Banga Vs. Ram Chander Aggarwal  Insc 293 (29 April 2005)
Bhan & A.K. Mathur Bhan, J.
appeal by grant of leave has been filed against the judgment and order dated
22.03.2002 passed by the High Court of Delhi at New Delhi in Regular First Appeal No.280 of 1982. By the impugned
order the High Court has allowed the appeal and set aside the judgment and
decree for possession of the suit property and damages passed by the Trial
Court in favour of the plaintiff-appellant.
in dispute is an evacuee property i.e. shop No.114, New Qutab Market, New
Delhi, a Government Built Property in terms of Rule 2(d) of the Displaced
Persons (Compensation and Rehabilitation) Rules, 1955 and forms part of the
compensation pool within the meaning of Section 14 of the Displaced Persons
(Compensation and Rehabilitation) Act, 1954 (for short "the Act") Bhagwan
Das, father and predecessor-in- interest of the defendant-respondent who was
not a displaced person filed C.W.P. No.458-D of 1958 in the Circuit Bench of
the Punjab and Haryana High Court at Delhi seeking transfer of shop No.114, in
his favour on the ground that the same was allotted to him with effect from
10.05.1956 by the Department and he has been regularly paying rent for the same
and prayed that the same be transferred in his favour, instead of selling it in
public auction to any other person. Shri M.S. Chadha, Settlement Commissioner,
Ministry of Rehabilitation filed the counter affidavit on behalf of the
Department and took the stand that the Qutab Market was constructed by the
Ministry of Rehabilitation and the same forms part of the compensation pool
within the meaning of Section 14 of the Act to be transferred on ownership
basis to displaced persons only. It was also stated that these shops were
offered as a temporary measures to squatters (Bhagwan Dass, predecessor-in-
interest of the respondent) as an alternative accommodation as they were
occupying the land before the construction of the market but the same could not
be transferred/sold to Shri Bhagwan Dass a squatterer or to any other squatter
who was not a displaced person.
certain other persons had also filed writ petitions. C.W.P. No.438-D of 1958
and other connected matters were disposed of by an order dated 21.09.1960
wherein it was agreed by the Department that if the Department decides to sell
the shop in question by auction, whether public or private, or by calling
tenders, the occupier of the shop will also be given equal opportunity to give
his bid or tender, as the case may be, and the bid or tender of the occupier
will be considered on merits along with other bidders or tenderers, if any.
advertisement was issued on 28.12.1960 in the papers inviting tenders for the
sale of the various shops located in different markets by tender. Appellant
submitted his tender along with draft No.03260/2 dated 4.1.1961 for Rs.350/-
drawn on Union Bank of India, Karol Bagh, New Delhi towards 5% earnest money.
Appellant's tender being the highest was accepted and the remaining price was
adjusted against the verified claim of the appellant as per Section 8 of the
Dass did not participate in the sale proceedings conducted consequent to the
order dated 21.09.1960 passed by the High Court in C.W.P. No. 438-D of 1958. Sale certificate duly confirmed under the rules was
issued in favour of the appellant in respect of shop No.114, New Qutab Road
Market, New Delhi.
deed was also issued on 17.10.1963 and the same was registered on 22.02.1964 by
the Sub. Registrar. By mistake in the lease deed the property was mentioned as
114, New Rajinder Nagar instead of 114, New Qutab Road which was corrected by a supplementary lease deed dated
28.02.1967. In the supplementary lease deed it was mentioned that the area sold
to the appellant was shop No.114, New Qutab Road and not 114, New Rajinder Nagar which had been mentioned in
the lease registered on 22.02.1964. One of the conditions of sale as per
advertisement was that if any of the properties is under the occupation of the allottees
or unauthorised occupants the purchaser will be entitled to received the rent
from the tenants.
Dass died in the year 1962. Since neither Bhagwan Das, predecessor-in-interest
of the respondent nor the respondent or any other legal heir of Bhagwan Dass
had paid any rent from the inception of the tenancy, a demand notice was issued
to the respondent under Section 21 of the Act for recovery of the rent for the
period 8.8.1955 to 27.02.1961 i.e. till the date of sale of the shop to the
filed the suit for possession of Shop No. 114, New Qutab Road and recovery of damages for unauthorised use and occupation
of the property against the respondent on 26th of July, 1973. The respondent
filed the written statement on 3rd of May, 1978 which was later on amended on
31st of October, 1981 and resisted the suit on the ground that the appellant
was not the owner of the property as the same could not be transferred to the
appellant by way of sale. That the Joint Hindu firm M/s. Bhima Mal Dina Nath of
which he was a member was the tenant in the premises since 8.8.1955 by virtue
of Ext. D-1 letter of allotment and Ext. D-3 terms of tenancy. It was pleaded
by him that the rent of the shop was Rs.19.80 and not Rs.40/- per month as
demanded. In the alternative, it was pleaded that he was entitled to adjust the
sum of Rs.4,186.83 paid by him as house tax.
