IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.SASIDHARAN NAMBIAR THURSDAY, THE 21ST FEBRUARY 2008 / 2ND PHALGUNA 1929 SA.No. 763 of 1994(G) ------------------------------- AS.3/1985 of ADDL.SUB COURT, IRINJALAKUDA OS.535/1977 of PRL.MUNSIFF COURT,IRINJALAKUDA .................... APPELLANT/ RESPONDENT/ PLAINTIFF ------------------- ROSSY, S/O. ALAPATT KUNJUVAREED, KATTOOR DESOM, KATTOOR VILLAGE, MUKUNDAPURAM TALUK. BY ADV. SRI.SUBHASH CYRIAC RESPONDENTS: ---------------------- ANTHONY, S/O. KURUTHUKULAM DEVASSY, KATTOOR DESOM, KATTOOR VILLAGE, MUKUNDAPURAM TALUK. THE LEGAL REPRESENTATIVES OF DECEASED SOLE RESPONDENT -------------------------------------------------------------------------------------------------- ADDL. R2. THOMAS , KURUTHUKULAM , VAZHAKALA ROAD, KATTOOR P.O., THRISSUR DISTRICT. ADDL. R3. PAULSON, NEAR MINI INDUSTRIAL ESTATE, PANJANAM P.O. KATTOOR. ADDL.R4. JOSEPH OF DO. DO. ADDL.R5. SMT.K.A.S., SEENA, OF DO. DO. ADDL.R6. SMT.K.A.REENA OF DO. DO. ADDL.R7. K.A.ROSSY OF DO. DO. ADDL.R8. K.A. MARY OF DO. DO. THE LEGAL REPRESENTATIVES OF DECEASED SOLE RESPONDENT ARE IMPLEADED AS ADDITIONAL RESPONDENTS 2 TO 8 AS PER ORDER DT. 15.1.08 IN IA. 1193/07. BY ADV. SRI.RENJITH THAMPAN THIS SECOND APPEAL HAVING BEEN FINALLY HEARD ON 21/02/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: M.SASIDHARAN NAMBIAR,J. =========================== S.A. NO. 763 OF 1994 =========================== Dated this the 21st day of February, 2008 JUDGMENT Plaintiff in O.S.535/1977 on the file of Munsiff Court, Irinjalakuda is the appellant. Defendant is the respondent. Appellant instituted the suit for recovery of possession with arrears of licence fee and damages. Contending that plaint schedule property was entrusted to the respondent under Ext.B1 license deed dated 1.12.1968 and under the licence, for the first year an annual fee of Rs.210/- is to be paid and thereafter it is to be enhanced at Rs.30% per annum and respondent has been in possession of the property under the said licence and licence was cancelled under notice dated 2.9.1976 and respondent did not surrender possession and appellant sought a decree for recovery of possession with arrears of licence fee from 1.9.1975. Respondent resisted the suit contending that property was obtained as per S.A.763/1994 2 Ext.B1 agreement dated 1.12.1966 from the husband of appellant on a monthly rent of Rs.15/- and the lease was obtained for commercial purpose to enable appellant to construct a building for commercial purpose and pursuant to the agreement respondent constructed a building before 1.1.1967 and he has been in possession of the property since then and Ext.A1 was executed subsequently as appellant and her husband wanted a registered document to be executed and he is entitled to the benefit of Section 106 of Kerala Land Reforms Act and he is not liable to be evicted. It was also contended that rent till 31.8.1976 was paid and appellant is not entitled to the decree sought for. 2. Learned Munsiff referred the claim raised under section 106 of Kerala Land Reforms Act to Land Tribunal, Irinjalakuda. Before the Tribunal respondent was examined as PW1 and his witnesses were examined as Pws.2 and 3, Exts.A1 to A3 were marked on their side. On the side of appellant, she was examined as DW1 and Exts.B1 and B2 were marked. Land Tribunal on the evidence found that respondent is not entitled to the benefit of S.A.763/1994 3 Section 106 of Kerala Land Reforms Act. That finding was accepted by the learned Munsiff as he is bound to. No other evidence was adduced. On the evidence, a decree was granted as sought for in favour of appellant. It was challenged by defendant before Additional Sub Court, Irinjalakuda in A.S.3/1985. Learned Sub Judge on reappreciation of evidence found that plaint schedule property was obtained on lease for commercial purpose by respondent under Ext.A1 agreement from the husband of appellant on 1.12.1966 and evidence of PW1 and PW3 establish that pursuant to the agreement a building was constructed before 20.5.1967 and so respondent is entitled to the protection provided under section 106 of Kerala Land Reforms Act and appellant is not entitled to the decree for recovery of possession granted by the trial court. But a decree for realisation of arrears of rent was granted. It is challenged in the second appeal. 