1 IN THE HIGH COURT OF BOMBAY AT GOA. SECOND APPEAL NO. 22 OF 2002. 1 Smt. Muktabai Vassant Kamat 2 Shri Sripad Vassant Kamat 3 Shri Vallabh Vassant Kamat 4 Smt. Deepa Sripad Kamat 5 Smt. Vibha Vallabh Kamat 6 Shri Gurudas Vassant Kamat 7 Shri Narayan Vassant Kamat 8 Shri Umesh Vassant Kamat all residents of Verem, Sonarbhat, Reis Magos, Goa. …....... Appellants. Versus 1 M/s Janardan G. Thaly & Co. Sushila Building, 18th June Road, Panaji, Goa. 2 Shri Sheshnarayan Janardan Thaly, 3 Shri Dattatrai Janardan Thaly, 4 Ravindra Janardan Thaly, all three having their office at 2 Sushila Building, 18th June Road, Panaji Goa. …...... Respondents. Mr. M. B. D'Costa, Senior Advocate with Mr. J. A. Lobo, Advocate for the appellants. Mr. Sudin M. Usgaonkar, Advocate for the Respondents. Coram:-A. P. LAVANDE,J Reserved on: - 27th January, 2011. Pronounced on: - 6th May, 2011. JUDGMENT By this second appeal, the plaintiffs challenge Judgment and decree dated 6.11.2001 passed by the Second Additional District Judge, Panaji, in Regular Civil Appeal No. 105/1999 whereby and where under the appeal preferred against judgment and decree dated 31.8.1999 passed by the First Additional Civil Judge Senior Division, Mapusa in Special Civil Suit No. 75/1996/SR(I), has been dismissed. 2. Briefly, the facts leading to filing of the present appeal are as under:- The plaintiffs filed the above suit for eviction of defendants and vacant possession of the suit plot the land admeasuring 1656 square 3 metres bearing survey no. 82/2( hereinafter referred to as the “suit plot”) and for recovery of arrears of rent of Rs.1000/- for the year 1986 and mesne profits at the rate of Rs.1000/- per annum from 1.1.1987 until delivery of possession. The plaintiffs claimed that the suit plot was given on lease to the defendants for the purpose of storing timber at an annual rent of Rs.1000/- and the rents were paid up to 31.12.1985. By Advocate notice dated 20.9.1986, the lease was terminated with effect from 31.10.1986 and the defendants were called upon to handover vacant possession of the suit plot to the plaintiffs. Upon failure to comply the demand, the plaintiffs filed the above suit. 3. The defendants filed written statement in which they admitted that the suit plot was granted on yearly lease but according to the defendants it was given for industrial purpose and the lease was created prior to 1947 and the defendants had erected permanent structure in the suit plot/shed to carry out activities of manufacturing furnitures and defendants also erected another shed for storing materials. Defendants claimed that lease was governed by the provisions of decree no. 43525 and therefore termination by notice was illegal. In the alternative defendants contended that even if the lease is held to be governed by 4 Transfer of Property Act, 1882, the same being yearly lease for manufacturing purpose one month notice given by the plaintiffs was not in accordance with Section 106 of the Transfer of Property Act, 1882. 4. On the basis of the pleadings of the parties the trial Court framed following issues:- 1 Whether the defendants prove that the lease of the suit land was created prior to the year 11947 and it was subsisting as on 8th June, 1961? 2 Whether the defendants prove that the lease of the suit land is for industrial ( manufacturing purpose) and it cannot be terminated otherwise then in accordance with the provisions of decree no. 43525? 3 Whether the defendants prove that the notice given to them by the plaintiff under section 106 of Transfer of Property Act is bad in law and as such the suit is liable to be dismissed for want of cause of action? 4 To what relief if any are the plaintiffs entitled? 5. In the suit plaintiffs examined PW1 Shri Vallabh Kamat. On behalf of defendants four witnesses were examined namely DW1 Shri Dattatray Thali( defendant no. 3), DW2 Shri Daji Thakur, employee of the defendants, DW3 Shri Shripad Dessai and DW4 Shri Pandurang V. Naik. Upon appreciation of the evidence, oral and documentary, led by the 5 parties, learned trial Court held that the evidence on record clearly proved that defendants were in possession of the suit property even prior to liberation; the plaintiffs had not mentioned any reason for termination of lease nor mentioned the year in which suit plot was given on lease, the defendants prove that they had constructed shed on the said plot before liberation of Goa and were manufacturing furnitures in the said shed. The learned trial Court held that plaintiffs had failed to prove that the suit plot was given on lease to the defendants in the year 1973. Consequently, the trial Court dismissed the suit. 6. Plaintiffs preferred an appeal to the District Court. The Appellate Court formulated the following points for determination:- 1 Whether the lease of the suit land is governed by the provisions of No. 43525 or by provisions of Transfer of Property Act? 2 Whether the plaintiffs are entitled to the eviction of the defendants from the suit land? 3 Whether the plaintiffs are entitled to the arrears of rent of Rs.1,000/- pertaining to the year 1986 and mesne profits @ Rs.1,000/- p.a. from 1.1.1987 until delivery of vacant possession of the suit land to the plaintiffs? 