the filing of the suit, Shri B.P. Aggrawal, brother of the respondent and a
legal heir of Late Bhagwan Singh filed an application before the Regional
Settlement Commissioner for supply of documents relating to the tenancy of Bhagwan
Das in respect of Shop No. 114. On 23rd of February, 1978, a petition under
Section 24 of the Act was filed by the respondent along with other legal heirs
of Bhagwan Das seeking quashing of the sale made in favour of the appellant
with consequent relief of sale afresh in favour of the legal representatives of
Bhagwan Das. It was alleged that the respondent came to know about the sale in favour
of the appellant for the first time on 17th of February, 1978. This petition
was dismissed by the Deputy Chief Settlement Commissioner exercising the powers
of Chief Settlement Commissioner on 5.7.1978 thereby upholding sale and
transfer of the shop in favour of the appellant. Aggrieved against this order,
respondent filed a revision petition before the Central Government under
Section 33 which was dismissed on 25th of November, 1978. Being aggrieved by
the passing of these orders, respondent along with other heirs of Bhagwan Das
filed CWP No. 396/1979 in the High Court of Delhi seeking quashing of the
orders and the sale made in favour of the appellant with consequential relief
of sale afresh in their favour. High Court dismissed the writ petition on
9.4.1979, aggrieved against which respondent filed SLP(C) No. 10765/1979 in
which leave was granted and the same was registered as Civil Appeal No.
615/1982. The respondent got the C.A. No. 615/1982 dismissed as withdrawn and
as a consequence thereof the sale made in favour of the appellant and the
orders passed by the authorities and the High Court rejecting the respondent's
challenge to the sale made in favour of the appellant attained finality.
the conclusion of these proceedings, the trial court in the suit filed by the
appellant on 26th of July, 1973 which was re- numbered as Suit No. 781/1976
framed the following issues/additional issues:- "1. Whether plaintiff is
the owner of the suit property?
Whether suit is properly valued for purposes of Court fee and jurisdiction? If
not, what is the proper valuation?
Whether plaintiff is entitled to any damages? If no, at what rate; for what
period and to what amount?
Whether the defendants of M/s. Bhima Mal Dina Nath, alleged Joint Hindu Family,
is a tenant of the suit premises as alleged in the written statement, if so, to
the what effects?
Whether the suit is time barred?
Whether the Civil Court has no jurisdiction to entertain
the suit and decide the suit?
Whether the sale of the property in dispute in favour of the plaintiff by the
Ministry of Rehabilitation is a nullity as alleged by the defendants in the
amended written statement? OPD.
Whether a Civil Court has got no jurisdiction to go into
the validity or otherwise of the sale?
Whether Union of India is a necessary party?
what is the effect of not joining it?" Trial Court decided all the issues
in favour of the appellant. Appellant was held to be the owner of the suit
property. Suit was held to be property valued for the purpose of court fee and
jurisdiction. Regarding Issue No. 3, it was held that the appellant was
entitled to damages which were quantified at Rs.3,600/-. It was held under
issue No. 4 that M/s. Bhima Mal Dina Nath, the alleged Joint Hindu family was
not the tenant of the suit premises and in Issue No. 5, it was held that the
suit was within limitation.
Issue No. 6, it was held that the Civil Court has the jurisdiction to entertain and decide the suit.
Additional Issues 1 and 2 were not pressed by the respondent. Trial Court came
to the conclusion that the documents relied upon by the respondents to
establish tenancy were manipulated and even as per these documents it stood
established that the respondents and their predecessors-in- interest had never
paid any rent from the inception of the tenancy, as a result of which, a demand
notice Ext. D-6 towards the arrears of rent was issued to the respondent for
the period 8.8.1955 to 27.7.1961 i.e. till the date of sale of the suit property
to the appellant. As the respondent had failed to pay the rent agreed upon, the
tenancy created in his favour stood terminated. Trial Court also came to the
conclusion that the respondent was not entitled to the benefit of Section 29 of
the Act. It was held that since there was no relationship of landlord and
tenant, the Civil Suit was maintainable. In view of the findings recorded, the
Trial Court decreed the suit and the appellant was given a decree for
possession of the suit property and damages in the sum of Rs.3,600/- for unauthorised
use and occupation of the suit property by the respondent.
against the judgment and decree passed by the Trial Court, respondent filed
Regular First Appeal in the High Court of Delhi at New Delhi which was numbered
as RFA No. 250/1982. High Court accepted the appeal and set aside the judgment
and decree passed by the Trial Court. It came to the conclusion that as per
compromise arrived at in CWP No. 438-D/1958 filed by Bhagwan Das, the
Department could sell the property only by way of public auction and not by any
other mode. Since in the present case, the sale was made in favour of the
appellant by inviting tenders the same was not valid. The High Court further
held that the Trial Court fell in error in giving undue weight to the unexhibited
documents marked as `PX' and `PY'.