3. The appeal was admitted formulating the following substantial questions of law. 1. Was the first appellate S.A.763/1994 4 court justified in relying on Ext.A1, as husband of appellant has no right over the property to grant a lease. 2. When execution of Ext.A1 was admitted by respondent, is there an implied surrender of the right obtained under Ext.A1. 3. When Ext.B1 does not disclose existence of any shed or construction, whether first appellate court was justified in holding that a shed was constructed prior to May, 1967. 4. Learned counsel appearing for appellant and respondent were heard. 5. The argument of the learned counsel appearing for appellant is that respondent has admitted execution of Ext.B1 registered licence S.A.763/1994 5 deed dated 1.12.1968 and Ext.B1 establish that there was no building in the property covered under Ext.B1 at the time of its execution and it shows that it was a vacant land on 1.12.1968 and first appellate court was not justified in holding that shed was constructed prior to May,1967. It was also argued that even if Ext.A1 agreement is binding on the appellant as it was executed by her husband, when Ext.B1 registered license deed was subsequently executed, there is an implied surrender of the lease under Ext.A1 and as Ext.B1 was executed in 1968 first appellate court was not justified in holding that respondent is entitled to the benefit under the Kerala Land Reforms Act. Learned counsel relied on the decisions of Division Bench of this court in Sathianesan Punnose v. Robertson Titus (1993(2) KLT 956, Sulaikha Beevi v. Mathew (2001(1) KLT 360), and Apex Court in Chandy Varghese v. Abdul Khader (2003 (3) KLT 553). 6. Learned counsel appearing for respondent argued that existence of Ext.A1 lease was suppressed by appellant and suit was instituted as S.A.763/1994 6 if there was no earlier relationship between the parties prior to the execution of Ext.B1 and evidence of PW1 is sufficient to hold that she was aware of Ext.A1 lease and fact that respondent has been in possession of the property pursuant to Ext.A1 and her husband was collecting the rent payable under Ext.A1 and when Ext.B1 was executed relationship between the parties was not varied or changed and only the quantum of rent payable was modified and so Ext.B1 cannot be an implied surrender. It was argued that Land Tribunal did not uphold the claim under section 106 of Kerala Land Reforms Act and first appellate court on appreciating the evidence in proper perspective found that evidence of PW3 is reliable and his evidence establish that the shed in the plaint schedule property, was constructed in 1966 prior to the crucial date provided under section 106 and Ext.A1 enables respondent to construct the shed for commercial purpose and as the building was constructed for commercial purpose, prior to the designated date provided under section 106, first appellate court rightly granted the benefit to the S.A.763/1994 7 respondent. Relying on the decision of the Apex Court in Commissioner, Hindu Religious & Charitable Endowments v. P.Shanmugama and others (2005) 9 SCC 232) it was argued that when first appellate court on appreciating evidence found that evidence of PW3 is credible and reliable, it is not for this court, in exercise of the powers under section 100 of Code of Civil Procedure, to reappreciate the evidence as findings of fact by the first appellate court is final and findings of the first appellate court that the shed was constructed prior to May, 1967 can only be upheld and based on that finding of the first appellate court that appellant is entitled to the benfit of Section 106 of Kerala Land Reforms Act is perfectly correct. Relying on the decision of the Apex Court in Lathika v. S.K.Jamnadas (1999(3) KLT 235)it was argued that by execution of Ext.B1, there was no implied surrender of the lease obtained under Ext.A1 as what was provided under Ext.B1 was only enhancement of the rent payable under Ext.A1 and based on Ext.B1 it cannot be said that entrustment was only in 1968 or that respondent is not entitled to the benefit S.A.763/1994 8 under section 106 of the Kerala Land Reforms Act. Relying on the decision of Apex Court in Mahboob Sahab v. Syed Ismail and others (AIR 1995 SC 1205) it was argued that Apex Court in that case accepted a lease created by the father, when father has no right over the property and the property was of his of son and the son was an attesting witness to the document and by his conduct son agreed to the transaction and on the evidence in this suit also evidence of PW1 establish that it was her husband who was an advocate, who was dealing with her property and Ext.A1 is binding on the appellant and by her conduct she has consented to the lease, and there is no reason to interfere with the finding of first appellate court. 