M. J. Talegaonkar v. Tejoomal Lakhmichand Narang & others
1989-07-12
C.MOOKERJEE, SUJATA V.MANOHAR
body1989
DigiLaw.ai
JUDGMENT - C. MOOKERJEE, C.J.: --- This appeal is by M.J. Talegaonkar, defendant No. 1, who was described in the plaint of the Suit No. 604 of 1974 as a member of Bombay Zionist Association for himself and representing all the members of the Bombay Zionist Association, an unregistered Association, having its office at Narang House, 2nd Floor, 41-45, Hamam Street Bombay. The plaintiffs respondents Nos. 1 and ' instituted in this Court the said Suit No. 604 of 1974, inter alias for declaring that the Bombay Zionist Association and the 1st defendant and all members of the said Association or persons claiming through them and the defendants Nos. 2 to 13 had no right, title or interest in the said suit premises, viz., part of the 2nd floor at 41-45, Hamam Street, Bombay, or any part thereof. The prayer (b) of the plaint was for ordering the 1st defendant and all members of the Bombay Zionist Association and the defendants Nos. 2 to 13 to remove themselves and to deliver to the plaintiffs vacant possession of the suit premises. The prayer (c) of the plaint was for recovering from the defendants compensation from July 1971 at the rate of Rs. 240/- per month till 30th April, 1974 for wrongful occupation of the suit premises and further damages till the delivery of possession. The plaintiffs were granted leave under Order 1, Rule 8 of the Code of Civil Procedure for suing the 1st defendant as representing the members of the Bombay Zionist Association. 2. It is undisputed that long before the plaintiffs-respondents Nos. 1 and 2 became the owners of the building known as Narang House situate at 41-45, Hamam Street, Bombay and at least since the year 1921, a tenancy shown in the name of the Bombay Zionist Association in respect of a part of the second floor of the said building had been in existence. The then owners till they transferred their right, title and interest in favour of the plaintiffs respondents Nos. 1 and 2 used to throughout grant rent receipts in respect of the said premises in the name of the Bombay Zionist Association. It is also not disputed that the Bombay Zionist Association is an unregistered body. With effect from 1st June, 1950 the plaintiffs respondents Nos.
1 and 2 used to throughout grant rent receipts in respect of the said premises in the name of the Bombay Zionist Association. It is also not disputed that the Bombay Zionist Association is an unregistered body. With effect from 1st June, 1950 the plaintiffs respondents Nos. 1 and 2 became owners of the premises and thereafter had issued a letter calling upon the Bombay Zionist Association to attorn as a tenant in respect of the said premises under them. It is also not disputed that since the said purchase made by the plaintiffs-respondents Nos. 1 and 2 all along rent used to be paid in the name of the Bombay Zionist Association for which the plaintiffs had granted rent receipts describing the said Association as their tenant in respect of the premises in question. Thereafter the plaintiffs had given a notice addressed to the said Association purporting to determine the said tenancy standing in the name of the Association. A reply was sent on behalf of the Association to the plaintiffs. Thereafter on 2nd March, 1964 the plaintiffs served a second notice to quit again addressed to the Bombay Zionist Association to which again a reply was sent on behalf of the Association. Thereafter, on or about 2nd December, 1964, the present plaintiffs had filed R.A.E. Suit No. 839/6863 of 1964 against the Bombay Zionist Association as a defendant in the Court of Small Causes at Bombay for eviction from the 2nd floor of the building at 63/67, Medows Street, Bombay. In the plaint of the said suit filed in the Court of Small Causes, Bombay, the plaintiffs had, inter alia, averred that the defendant Association was the tenant under the plaintiffs in respect of the suit premises and the said tenancy had been terminated by a notice to quit dated 2nd March, 1964. The plaintiffs further averred the grounds on which they were entitled to recover possession of the said premises from the defendant. The said suit was decreed ex parte against the defendant Association on 15th February, 1968. Upon application made by and on behalf of the defendant, in March 1969, the said ex parte decree passed in R.A.E. Suit No. 839/6863 of 1964 was set aside and the suit was restored.