Ext. `PX' pertained to Shop No. 114, New Rajinder Nagar and not to a shop in New Qutab Road. The supplementary lease Deed
executed in the natue of corrigendum, substituted the words "114, New Qutab
Road" in place of 114, New Rajinder Nagar, was rejected as these documents
were not put to Mr. S.B. Lal, PW 4, a Clerk of the Office of the Rehabilitation
Department and DW 6 when they appeared in the witness Box. The High Court also came
to the conclusion that the property was not an evacuee property. It was further
held that Section 29 of the Act was not applicable to the facts of the present
case and that the respondent was a tenant of the suit property.
counsel for the parties have been heard at length. With their help we have gone
through the findings recorded by the High Court as well as the Trial Court and
the evidence on record.
High Court has erred in holding that as per orders passed by the High Court in
the Writ Petition No. 438-D/1958 filed by Bhagwan Das, the property could be
sold only by way of public auction and not by any other mode. The High Court on
21st of September, 1960 on a concession made by the Department of
Rehabilitation passed the order in CWP 438-D of 1958 in the following terms:-
"A compromise has been arrived at between the petitioner and respondents
in this case to the effect that if the Government decides to sell the shop in
question by auction, whether public or private, or by calling tenders, the
petitioner will also be given equal opportunity to give his bid or tender, as
the case may be, and that the bid or tender of the petitioner will be
considered on merits along with other bidders or tenderers, if any." It is
clear from the reading of the order that the Department had the option to sell
the suit property either by auction, public or private, or by calling the
tenders. In the present case, the Department sold the property by inviting
tenders. An advertisement was issued in the newspapers inviting tenders, in
response to which the appellant filed his tender which was accepted being the
Das did not file a tender in response to the advertisement. The finding
recorded by the High Court is factually incorrect. The High Court has erred in
holding that the sale was bad in law having been made in contravention of the
order passed by the High Court in CWP No. 438-D/1958. The Department had the
option to sell the property either by auction, public or private or by calling
the tenders. It was left to the Department to choose either of the two modes
and the Department sold the property by inviting the tenders as per the
undertaking given by it to the High Court. The sale has been made as per order
passed by the High Court by inviting tenders, the same is valid and the finding
recorded by the High Court to the contrary cannot be sustained being factually
bid by way of tender given by the appellant being the highest was accepted. He
paid the entire sale consideration. The sale was confirmed in his favour and
the Sale Certificate was issued. Since the property was sold on leasehold
basis, the lease Deed was executed on 17th October, 1963 which was registered on 22nd February, 1964. The appellant became the owner of
the property, the moment full price of the property was paid and the title of
the property passed on to him from the day of the confirmation of the sale and
the issuance of sale certificate. The High Court, in our view, erred in holding
that the issue of ownership was not concluded in the earlier proceedings
instituted by the respondents before the Rehabilitation Authorities, the Writ
Petition in the High Court and the Appeal in this Court. It also erred in
holding that only the question of validity of sale was involved in the earlier
proceedings and not of ownership. It failed to appreciate that the valid sale
confers both the title and the ownership rights in the purchaser. After the
rejection to the challenge to the sale Deed up to this Court, the appellant became
the owner of the property in dispute and it cannot be said that even though the
sale has been upheld the appellant did not become the owner of the property.
The view taken by the High Court is against the Mothu Ram, AIR 1965 SC 1994 and
also against the fundamental principle of jurisprudence as it is an established
fact that a valid sale confirmed by the authorities confers title as well as
ownership rights in the purchaser.
