M/S Kamakshi Builders Vs. M/S Ambedkar Educational Society &Amp; Ors 
Insc 633 (18 May 2007)
S.B. Sinha & Markandey Katju
S.B. SINHA, J :
1. This appeal is directed against the judgment and order dated 31.12.1999
passed by the High Court of Andhra Pradesh, allowing the appeal from a judgment
and decree dated 05.09.1998 passed by the IV Senior Civil Judge, City Civil
Court, Hyderabad in O.S. No. 161 of 1989.
2. Respondent No. 3 herein was the owner of the property which is situated
at Bagh Lingampalli, Hyderabad. It was let out to Respondent No.
1, where an educational institution was being run on a monthly rent of
Rs.1,200/- by a deed of lease dated 16.05.1973. The period of lease was
initially for 11 months, which expired in 1975. Respondent No. 1, however, did
not surrender the tenancy or deliver vacant possession of the tenanted premises
to Respondent No.3. It tendered rents till December 1976. No rent, however, was
demanded by Respondent No. 3 from Respondent No.1.
Several constructions were raised by it from time to time.
3. Respondent No. 3, however, entered into a development agreement with the
managing partner of the appellant and other persons on 01.04.1986.
A deed of partnership was executed on 21.04.1986. Disputes and differences
having arisen between the partners, the same were referred to an arbitrator. An
arbitration award was passed on 22.11.1987, in terms whereof a sum of
Rs.4,00,000/- was awarded in favour of Respondent No. 3. The said award was
made the rule of court in terms of Section 14(2) of the Arbitration Act,
1940 by an order dated 29.02.1988. Allegedly, by reason of the said award,
the appellant became the owner of the property. Respondent No. 1 was called upon
to pay rents in respect of the suit property by a notice dated 22.11.1987. The
tenancy was terminated by a notice dated 30.10.1988. On or about 08.12.1988,
Respondent No. 1, in reply to the said notice, asked the appellant to furnish
the particulars in regard to the ownership of the suit property. It, however,
not claimed therein that it had acquired any ownership by reason of a purported
oral gift made by Respondent No. 3 herein, as appears to be the case now. As it
failed to vacate the premises, a suit for recovery of possession and arrears of
rents and also for damages for wrongful use and occupation of the property was
filed by the appellant. In the written statement filed in the suit, it was,
inter alia, contended that Respondent No. 3 herein made an oral gift in its
favour on or about 01.10.1975. In the alternative, it was contended that it had
acquired an indefeasible title in respect of the property in question by
adverse possession. Respondent No. 3 in its written statement supported the
case of the appellant, inter alia, denying and disputing the claim of
Respondent No. 1 herein that he made an oral gift in its favour.
4. In the suit, inter alia, the following issues were framed :
"I. Whether the oral gift by the third defendant in favour of first
defendant is true and valid and binding on the plaintiff ? II. Whether the
documents relied upon by the plaintiff are brought into existence in between
the plaintiff and third defendant in the circumstances alleged in W.S. ?"
5. Respondent No. 1 admittedly did not examine himself. The suit of the
appellant was decreed. The learned Trial Judge opined :
i) The burden was on Respondent No. 1 to prove the oral gift.
ii) There was no reason for it not to disclose thereabout in its reply to
the notice issued by the appellant.
iii) No declaration was filed by Respondent No. 1 before the Urban Land
Ceiling Authority in the year 1976.
iv) A purported letter written by Respondent No. 3 confirming the oral gift
had not been produced.
v) Although constructions were raised by it on the suit premises, in none of
the applications, the right to make constructions was based on the ownership of
the property derived by reason of the oral gift.
vi) No disclosure was made in regard to the ownership of the property, in the
return filed by it before the Registrar under the Societies Registration Act.
vii) No resolution had been passed by the Governing Body accepting alleged
viii) No special quota or any reservation in the institution run by
Respondent No. 1-Society for Muslims, having been made, the plea of oral gift
cannot be believed.
ix) No display on any board was made mentioning that the property was gifted
to Respondent No.1-Society.
x) No mutation was effected pursuant to or in furtherance of the alleged
oral gift on 01.10.1975.
xi) The witnesses of the purported oral gift being DW-2, DW-3 and DW- 4,
being the Chairman of the Respondent No.1-society, his P.A. and a Chartered
Accountant and friend of DW-2 respectively, no reliance can be placed upon their
xii) Plea of purported oral gift was made for the first time only in the
xiii) No gift tax was paid in respect of the said purported gift either by
Respondent No. 3 or by Respondent No.1.
