage of an enactment is a right accrued. It was said:

It has been very common in the case of repealing statutes to save all rights accrued, if it were held that the effect of this was to have it open to any one who could have taken advantage of any of the repealed enactments still to take advantage of them, the result would be very far-reaching.

It may be, as Windeyer, J., observes, that the power to take advantage of an enactment may without impropriety be termed a 'right.' But the question is whether it is a ' tight accrued ' within the meaning of the enactment which has to be construed.

Their Lordships think not, and they are confirmed in this opinion by the fact that the words relied on are found in conjunction with the words ' obligations incurred or imposed.' They think that the mere right (assuming it to be properly so called) existing in the members of the community or any class of them to take advantage of an enactment, without any act done by an individual towards availing himself of that right, cannot properly be deemed a ' right accrued ' within the meaning of the enactment.

18. In Sakharam v. Manickchand : [1962]2SCR59 , the Supreme Court affirmed the observations of the Lord Chancellor in the above citation, while distinguishing the case they were considering. The Supreme Court observed

The observations quoted above, made by the Lord Chancellor with all respect, are entirely correct, but have been made in the context of the statute under which the controversy had arisen.

19. The question before the Supreme Court in that case was whether the status of the appellant as ' protected tenant within the meaning of the Bombay Tenancy Act, 1939 was affected by the repeal of the Act in 1948. The Courts below had denied the appellant's status and decreed the suit for possession. The status of the appellant as protected tenant before the repeal had been recognised by the public authorities under the Act. The necessary entries in the Record of Rights had been made and the landlord had not taken any steps under the Act before its repeal to have a declaration that the tenant had not acquired the status. The tenant had nothing more to do to acquire the status before the Act was repealed. The new Act, by a saving clause, protected any right, title, interest, obligation or liability already acquired or incurred before the commencement of the new Act. Upholding the claim of the tenant and distinguishing the decision of the Judicial Committee above referred to, the Supreme Court said:

That decision is only authority for the proposition that the mere right existing at the date of a repealing statute, to take advantage of provisions of the statute repealed is not a ' right accrued ' within the meaning of the usual saving clause. In that ruling their Lordships of the Privy Council assumed that the contingent right of the original grantee was a right but it was not a ' right accrued ' within the meaning of the repealed statute. It was held not to have accrued because the option given to the original grantee to make additional purchases had not been exercised before the repeal. In other words, the right which was sought to be exercised was not in existence at the date of the repealing Act, which had restricted these rights.

20. Another instance of a right accrued is Hamilton Cell v. While L.R. (1922) 2 K.B. 422. In that case, the landlord of an agricultural holding gave his tenant notice to quit, as he wanted to sell the holding. Subject to the terms and conditions of Section 11 of the Agricultural Holdings Act, 1908, the tenant thereupon became entitled to compensation. The tenant duly complied with one of the conditions, namely, giving notice of his intention to claim compensation. Another condition was that he should make his claim within three months of quitting. But, before the time for him to quit arrived, Section 11 was repealed. Notwithstanding, he made his claim within three months. It was held that his claim could proceed, and that he could recover compensation under the repealed Section 11. That was a case where the right accrued from the fact of the landlord having given a notice to quit in view of a sale. The conditions imposed by Section 11 were conditions not of the acquisition of the right but of its enforcement.