4 What relief? What order? 6 7. The Appellate Court held that the lease was created for industrial purpose and it was in existence prior to coming into force of decree no. 43525 and was subsisting as on the date of coming into force of said decree no. 43525 and as such the lease was governed by said decree and consequently non-suited the plaintiffs, since no ground was made out for eviction of the defendants in terms of said decree. The Appellate Court further held that even if lease was governed by Transfer of Property Act, the notice of termination of tenancy was not in accordance with Section 106 of the Transfer of Act since in terms of Section 106 of Transfer of Property Act the lease from the year to year is terminable by six months' notice expiring with the end of the year of tenancy. 8. The appeal was admitted on the following substantial questions of law. I. Whether a transaction which does not comply with the requirement of Articles 8 and 10 of decree is entitled to protection of decree? II. Whether a lease of land for purpose of storing timber is governed by Transfer of Property Act and it is neither a 7 lease for industrial nor manufacturing purpose therefore terminable by 15 days notice under Section 106 of Transfer of Property Act? 9. Mr. D'Costa, learned Senior Counsel appearing for the appellants submitted that both the Courts clearly erred in holding that lease was granted prior to liberation and as such was governed by decree no. 43525. According to learned Counsel both the Courts misconstrued the evidence led by the parties and erred in holding that lease was not created in the year 1973 as contended by the plaintiffs but was created prior to the liberation. According to learned Counsel the subsequent change in the nature of the property leased does not determine the nature of the lease and it is the nature of the property at the time of creation of the lease which determines whether the lease is for open plot of land for storing materials or for industrial purpose. According to learned Counsel the documentary evidence led by the parties does not establish that lease was created prior to 1973 since rent receipts are only from the year 1973 onwards. According to the learned Counsel no documentary evidence has been produced by the defendants to establish that lease was created prior to 1973. Placing reliance upon the provisions of decree no. 43525, more 8 particularly Articles 2, 8 and 10 of the said decree, Mr. M. D'Costa submitted that even the provisions of said decree do not advance the case of defendants and the defendants cannot claim protection to their lease in terms of these provisions. Mr. D'Costa further submitted that since the lease was created in the year 1973 the same is governed by Transfer of Property Act and not by decree no. 43525 dated 7.3.1961. In support of his submission Mr. D'Costa placed reliance upon following judgments:- i. Bulkan Sah & others Vs. Ganga Devi Nathani and others, AIR 1964 Patna 214. ii. Bhagabandas Agarwalla Vs. Bhagwandas Kanu and others,(1977) 2 SCC 646 iii. Dharam Pal Vs. Harbans Singh, (2006) 9 SCC 216. iv. Prakash Ramaji Lende Vs. United Church of Northerns India, 2004(1) Mh. L. J. 363. v. Harishchandra Dhondusheth Khude VS. Vithoba Rakhumai Devsthan, 2004(4) Bom C.R. 154. 10. Per Contra, Mr. Usgaonkar, learned Counsel appearing for respondents supported the impugned judgment and decree and submitted that the Appellate Court and the trial Court have correctly come to the 9 conclusion that the lease was created prior to coming into force decree no. 43525 and as such was not governed by Transfer of Property Act. According to learned Counsel both the Courts have concurrently and rightly held that lease was governed by decree no. 43525. Mr. Usgaonkar further submitted that the lease of the suit plot was for industrial purpose and was governed by decree and not by Transfer of Property Act. Learned Counsel further submitted that in the absence of any ground for termination of lease in terms of the decree both the Courts below are right in dismissing the suit. He further submitted that even if the lease is held to be governed by Transfer of Property Act, the notice terminating tenancy is not valid since lease was yearly lease for manufacturing purpose and as such the notice of one month for termination of tenancy is illegal in law. Learned Counsel, therefore, submitted that the appeal be dismissed. Reliance was placed by Mr. Usgaonkar on the judgment of this Court in the case of G. N. Agrawal Vs. Alina D'Costa E Pinto and others, 1989(2) Goa L. T. 118. 