xiv) Had Respondent No. 1 any intention to make any gift, ordinarily it
would have been presumed to do so in favour of the minority Muslim Societies.
xv) No explanation had been offered by Respondent No. 1 as to why it paid
rent upto October 1976.
xvi) In none of the letters addressed by Respondent No. 1 to the University
Grants Commission, Osmania University, Urban Land Ceiling Authority, Registrar
of Cooperative Societies, Municipal Corporation of Hyderabad, the factum of the
alleged deed of gift was disclosed.
xvii) The purported reply sent to the notice marked as Ex. A4 had not been
xviii) For proving the oral gift Respondent No. 1 should have examined
xix) Respondent No. 1 had not been able to show that it had acquired title
by adverse possession.
6. The High Court, however, by reason of the impugned judgment reversed the
said judgment holding :
i) There was no reason as to why there was no demand to pay rent from
Respondent No.1 for a period of ten years.
ii) No explanation was offered as to why Respondent No. 1was asked to
deliver vacant possession of the property only in the year 1987 and a suit was
filed only in the year 1989.
iii) As Respondent No. 1 constructed a large number of structures on the
schedule property upon obtaining necessary permission from the Municipal
Corporation, Hyderabad and has been paying taxes thereupon and having informed
thereabout to various authorities like University Grants Commission, Osmania
University, Government of Andhra Pradesh, no explanation was offered from Respondent
No. 3 as to why he had been keeping silence for the period upto his entering
into agreement with the appellant as a partner and allowing an award to be
passed by the learned Arbitrator.
iv) Acquiescence on the part of Respondent No. 3 would give rise to a
presumption that Respondent No. 1 had been allowed to raise construction, which
must have been done pursuant to the oral gift of the property.
v) The reasoning of the trial court that donor being a Muslim would not have
gifted it to an institution belonging to other community cannot be accepted. It
was not necessary for Respondent No. 1 to inform about the said oral gift to
various authorities including the University Grants Commission.
vi) The findings of the learned Trial Judge disbelieving the case of
Respondent No. 1 are based on surmises and conjectures.
vii) Non-examination of Respondent No. 3 would give rise to an adverse
inference as burden of proof lay to show lay on him to show that he had not
made any oral gift having regard to his conduct apart from the oral testimony
that Respondent No.1 has paid rent to Respondent No.
3 till 1976.
viii) No materials was produced to show that in fact such rent was tendered
7. As regards the claim of Respondent No. 1 that it had perfected its title
by adverse possession, it was held that although a tenant cannot claim adverse
possession so long as he continues to be a tenant, but once his tenancy is
determined, his possession would be adverse to that of the owner.
8. Appellant is, thus, before us.
9. Mr. Dushyant A. Dave, learned Senior Counsel appearing on behalf of the
appellant, would submit :
i) The High Court committed a serious error in passing the impugned judgment
insofar as it failed to take into consideration that Respondent No. 3 being
admittedly the owner of the property, the burden lay on Respondent No. 1 who
had alleged an oral gift was made in its favour, and it having failed to prove
the same, assuming that Respondent No. 3 did not demand rent or did not take
step therefor, Respondent No. 1 cannot be said to have proved its case.
ii) The question of Respondent No. 1 acquiring any title by adverse
possession would not arise, as at all material point of time, it was a tenant.
10. Mr. K. Parasaran, learned Senior Counsel appearing on behalf of
Respondent No. 1, would, on the other hand, submit :
i) The burden of proof lay heavily on Appellant to prove the oral gift was
made by examining the donor i.e. Respondent No. 3 in the suit and in any event,
as it was incumbent on him to examine himself inasmuch he having supported the
case of the appellant must also be held to be plaintiff.
ii) Although DW-2, one of the attestors of the oral gift in his cross-
examination stated that he had written a letter of thanks to Respondent No.3
for his generous donation, non-production thereof would not give rise to an
adverse inference, inasmuch as had the Respondent No.
