Case: Mahadev Pandurang Kambekar Vs. Shree Krishna Woollen Mills

( 3 ) ADMITTEDLY, the Defendant is the owner of the land being survey No. 58 and survey No. 60 atp in Bombay Suburban District. After the city Survey, those survey numbers are numbered as CTS no. 741, 741/1 to 741/7. The Defendant by an indenture of lease dated8 granted lease of the suit land in favour of the Plaintiff for a period of 99 years. The rent payable by the Plaintiff was rs. 410/per month. Clause (7) of the lease deed provided that within 20 years from the date of the lease the Plaintiff can exercise an option for purchasing the suit land for Rs. 82,016/by giving a notice of his intention to do so to the Defendant. Clause (4) of the lease deed provided that if the agreed rent is not paid by the Defendant for a period of 12 months or more and if thee commits breach of any condition of the lease, the defendant would be entitled to forfeit the lease and then would be entitled to the possession of the suit land. It is these two clauses of the lease deed which are really relevant and significant in so far as these Appeals are concerned. In exercise of the option given to the Plaintiff by clause (7) of the lease deed, the Plaintiff addressed a letter dated8 to the Defendant calling upon him to make out a marketable title and execute a conveyance of the land in favour of the plaintiff against payment of Rs.. The response of the Defendant was that the land leased to the Plaintiff is only 14912 sq. yards, whereas the plaintiff has encroached upon and is presently occupying the land admeasuring 21577. 63 sq. yards. , and therefore, the Defendant is willing to execute a sale deed of the land admeasuring 14912 sq. yards and that the Plaintiff should deliver possession 6666 sq. yards of the land which is encroached upon by the plaintiff to the Defendant. There was some correspondence between the parties in relation to carrying out joint survey of the land, but ultimately joint survey was not carried out. The Defendant also did not execute a conveyance, therefore, the plaintiff filed the suit seeking a decree of specific performance of the agreement contained in clause 7 of the lease deed( 4 ) THE Defendant filed written statement and a counter claim. The counter claim of the Defendant was that the Plaintiff has not paid the rent from 20th September, 1978 till 19th February, 1980, therefore, in terms of clause (4) of the lease deed the lease is forfeited. The lease stand terminated and therefore the Defendant is entitled to possession of the leased property( 5 ) THE Plaintiff filed written statement to the counter claim filed by the Defendant. The defence of the Plaintiff was that after having exercised the option under clause (7) the Plaintiff was not liable to pay any rent and therefore, there is no question of there being any default committed by the Plaintiff in payment of rent and therefore, there is no question of lease being forfeited, the Defendant raised some other defences also( 6 ) THE parties, thereafter, filed some documentsThe court on the basis of the pleadings framed following issues:I S S U E S1. Does Defendant prove that Plaintiffs have committed breach of the agreement contained in lease by making default in payment of rent from 20th September, 1978, till 19th February, 1980, and thereby he has lawfully terminated the leave 2. Does Defendant prove that the Plaintiff is in possession of excess land of 6666 sq. yards 3. Whether Plaintiffs prove that they are/were ready and willing to perform their part of the contract and Plaintiffs performed the same is accordance with the stipulations in the lease agreement 4. Are Plaintiffs entitled to specific performance of the Agreement 5. Whether Defendant is entitled to compensation at the rate of Rs. 6000/per month 6. What decree or order in the suit as well as in the counter claim( 7 ) THE Plaintiff led oral evidence of one Mr. Krishana R. Sood and the Defendant examined himself. The court decided the suit by its judgment dated. In so far as the Plaintiffs suit for decree of specific performance was concerned, the learned single Judge held that the only defence raised on behalf of the Defendant was that the plaintiff has not been able to show that it is ready and willing to perform its part of the contract and therefore Plaintiff is not entitled to a decree of specific performance. However, according to the learned single Judge, the Plaintiff has proved that the Plaintiff was always ready and willing to perform his part of the contract and therefore the learned single Judge passed a decree of specific performance in favour of the Plaintiff. The learned single Judge also held that the Defendant was not justified in saying that the Plaintiff has encroached upon any land belonging to the Defendant. So far as the counter claim is concerned, the learned single Judge held that the Plaintiff was not justified in saying that after exercise of option under Clause (7), the Plaintiff ceased to be liable to pay the rent. It was held that the Plaintiff admits that the Plaintiff has not paid rent for a period of more than 12 months and therefore, the lease is forfeited. The counter claim of the defendant, thus, was allowed and decree of possession was passed in favour of the Defendant.