11. I have carefully considered the rival submissions, perused the record and the judgments relied upon. 10 12. Perusal of the record discloses that trial Court has neither discussed nor Marshalled the evidence led by the both the parties which the trial Court was required to do in law. However, the lower Appellate Court has analysed the evidence led by both the parties and has come to the conclusion that lease was created for industrial purpose and it was in existence prior to coming into force decree no. 43525. The Appellate Court further held that even if the lease was governed by the Transfer of Property Act, the notice of termination of tenancy was not in accordance with Section 106 of Transfer of Property Act. 13. The plaintiffs examined only Shri Vallabh Kamat, PW1 in support of their case. According to him the lease was created in the year 1973 for the purpose of storing timber. It is pertinent to note that in the plaint itself, the plaintiffs have not stated as to when the lease was created. On the contrary the defendants have led evidence of four witnesses to prove that industrial activities were carried out by the defendants in the suit plot even during the period prior to coming into force decree no. 43525 which came into force on 7.3.1961. DW4 stated that carpentry work was carried out in the suit plot for last 45 years, and this part of examination is not shaken and therefore the finding of the 11 lower Appellate Court that lease was created prior to coming into force decree no. 43525 in respect of suit plot cannot be said to be finding not based on any evidence or perverse. Merely because the defendants have not produced rent receipts prior to 1973 it cannot be assumed that lease was created for the first time in the year 1973 which is not even the case set up by the plaintiffs in the plaint. Therefore the finding of lower Appellate Court that lease in respect of suit plot was created prior to coming into force decree no. 43525 cannot be said to be perverse or based on no evidence warranting interference in the second appeal. 14. The next question arises for consideration is whether such a lease is entitled to protection under the said decree. In order to appreciate the contention of Mr. D'Costa that such a lease is not entitled to protection of the decree, it would be appropriate to quote Articles 2, 8 and 10 of the decree upon which reliance has been placed by Mr. D'Costa, which read thus:- Article 2:- Leases of land, which are not meant for productive purpose or in which commercial or industrial establishments are functioning with the consent of the lessor, provided that the respective 12 agreements, comply with the external form which for those reasons is required by Article 10, are governed by the provisions of this law. Article 8:- 1. Save what is provided in Article 10, the lease shall be in writing with the signature of the lessor and the lessee; if any of them is unable to , or does not know to write, their signatures may be put by a third person at the request of the party with the assistance and the signature of two witnesses in the presence of the Notary, who shall certify and attest all the signatures. The laws in force at present on this subject shall continue to be observed in so far as they are not inconsistent with this Decree. 2. Subject to the provision in the second part of para 3 of the said article, notwithstanding absence of title in writing, the lease may be proved in Courts by any other evidence, when it is demonstrated that the lessor or the lessee is at fault. 13 3. When the lessee denies that he is at fault, the averment shall be admissible only when it is supported by a rent receipt, issued by the person entitled to the enjoyment of the property or by his representative. 4. In Macau, the stamp in Chinese characters used by the landlord or the rent collector shall be equivalent to a signature on the receipt. 5. The deposit made within three months subsequent to the first rent falling due, when it is not objected to or the objection is overruled, is equivalent to a receipt. 