IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.BALAKRISHNAN NAIR & THE HONOURABLE MR. JUSTICE P.N.RAVINDRAN WEDNESDAY, THE 21ST MAY 2008 / 31ST VAISAKHA 1930 RCRev..No. 66 of 2008(A) ----------------------------------- RCA.55/2005 OF 6TH ADDL.DISTRICT COURT, ERNAKULAM, RCP.64/2004 OF RENT CONTROL COURT, ERNAKULAM. .................... REV.PETITIONER/APPELLANTS/RESPONDENTS: --------------------------------------------------------------------- 1. K.J.XAVIER, KALATHIPARAMBIL HOUSE, KALATHIPARAMBIL ROAD, VADUTHALA P.O., KOCHI - 23. 2. TENSEN, C.C.41/3385, BHARATH AUTO SERVICE, VICTORIA TOWERS, BANERJI ROAD, KACHERIPADY, COCHIN - 18. BY ADV. SRI.DINESH R.SHENOY. RESPONDENT/ RESPONDENT/PETITIONER: -------------------------------------------------------------- SEBASTIAN K.M., KATTUNILATH HOUSE, KALOOR P.O., KOCHI - 17. BY ADV. SRI.P.SANJAY. THIS RENT CONTROL REVISION HAVING BEEN FINALLY HEARD ON 31/03/2008, THE COURT ON 21/05/2008 PASSED THE FOLLOWING: K.Balakrishnan Nair & P.N.Ravindran, JJ. ======================== R.C.R.No.66 of 2008 ======================== Dated this the 21st day of May, 2008. ORDER Ravindran,J. The respondents in R.C.P.No.64 of 2004 on the file of the IIIrd Additional Munsiff and Rent Control Court, Ernakulam are the petitioners. The respondent/land lord sought eviction of the petitioners from building bearing Door No.C.C.41/3385 of Cochin Corporation under Sections 11(2)(b) and 11(4)(i) of the Kerala Buildings (Lease and Rent Control) Act, 1965, hereinafter referred to as the "Act", for short. By order passed on 18.12.2004, the Rent Control Petition was allowed under Section 11(2)(b) of the Act. The prayer for eviction under Section 11(4)(i) of the Act was declined. Aggrieved by the rejection of the prayer for eviction RCR 66/08 -: 2 :- under Section 11(4)(i) of the Act, the respondent/land lord filed R.C.A.No.49 of 2005 and aggrieved by the order of eviction passed under Section 11(2)(b) of the Act, the petitioners filed R.C.A.No.55 of 2005 in the Court of District Judge and Rent Control Appellate Authority, Ernakulam. By a common judgment delivered on 9.8.2007, the Appellate Authority dismissed both the appeals. The respondents in R.C.P.No.64 of 2004 have challenged the order passed by the Rent Control Court and the judgment of the Appellate Authority in this revision petition filed under Section 20 of the Act. 2. The brief facts of the case set out by the land lord are as follows: The respondent/land lord acquired title to the petition schedule shop room as per Ext.A1 sale deed dated 5.8.2003. The first petitioner herein, to whom the said shop room has been let out has kept the rent in arrears from 1.9.1992 onwards. Besides, he has also sublet the petition schedule shop room to the second petitioner wherein he is running a two wheeler workshop under the name and style "Bharath Auto Service". After the land lord acquired the title to the petition schedule shop room, he demanded payment of arrears of rent on 1.9.2003 and 1.10.2003. Since the first petitioner did not respond to the demand for RCR 66/08 -: 3 :- payment of arrears, he sent Ext.A2 notice dated 20.10.2003 to the first petitioner/tenant demanding payment of arrears of rent at the rate of Rs.1,500/- per month from 1.9.1992 onwards together with interest thereon. But the first petitioner refused to accept the said notice. Later, when the land lord came to know about the sublease of the petition schedule shop room, he sent Ext.A3 notice dated 13.1.2004 calling upon the first petitioner to terminate the sub lease and to surrender vacant possession of the petition schedule shop room. The first petitioner thereupon sent Ext.B1 reply notice dated 11.2.2004 claiming that the former land lords had agreed to sell the building to him for a sale consideration of Rs.30,000/-, that they had received the entire sale consideration in cash, that no rent is payable thereafter as he is occupying the building as the owner thereof and that the second petitioner herein is only a mechanic engaged by him in the workshop. 