Reasoning:
It is true that in view of the provisions of Section 41 of the Presidency Small cause Courts Act, the counter claim of the Defendant for a decree of eviction against the tenant is not maintainable in this court is not raised by the plaintiff in the written statement to the counter claim. However, in our opinion, despite that the plaintiff is entitled to urge that contention in appeal for the first time because the facts that are necessary for deciding that contention can be culled out from the counter claim filed by the Defendant himself. In thefiled by the defendant, the Defendant admits the relationship between the parties. The Defendant admits that the defendant is the owner of the property and that the defendant has granted lease of the property for a period of 99 years in favour of the Plaintiff. Thus, so far as characters of the parties are concerned,. e. landlord and tenant are admitted by the defendant himself. Thus, this is a suit filed by a landlord for a decree of eviction against the tenant/lessee. Whether after forfeiture of the lease or termination of the lease the Plaintiff continues to be a tenant for the purpose of Section 41 of the presidency Small Cause Courts Act or not is a different question and for deciding that question pleadings of the parties are not really relevant. For the purpose of deciding this contention the pleadings in the counter claim of the Defendant can be taken at their face value and therefore, in our opinion, the Plaintiff is entitled to urge this contention( 13 ) IT is clear from the observations of the division Bench quoted above that the Division Bench has held that the words landlord and tenant are used in Section 41 as a means of identification or a label to point out particular rights and obligations which arise out of such relationship either during its subsistence or after its terminationAs we have come to the conclusion that the counter claim of the defendant for a decree of eviction against the plaintiff was not maintainable in this court, we do not propose to decide two other submissions that were advanced on behalf of the Plaintiff( 15 ) IN the result, therefore, we have no option but to allow the appeal filed by the Plaintiff and set aside the decree of possession passed by the learned single Judge in the counter claim filed by the defendant( 18 ) IT is common ground that the suit of the plaintiff for a decree of specific performance arises out of Clause (7) of the lease Deed. Clause (7) of the lease deed reads as under:7. It is hereby agreed between the Lessees and Lessor that at any time within 20 years from the date of this Lease the Lessees for a consideration of Rs. 82016/which amount represents the present market value of the land and if and when the Lessees so elect and intimate to the Lessor in writing about their intention to purchase the same the Lessor shall within 4 months from the date of such intimation make out a marketable title of the said land to himself and execute a proper deed of conveyance in favour of the Lessees against the payment of the aforesaid amount free from encumbrances and liabilities whatsoever. In the event of such conveyance being executed the costs of and all incidental expenses to the execution thereof shall be borne by the parties in equal mainly except the costs of their respective legal advisers. Perusal of the above quoted clause shows that an option has been given by this clause to the Plaintiff to purchase the entire demised premises from the defendant for a consideration of Rs.. It is also an admitted position that that option was exercised by the Plaintiff by letter dated 3rd february, 1978. As per Clause (7), the option was to be exercised within 20 years of the date of the ease. It is an admitted position that the option was exercised by letter dated8 within the period of 20 years from the date of leasePerusal of Clause (1) shows that lease of land admeasuring 14912 sq. yards or thereabout was agreed to be granted. Use of the phrase thereabout shows that the land of which lease was granted can be a few yards more than 14912 sq. yards or a few yards less. Perusal of Clause 7 of the lease deed shows that the option was given to the lessee to purchase the demised land. Therefore, while considering the question whether the Plaintiff is entitled to a decree of specific performance or not it was necessary for the Court to record a definite finding as to what is the area of the demised land. The observation of the learned Judge that the question whether the Plaintiff is in possession of any excess area is not relevant for deciding the issue of entitlement or otherwise of the Plaintiff to a decree of specific performance, in our opinion, is clearly wrong. In this regard it is pertinent to be noted that Clause (7) also mentions the purchase price to be paid by the Plaintiff. That price obviously is fixed with reference to the area of the demised land. The learned single Judge in the judgment has observed that because the lease deed uses the phrase thereabout in relation to the demised land, lease of definite area is not granted. The observation, in our opinion, is erroneous. As observed above use of the phrase thereabout in relation to area mentioned in the lease deed may permit allowance of a few yards, but in our opinion, to hold that the lease deed which grants lease of land admeasuring 14912 sq. yards. or thereabout actually grants lease of land admeasuring 21069 sq. yards is absolutely unjustifiable. It is clear from the judgment of the learned single Judge that in the Sanads at Exh. 1, property register card at Exh. 2 show that the area of city Survey No. 741, 741/1 to 741/7 is shown as 21564 sq. yards. Pursuant to Courts order the City Survey map of the above referred survey numbers was produced. That map also shows that the area of the above mentioned survey numbers is 21564 sq. yards. The learned Judge has also observed to the same effect. exh. S is the certified map of City Survey no. 741, 741/1 to 7 in pursuance of the order of this court in this suit and this map is relevant to show the boundary line of suit land which is shown in yellow colour. This map shows that the area of the suit land is 21564 sq. yards equal to 17,982. 