Supreme Court Upholds Gift Deed and Eviction: D.N. Joshi vs. D.C. Harris (2017)

Introduction

Date of the Judgment: July 3, 2017

Citation: (2017) INSC 588

Judges: R. Banumathi, J., A.M. Khanwilkar, J.

Can a gift deed made under Muslim law be considered valid if the physical possession of the property is not handed over, especially when the property is already under tenancy? The Supreme Court of India addressed this question in a case concerning a long-standing property dispute. The court examined the validity of a gift deed and its impact on the subsequent sale and eviction of a tenant. The judgment was delivered by a two-judge bench comprising Justices R. Banumathi and A.M. Khanwilkar, with the opinion authored by Justice A.M. Khanwilkar.

Case Background

The case revolves around a property located in Haldwani, consisting of six rooms, a toilet, a kitchen, and two verandahs. The predecessor-in-title of the respondents (plaintiffs) purchased this property from one Zamir Ahmad. The predecessor-in-title of the appellants (defendants) was a tenant in the said premises during the lifetime of the previous owner, Akhtari Begum, who passed away in 1954.

According to the respondents, Akhtari Begum gifted the property to her brother, Zamir Ahmad, through a gift deed dated May 31, 1949. The deed stated that Zamir Ahmad would acquire full ownership rights, similar to those held by Akhtari Begum. Subsequently, the respondents’ predecessor purchased the property from Zamir Ahmad via a sale deed dated October 10, 1965. After this purchase, the respondents demanded rent from the defendant, who denied their title, leading to a suit for eviction, arrears of rent, and damages.

Timeline:

Course of Proceedings

The Munsif Court, Nainital, dismissed the suit on September 26, 1969, ruling that the gift deed was invalid because possession was not given to the donee, Zamir Ahmad. The court also stated that no landlord-tenant relationship existed between the parties. The District Judge of Kumaon, Nainital, upheld this decision in the first appeal, also citing the lack of proof of delivery of possession from Akhtari Begum to Zamir Ahmad.

The respondents then filed a second appeal before the High Court of Judicature at Allahabad in 1974. Initially, the appeal was admitted by the Registrar of the Allahabad High Court on May 20, 1974, and was scheduled for a hearing under Order LXI, Rule 11 of the Code of Civil Procedure (CPC). However, it was dismissed for default on March 13, 1980, as no substantial question of law was found. Subsequently, the appeal was restored on May 7, 1980, and admitted on the same day by a single-word order, “Admit.”

After the establishment of the High Court of Uttarakhand at Nainital, the second appeal was transferred and renumbered as Second Appeal No. 1269 of 2001. The respondents filed an application to amend the appeal, adding substantial questions of law, which was allowed by the High Court on July 15, 2006. The High Court, in its final judgment, allowed the appeal, holding the gift deed valid and ordering the eviction of the appellants.

Legal Framework

The case primarily involves the interpretation of the following legal provisions:

• Section 100 of the Code of Civil Procedure (CPC): This section deals with second appeals to the High Court. The amended version of this section, which came into effect in 1976, requires the High Court to formulate substantial questions of law for determination.
• Order XLI, Rule 11 of CPC: This rule outlines the procedure for the appellate court to hear and potentially dismiss an appeal without sending notice to the lower court. It allows the court to dismiss the appeal if no sufficient grounds are found.
• Order XLII of CPC: This order specifies the procedure for second appeals, stating that the rules of Order XLI apply to appeals from appellate decrees. Rule 2 of Order XLII mandates the court to formulate substantial questions of law at the time of hearing the second appeal.
• Section 111 of the Transfer of Property Act, 1882: This section deals with the determination of a lease, including termination due to the tenant denying the landlord’s title.
• Section 106 of the Transfer of Property Act, 1882: This section deals with the notice for termination of tenancy.
• Section 129 of the Transfer of Property Act, 1882: This section states that nothing in Chapter VII of the Act (which includes Section 123) shall affect any rule of Muslim law.
• Muslim Law on Gifts (Hiba): Under Muslim law, a gift (Hiba) requires three essential elements: (1) a declaration of the gift by the donor; (2) acceptance of the gift by the donee; and (3) delivery of possession. The law does not mandate a written document for a valid gift.

Arguments

The appellants (defendants) argued that the High Court exceeded its jurisdiction by deciding the second appeal without formulating a substantial question of law and by re-appreciating evidence to overturn concurrent findings of fact by the lower courts. They relied on several Supreme Court judgments, including Kanai Lal Garari And Others Versus Murari Ganguly And Others, Narayanan Rajendran And Another Versus Lekshmy Sarojini And Others, Biswanath Ghosh (Dead) by Legal Representatives And Others Versus Gobinda Ghosh Alias Gobindha Chandra Ghosh And Others, Ashok Rangnath Magar Versus Shrikant Govindrao Sangvikar, and Syeda Rahimunnisa Versus Malan Bi (Dead) By Legal Representatives And Another, to support their claim that the High Court should have framed a substantial question of law before admitting the appeal.

