Chiranji Lal Khaitan & Ors Vs.
Moti Lal Saraogi  INSC 176 (4 August 1971)
CITATION: 1971 AIR 2116 1972 SCR (1) 22
Bihar & West Bengal (Transferred
Territories) Act, 1956-West Bengal Transferred Territories (Assimilation of
Laws) Act, 1958-West Bengal Non-Agricultural Tenancy Act, 1949-Suit for
ejectment of tenant filed in Bihar territory after notice under s. 106 of T.P.
Act-Suit decreed-Appeal pending in Patna High Court-Territory transferred to
West Bengal-Appeal transferred to Calcutta High Court Suit whether liable to be
dismissed for want of six months' notice under s. 9(1)(b)(iii) of 1949
Act-Section whether made applicable by s. 88 of that Act-Effect of s.3(2) of
1958 Act-No compensation for superstructures payable when tenancy not
terminated under s. 9(1)(b)(iii).
The plaintiff (predecessor-in-interest of the
appellants) leased a plot of land then situate in Bihar State to the defendant
by oral lease in 1943. In 1947 without the plaintiff's knowledge the defendant
built certain superstructures on the land. In 1948 the plaintiff asked him to
remove the structures. On his failure to do so the plaintiff in 'September,
1948 gave him a notice to quit under s.106 of the Transfer of Property Act. Thereafter
he filed a suit which was decreed by the trial court in 1952.
The first appellate court affirmed the
decree. The defendant's second appeal was pending in the Patna High Court when
the area in question was transferred to West Bengal. Under the provisions of
the Bihar & West Bengal (Transferred Territories) Act, 1956 the said appeal
was transferred to the Calcutta High Court. In 1958 the West Bengal Legislature
enacted the West Bengal Transferred Territories (Assimilation of Laws) Act,
1958. The Calcutta High Court in 1965 set aside the decree and dismissed the
plaintiff's suit because six months' notice as required under s.9(1)(b)(iii) of
the West Bengal Non-Agricultural Tenancy Act, 1949 had not been given.
According to the High Court s.9 was made applicable by s.88 of the Act which
was in wide terms. With certificate appeal against the judgment of the Calcutta
High Court was filed in this Court. Allowing the appeal,
HELD : (i) The provisions of the 1949 Act did
not apply to the 'transferred territories' on their own force. They were
extended to these territories under the provisions of 1958 Act. Section 3 of
that Act while repealing the laws that were in force in the 'transferred
territory' and extending the laws that were no force in the rest of' West
Bengal saved the previous operation of the existing laws so repealed and
'further saved anything done or suffered under those laws. [28C-E] In other
words because of cl.(a) of the proviso to s.3(2) acts duly ,done under the
repealed laws are protected. The quit notice given under s.106 of the Transfer
of Property Act by the plaintiff was an act duly done under a repealed law and
was therefore protected. Its 23 validity could not be tested on the basis of
the provision of the 1949 Act. This interpretation advances public interest
because otherwise all ejectment suits which had been instituted before, the
transfer of territories had been effected would automatically fail for
non-compliance of s.9 of the 1949 Act, a law which was not in force in the transferred
territory before their transfer. The legislature would not have intended such a
result. [28E-G] (ii)The liability to pay reasonable compensation for the
structure,., Put up by the tenant arises under the proviso to cl.(iii) of
9.9(1)(b). That proviso imposes the liability to pay reasonable compensation
for the structures put up only when the termination of the tenancy is made
under cl.(iii) of s.9(1)(b) and not otherwise. As the termination of the
tenancy in the present case was not made under that provision the question of
paying compensation did not arise.
CIVIL APPELLATE JURISDICTIONION: Civil Appeal
No. 1973 of 1966.
Appeal from the Judgment and decree dated
August 30, 1965 of the Calcutta High Court in Appeal from Appellate Decree No. 1033
V.S. Desai, Krishna Sen and B. P Maheshwari,
for the appellants.
D.N. Mukherjee and A. G. Ratnaparkhi, for
respondent, No. 1 (a).
The Judgment of the Court was delivered by
Hegde,J.--This appeal by certificate arises from the decision of the Calcutta
High Court in its appellate decree No.
1033 of 1956. The appellants are the legal
of the. original plaintiff Chiranji Lal
Khaitan. The plaintiff was the owner of the suit property. According to the
plaint case, the plaintiff leased out the property described in Sch. III to the
plaint a vacant plot to the defendant in June 1943 on a monthly rental of Rs.
20/-. It was an oral lease. The defendant took on lease that property for the
purpose of carrying on his motor business. But in the year 1947 without the
plaintiff's knowledge the defendant constructed several structures on the land.