3. The petitioners resisted the Rent Control Petition. They contended that the first petitioner was in occupation of a building facing Banerji road as a tenant since 1961 and was running a workshop therein, that the land lords Mr. Antony Brown and Mrs. RCR 66/08 -: 4 :- Victoria Antony approached him through RWs 3 and 4 and some other persons who were doing business in the neighbourhood to surrender possession of the said building so as to enable them to construct a multi storied building, that after negotiations, the first petitioner agreed to surrender possession of the building in his possession and the land lords agreed to sell the petition schedule shop room to him for a sale consideration of Rs.30,000/-, that it was also agreed that till he pays the agreed sale consideration of Rs.30,000/- to the land lords, he would have to pay a nominal rent of Rs.150/- per mensem, that as per the agreement, he shifted to the new building during October, 1990 and that on 13.11.1991, he paid the agreed sale consideration of Rs.30,000/- to the former land lords and was put in possession of the petition schedule shop room as full owner thereof. The petitioners also contended that no rent has been paid since 13.11.1991 as the ownership of the building stood transferred to the first petitioner. They also contended that the second petitioner is not a sub lessee but only a mechanic employed by the first petitioner. The petitioners also raised a further contention that if at all the previous owners had any right, tittle or interest in the petition schedule schedule shop RCR 66/08 -: 5 :- room it has been lost by adverse possession and limitation. 4. In the Rent Control Court, the respondent/land lord examined himself as PW1, his vendors as PWs 2 and 3 and the Advocate Commissioner as PW4. The petitioners examined themselves as RWs 1 and 2 and the mediators as RWs 3 and 4. Exts.A1 to A6 were marked on the side of the respondent/land lord and Exts.B1 to B5 were marked on the side of the petitioners/tenants. The report submitted by the Advocate Commissioner was marked as Ext.C1. On application filed by the petitioners/tenants as I.A.No.9440 of 2004, the Rent Control Court held that the denial of land lord's title by the first petitioner/tenant is not bonafide. I.A.No.9440 of 2004 was accordingly dismissed. The trial of the Rent Control Petition commenced thereafter. Though the first petitioner was not entitled to raise the plea regarding the denial of title once again, the Rent Control Court considered the said issue afresh and held that the denial of the land lord's title is not bonafide. The plea of adverse possession and limitation raised by the first petitioner was also repelled. On the question of arrears of rent, on an analysis of the evidence oral and documentary, the Rent control RCR 66/08 -: 6 :- Court held that the rent payable is only Rs.150/- per mensem. Since the first petitioner had not admittedly paid the rent from 1.9.1992, an order of eviction was passed under Section 11(2)(b) of the Act. As regards the prayer for eviction under Section 11(4) (i) of the Act, the Rent Control Court held that the second petitioner herein, the alleged sub lessee is only a mechanic employed by the first petitioner. The prayer for eviction under Section 11(4)(i) of the Act was accordingly declined. The petitioners and the respondent carried the matter in appeal. The Appellate Authority concurred with the findings of the Rent Control Court and dismissed the appeals. The petitioners have in this revision petition challenged the order of eviction passed by the Rent Control Court under Section 11(2)(b) of the Act as affirmed by the Appellate Authority. 5. We heard Sri.Dinesh R.Shenoy, the learned counsel appearing for the petitioners. The learned counsel for the petitioner raised two contentions. The first contention is that the first petitioner is the owner of the petition schedule building and therefore, he is not liable to pay rent or to be evicted therefrom. The second contention is that in any view of the matter, as the first petitioner has perfected title to the petition schedule building RCR 66/08 -: 7 :- by adverse possession and limitation, the respondent/land lord is not entitled to claim rent or to evict him. 6. We shall first deal with the contention that the first petitioner is the owner of the petition schedule shop room and is therefore not liable to pay rent or to be evicted therefrom. The case set out by the first petitioner is that the former land lords had agreed to sell the petition schedule shop room to him on payment of the sale consideration of Rs.30,000/-. According to the first petitioner, the payment of Rs.30,000/- was made on 13.11.1991. He had also deposed that he had borrowed a sum of Rs.10,000/- from one Karthikeyan, who is not examined as a witness. In our opinion, the findings of the Rent Control Court and the Appellate Authority that the said claim of the petitioners cannot be accepted, does not suffer from any infirmity. Under Section 54 of the Transfer of Property Act, a transfer of ownership of immovable property of the value of Rs.100/- and above can be made only by a registered instrument. In the case on hand, apart from the fact that no document evidencing transfer of ownership of the petition schedule shop room has been executed or