6 sq. mrts.Thus, from the material on the record of the learned single Judge it is clear that the area of the survey numbers in relation to which he has passed a decree of specific performance was 21564 sq. yards. In view of this position of the record, by passing a decree of specific performance of a contract to sale the land admeasuring 14912 sq. yards or thereabout, the Defendant cannot be made to sale the land admeasuring 21564 sq. yards. The learned single Judge has referred to the description of the property in the lease deed and has held that the Plaintiff is entitled to the decree of specific performance of the contract, irrespective of the actual areasThe learned single Judge failed to see that the price was fixed under the impression that the area is 14912 sq. yards. It is to be seen that the Defendant has stated that for the first time in 1967 he became aware that the area of these survey numbers is more. It means that when the lease was granted the defendant was under the impression that the area of the survey numbers was 14912 sq. yards, it was subsequently found as a result of survey conducted by the Government that the area is in excess of 21000 sq. yards. In these circumstances, the learned single judge ought to have considered the question whether the agreed consideration is adequate or not. In any case without applying mind to that aspect of the matter, a decree of specific performance should not have been made. . At the hearing of this Appeal, on behalf of the plaintiff a copy of the order passed by the superintendent of Land Record, Mumbai Suburban district has been produced. In that order, it appears that a finding has been recorded that the defendant was owner of land admeasuring 14912 sq. yards only. A submission was made on behalf of the Defendant that they have challenged the order before the superior authority. Thus, so far as the city survey department is concerned, it is apparent that final decision has not yet been taken. In our opinion, however, the decision of the civil suit cannot be based solely on the basis of the orders that may be passed by the city survey officer from time to time. The court will have to find out on the basis of the evidence on record as to what is the exact area in possession of the Plaintiff. It is the case of the Plaintiff that the Plaintiff is in possession of land admeasuring 14912 sq. yards only as a lessee, and it is the case of the Defendant that the Plaintiff is in possession of land in excess of that area. Therefore, it was for the Plaintiff and the Defendant to lead evidence of expert witnesses, who have measured the land, to establish what was the land actually held by the Plaintiff as a lessee and a finding as to actual land in possession of the plaintiff as a lessee could have been recorded by the learned single Judge only on the basis of the evidence led by the parties. It is clear from the record that both the parties have not led any evidence either documentary or oral on this aspect of the matter. In our opinion, therefore, the decree passed by the learned single Judge cannot be sustained( 19 ) IN our opinion, two more aspects which were relevant and which have not been properly considered by the learned single Judge are that a contention was specifically raised on behalf of the Defendant that under the lease deed option to purchase the land was given to the Plaintiff, the Plaintiff is a body corporate, therefore, a decision to exercise that option can be taken by that body corporate only by passing a resolution. But a resolution passed by the company taking decision to exercise the option under clause (7) of the lease deed was never produced. This submission has been considered by the learned single Judge and has been rejected only by saying that the witness Mr. Sood is a secretary of the company and the deposition given by him before the court is not repudiate by the company. In our opinion, this is not a satisfactory answer. It was, in our opinion, for the Plaintiff to lead evidence to show either that they has passed a resolution deciding to exercise the option given to it under Clause (7) or to produce material showing that that decision to exercise that option has been taken by any officer of the company, who was authorised either by the Memorandum of Association or articles of Association of the Company or by a resolution of the company. . Second aspect, in our opinion, which has been overlooked by the learned single Judge is that passing a decree of specific performance is in the discretion of the court. One relevant aspect, in our opinion, should have been considered by the learned single Judge while deciding to pass a decree of specific performance was the admitted conduct of the plaintiff of stopping payment of rent after giving the purchase notice and thereby forfeiting its lease. The Plaintiff was entitled to purchase the property in its character as a lessee and if the Plaintiff allows that character itself to be forfeited by its default, the question, in our opinion, to be considered would be whether such a Plaintiff is entitled to claim a decree of specific performance, which is in the discretion of the court. We do not propose to express any final opinion either on this aspect or the aspect considered earlier, because in our opinion, these aspects should be considered by the learned single Judge before passing a decree of specific performance in favour of the Plaintiff( 20 ) IN our opinion, therefore, the decree of specific performance passed by the learned single judge in favour of the Plaintiff is liable to be set aside. However, as observed above the most crucial aspect to be considered is the area of the land in possession of the Plaintiff and for recording a final finding on that aspect , in our opinion, additional evidence is necessary in view of the subsequent orders passed by the survey authorities. Considering the manner in which the suit was contested by both the sides, in our opinion, both the sides should be given an opportunity to lead further evidence in the matter. Therefore, we propose to remand the suit back to the learned single Judge for further hearing and decision in accordance with law.