3 gone into the witness box, a suggestion would have been put to him in
iii) The learned Trial Judge committed a serious error in opining that
Respondent No. 1 should have displayed the factum of oral gift on any board,
such a conduct, Mr. Parasaran would contend, is very artificial and unnatural.
iv) Although, no application for mutating the name of Respondent No. 1 was
filed, the same was not sufficient to negative the gift, particularly in the
context of other surrounding circumstances.
v) The learned Judge applied different standards by making observation that
Respondent No. 1 had not made any declaration before the Urban Land Ceiling
Authorities about the gift and no minutes thereabout had been produced, as the
appellant or Respondent No. 3 should have produced records of declaration
before the Urban Land Ceiling Authorities, particularly having regard to the
fact that the burden of proof in that behalf was on the appellant as it filed a
suit for ejectment.
vi) Assumption of the learned Trial Judge that Respondent No. 3 being a
Muslim would have gifted the property to some minority institution is based on
vii) The Trial Court has also committed a serious error in drawing adverse
inference against Respondent No. 1 for not issuing any letter to the University
Grants Commission, Osmania University, Urban Land Ceiling Authorities,
Registrar of Cooperative Society, Municipal Corporation of Hyderabad, as there
was no occasion therefor.
11. The learned counsel would contend that having regard to the provisions
contained in Article 67 of the Limitation Act, the suit was barred by
limitation. The deed of lease, being for a period of 11 months, expired on
16.07.1974 and limitation would be deemed to run from the said date.
12. In this connection, our attention has also been drawn to the evidence of
PW-1, who was the Managing Partner of the appellant, which reads thus :
"Just one or two months prior to execution of A.10, I came into contact
with D.3. I do not remember the persons who introduced D.3 to meI came to know
through D.3 that D.1 is tenant. On the date D.3 was introduced to me, he
informed that D. 1 is not paying the rents for the last 10 years"
13. As it was known to the said witness that Respondent No. 1 had not been
paying rents even before the partnership deed was entered into, the appellant
would be presumed to have no knowledge that Respondent No. 1 had been in
possession of the property in assertion of his title by not paying rents. As
Respondent No. 1 was in possession for a period of more than 12 years, it must
be held to have acquired title by prescription.
14. Respondent No. 3 was admittedly the owner of the property. As his
ownership had not been disputed, the burden was on Respondent No. 1 to prove
his title. It has, as noticed hereinbefore, claimed title : (i) by reason of an
oral gift; and (ii) by adverse possession.
15. The case that the oral gift was made on 01.10.1975 was specifically made
out. The witnesses to the said oral gift were members of the Governing Council,
his Personal Assistant and a Chartered Accountant, who admittedly was a friend
16. It is expected of a person who has obtained title by reason of an oral
gift; Hiba although permissible in law, but a heavy burden lay on him to prove
the same. Respondent No. 1 is an educational society. It was running an
institution on the suit property. It was, therefore, expected of it that it
would insist on execution of a registered deed of gift.
17. It may be true that, as a defendant, it was not required to examine
Respondent No. 3 herein , who had been siding with the plaintiff by calling him
as a witness by getting summons to depose in the court. There cannot be any
doubt whatsoever that only by reason of the fact that Respondent No.
3 did not get himself examined for one reason or the other, the same would
mean that Respondent No. 1 discharged its burden. The learned Trial Judge did
not place reliance on depositions of the witnesses examined on behalf of the
Respondents to prove oral gift as they were interested persons. The High Court
did not deal with the matter. The learned Trial Judge analysed the evidences brought
on record by the parties. So far as the appreciation of evidence based on oral
evidence is concerned, the learned Trial Judge having had the occasion to
notice the demeanour of the witnesses, was the best judge to arrive at a
finding in regard to their reliability or trustworthiness. The High Court did
not deal with the matter, ordinarily it could not have even done so [See Raj
bir Kaur and Another v. S. Chokesiri & Co. (1988) 1 SCS 19].
18. It may be true, as has been contended by Mr. Parasaran, that conduct of
the parties would be relevant, but what would be more relevant is the conduct
of a party, who from his status of a tenant acquires the status of the owner of
the property. Acquisition of such ownership by way of gift and, thus, wholly
without consideration, is not expected of a society registered under the
Societies Registration Act. Not only that it was acknowledged such donation to
the donor by issuing an appropriate letter in that behalf (which is said to
have been done). DW-2 although stated before the court that such a letter had
been written, the same had not been proved.
19. Mr. Parasaran himself has relied upon a decision of this Court in Gopal
Krishnaji Ketkar v. Mamomed Haji Latif & Others [1968 (3) SCR 862] wherein
this Court laid down the law in the following terms :
"Even if the burden of proof does not lie on a party, the Court may
draw an adverse inference, if he withholds important documents in his
possession which can throw light on the facts at issue. It is, in or opinion, a
sound practice for those desiring to rely upon a certain state of facts to
withhold from the Court the best evidence which is in their possession which
could throw light upon the issues in controversy and to rely upon the abstract
doctrine of onus of proof:
20. The said decision has been noticed by this Court in subsequent decisions
in Punit Rai v. Dinesh Chaudhary [(2003) 8 SCC 204] and Citibank N.A. etc. v.