21. Here, the right to purchase under Section 9 of the City Tenants' Protection Act is just an option given to the tenant, in the event of an action in ejectment being instituted against him by the landlord. As long as the landlord does not seek to elect him, even an opportunity to exercise the option for the purchase cannot and does not arise. It is an inchoate doubly contingent right. The landlord must commence an action in ejectment. If he commences an action, the tenant may apply to the Court for an order that the landlord shall he directed to sell the land for a price to be fixed by the Court. Under Section 9, on the tenant exercising the option to purchase, the Court shall determine the price in accordance with the provisions of the section and shall order that, within a period to be determined by the Court, not being less than three months and not more than three years from the date of the order, the tenant shall pay into Court or otherwise as directed, the price so fixed in one or more instalments with or without interest. In default of payment by the tenant of any one instalment, the application for purchase could be dismissed. It is only on payment of the price fixed in full that the Court can pass an order directing the conveyance by the landlord to the tenant of the land. In the present case, except for the fact that the 2nd defendant could claim that he is a tenant under the earlier Act, nothing further has happened. No action in ejectment had been instituted by the landlord before the old definition was repealed to give an opportunity to the tenant to make a claim for purchase under Section 9. All that remained on the date of the Act was amended was a right to take advantage of the provisions under Section 9, in the event of the landlord instituting a suit in ejectment. As the landlord had option to institute or not to institute a suit in ejectment, the tenant also had an option to claim or not to claim the benefits of the section. Even after the application has been filed by him and the price payable for the land fixed, the tenant may choose not to purchase the property by not paying the price. This right to take advantage of the provisions under Section 9 is on the facts of the present case certainly not a right accrued or privilege acquired as the terms have been judicially interpreted.

22. In Rajagopal Chettiar v. Razack Sahib (1950) 1 M.L.J. 29, Mack, J., observed:

Section 9 of the City Tenants' Protection Act gives no right to a tenant to apply to the Court for an order directing the landlord to sell the land to him under the provisions of that section until the landlord files a suit in ejectment against him. There are two conditions prescribed to entitle a tenant to make such an application (1) He must be entitled to compensation under Section 3 and (2) a suit in ejectment must be filed against him.

23. In S.M. Transports (P.) Ltd. v. Sankaraswamigol Mutt : AIR1963SC864 , the Supreme Court had to consider the nature of the right conferred under Section 9 of the Act. The protection given by Madras Act XIX of 1955 to non-residential tenants in respect of certain areas was taken away by Madras Act XIII of 1960. As a result of it, the principal Act ceased to apply to the town of Thanjavur. By Section 9 of Madras Act XIII of 1960 all proceedings pending in Courts in respect of non-residential buildings in places where protection of the Act to them was taken away, abated and the 'rights or privileges acquired by the tenants in respect of the non-residential buildings were extinguished. The Supreme Court had to consider the constitutional validity of the amendment under Act XIII of 1960 under Articles 19 (1) (f) and 31 (1). After holding that Article 19 applies to both concrete as well as abstract rights of property, examining the question whether a tenant of non-residential building in Thanjavur acquired a right of property under the principal Act before its amendment in 1960 and whether he was deprived of that right or otherwise restricted in the enjoyment thereof by the amending Act, it was observed:

The question that fails to be considered is whether the second right, namely, the right of a tenant to apply to the Court for an order directing the landlord to sell the land to him for a price to be fixed by it, under Section 9 of the principal Act is a right to property. The law of India does not recognise equitable estates. No authority has been cited in support of the contention that a statutory right to purchase land is, or confers, an interest or a right in property. The fact that the right is created not by contract but by a statute cannot make a difference in the content or the incidents of the right that depends upon the nature and the scope of the right conferred. The right conferred is a right to purchase land. If such a right conferred under a contract is not a right of property, the fact that such a right steams from a statute cannot obviously expand its content or make it any the less a non-proprietary right. In our view, a statutory right to apply for the purchase of land is not a right of property.

24. The Supreme Court rejected the claim of the tenant that the Court which was seized of the tenant's application under Section 9 should, notwithstanding the amendment, proceed and dispose of the same under the old Act. Though the decision of the Supreme Court may not be directly applicable to the question now under discussion it gives an idea of the nature of the right which a tenant has been conferred under the Act, and that was a case where the tenant had exercised his option to purchase and filed an application for a sale of the land to him.