registered, even the alleged oral agreement or the payment of the sum of Rs.30,000/- to the land lords has not been proved. In RCR 66/08 -: 8 :- the absence of any cogent evidence, the Rent Control Court and the Appellate Authority were right in rejecting the contention of the petitioner that he had become the owner of the petition schedule shop room by paying the sale consideration of Rs.30,000/- to the former land lords. It is not possible to hold on the evidence on record that the former land lords had agreed to assign their right, title and interest over the petition schedule shop room to the first petitioner for a sale consideration of Rs.30,000/- or that they had received the sale consideration in full from the first petitioner on 13.11.1991. The conduct of the first petitioner in not instituting a suit for specific performance of the agreement, assuming there was such an agreement and his omission to take steps to get a sale deed executed in his favour establish beyond doubt that there is no merit in the said plea. The finding of the authorities below that the first petitioner has failed to prove the oral agreement in his favour and the payment of sale consideration by him is a plausible view on the evidence on record and it cannot be said to be perverse or in any way infirm. We accordingly affirm the finding of the Rent Control Court and the Appellate Authority and reject the contention of the RCR 66/08 -: 9 :- first petitioner that since 13.11.1991 he is the absolute owner of the petition schedule shop room. 7. We shall now deal with the question whether the first petitioner has perfected title to the petition schedule shop room by adverse possession and limitation. In Ext.B1 reply caused to be issued by the first petitioner to Ext.A3 notice, the first petitioner had no case that he had perfected title to the petition schedule property by adverse possession and limitation. On the other hand, his claim was that he had become the owner of the petition schedule shop room on 13.11.1991 on payment of the sum of Rs.30,000/- to Mr.Antony Brown and Mr. Victoria Antony. In other words his claim was that he is in possession and enjoyment of the petition schedule shop room in his own right as the transferee from the former land lords, who had, according to him, received the entire sale consideration from him. In the objection to the Rent Control Petition filed on 14.7.2004, the main contention raised by the first petitioner is that he is in possession of the petition schedule building eversince 13.11.1991 as the owner thereof without the liability to pay rent. It was also contended that if at all it is assumed, without admitting that anybody else had had any right, title or interest in the property, RCR 66/08 -: 10 :- the same has been lost due to his open hostile, peaceful, adverse, exclusive, possession as the owner thereof since 13.11.1991. It was further contended that the previous owners had sold and transferred the property to him and put him in possession on 13.11.1991, that only the sale deed remained to be executed, and that if at all the previous owners may be said to have retained any right title or interest in the property, the same has been lost due to his open, hostile, peaceful and exclusive adverse possession since 13.11.1991. In I.A.No.9440 of 2004 filed under Section 11(1) of the Act wherein the petitioners herein had prayed that the Rent Control Petition may be dismissed finding that a bonafide dispute as to title arises for adjudication, the first petitioner had stated as follows: "At any rate the property has been in my opinion, hostile, peaceful and exclusive adverse possession to the exclusion of all else since 13.11.1991 as the owner thereof." The first petitioner herein, who was examined as PW1 has in his proof affidavit stated as follows: "6. As per the terms of the agreement, it had been agreed that Antony and Victoria would execute the Sale Deed in my favour as soon as possible after RCR 66/08 -: 11 :- the disputes with regard to the joint venture are sorted out and the prior title document of the property was received back from the Bank. It was also agreed that no rent need to be paid thereafter and accordingly I have been in absolute, peaceful, exclusive possession and enjoyment of the room eversince 13.11.1991 as the owner thereof without paying any rent and without any liability to pay any rent also. If at all it is assumed, without admitting, that anybody else had had any right, title or interest in the property, the same has been lost due to my open, hostile, peaceful, exclusive, adverse possession and enjoyment of the property as the full absolute owner thereof since 13.11.1991. 