Praduman Kumar Vs. Virendra Goyal
[1969] INSC 72 (11 March 1969)
11/03/1969 SHAH, J.C.
SHAH, J.C.
GROVER, A.N.
CITATION: 1969 AIR 1349 1969 SCR (3) 950 1969
SCC (1) 714
ACT:
Transfer of Property Act (4 of 1882) s.
114-Relief against forfeiture-Opportunity given-Trial Court-Failure to avail-
Appellate Court's jurisdiction.
HEADNOTE:
In a lease of land, it was covenanted that in
the event of default of payment of rent for two consecutive years, the tenancy
rights will stand forfeited. As the rent remain due and in arrears for two
years, the landlord filed a suit for the eviction of the tenants and for
payment of the arrears of rent and compensation. The tenants claimed relief
against forfeiture of their tenancy rights under s. 114 of the Transfer of Property
Act and deposited in Court an amount less than the amount due. The Trial Court
decreed the suit holding that the conditions relating to deposit in Court of
rent in arrear, interest thereon, and costs of the suit were not complied with.
The tenants appealed and offered to pay balance of rent due together with costs
of the suit and the appeal and interest, and deposited an amount much larger
than due. The appellate court allowed the appeal holding that the tenants were
entitled to the benefit of s. 114 when they were willing and ready to pay more
than what was due, and there were valuable constructions on the plots and the
respondent's dispossession would put them to a great loss. The High Court
dismissed the appeal against this decision. In appeal before this Court, the
landlord contended that the jurisdiction under s. '114 to relieve against
forfeiture could only be exercised by the Court of First Instance; that the
tenants having failed to avail of the opportunity given by the Trial Court to
pay the amount due with interests and costs, the appellate court had no
jurisdiction to grant another opportunity; and that the discretion was not
properly exercised in this case. Repelling the contentions, this Court :-
HELD : The covenant of 'forfeiture of tenancy
for non- payment of rent is regarded by the Courts as merely a clause for
securing payment of rent, and unless the tenant has by his conduct disentitled
himself to equitable relief the Courts grant relief against forefeiture of
tenancy on the tenant paying the rent due, interest thereon and costs of the
suit. Jurisdiction to relieve against forefeiture for non-payment of rent may
be exercised by the Court if the tenant in a suit in ejectment at the hearing
of the suit pays the arrears of rent together with interest thereon and full
costs of the suit. In terms s. 114 makes payment of rent at the hearing of the
suit in ejectment a condition of the exercise of the Court's jurisdiction but
an appeal being a rehearing of the suit, in appropriate cases, it is open to
the Appellate Court at the hearing of the appeal to relieve the tenant in
default against forfeiture. Passing of a decree in ejectment against the tenant
by the Court of First Instance does not take away the jurisdiction of the
Appellate Court to grant equitable relief. [953 C] Failure to avail themselves
of the opportunity does not operate as a bar to the jurisdiction of the
Appellate Court.
The Appellate Court may, having regard to the
conduct of the tenant, decline to exercise its discretion to grant him relief
against forfeiture. [954 A] 951 Chilukuri Tripura Sundaramma v. Chitukuri
Venkates-Warlu alias Ramchandram and Others, A.I.R. 1949 Mad. 841; Janab Vellhi
and others v. Smt. K. Kadervet-- Thayammal, A.I.R.
1958 Mad. 232; Shrikishanlal and Others v.
Ramnath Jankiprasad Ahir and others, I.L.R. 1944 Nag. 877; Budhi Ballabh and
others v. Jai Kishen Kandpal, 1963 A.L.J. 132, Bhagwant Rambhau Khese v.
Ramchandra Kesho Pathak, A.I.R.
1953 Bom. 129; Namdeo Lokman Lodhi v.
Narmadabai and others, [1953] S.C.R. 1009. 1025, referred to.