6. Clauses which imply derogation of the supplementary laws of contact may be proved by a writing only. 7. The restrictive provisions of the preceding paragraphs are not applicable to leases for residence for short periods in beaches, hot springs or summer resorts, nor to the houses occupied by the landlord and leased for the period 14 corresponding to his temporary absence, up to the maximum of one year. But when the lessee, if sued on the ground of arrears of rent, may only proved by receipt of the said rent issued according to the provisions in this article. Article 10(1) (a) Lease subject to registration (b) Lease for commerce or industry. (c) Leases for the exercise of liberal professions. (d) Leases taken by any local body, association or society of public utility or private lawfully constituted. shall be reduced into public deeds. 2. In the cases contemplated in clauses (a) to (d) a document in writing is sufficient, in accordance of para 1 of Article 8, if the rent corresponds to a monthly sum not exceeding an amount of Esc.4000/- 3. Inexistence of proper title does not prevent, in case of clause (a), the lease, if it is for residential purpose, from subsisting for all purposes as six 15 monthly provided it is reduced into a private writing or the other party is at fault for its in existence in accordance with para 2 of article 8; but in similar cases the contract, which cannot be admitted in evidence nor invoked before any authority or public office, even if one of the parties is at fault is absolutely null. 15. No doubt in terms of Article 2 lease of land which are not meant for productive purpose or for industrial purpose are governed by the provisions of the decree provided the respective agreement complied with the form as required under Article 10. In terms of Article 10 lease for commercial or industrial purpose has to be reduced into public deed. In terms of Article 8 if lease is not in writing, the lease must be proved in Court by any other evidence when it is demonstrated that lessor or lessee is at fault. In the present case it is the case of the plaintiffs that lease was oral and not in writing. In such an eventuality, in my considered opinion the plaintiffs cannot be permitted to take advantage of the fact that the lease was not in writing for which necessarily both the parties must be faulted. Therefore mere fact that the lease was not reduced into writing 16 would not make provisions of decree no.43525 inapplicable to the lease entered into between the plaintiffs and the defendants prior to coming into force decree no.43525. Once it is held that the lease was created prior to coming into force the decree it necessary follows that the lease is governed by the said decree and could have been terminated by the plaintiffs on the ground available under the decree. It has not been seriously disputed that none of the grounds under the said decree for termination of lease was available to the plaintiffs so as to justify the termination of lease. Once it is held that the lease was for industrial purpose and is governed by the decree the ratio laid down by the Division Bench of this Court in the case of Gangadhar Narsingdas Agrawal, (Supra) is squarely applicable in the present case. In the said case Division Bench of this Court has held that a lease which was created on 12.12.1956 in respect of plot of land was governed by decree no. 43525 and the decree was not repealed by the Transfer of Property Act. 16. Thus, I find that finding given by the lower Appellate Court that the lease was governed by the decree no. 43525 cannot be said to be unsustainable in law. In so far as judgment of Patna High Court in the case of Bulkan Sah and ors Vs. Ganga Devi Nathani and ors,( Supra), 17 no doubt, the Patna High Court has held that the lease for manufacturing purpose must be lease which at its inception is for that purpose and the mere fact that after the premises are taken on lease they are used by the tenant for manufacturing does not make the lease for manufacturing purpose within the meaning of Section 106 of Transfer of Property Act. The ratio of said case does not advance the case of the appellants in as much as there is no evidence on record that initially the lease was in respect of open plot and after the lease the defendants started using it for industrial purpose. Thus the ratio of said judgment is of no help to the appellants. In so far as other authorities relied upon by Adv. Mr. M. D'Costa are concerned the same are in relation to Section 106 of the Transfer of property Act. Since I have already held that the lease is governed by the decree no. 43525, I do not deem it necessary to deal with all the authorities relied upon by Advocate Mr. M. D'Costa which are in relation to Section 106 of the Transfer of Property Act. 17. In view of the above, I do not find any merit in the appeal. 18. In view of above discussion the substantial questions of law formulated are answered against the appellants. Consequently the appeal 18 stands dismissed. In the facts and circumstances of the case, parties are directed to bear their own costs. A. P. Lavande, J. vn*