7. The fact that the plaint schedule property belongs to the appellant was not disputed. So also fact that Ext.B1 registered licence deed was executed on 1.12.1968 by respondent was also admitted. Though appellant did not admit the relationship created under Ext.A1, at the time of evidence when Ext.A1 was confronted to her as DW1, she did not dispute the lease arrangement. She S.A.763/1994 9 also did not dispute the fact that her husband was collecting the rent as provided under Ext.A1 made endorsements in Ext.A2 account book and also issued Ext.A3 receipt. She also admitted that apart from her husband, others also were collecting rent on her behalf. Therefore appellant cannot disown Ext.A1. But because of the existence of Ext.A1, it cannot be said that respondent is entitled to the benefit of Section 106 of Kerala Land Reforms Act. 8. Section 106 reads:- Special provisions relating to leases for commercial or industrial purposes:-(1) Notwithstanding anything contained in this Act, or in any other law, or in any contract, or in any order or decree of court, where on any land leased for commercial or industrial purpose, the S.A.763/1994 10 lessee has constructed buildings for such commercial or industrial purpose before the 20th May, 1967, he shall not be liable to be evicted from such land, but shall be liable to pay rent under the contract of tenancy, and such rent shall be liable to be varied every twelve years. Explanation:- For the purposes of this section- (a) 'lessee' includes a legal representative or an assignee of the lessee; and (b) “building” means a permanent or a temporary building and includes a shed. (1A) The lessor or the S.A.763/1994 11 lessee may apply to such authority as may be prescribed for varying the rent referred to in sub- section (1), and thereupon such authority may, after taking into consideration such matters as may be prescribed and after giving the lessor and the lessee an opportunity of being heard, pass such orders on the application as it deems fit. (2) If, between the 18th December, 1957 and the date of commencement of this Act, any decree or order of court has been executed and any person dispossessed by delivery, such person shall, on application before the S.A.763/1994 12 Land Tribunal, be entitled to restoration of possession; Provided that, before restoration, such person shall be liable to pay-- (i) the compensation paid by the landlord for any improvements in the land and subsisting at the time of restoration. (ii) the compensation for any improvements effected subsequent to the delivery; Provided further that he shall not be entitled to restoration if the property has passed on to the possesison of a bona fide transferre for value. (3) Nothing contained in sub section (1), sub S.A.763/1994 13 section(1A) and sub section (2) shall apply to lands owned or held by the Government of Kerala or a local authority. Explanation:- For the purpose of this sub- section, “local authority” includes the Cochin Port Trust and any University established by an Act of the Kerala State Legislature). In order to avail the benefit under section 106, it is for the respondent to prove that there was a lease of land for commercial or industrial purpose and pursuant to the lease the lessee constructed a building for commercial or industrial purpose and such construction was made before 20.5.1967. Only of all ingredients provided thereunder are established, respondent could claim the benefit. In that event, respondent cannot be evicted from that land, though he is liable to pay rent as S.A.763/1994 14 provided in the contract, which is liable to be enhanced every twelve years. 