The said suit was decreed ex parte against the defendant Association on 15th February, 1968. Upon application made by and on behalf of the defendant, in March 1969, the said ex parte decree passed in R.A.E. Suit No. 839/6863 of 1964 was set aside and the suit was restored. It further appears that the defendant in the said suit in the Court of Small Causes having raised objection about the frame of the suit on the ground that the Association was an unregistered one, the plaintiffs thereupon had applied for amendment of the plaint. The trial Court having rejected the said prayer, a revision was taken before the Division Bench of the Court of Small Causes at Bombay, but the revision was also unsuccessful. Thereafter, without obtaining leave from the Court of Small Causes at Bombay, the present plaintiffs had withdrawn the said suit for recovery of possession against the defendant the Bombay Zionist Association. 3. It may be also noted that by granting rent receipts describing the Association as the tenant, the plaintiffs had received rent from the said Association upto the month of June 1971. The cheque issued as rent for the month of July 1971 in favour of the plaintiffs was dishonoured on presentation. On or about 4th September, 1971 the plaintiffs had addressed a letter to the 1st defendant's lawyer to disclose the names of the office-bearers of the Association. No fresh notice purporting to terminate the alleged tenancy was thereafter issued by the plaintiffs. On 14th November, 1973 the plaintiffs had written a letter to the Bombay Zionist Association, inter alia, stating that the plaintiffs had been advised that there was no lawful tenancy between the plaintiffs and the Bombay Zionist Association as the Association was not a registered body and that there could not be any lease or tenancy between a landlord and such unregistered body. The Association was informed that the plaintiffs were taking proceedings in the appropriate Court for ejecting the Association and the information required by the letter was necessary for the institution of the said suit. By the same letter the plaintiffs had claimed moneys which had become due for use and occupation of the premises. 4.
The Association was informed that the plaintiffs were taking proceedings in the appropriate Court for ejecting the Association and the information required by the letter was necessary for the institution of the said suit. By the same letter the plaintiffs had claimed moneys which had become due for use and occupation of the premises. 4. Thereafter, on 23rd April, 1974, the plaintiffs instituted the suit out of which this appeal arises impleading the appellant as defendant No. 1 for himself and representing all members of the Bombay Zionist Association. Defendants Nos. 2 to 8 were the persons who had been inducted by defendant No. 1 as tenants/licensees in respect of three different portions of these premises. Defendant No. 1 and the other defendants filed several sets of written statements contesting the suit. As already stated, the learned Single Judge had decreed the same in favour of the plaintiffs. He, however, did not make any order as regards costs. 5. Both before the learned Single Judge and before us the principal point urged on behalf of the defendant No. 1 was that section 28 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, was attracted to the instant suit and, therefore, the Court of Small Causes, Bombay, had exclusive jurisdiction to try the suit and the same was not maintainable in this Court. In other words, the question is whether the instant suit was one between a landlord and a tenant or a protected licensee who is a deemed tenant relating, inter alia, to recovery of rent and possession of any premises to which the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, apply. In overruling the contentions of the defendant No. 1, the learned Single Judge relied upon the statement of law contained in Halsbury's Laws of England, Volume 23. Third Edition, page 425, paragraph 1017 and the observations made in the judgment of Mr. .Eve in the case of (Jarrot v. Ackerley )1, 113 L.T. 371. Full report of the case is, however, to be found in (1914 - 15) All. E.R. reprint at page 1248. After setting out the principles of law laid down in the above decision, the learned Single Judge has concluded: "No evidence whatever was led on behalf of defendant No. 1.
Full report of the case is, however, to be found in (1914 - 15) All. E.R. reprint at page 1248. After setting out the principles of law laid down in the above decision, the learned Single Judge has concluded: "No evidence whatever was led on behalf of defendant No. 1. There is, therefore, no evidence on record to suggest that the tenancy was taken in the name of some individual members for the Association, or on behalf of all the members of the Association at the time the tenancy was created who undertook the lessee's obligations to the lessor, or on behalf of the members of the Association from time to time or that they undertook the lessee's obligations." 6. For deciding this appeal, it is unnecessary for us to discuss the wider question whether under the law of this country any transfer can be at all made in favour of an unincorporated body or association of individuals. We may, however, point out that under section 5 of the Transfer of Property Act as amended in the year 1929 "living person" includes a company or association or body of individuals, whether incorporated or not, but nothing therein contained shall affect any law for the time being in force relating to transfer of property to or by companies, associations or bodies of individuals. Mr. Nain, the learned Counsel for the plaintiffs respondents Nos. 1 and 2, drew our attention to section 4 of the Transfer of Property Act under which the chapters and sections of the Transfer of Property Act which relate to contracts shall be taken as part of the Indian Contract Act, 1872. Under section 105 of the Transfer of Property Act, the essential elements of a lease are (1) the parties, (2) subject matter, (3) demise, (4) the terms and (5) the consideration or rent. Mr. Nain has contended that a lease is in the nature of a contract and, therefore in order to be a lessee, one must have capacity to enter into contract. In his submission, an unincorporated body not being a judicial person, has no capacity to enter into contract and, therefore, it is precluded from becoming a lessee.