7. The statement that I have not paid rent since 1.9.1992 is incorrect. No rent was payable and I have not paid any rent since the payment of Rs.30,000/- on 13.11.1991 as the entire sale consideration to the then land owners, Antony and Victoria as agreed. They had sold and transferred the property and possession to me on 13.11.1991. Only the Sale Deed remained to be executed. If at all they may have retained any right, title or interest in the property, the same has been lost due to my open, hostile, peaceful and exclusive adverse possession of the room as my own proper eversince 13.11.1991, without paying any rent and without liability for rent also. The petitioner RCR 66/08 -: 12 :- cannot claim any independent right, due to the execution of a paper sale in his favour." 8. The contention of the first petitioner is that eversince 13.11.1991, the date on which he claims to have paid the sum of Rs.30,000/- as sale consideration to the former land lords, he is in possession of the tenanted premises adverse to that of the land lords, as the absolute owner thereof. The first petitioner admits that his initial entry into the tenanted premises was as a tenant and his possession was as a tenant. It implies that he came into possession with the permission of the land lords. The Apex Court has in State Bank of Travancore v. Aravindan Kunju Panicker and others - (1972) 4 S.C.C. 274, held that "a permissive possession cannot be converted into an adverse possession unless it is proved that the person in possession asserted an adverse title to the property to the knowledge of true owners, for a period of twelve years or more." 10. In Achal Reddy v. Ramakrishna Reddiar and others - (1990) 4 S.C.C. 706, the Apex Court held as follows: "9. ..... In the case of an agreement of sale the party who obtains possession, acknowledges title of the vendor even though the agreement of sale may be invalid. It is an acknowledgment and recognition RCR 66/08 -: 13 :- of the title of the vendor which excludes the theory of adverse possession. The well settled rule of law is that if a person is in actual possession and has a right to possession under a title involving a due recognition of the owner's title his possession will not be regarded as adverse in law, even though he claims under another title having regard to the well recognised policy of law that possession is never considered adverse if it is referable to a lawful title. The purchaser who got into possession under an executory contract of sale in a permissible character cannot be heard to contend that his possession was adverse. In the conception of adverse possession there is an essential and basic difference between a case in which the other party is put in possession of property by an outright transfer, both parties stipulating for a total divestiture of all the rights of the transferor in the property, and in a case in which there is a mere executory agreement of transfer both parties contemplating a deed of transfer to be executed at a later point of time. In the latter case the principle of estoppel applies estopping the transferee from contending that his possession, while the contract remained executory in stage, was in his own right and adversely against the transferor. Adverse possession implies that it commenced in wrong and is maintained against right. When the RCR 66/08 -: 14 :- commencement and continuance of possession is legal and proper, referable to a contract, it cannot be adverse. 10. In the case of an executory contract of sale where the transferee is put in possession of the property in pursuance of the agreement of sale and where the parties contemplate the execution of a regular registered sale deed the animus of the purchaser throughout is that he is in possession of the property belonging to the vendor and that the former's title has to be perfected by a duly executed registered deed of sale under which the vendor has to pass on and convey his title. The purchaser's possession in such cases is of a derivative character and in clear recognition of and in acknowledgement of the title of the vendor. The position is different in the case where in pursuance of an oral transfer or a deed of transfer not registered the owner of a property transfers the property and puts the transferee in possession with the clear animus and on the distinct understanding that from that time onwards he shall have no right of title to the property. In such a case the owner of the property does not retain any vestige of right in regard to the property and his mental attitude towards the property is that it has ceased to belong to him altogether. The transferee after getting into possession retains the