They also cited Section 97 of the Code of Civil Procedure Amendment Act 104 of 1976, specifically clause (m) of sub-section (2), which states that the amended Section 100 of the CPC does not apply to appeals admitted before the commencement of the said section. The appellants contended that the High Court’s decision was a nullity because the second appeal was admitted without formulating a substantial question of law.

The respondents (plaintiffs), on the other hand, argued that the second appeal was filed before the 1976 amendment to the CPC. They pointed out that the appeal was admitted by the Registrar of the High Court on May 20, 1974, and that the High Court had subsequently allowed an amendment to include substantial questions of law. They contended that the High Court had, in fact, formulated and answered a substantial question of law in its judgment.

Regarding the findings on merit, the respondents argued that the High Court had corrected manifest errors by the trial and appellate courts in interpreting the gift deed and misapplying the law. They submitted that the High Court had correctly followed the decision of the Allahabad High Court in a similar matter involving the same gift deed, which had also been upheld by the Supreme Court. They argued that the High Court was justified in concluding that the gift deed was valid and that the respondents had the right to seek eviction.

Issues Framed by the Supreme Court

The main issue framed by the Supreme Court was:

1. Whether the judgment rendered by the High Court should be treated as a nullity because the second appeal was admitted without formulating a substantial question of law as required by Section 100 of the CPC.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Judgment

How each authority was viewed by the Court?

✓ The Supreme Court cited Kanai Lal Garari, Narayanan Rajendran, Biswanath Ghosh, Ashok Rangnath Magar, and Syeda Rahimunnisa to emphasize the importance of formulating substantial questions of law in second appeals. However, it distinguished the present case, noting that the High Court had substantially complied with this requirement.

✓ The Court relied on Hafeeza Bibi to reiterate the essential requirements for a valid gift under Muslim Law, emphasizing that physical possession is not always necessary for a valid gift and that constructive possession can suffice.

✓ The Court cited Ambica Prasad to state that attornment by the tenant is not necessary for the validity of transfer of landlord’s rights.

✓ The Court used Section 111 of the Transfer of Property Act, 1882 to justify the termination of the tenancy.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• The High Court’s substantial compliance with Section 100 of the CPC by allowing an amendment to include substantial questions of law and ultimately framing and answering a question of law in its judgment.
• The validity of the gift deed, which was supported by the fact that the tenant continued to pay rent to Zamir Ahmad after Akhtari Begum’s death, indicating constructive possession.
• The fact that the High Court had relied upon a previous decision of the Allahabad High Court, which had been upheld by the Supreme Court, concerning the same gift deed.
• The clear intention of the donor, Akhtari Begum, to transfer ownership to Zamir Ahmad, as stated in the gift deed.
• The fact that attornment by the tenant is not necessary for the validity of transfer of landlord’s rights.

The Court’s reasoning was a blend of factual analysis and legal interpretation, with a slightly higher emphasis on legal considerations.

The Court considered the argument that the High Court should not have interfered with the concurrent findings of fact by the lower courts, but it held that the High Court had analyzed the issue correctly and justly relied upon another decision of the High Court between the same parties in relation to the same gift deed. The Court also noted that the High Court had correctly interpreted the gift deed and the applicable law.

The Court stated:

“In other words, in the facts of the present case there has been substantial compliance of Section 100 of C.P.C., as amended.”

“On the plain language of the gift deed, it is evident that there is clear intention to handover possession to Zamir Ahmad…”

“The two courts below gave undue weightage to the fact that Akhtari Begum had reserved to herself the right to receive rent during her lifetime and that she did not issue attornment in favour of Zamir Ahmad in respect of the suit premises.”

Key Takeaways

• Substantial compliance with Section 100 of the CPC is sufficient if the High Court allows an amendment to include substantial questions of law and frames and answers a question of law in its judgment.
• Under Muslim Law, constructive possession of a property can be sufficient for a valid gift, especially when the property is already under tenancy.
• A transfer of landlord’s rights is valid even without the tenant’s attornment to the new landlord.
• The Supreme Court will uphold decisions of the High Court if they are in line with precedent and correctly interpret the law.

Directions

No specific directions were given by the Supreme Court in this case.

Specific Amendments Analysis

Not Applicable

Development of Law

The ratio decidendi of this case is that substantial compliance with Section 100 of the CPC is sufficient if the High Court allows an amendment to include substantial questions of law and frames and answers a question of law in its judgment. Additionally, the case clarifies that under Muslim Law, constructive possession of a property can be sufficient for a valid gift, especially when the property is already under tenancy. The case also reiterates that attornment is not necessary for the validity of transfer of landlord’s rights. This judgment reinforces the established legal principles regarding gift deeds under Muslim law and the requirements for second appeals under the CPC.

Conclusion

The Supreme Court dismissed the appeal, upholding the High Court’s decision that the gift deed was valid and that the respondents were entitled to seek eviction of the appellants. The Court found that there was substantial compliance with Section 100 of the CPC and that the High Court had correctly interpreted the law and the facts of the case.