9. The crucial question therefore is whether respondent has established that pursuant to Ext.A1, a building was constructed for commercial or industrial purpose and that too before 20th May 1967. Ext.A1 definitely enables respondent to construct a building. Ext.A1 also prove that lease was commercial. The question then is whether there was acceptable evidence to prove that a building or a shed was constructed in the land obtained under Ext.A1 prior to 20.5.1967. Land Tribunal on appreciating evidence found that evidence of PW2 and 3 are insufficient to prove that the building was constructed prior to May, 1967 and holding that there is no other acceptable evidence to the contrary, it was found that respondent is not entitled to the benefit. First appellate court accepting the evidence of PW3 found that building was constructed prior to May, 1967 and the lease was for commercial purpose and granted the benefit. The argument of the learned counsel appearing for respondent is that as the S.A.763/1994 15 question whether the evidence of PW3 is credible and could be relied on is a question of fact and first appellate court found that his evidence was credible and reliable, it is not for this court to reappreciate the evidence and substitute the finding of fact of the first appellate court. True, in exercise of the powers of this court under section 100, ordinarily, it is not for this court to reappreciate the evidence and substitute the finding of fact rendered by courts below or the first appellate court. But if it is found that appreciation of evidence was perverse or material evidence was overlooked or extraneous evidence was considered, then this court is bound to reappreciate the evidence and substitute the findings of first appellate court. That exactly is the case herein. 10. First appellate court solely relied on the evidence of PW3 to hold that, the building was constructed prior to 1967. While appreciating the evidence of PW3, Ext.B1 was not born in mind by the first appellate court. As stated earlier, it is the specific case of the respondent even in Ext.A3 S.A.763/1994 16 reply notice that Ext.B1 registered licence deed was executed, as appellant and her husband wanted the terms of the contract to be reduced in a registered document, Ext.B1 shows that the subject matter of the licence arrangement is a vacant land. If in fact respondent had constructed a shed or a building, as provided under Ext.A1, existence of the building would have been definitely mentioned in Ext.B1. Eventhough Ext.A1 enables respondent to construct a building, if respondent did not construct the building, he cannot claim the benefit. Therefore for the reason that Ext.A1 enables the respondent to construct the building, it is not possible to hold that he had constructed a building prior to the execution of Ext.B1 much less before 20th May, 1967. When Ext.A1 recites at more than one place that the land which was the subject matter of Ext.B1 license was a vacant land and case of respondent that building was constructed prior to May 1967 cannot be accepted. On the evidence it is absolutely clear that there was no building in existence on that land as on 1.12.1968. Bearing this aspect in mind, evidence S.A.763/1994 17 of PW3 is to be appreciated. 11. A reading of the evidence of PW3 shows that he was made to depose that a building was constructed in 1966, to enable the respondent to get the benefit of Section 106. In chief examination, he deposed that the building was constructed 17 years back. In cross examination he further asserted that the building was constructed in 1966. When PW3 was further cross examined with reference to the years, he expressed his ignorance. It is absolutely clear that evidence of PW3 is not credible or reliable and based on that evidence, it is not possible to hold that the building was constructed prior to the execution of Ext.B1. If that be so,on the evidence, first appellate court was not justified in holding that respondent is entitled to the benefit of Section 106 of Kerala Land Reforms Act. Even if it is taken that Ext.B1 does not operate as an implied surrender of Ext.A1 lease as canvassed by learned counsel appearing for respondent, in the absence of acceptable evidence it can only be found that the necessary ingredients of Section 106 was not proved. S.A.763/1994 18 Hence appeal is allowed. The judgment of the first appellate court in A.S.3/1985 is set aside. The decree of the trial court in O.S.535/1977 is restored. Respondent is granted two months time to surrender vacant possession of the property. M.SASIDHARAN NAMBIAR JUDGE tpl/- M.SASIDHARAN NAMBIAR, J. --------------------- S.A.NO.763 /1994 --------------------- JUDGMENT 21st, February,2008