Mr. Nain has contended that a lease is in the nature of a contract and, therefore in order to be a lessee, one must have capacity to enter into contract. In his submission, an unincorporated body not being a judicial person, has no capacity to enter into contract and, therefore, it is precluded from becoming a lessee. Undoubtedly, a body of persons which is neither an incorporated one nor has statutory recognition in the matter of a Society under the Societies Registration Act could not be considered as juristic persons and, therefore, suffers from various legal disabilities, but at the same time, the Indian law recognises several kinds of unincorporated bodies who are capable of having proprietary and other kinds of rights over the immovable properties. We need not pursue the said point at length because the point before us falls within a narrower compass. 7. Does the section 28 of the Bombay Rents, Hotel and Lodging Houses Rates Control Act, 1947, apply to the present case which was instituted by the plaintiff-respondents Nos. 1 and 2 in the Ordinary Original Jurisdiction of this Court? Whether the Bombay Zionist Association itself or its members were jointly tenants or licensees inducted before 1st February, 1973 ? Even if no tenancy could be lawfully created in favour of the Bombay Zionist Association itself which was an unincorporated body, there was no legal bar to the member of the said Association becoming jointly tenants of the premises. The members either individually or jointly had contractual capacity. Therefore, they could individually or in aggregate be tenants. It would be a question of fact in each case whether the landlords on the one hand and the aggregate body of the members on the other hand agreed to create tenancy in favour of all the members jointly or in common. We have already quoted the finding of the learned Single Judge that Association being an unregistered one was not a legal entity and, therefore, was not capable of becoming tenant. He also has held that there could be no tenancy in favour of the persons who were members of the Association because it had not been provided that they had undertaken or had authorised any one to undertake the obligations imposed upon a lessee.
He also has held that there could be no tenancy in favour of the persons who were members of the Association because it had not been provided that they had undertaken or had authorised any one to undertake the obligations imposed upon a lessee. In arriving at the said finding in favour of the plaintiffs the learned Single Judge had relied upon the statement of law contained in Halsbury's Laws of England (3rd Edition) Volume 23, page 425 and had placed reliance upon the decision of Eve. J. in the case of Jarrot v. Ackerly, reported in 85 L.J. Ch. 135. The facts of the said case of Jarrot v. Ackerley (supra) are required to be set out at some length because the facts of the reported case are different and the ratio of the said decision is not at all applicable to the present case before us. In the said reported case a lessee had granted an underlease in favour of a society of automobile mechanic drivers which was not registered either as a Society or trade union. The said indenture of underlease containing usual covenants of lessees was purported to be executed on behalf of the underlessees by only one person purporting to act on behalf of the Society although he had not been appointed to do so under seal. After the head-lessors had forfeited the lease of the person who had granted the said underlease in favour of the Society, an action was originally brought in the name of the said Society itself against the head-lessors seeking to obtain relief under section 4 of the Conveyancing and Law of Property Act, 1892, in respect of their alleged interest in the underlease of a part of the building in question. Subsequently, three persons described as the trustees of the said Society were brought on record as the plaintiffs. The learned Judge, who dismissed the suit as not maintainable, held that the plaintiffs as trustees had no locus standi to sue for an order for vesting in the plaintiffs the premises for the residence of the underlessee with right of renewal. He had proceeded to hold that it had been admitted before him that such an underlease in favour of the members of the Society from time to time could not granted.