In 1948 the plaintiff asked him to remove those structures but the defendant
did not comply with that demand, hence in September 1948, the plaintiff served
on him a notice to quit determining the tenancy With effect from the 1st
November, 1948. As the defendant did not surrender possession of the
property,-the plaintiff instituted the suit from which this appeal M 1245 Sup
CI/71 24 arises on January 3, 1940 in the court of Muinsif at Purulia. At the
time of the institution of the suit, the suit property was within the limits of
the State of Bihar.
The defendant resisted the suit on various
grounds. The learned trial judge rejected all those grounds and decreed the
suit ill May, 1952, as prayed for and directed the defendant to deliver vacant
possession of the suit plot after removing the structures put up by him. The
decree of the trial court was affirmed by the List appellate court on July 11,
1952. Meanwhile in 1956, some of the border areas of the Bihar State were
transferred to the State of West Bengal as a result of the amendment of the
One of the areas that stood transferred to
the State of West Bengal is that concerned in the present litigation. The
transfer in question took place on November 1, 1956. The defendant filed a
,second appeal. against the aforementioned decree in High Court of Patna on
September 7, 1956 and the same was admitted by the High Court on September 10,
That appeal stood transferred to the High
Court of Calcutta under the provisions of the Bihar and West Bengal Transfer of
Territories Act, 1956, the Act under which the transfer of territories
mentioned earlier took place. Part VIl of that Act provided that the law then
in force in the transferred ,territories was to continue until otherwise
provided by the ,competent legislature or other competent authority. In 1959
the West Bengal legislature enacted the West Bengal Transferred Territories
(Assimilation of Laws) Act, 1958 (to be hereinafter referred to as the '1958
That Act came into force on July 1, 1959. The
second appeal filed by the ,defendant which had stood transferred to the
Calcutta High ,Court came up for hearing before that court on August 10, 1965.
Before the High Court the defendant's Counsel pressed for decision only two
points viz. , (1)That the plaintiff's claim is barred by equitable estoppel and
(2) -the suit is liable to be dismissed under' s. 9 read with s. 80 of the West
Bengal Non-agricultural Tenancy Act, 1949 (to be hereinafter referred to as the
The High Court rejected the first contention.
Agreeing with the courts below, it came to the conclusion that there is no
reliable evidence to show that the structures in question 25 were put up either
with the consent or knowledge of the plaintiff. But it accepted the second
contention advanced on behalf of the defendant and dismissed the suit. Hence
All the courts below have concurrently come
to the conclusion that the defendant has failed to establish his plea of
equitable estoppel. That conclusion is based on findings of fact. We see no
reason to review those findings.
The only question that we have to consider is
whether the High Court was right in holding that the suit for ejectment ought
to fail for non-compliance of s. 9(1)(b)(iii). The High Court held that the
plaintiff having failed to give six months' notice before instituting the suit
as required by the aforesaid provision, the suit is liable to be dismissed.
It is urged on behalf of the appellants that
s. 9 of the '1949' Act is not applicable to the facts of the case.
Before instituting the suit for ejectment the
plaintiff had given a notice to quit under s. 106 of the Transfer of Property
Act, the governing provision, at the time of the institution of the suit. It
was not disputed that the notice to quit in question at the time it was given
was a valid notice. Therefore all that we have to see is whether because of the
provisions of the 1949 Act read with the provisions of the 1958 Act', the suit
which was validly instituted has ceased to be maintainable.
We have earlier seen that under the
provisions of the Bihar and West Bengal (Transfer of Territories) Act, 1956,
the existing laws were continued till appropriate provisions are made by the
concerned legislatures. Therefore s. 106 of the Transfer of Property Act
continued to be in force in the area concerned till the 1958 Act' came into
force. Section 3 of that Act provides "(1) All State laws which,
immediately before the appointed day, extend to, or are not in force in, the
State of West Bengal, but do not extend to, or are not in force in, the
transferred territories shall as from that day, extend to or, as the caes may
be, come into force in the transferred territories.
26 Provided that the State law specified in
Schedule I shall extend to the transferred territories subject to the amendment
specified in that Schedule;
(2)All State laws which, immediately before
the appointed day are in force in the whole or any 1,art of the transferred
territories but not in the rest of West Bengal shall, on that day, stand
repealed in the transferred territories :
Provided that such repeal shall not affect
(a) the previous operation of any Slate law so repealed or anything duly done
or suffered there under ; or (b)any, right, privilege, obligation, or liability
acquired, accured or incurred under any State law so repealed ; or (c)any
penalty, forfeiture or punishment incurred in respect of any offence committed
against any State law so repealed ; or (d)any investigation, legal proceeding
or remedy in respect of any such right, privilege, obligation, liability,
penalty, forfeiture or punishment as aforesaid and any such investigation,
legal proceeding or remedy may be instituted, continued or enforced and any
such penalty, forfeiture or punishment may be imposed, as if this Act had not
(The remaining portion of the section is not
relevant for our present purpose.) The expression "State law" is
defined thus in S. 2(b) "" State law" means so much of any
enactment, 'ordinance or regulation as relates to. any of the matters
enumerated in Lists II and III in the Seventh Schedule to the Constitution and
include any order, by-law, rule, Scheme notification or other instrument having
the force of law"..