25. The question of retrospectivity of the amendment with reference to Section 9, on another aspect, has come up for consideration before this Court in more than one case. Amending Act XIII of 1960 made certain vital amendments in Section 9 of the Principal Act, affecting the extent of land that a landlord could be compelled to convey to a tenant and in the fixing of price for the conveyance. In Gnanaprakasam v. Mahboob Bi : (1962)1MLJ254 , where in pending proceedings a landlord claimed under the amended provision and the tenant pleaded that the amendment was not retrospective, Srinivasan, J., observed:

Since the policy underlying the Act was only the protection of the tenant from eviction, the right that was conferred upon him was only to that limited extent and if the Act as amended defined that right only in relation to such extent of land that would be necessary for his convenient enjoyment, it is difficult to see what valuable right of the tenant was taken away by the amendment. It is true that under the unamended Act, ' the tenant could ask for a sale of the entire extent of land that he was in possession of and notwithstandng that hardship might be caused to the landlord, the old Act made it possible for the tenant to secure the sale of the entire extent to him. It is common knowledge that during the recent years the value of immovable properties have appreciated to a great extent and there would appear to be no reason why the tenant should be given a considerable extent of land at the expense of the landlord and at a considerably lower price than the prevailing price, if what all the Act intended to do was to protect the tenant from eviction. The restriction of the right of the tenant to secure a conveyance of only such portion of the holding as would be necessary for his convenient enjoyment does not to my mind affect the right that was created in the tenant, that right being only a protection against the eviction. It was not and could not have been the intention of the Legislature to enrich the tenant at the expense of the landlord over and above what was required for carrying out the policy of the Act.

26. This Judgment has been followed by Anantanarayanan, J., (as he then was) in Govindammal v. Duraiswami S.A. No. 1190 of 1960 and C.R.P. Nos 1825 and 2029 of 1960. In Natesan Mudaliar v. S.B.K.P.K. Bhajana Matam (1966) 1 M.L.J. 130: I.L.R.(1967) 1 Mad. 414, while following the above decisions, I observed:

It cannot be said that the tenant has acquired any vested right in the matter. The tenant had no right under the common law to purchase the land at any price. Under the common law as well as under the Transfer of Property Act, the only right of a tenant who had put up the structure on leasehold land taken on terminable lease is only to remove the structure at the time of delivery of possession on the termination of the lease. The right to exercise an option of purchase of the land is given to the tenant only under the Act. It is a privilege conferred on him by the Act.

27. In the above three cases, the question arose as to the applicability of the amended provision in pending proceedings. Here, we are concerned with, a case where even an occasion for the exercise of the option by the tenant has not arisen. The entire thing, as discussed supra, was contingent and wholly dependent first on the contingency of the landlord commencing an action for eviction, second on the will of the tenant whether he would at all exercise the option to purchase rather than claim compensation for the superstructure and next whether the tenant would pursue the matter and pay the price in terms of an order of Court. This option or privilege in my opinion, cannot be considered a vested right. Mr. Gopalaswami Ayyangar contended that his client has acquired the status of a ' tenant ' under the old Act. But that status does not carry with it as a vested right, the right under Section 9. This case is not concerned with a right under Section 3 of the Act.. No right has been agitated under that section. Further the landlord, by his Counsel, has offered to pay compensation for the structures on the land on ejectment and as provided in Section 3 submit to necessary directions in this regard. The present case is concerned with an application under Section 9 of the Act only. In the light of the above discussion, it follows that, on coining into force of Madras Act XIII of 1960, a person deriving title by assignment from a tenant, whether the assignment was before or after the Act, cannot claim the benefits of Section 9 of the Principal Act, III of 1922, at any rate, in a case where no action in ejectment has been commenced prior to the amendment. The application under Section 9 of the Principal Act by the 2nd defendant is therefore, not maintainable. In this view, it is unnecessary to consider the other question raised by the landlord.

28. The order of the trial Court dismissing I.A. No. 1229 of 1960, filed by the 2nd defendant, shall therefore stand restored. The decree and judgment in ejectment against him are also restored, subject to this that on the application of the 2nd defendant, if he would have compensation for the superstructure on the land, the compensation may be ascertained in execution and a fresh decree passed by the trial Court in accordance with Section 4 of the Act. The 2nd defendant may, if he so desires, remove the superstructure without claiming compensation. Application, if any, for compensation by the 2nd defendant shall be made within three months from this date. The Second Appeal and Civil Revision Petition are allowed accordingly. The parties will bear their own costs. As the substantial case here is the Civil Revision Petition, no leave.

29. If the second defendant does not chose to claim compensation, the execution of the decree in ejectment shall be stayed by six months.


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