He had proceeded to hold that it had been admitted before him that such an underlease in favour of the members of the Society from time to time could not granted. In regard to the alternative argument that the said underlease was in favour of members at the time at which it was granted, the learned Judge had pointed out that the action had not been brought on behalf of such members but on behalf of a different class. The plaintiffs were found to be not entitled to claim as trustees or in any representative or other capacity on behalf of the society formed. The learned Judge had further pointed out that in case the lease was made to the aggregate of individuals, then it could not be inferred that one single member who had executed the counterpart of the lease had authority to bind the other members of the Society. 8. The facts of the present case before us are quite different from those involved in the above cited reported case and the present case has to be decided in the light of different principles of law. Under section 107 of the Transfer of Property Act, a registered written instrument is compulsory in cases of a lease from year to year or for any term exceeding one year of reserving a yearly rent. In India all other kinds of leases of immovable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession. In the absence of a contract or local usage to the contrary the rights and liabilities of the lessor and lessee would be governed by section 108 of the Transfer of Property Act. In the present case there was no written indenture containing covenants by the lessor. The defendant No. 1 claimed a tenancy from month to month. After the Bombay Rents, Hotel and Lodging House Rates Control Act came into force, the mutual rights and obligations are no longer purely contractual but are mostly regulated by statute. A tenancy governed by the Rent Control legislation has been described to be a statutory tenancy.
The defendant No. 1 claimed a tenancy from month to month. After the Bombay Rents, Hotel and Lodging House Rates Control Act came into force, the mutual rights and obligations are no longer purely contractual but are mostly regulated by statute. A tenancy governed by the Rent Control legislation has been described to be a statutory tenancy. The expression "landlord" under section 5(3) of the Bombay Rents, Hotel and Lodging House Rates Control Act means "any person who is for the time being receiving or entitled to receive rent in respect of any premises........" Under section 5(11) of the said Act, "tenant" means 'any person by whom or on whose account rent is payable for any premises and includes--- (a) such sub-tenants and other persons as have derived title under a tenant before the 1st day of February, 1973; (aa) any person to whom interest in premises has been assigned or transferred ...........; (b) any person remaining, after the determination of the lease, in possession, with or without the assent of the landlord, of the premises leased to such person or his predecessor who has derived title before the 1st day of February, 1973; (bb) such licensees as are deemed to be tenants for the purposes of this Act by section 5-A; (c) (i) in relation to any premises let for residence, when the tenant dies,..........., any member of the tenant's family residing with the tenant at the time of his death,............; (ii) in relation to any premises let for the purposes of education, business ........". Thus, under Rent Control law, the main indicium of a tenant is payment of rent. When the landlord accepts rent from month to month from a person enjoying possession of premises, a tenancy from month to month comes into existence. In case of a monthly tenancy in common or joint tenancy governed by the Rent Control Law, it is not necessary to affirmatively establish that all the tenants had individually undertaken to take upon themselves the obligations as tenants. The Rent Control Law would govern the rights and obligations between the landlords and tenants.
In case of a monthly tenancy in common or joint tenancy governed by the Rent Control Law, it is not necessary to affirmatively establish that all the tenants had individually undertaken to take upon themselves the obligations as tenants. The Rent Control Law would govern the rights and obligations between the landlords and tenants. Only the Court mentioned in section 28 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, has jurisdiction to inter alia, entertain a suit or proceeding between a landlord and a tenant relating to recovery of rent or possession of the premises to which the provisions of the said Act apply. No other Court has jurisdiction to entertain such a suit or proceeding. 9. In the instant case, the admitted position is that since the year 1921 the predecessors of the plaintiffs had accepted rents by issuing rent receipts in the name of the Bombay Zionist Association and members of the said Association had throughout enjoyed possession of the premises. After the plaintiffs acquired the landlords' interest in the premises, they themselves had called upon the Association to attorn to them. The defendant No. 1 had attorned and the plaintiffs had continued to accept rent for use and enjoyment of the premises by the members of the Association. By reason of these acts of both the parties, a tenancy from month to month had come into existence. Even assuming that an unincorporated body was not competent to enter into contract of tenancy, there was no legal bar in the way of the persons who were members of the said unincorporated Association from becoming tenants in common or joint tenants. The said Association in whose name the rent receipts wee being granted could be considered to be a compendious mode of describing the persons who were members of the said Association. Therefore, mutual rights and obligations were created as between the plaintiffs on the one hand and the members of the Association on the other on whose behalf rent was throughout paid to the plaintiffs. We have already observed that in the absence of existence of any written indenture of lease with respect, there was no force in the observation of the learned Single Judge that the defendant No. 1 was required to affirmatively establish that other members of the Association had taken upon themselves the obligations under the lease in question.