RCR 66/08 -: 15 :- same with the clean animus that he has become the absolute owner of the property and in complete negation of any right or title of the transferor, his enjoyment is solely as owner in his right and not derivatively or in recognition of the title of any person. So far as the vendor is concerned both in mind and actual conduct, there is a total divestiture of all his right, title and interest in the property. This applies only in a case where there is a clear manifestation of the intention of the owner to divest himself of the right over the property. On the other hand in the case of an executory contract the possession of the transferee until the date of registration of the conveyance is permissive or derivative and in law is deemed to be on behalf of the owner himself. The correctness of the decision in Annamali v. Muthiah cannot, therefore, be doubted." (Emphasis supplied) 11. In Mohan Lal (Deceased) through his LRS. Kachru and others v. Mirza Abdul Gaffar and another - (1996) 1 S.C.C. 639, the Apex Court held that the appellant therein who had come into possession under an agreement of sale must disclaim his right thereunder and prove assertion of his independent hostile adverse possession to the knowledge of the transferor or his successor in title or interest and that the latter RCR 66/08 -: 16 :- had acquiesced to his illegal possession during the entire period of 12 years, i.e., upto completing the period of his title by prescription nec vi, nec claim, nec precario. It was held that as the appellant's claim is founded on Section 53-A of the Transfer of Property Act he admits by implication that he came into possession of the land lawfully under the agreement and continued to remain in possession till date of the suit and therefore, the plea of adverse possession is not available to him. 12. In Madhavkrishna and another v. Chandra Bhaga and others - (1997) 2 S.C.C. 203, the Apex Court while allowing the plaintiff's appeal from a suit for declaration of title and for possession of a parcel of land held as follows: "The doctrine of adverse possession would arise only when the party has set up his own adverse title disclaiming the title of the plaintiff and established that he remained exclusively in possession to the knowledge of the appellant's title hostile to their title and that the appellant had acquiesced to the same." 13. In Kodiyan v. Karambi - 2007(2) K.L.T. 361, a learned single Judge of this Court after an elaborate survey of the various decisions of the Apex Court and of this Court on the point held as RCR 66/08 -: 17 :- follows: "7. Adverse possession is commenced in wrong and is aimed against the right. A person is said to hold the property adversely to the real owner, when that person in denial of the owner's right excluded him from the enjoyment of the property. The requirement of adverse possession is nec vi nec clam nec precario, ie. the possession required must be adequate in continuity, in publicity and in extent. Where the possession is referable to a permissive possession, it cannot be said that the person in possession has perfected title by adverse possession, even if he continued in possession for a long period. Mere continuance of possession for twelve years or more is not enough to defeat the title of the real owner and to claim title by operation of S.27 of the Limitation Act. The exception to the General Rule that the limitation bars only the remedy and not the right is contained in S.27 of the Limitation Act, which reads as follows: "27. Extinguishment of right to property- At the determination of the period hereby limited to any person for instituting a suit for possession of any property, his right to such property shall be extinguished." By the expiry of the period for instituting a suit for RCR 66/08 -: 18 :- possession, the right of the owner of the property shall stand extinguished and the person in adverse possession would get a legal right to be in possession. A person who has perfected title by adverse possession could even maintain a suit on the basis of the prescriptive title he has acquired. S.27 operates as an extinguishment of the right of the real owner and a vesting of the right in the trespasser or a person in unlawful possession. Article 65 of the Limitation Act provides for a period of limitation of twelve years for filing a suit for possession of immovable property; and the time from which the period begins to run is provided as "when the possession of the defendant becomes adverse to the plaintiff. Therefore, the starting point of the period of limitation is the point at which the possession of the defendant becomes adverse to the plaintiff. That