Standard Chartered Bank and Others etc. [(2004) 1 SCC 12]
21. As the said letter has not been produced, the inference which could be
drawn therefrom is that either DW-2 did not tell the truth that such a letter
was written and/or an adverse inference could be drawn that had the said letter
been produced, the same would have gone against the interest of Respondent No.
1. In making an oral gift by an owner of the property in favour of his tenant
apart from it being wholly unlikely, actual delivery of possession is
imperative. There is nothing on record to show that at any point of time,
Respondent No. 3 had delivered the possession of the premises in question to
Respondent No. 1. Respondent No. 1 being a tenant, continued to be a tenant.
Its status as a lessee on its own showing merged into a higher status. At what
point of time such status was changed been a relevant fact. It was within the
special knowledge of Respondent No. 3 The onus lay heavily on him to prove the
same. It failed to discharge its burden.
22. The learned Trial Judge cannot be said to have committed any error in
noticing the fact that Respondent No. 1 on its own showing did not file any
application for mutation of its name before the Revenue authorities. It, even
did not take any step to let others know about its change of status, be it the
revenue department, or be it other authorities with which it was dealing,
namely, the University Grants Commission, Government of Andhra Pradesh, Osmania
University, or even Municipal Corporation of Hyderabad. An application for
mutation of one's name in the revenue records by the parties although would not
by itself confer any title, but then a presumption in regard to the nature of
possession can be drawn in that behalf. Had such an application been filed by
Respondent No. 1 before the concerned authorities, at least it could have been
shown that it had claimed possession on its own right, not as a tenant.
23. The High Court although noticed the lease came to an end in the year
1975 and if from the said date or at least from the date of purported oral gift
allegedly made in its favour by Respondent No.1. Any change in the nature of
its position occurred, it was expected of it to accept the same by its conduct.
Why it would pay rent to Respondent No. 3 till October 1976 has not been
24. Acquiescence on the part of Respondent No. 1, as has been noticed by the
High Court, did not confer any title on Respondent No. 1. Conduct may be a
relevant fact, so as to apply the procedural law like estoppel, waiver or
acquiescence, but thereby no title can be conferred.
25. It is now well-settled that time creates title.
26. Acquisition of a title is an inference of law arising out of certain set
of facts. If in law, a person does not acquire title, the same cannot be vested
only by reason of acquiescence or estoppel on the part of other.
27. It may be true that Respondent No. 1 had constructed some buildings;
but it did so at its own risk. If it though that despite its status of a
tenant, it would raise certain constructions, it must have taken a grave risk.
There is nothing on record to show that such permission was granted. Although
Respondent No. 1 claimed its right, it did not produce any document in that
behalf. No application for seeking such permission having been filed, an
adverse inference in that behalf must be drawn.
28. It may be true that Respondent No. 3 herein should have examined himself
and the learned Trial Judge committed a serious error in drawing an adverse
inference in that behalf as against Respondent No. 1. It was, however, so done
keeping in view the fact that Respondent No. 3 was evidently not interested in
the property in view of the fact that it had suffered a decree. For all intent
and purport, even if the submission of Mr. Parasaran is accepted that the
appellant is claiming is claiming only by reason of an award, he has transferred
the property in his favour. He received a valuable consideration in terms of
the award. We are not concerned with the validity thereof. Non-examination of
Respondent No. 3 indisputably would give rise to a presumption, as has been
held by this Court in Sardar Gurbaksh Singh v.
Gurdial Singh [AIR 1927 PC 23], Martand Pandharinath Chaudhari v.
Radhabai Krishnarao Deshmukh [AIR 1931 Bombay 97], and The Ramanathapuram
Market Committee, Virudhunagar v. East India Corpn.
Ltd., Madurai [AIR 1976 Madras 323] and Vidhyadhar v. Manikrao and Anr.
[(1999) 3 SCC 573], but by reason of presumption alone, the burden is not
discharged. A title is not created.
29. A claim of title by prescription by Respondent No. 1 again is not
tenable. It based its claim on a title. It had, therefore, prima facie, no
30. Reliance placed by Mr. Parasaran on Article 67 of the Limitation Act is
also not apposite. It is a special provision. It would apply in a case where a
tenant has ceased to be a tenant in terms of the provisions of the Andhra
Pradesh (Rent and Eviction Control) Act. A tenant continues to be a tenant
despite termination of tenancy. Article 67 would not be attracted in a case
where a tenant remains a statutory tenant. In a case of this nature, Article 65
would apply. As the claim of Respondent No. 1 was based on a title, the onus
was on him to prove the same. Respondent No. 1 failed to discharge the same
and, therefore, the learned Trial Judge, in our opinion, has committed no error
in passing a decree in favour of the plaintiff.