27 One of the statutes that stood extended to
the transferred territories under the '1958 Act' is the '1949 Act'.
Section 9(1)(b)(iii) of that Act provides :
"(1) Notwithstanding anything contained
any other law for the time being in force or
in any contract if any non-agricultural land has been held for a term of more
than one year but less than twelve years(b)without a lease in writing
then the tenant holding such non-agricultural
land shall be liable to ejectment on one or more of the following grounds and
not otherwise namely ;
(iii)on the ground that the tenancy has been
terminated by the landlord by six months' notice in writing expiring with the
end of a year of the tenancy served on the tenant in the prescribed manner in
the case of tenancies of the class specified in clause (b), ;
Provided that a tenant shall not be liable to
ejectment on the ground specified in clause (iii) except on payment of such
reasonable compensation as may be agreed upon between the landlord and the
tenant or if they do not agree, as may be, determined by the Court on the
application of the landlord or such tenant.-The only other relevant provision
is section 88 of that Act which says :
"The provisions of this Act shall have
effect in respect of all suits, appeals or proceedings including proceedings in
execution for ejectment of a non-agricultural tenant which are pending at the
date of commencement of this Act.
The contention based on s. 9(1)(b)(iii) was
taken for the first time in the High Court of Calcutta. The High Court as
mentioned earlier has accepted that contention. If s. 9 read with S. 88 of the
'1949 Act' governs this appeal then undoubtedly the plaintiff's suit has to
fail. But the 28 question is whether those provisions are not subject to s. 3
of the '1958 Act'? This question has not been considered by the High Court. The
High Court was greatly impressed by the width of S. 88 of the '1949 Act'. Read
by itself there is no doubt that that provision makes applicable all the
provisions of the '1949 Act' to all suits, appeals or proceedings including
proceedings in execution for ejectment of non-agricultural tenant which was
pending at the time, of the commencement of that Act. There is no dispute that
the plaintiff has not complied with the requirements of S. 9(1)(b)(iii) of that
Act. Therefore if the plaintiff was required to comply with the provisions of
the '1949 Act' in all respects, he having not complied with the same, the suit
ought to fail. But then, the provisions of the '1949 Act" did not apply to
the 'transferred territories' on their own force. They were extended to those
territories under the provisions of the '1958 Act'. Therefore their application
is subject to the conditions laid down by the '1958 Act'.
As seen earlier S. 3 of that Act while
repealing the laws that Were in force in the 'transferred territory and
extending the laws that were in force in the rest of West Bengal saved the
previous operation of the existing laws so repealed and further saved anything
duly done or suffered under those laws. In other words because of cl. (a) of
the proviso to S. 3(2), acts duly done under the repealed laws are protected.
Hence the quit notice given under S. 106 of the Transfer of Property Act by the
plaintiff was an act duly done under a repealed law. That act is protected. Its
validity cannot be tested on the basis of the provisions of the '1949 Act'.
This is plain from the language of S. 3(2) of the '1958 Act'. That
interpretation also advances public interest. Otherwise all ejectment suits
which had been instituted before the transfer of territories had been effected
would automatically fail for non-compliance of s. 9 of the '1949 Act', a law
which was not in force in the transferred territories before their transfer.
The legislature would not have intended such a result.
If the plaintiff was not required to comply
with requirements of S. 9(1)(b)(iii) of the '1949 Act'-as we think he was
not-then the plaintiff is not liable to pay any compensation for the structures
put up by the defendant.
The liability to pay reasonable compensation
for the structures put up by the tenant arises under the proviso to cl. (iii)
of 29 s.9(1)(b). That proviso imposed the liability to pay reasonable
compensation for the structures put up only when the termination of the tenancy
is made under cl. (iii) of s.
9(1)(b) and not otherwise. As the termination
of the tenancy was not made under that provision, the question of paying
compensation does not arise.
In the result this appeal is allowed,
judgment and decree of the Calcutta High Court are set aside and that of the
trial court as affirmed by the first appellate court is restored.
Parties to bear their own costs in this Court
and in the High Court.
G.C. Appeal allowed.