Having regard to the circumstances that
valuable constructions were put up on the land and that the tenants had
deposited much larger amount than due, the discretion was rightly exercised in
favour of the tenant In an appeal with special leave, this Court will not
ordinarily interfere with an order made in exercise of the discretion of the
Courts below, especially when there was evidence that the tenants were guilty
of conduct disentitling them to relief against forfeiture for non-payment of
rent. [954 E]
CIVIL APPELLATE JURISDICTION : Civil Appeal
No. 648 of 1966.
Appeal by special leave from the order dated
December 4, 1964 of the Allahabad High Court in Second Appeal No.
3310 of 1964.
Sarjoo Prasad and J. P. Goyal for the
appellant.
R. K. Garg and A. N. Goyal, for respondent
No. 1.
R. K. Garg, D. P. Singh, S. C. Agarwala, Uma
Dutt and S. Chakravarti, for respondent No. 2.
The Judgment of the Court was delivered by
Shah, J. Under a deed dated October 28, 1949, Virendra Goyal, the first
respondent herein, obtained permanent tenancy rights in 28 plots of land of the
ownership of Lala Praduman Kumar. The tenant agreed to pay Rs. 250/- per annum
as advance rent on the first day of January of each year, and in default of
payment of rent for two consicutive years the tenancy rights were to stand
forfeited. Goyal transferred his tenancy rights to Lala Hukam Chand.
Pursuant to the lease several tenements were
raised on the land demised.
The tenant failed to pay the rent accrued due
for two years.
The appellant then served a notice on January
4, 1960, terminating the tenancy and instituted an action in the Court of the
City Munsiff, Saharanpur, against Virendra Goyal and Lala Hukam Chand for a
decree in ejectment and for an order for payment of' Rs. 545/1 1 /- as rent and
compensation.
Several contentions were raised in their
written statement by the defendants one of which alone is material. The tenants
prayed that they should be given relief against forfeiture of their tenancy
rights under s. 114 of the Transfer of Property Act. 'In the Trial 952 Court
the tenants deposited an amount of Rs. 1,099-34. The Trial Judge held that the
conditions relating to deposit in Court of rent in arrear interest thereon, and
costs of the suit were not 'Compiled with and decreed the plaintiff's claim. In
appeal to the District Court the tenant offered to pay the balance of the
amount of the rent due together with costs of the suit and appeal and interest
at the rate of 6% per annum or such other rate as the Court may direct and
deposit in Court Rs. 2,082.50 in the aggregate. The learned District Judge was
of the view that the amount paid by the tenants was in excess of the amount due
by them and observed :
". . . the appellants have deposited
much more amount than is due to the respondent as arrears of rent the costs of
the suit and of the appeal and the interest. There is no reason why benefit of
section 1 1 4 of the Transfer of Property Act be not given to the appellants
when they are ready and willing to pay much more amount than is actually due to
the respondent. The fact is that there are valuable constructions over the plot
and defendants dispossession would put them to a great loss. It is for this
reason that they are prepared to pay the amount that may be demanded from them.
1, therefore, find that the appellants are entitled to the benefit of section
114 of the Transfer of Property Act and are relieved against the
forfeiture".
The second appeal against this decision was
summarily dismissed by the High Court of Allahabad.
In appeal to this Court counsel for the
appellant contends (1) that jurisdiction under s. 114 of the Transfer of
Property Act to relieve against forfeiture for non-payment of rent may only be
exercised by the Court of First Instance and not by the Court of Appeal;
(2) that the Trial Court gave an opportunity
to the tenants to pay the amount of rent due together with interest and costs,
but the tenants failed to avail themselves of the opportunity. In the circumstances
the appellate Court had no jurisdiction to grant another opportunity to the
tenants to make the requisite payment and grant relief against forfeiture of
the tenancy;
(3) that in any event, discretion was, in the
circumstances, not properly exercised by the District Court.