sale of property and ownership are inseparable and the moment the price is paid
and sale is confirmed the purchaser becomes the owner. In Bishan Paul's case
(supra), it was held:- "It seems to us that the matter must be considered
on general principles. In this case the highest bid was of the respondent and
he paid the full price before the sale in his favour was confirmed. The sale
certificate, though issued later, mentioned the date of the confirmation of the
sale in his favour. The tenant was asked to attorn to the purchaser from the
date of confirmation of sale and thus possession was also delivered on that
day. Title, therefore, was not in abeyance till the certificate was issued but
passed on the confirmation of sale. The intention behind the rules appears to
be that title shall pass when the full price is realised and this is now clear
from the new form of the certificate reproduced in Jailmal's case, 66 Pun LR
99: (AIR 1964 Punj 99). No doubt till the price is paid in full there is no
claim to the property, but it seems somewhat strange that a person who has paid
the price in full and in whose favour the sale is also confirmed and who is
placed in possession should only acquire title to the property from the date on
which a certificate is issued to him. There may conceivably be a great deal of
time spent before the certificate is granted. In this case the tenant was told
to attorn from October
3, 1956 because
nothing remained to be done except the ministerial acts of issuing the
certificate and getting it registered. Therefore, so far as title was
concerned, it must be deemed to have passed and the certificate must relate
back to the date when the sale became absolute." The High Court also erred
in holding that the property was not an evacuee property.
Court recorded this finding in one line by observing, "It was not an evacuee
property". No reasons have been recorded for coming to this finding. No
issue was framed in the suit on this point. Property was being treated and
dealt with as evacuee property throughout. Respondent in the earlier proceeding
did not take the stand that the property was not the evacuee property, on the
contrary he treated the property to be a part of "compensation pool"
which is evident from the fact that the respondent filed the revision petition
under Sections 24 and 33 of the Act by treating the property to be an evacuee
property. The Department in CWP No. 458-D/1958 filed by the Bhagwan Das,
predecessor-in-interest of the respondent had taken a firm stand that the
property formed part of the "compensation pool" within the meaning of
Section 14 of Displaced Persons (Compensation and Rehabilitation) Act, 1954.
finding recorded by the High Court is bereft of any reasons whatsoever, against
the record and the findings recorded in the earlier round of litigation. The
same deserves to be set aside.
Court erred in not appreciating that the matter with regard to the validity of
the sale in favour of the appellant had been decided between the parties in the
earlier proceedings and the decision attained finality up to this Court. The
respondent could not be permitted to canvass against this issue again in the
present suit. The grounds of challenge to the ownership of the respondent in
the present case is the same which was taken by him in the earlier proceedings
under Sections 24 and 33 of the Act and the Writ Petition and the Appeal in
this Court. Since the decision had already been rendered in favour of the
appellant on the point, the respondent was estopped in the law from challenging
the sale made in favour of the appellant and his ownership on the same grounds
in the present case.
of the custodian is not the tenant of the custodian. This is clear from the
definition of the word "allotment" in Section 2(a) of The
Administration of Evacuee Property Act, 1950. This definition is in the
following terms:- "S.2(a): "allotment" means the grant by a
person duly authorized in this behalf of a right of use of occupation of any
immoveable evacuee property to any other person, but does not include a grant
by way of lease;" It is clear from this definition that the allottee is
not a lessee but is merely a licensee of the Department. On the disposal of the
property under The Displaced Persons (Compensation and Rehabilitation) Act, by
auction or otherwise, the allottee of the custodian or the occupier of the
premises becomes the tenant of the transferee.
29 which is a special provision enacted to give protection from ejectment to
the class of persons or class of property to be notified under clause (2) of
section 29 a deeming provision is introduced whereby such allottee becomes
tenant of the transferee which was held by it immediately before the transfer.
Section 29 reads as under:- " S. 29 (1) Where any person to whom the
provisions of this section apply, is in lawful possession of any immovable
property of the class notified under sub-section (2), which is transferred to
another person under the provisions of this Act, then, notwithstanding anything
contained in any other law, such person shall, without prejudice to any other
right which he may have in the property, be deemed to be a tenant of the
transferee on the same terms and conditions as to payment of rent or otherwise
on which he held the property immediately before the transfer :
that notwithstanding anything contained in any such terms and conditions, no
such person shall be liable to be ejected from the property during such period
not exceeding two years as may be prescribed in respect of that class of
property, except on any of the following grounds, namely:-
that he has neither paid nor tendered the whole amount of arrears of rent due
after the date of the transfer within one month of the date on which a notice
of demand has been served on him by the transferee in the manner provided in
Section 106 of the Transfer of Property Act, 1882;
he has, without obtaining the consent of the transferee in writing-
or otherwise parted with the possession of the whole or any part of the
used the property for a purpose other than the purpose for which he was using
it immediately before the transfer;
he has committed any act which is destructive of, or permanently injurious to,
The Central Government may, from time to time by notification in the Official
Gazette, specify the class of persons to whom, and the class of immovable
property in the compensation pool, other than agricultural land, in respect of
which, the provisions of this section shall apply and in issuing any such
notification the Central Government shall have regard to the following matters,
that is to say,-
length of the period for which any such persons may have been in lawful
possession of the property;
difficulty of obtaining alternative accommodation;
availability of any other suitable residential accommodation for the use of the
other matters as may be prescribed."