31. In Smt. Shakuntala S. Tiwari v. Hem Chand M. Singhania [(1987) 3 SCC
211], whereupon Mr. Parasaran placed strong reliance, this Court was
considering a case where termination of tenancy in terms of Sections 12 and 13
of the Bombay Rent Act stood admitted. The question of applicability of
Articles 66 and 67 of the Limitation Act was considered from that end. It was
held:- "12. If that is so then on the strict grammatical meaning Article
67 of the Limitation Act would be applicable. This is indubitably a suit by the
landlord against the tenant to recover possession from the tenant. Therefore
the suit clearly comes within Article 67 of the Limitation Act. The suit was
filed because the tenancy was determined by the combined effect of the
operation of Sections 12 and 13 of the Bombay Rent Act. In this connection, the
terms of Sections 12 and 13 of the Bombay Rent Act may be referred to. At the
most it would be within Article 66 of the Limitation Act if we hold that forfeiture
has been incurred by the appellant in view of the breach of the conditions
mentioned in Section 13 of the Bombay Rent Act and on lifting of the embargo
against eviction of tenant in two. Article 66 or Article 67 would be applicable
to the facts of this case; there is no scope of the application of Article 113
of the Limitation Act in any view of the matter. Sections 12 and 13 of the
Bombay Rent Act co-exist and must be harmonized to effect the purpose and
intent of the legislature for the purpose of eviction of the tenant. In that
view of the matter Article 113 of the Limitation Act has no scope of
application. Large number of authorities were cited.
In the view we have taken on the construction of the provisions of Articles
67 and 66 of the Limitation Act and the nature of the cause of action in this
case in the light of Sections 12 and 13 of the Bombay Rent Act, we are of the
opinion that the period of limitation in this case would be 12 years. There is
no dispute that if the period of limitation be 12 years, the suit was not
32. The said decision has no application in the facts and circumstances of
the present case as there is nothing to show that after the expiry of period
envisaged in the lease and despite the fact that the respondent itself had been
paying/tendering monthly rent, there had been final determination of the
tenancy pursuant whereto the respondent was required to hand over the vacant
possession to the landlord. Nothing has been brought on record to show that the
landlord has served any notice directing the tenant to handover vacant
possession upon valid termination of the lease.
33. In Devasahayam (Dead) By Lrs. v. P. Savithramma and Others [(2005) 7 SCC
653], whereto our attention has again been drawn, this Court came to the
conclusion that the civil court had no jurisdiction to try the suit covered by
the rent control legislation. No such contention had, however, been raised. The
question which as to whether the Civil Court would have jurisdiction to
determine a matter must fall for consideration of the trial court. An issue in
that regard should have been framed. In this case, the respondents have raised
a plea of title in itself, the question in regard to the jurisdiction of the
Civil Court has not been raised, presumably in view of the fact, that
ultimately the civil court was bound to determine the question whether the
defendant/respondent No. 3 made an oral gift or not being a complicated
question, could not have gone into in a suit under the Rent Control Act. In any
event, such a question having not been raised, we are of the opinion that the
same should not be permitted to be raised before us for the first time.
34. The plea in regard to lack of jurisdiction of the Civil Court has been
raised for the first time in the Written Submissions filed by the respondents
and not even by the learned counsel while making oral submission.
35. In Sohan Singh and Ors. v. General Manager, Ordnance Factory, Khamaria,
Jablapur and Ors. [AIR 1981 SC 1862], this Court noted the following in this
"We think that the view taken by the High Court on the facts of this
case is not correct because the jurisdiction of the labour court was not
challenged by the respondents in that court."
36. In Nagubai Ammal and Others v. B. Shama Rao and Others [AIR 1956 SC
593], this Court made a distinction between a proceeding which is collusive and
one which is fraudulent. Respondents have never questioned the validity of the
Award and the decree. No issue was framed in that behalf. It is not a case
where the suit can be dismissed on the ground of there being a collusive
proceeding between defendant No. 3 and plaintiff.
37. For the reasons aforementioned, the impugned judgment cannot be
sustained, which is set aside accordingly. The appeal is allowed. No costs.
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