We have already observed that in the absence of existence of any written indenture of lease with respect, there was no force in the observation of the learned Single Judge that the defendant No. 1 was required to affirmatively establish that other members of the Association had taken upon themselves the obligations under the lease in question. The tenancy was admittedly from month to month The members of the Association were admittedly throughout in possession. When the terms were not reduced into writing it was not necessary for the defendant No. 1 to prove that all the members of the Association had taken upon themselves the obligation under the lease. Further we have pointed out that most of the terms and conditions of the tenancy at least since the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, had come into force were no longer regulated by voluntary acts of parties but by statute. 10. In our view, no adverse presumption could be drawn against the defendant No. 1 for not examining any witness on his behalf, inasmuch as it is an admitted position that since 1921 rent was being received for the premises in the name of the Association. Even after the suit in the Small Causes Court was withdrawn by the present plaintiff, they had continued to received rent by granting receipts marked however, with the words 'without prejudice". In order to avoid the legal consequence of their acceptance of the said payments made by the defendants, the plaintiffs had asserted in the plaint and also at the time of the trial the no tenancy had been created in spite of the grant of such receipts for payment of rent throughout and it was for the plaintiffs to establish that the members of the Association did not either expressly or by implication accept the terms of the agreement and also did not take upon themselves the obligations of tenancy. Once we reach the conclusion that there was in fact a tenancy in favour of the member of the Association, this Court's jurisdiction to pass a decree for recovery under section 28 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 and the forum for this suit would be the Court of Small Causes, Bombay.
Once we reach the conclusion that there was in fact a tenancy in favour of the member of the Association, this Court's jurisdiction to pass a decree for recovery under section 28 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 and the forum for this suit would be the Court of Small Causes, Bombay. We make it clear that we are not deciding the present suit, whether or not the members of the Association who were tenants of the premises had forfeited protection under the said Rent Control Law and whether or not they were liable to be evicted by a decree of a competent Court. 11. In view of our finding about the status of the members of the Association vis-a-vis the plaintiffs, it is unnecessary for us to examine the alternative case whether or not the members of the Association were protected licensees and accordingly were deemed tenants and, therefore, entitled to the benefit of the Bombay Rents, Hotel and Lodging House Rates Control Act. The submission made on behalf of the appellant was that according to the averments made in the plaint of the suit, the defendant No. 1 was a licensee. The defendant No. 1 disputes that there was any valid determination of the said alleged licence. On 1st February, 1973, according to Mr. Vyas, the defendant No. 1 was in possession either as a tenant or as a licensee and, therefore, he would be entitled to the protection afforded under section 15-A of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 and must be deemed to have become a tenant under the plaintiffs in respect of the premises in his occupation. On the other hand, Mr. Nain appearing on behalf of the plaintiffs-respondents Nos. 1 and 2 submitted that the licence by necessary implication stood determined upon institution of the suit in the Court of Small Causes which was ultimately withdrawn. The said licence did not revive by reason of the withdrawal of the suit or by acceptance of rent and/or charges for use and occupation of the premises by the defendant No. 1. As already stated, we have found that the members of the Association were tenants of the suit premises. Therefore, no finding need be made regarding the alternative case of protection under section 15-A of the Act. The defendants Nos.
As already stated, we have found that the members of the Association were tenants of the suit premises. Therefore, no finding need be made regarding the alternative case of protection under section 15-A of the Act. The defendants Nos. 2 to 8 before the learned Single Judge had supported the cause of the defendant No. 1 and had contested the plaintiffs' claim for recover of possession. Before us, in view of the decree obtained by the plaintiffs, a different stand was sought to be taken up by the defendants Nos. 2 to 8. It was plainly not open to the said defendants Nos. 2 to 8 resile from their admissions in both in their pleadings and at the trial before the learned Single Judge. We may, however, note one submission made on behalf of them. It has been submitted by Mr. Dave that if it is found that the members of the Association were entitled to the benefit of section 15-A, such protection could only extend to the accommodation in the actual occupation of the defendant No. 1 and not in respect of the portion or portions of premises let out and/or permitted to be occupied by the defendants Nos. 2 to 8. For the reasons already given, we need not express any view on the said question. 12. In the above view, we find that in view of the provisions of section 28 of the Bombay Rents, Hotel and Lodging House Rates Control Act 1947, the suit in question was not maintainable in this Court and the plaintiffs were not entitled to the reliefs prayed for in the plaint of the suit. We accordingly allow this Appeal, set aside the judgment of the learned Single Judge and dismiss the suit. In the circumstances of the case, there will be no order as to costs. 13. On the application of the learned Counsel for the respondents, we direct that both parties will maintain status quo for eight weeks from today. Appeal allowed. ------