sub-Section (1) of Section 29, a person in lawful possession of any immovable
property notwithstanding anything contained in any other law and without
prejudice to any other right which he may have in the property by a deemed
fiction becomes the tenant of the person to whom the property is transferred on
the same terms and conditions as to the payment of rent or otherwise on which
the property was held by him immediately before the transfer. Protection
granted under Section 29(1) is not absolute and as per proviso is limited for a
period of two years.
during the period of two years such a person could be evicted if the grounds
mentioned in clauses (a), (b) and (c) to Section 29(1) came into operation.
Question as to whether an allottee becomes a tenant, or not, will depend on the
question whether the same falls within the purview of Section 29 of the Act. Section
29(2) of the Act provides that the Central Government may from time to time by
a notification in the Official Gazette specify the class of persons to whom,
and the class of immovable property in the compensation pool, other than
agricultural land, in respect of which, the provisions of this Section shall
apply and that the Central Government shall, while issuing such notification,
keep in mind the matters mentioned in clauses (a), (b), (c) and (d) of
exercise of the powers given under Section 29(2), the Central Government issued
a notification SRO 2219. Under this notification, provisions of Section 29 had
been made applicable to the following classes of persons:-
Every person, against whom no arrears of rent in respect of the property in his
lawful possession are outstanding at the date of transfer of property.
Every person, against whom any arrears of rent in respect of the property in
his lawful possession are outstanding at the date of the transfer of the
property, but who has paid up such arrears within sixty days of such date.
Every displaced person having a verified claim against whom any arrears of rent
in respect of the property in his lawful possession are outstanding at the date
of the transfer of the property, but such arrears of rent do not exceed the
amount of compensation payable to him.
Every displaced person having a verified claim against whom arrears of rent in
respect of the property in his lawful possession exceeding the amount of
compensation payable to him are outstanding at the date of transfer of the
property, but who after adjustment of the compensation against such arrears
pays up the balance of the arrears within sixty days of the date of such
adjustment." Bhagwan Das admittedly was not a displaced person and,
therefore, not covered under categories 3 and 4 of the notification. He would
also not fall under categories 1 and 2 as admittedly he did not pay the arrears
of rent due within 60 days of the transfer. This is clear from the fact that
Department had issued demand notice Ext. D-6 much after the transfer of the
property, in the year 1970, to the respondents to pay the arrears of rent from
8.8.1955 i.e. from the inception of the tenancy till its sale in favour of the
appellant on 27.7.1961.
counsel for the respondent then contended that the respondent or his
predecessor-in-interest did not either have the notice or the knowledge of the
transfer of the property in favour of the appellant and, therefore, the period
of 60 days should be counted from the date of acquiring the knowledge of this
fact by the respondent in the year 1978. This contention cannot be accepted
because of the clear provision of the notification which requires payment of
the arrears within 60 days of the date of transfer. Bhagwan Das,
predecessor-in- interest, of the respondent knew that the property is likely to
be sold and because of this, he filed the Writ Petition(C) No. 438-D of 1958
seeking a mandamus directing the Department to permit him to participate in the
sale of suit property being the occupant/tenant of the same. The writ petition
was allowed and Bhagwan Dass was permitted to participate in the sale of the
suit property which was to be held either by open auction or by inviting
tenders. The Department had issued advertisement in different newspapers
Dass did not respond to the advertisement and submit his tender. Assertion made
by the respondent that the Bhagwan Dass did not come to know about the
advertisement inviting tenders for the sale of the property or that he did not
come to know about the sale of the property in favour of the appellant cannot
be accepted. Knowledge of this fact would be personal to Bhagwan Dass and there
is nothing on record to show that Bhagwan Dass did not come to know about the
sale of the suit property in favour of the appellant.
Dass died in the year 1962. On 27.7.1961 the payment was required to be made
within 60 days from the date of sale, i.e., upto 27.09.1961. Since Bhagwan Dass
did not fulfil the condition of payment of rent within 60 days from the date of
the sale he did not become the tenant of the appellant.
being the successor-in-interest of Bhagwan Dass would acquire/inherit whatever Bhagwan
Dass possessed. As Bhagwan Dass did not become the tenant of the appellant the
respondent being the successor-in-interest of Bhagwan Dass would also not
become the tenant of the appellant.
the reasons stated above, the appeal is accepted. The judgment and decree
passed by the High Court is set aside and that of the trial Court is restored.
There will be no order as to costs.