953 In our view, there is no substance in any
of the contentions. Section 114 of the Transfer of Property Act provides
"Where a lease of immovable property has determined by forfeiture for
non-payment of rent, and the lessor sues to eject the lessee, if, at the
hearing of the suit, the lessee pays or tenders to the lessor the rent in
arrear, together with interest thereon and his full costs of the suit, or gives
such security as the Court thinks sufficient for making such payment within
fifteen days, the Court may, in lieu of making a decree for ejectment, pass an
order relieving the lessee against the forfeiture; and thereupon the lessee
shall hold the property leased as if the forfeiture had not occurred".
The covenant of forfeiture of tenancy for
non-payment of rent is regarded by the Courts as merely a clause for securing
payment of rent, and unless the tenant has by his conduct disentitled himself
to equitable relief the Courts grant relief against forfeiture of tenancy on
the tenant paying the rent due, interest thereon and costs of the suit.
Jurisdiction to relieve against forfeiture
for non-payment of rent may be exercised by the Court if the tenant in a suit
in ejectment at the hearing of the suit pays the arrears of rent together with
interest thereon and full costs of the suit. In terms s. 114 makes payment of
rent at the hearing of the suit in ejectment a condition of the exercise of the
Courts' jurisdiction but an appeal being a rehearing of the suit, in
appropriate cases it is open to the appellate Court at the hearing of the
appeal to relieve the tenant in default against forfeiture. Passing of a decree
in ejectment against the tenant by the Court of First Instance does not take
away the jurisdiction of the appel- late Court to grant equitable relief. This
is the view taken by the High Courts in India: see Chilukuri Tripura Sundaramma
v. Chilkuri Venketes-Warlu alias Ramchandram and others(1) Janab Vellathi and
others v. Smt. K. Kadervel Thayammal (2) ; Shrikishanlal and others v. Ramnath
Jankiprasad Ahir and others(3); Budhi Ballabh and others v. Jai Kishen
Kandpal(4). The High Court of Bombay in cases arising under the Bombay Rents,
Hotel and Lodging House Rates Control Act, 1947, has also expressed the same
opinion in Bhagwant Rambhau Khese v. Ramchandra Kesho Pathak(5).
We do not think that there is any bar to the
exercise of jurisdiction by the appellate court merely because in the Court of
First Instance relief against forfeiture was claimed by the tenants and they failed
to avail themselves of the opportunity of paying the amount of rent together
with interest thereon and costs of the suit.
(1) A.I.R. 1949 Mad. 841. (2) A.I.R. 1958
Mad. 232.
(3) I.L.R. 1944 Nag. 877. (4) 1963 A.L.J.
132.
(5) A.I.R. 1953 Bom. 129.
954 Failure to avail themselves of the
opportunity does not operate as a bar to the jurisdiction of the Appellate
Court.
The Appellate Court may, having regard to the
conduct of the tenant, decline to exercise its. discretion to grant him relief
against forfeiture. The question is not one of..jurisdiction but of discretion.
This Court in Namdeo Lokman Lodhi v. Narmadabai and others(1) has observed at
p. 1025 :
"....... in exercising the discretion
(under s. 114 of the Transfer of Property Act), each case must be judged by
itself, the delay, the conduct of the parties and the difficulties to which the
landlord has been put' should be weighed against the tenant....... It is a
maxim of equity that a person who comes in equity must do equity and must come with
clean hands and if the conduct of the tenant is such that it disentitles him to
relief in equity, then the court's hands are not tied to exercise it in his
favour".
The District Court has observed that valuable
constructions had been put upon the land leased and the tenants had deposited
an amount very much larger than the amount due to the landlord. Having regard
to the circumstances the District Court was of the view that discretion should
be exercised in favour of the tenants. The High Court summarily dismissed the
appeal. The High Court must be taken to have confirmed the view of the District
Court. In an appeal with special leave, this Court will not ordinarily
interfere with an order made in exercise of the discretion of the Courts below,
specially when there is no evidence that the tenants were guilty of conduct
disentitling them to relief against forfeiture for non-payment of rent.
The appeal therefore fails and is dismissed
with costs.
Y.P. Appeal dismissed.
(1) [1953] S.C.R.1009,1025.
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