Supreme Court Upholds Landlord’s Title: Tenant Estopped from Denying Ownership in Eviction Case (03 July 2017)

Date of the Judgment: 03 July 2017

Citation: [Not Available in Source]

Judges: J. Chelameswar, J. and S. Abdul Nazeer, J.

Can a tenant, after being put in possession of a property by a landlord, later deny that landlord’s ownership? The Supreme Court of India recently addressed this question in a case concerning an eviction petition filed under the East Punjab Urban Rent Restriction Act, 1949. The core issue was whether a tenant, who initially acknowledged the landlord’s title, could later challenge it by amending their written statement. The two-judge bench of Justices J. Chelameswar and S. Abdul Nazeer delivered the judgment, with Justice S. Abdul Nazeer authoring the opinion.

Case Background

The appellants, Jaspal Kaur Cheema and another, filed an eviction petition against the respondents, M/S Industrial Trade Links and others, seeking to evict them from a 200 sq. ft. area on the ground floor of Industrial Shed No. 93 in Chandigarh. The eviction was sought on the grounds of personal necessity, as per Section 13 of the East Punjab Urban Rent Restriction Act, 1949. The respondents contested the eviction, filing a written statement opposing the petition.

After the appellants presented their evidence, the respondents sought to amend their written statement. They wanted to add a plea stating that the appellants were not the actual owners of the premises. Instead, they claimed that Smt. Raj Nanda was the sole proprietor and that the eviction was not for her bona fide necessity. The respondents argued that the appellants were merely attorneys and were falsely claiming personal necessity to get the premises vacated.

Timeline

Course of Proceedings

The Rent Controller dismissed the respondents’ application to amend their written statement on 25.07.2013. The respondents then challenged this order by filing Civil Revision Petitions in the High Court of Punjab and Haryana. The High Court, through a common order dated 21.02.2015, set aside the Rent Controller’s decision and allowed the amendment application. The appellants then appealed to the Supreme Court, challenging the High Court’s order.

Legal Framework

The court considered the following legal provisions:

• Section 13 of the East Punjab Urban Rent Restriction Act, 1949: This section deals with the grounds for eviction of a tenant. The appellants sought eviction on the ground of personal necessity under this provision.
• Order 8 Rule 3 of the Code of Civil Procedure, 1908: This rule requires a defendant to specifically deny or dispute statements made in the plaint. An evasive denial can be considered an admission.
• Order 8 Rule 5 of the Code of Civil Procedure, 1908: This rule states that if a defendant fails to make a specific denial, it can be considered an admission.
• Section 116 of the Indian Evidence Act, 1872: This section deals with the estoppel of a tenant. It states that a tenant cannot deny the landlord’s title at the beginning of the tenancy. “No tenant of immovable property, or person claiming through such tenant, shall, during the continuance of the tenancy, be permitted to deny that the landlord of such tenant had, at the beginning of the tenancy, a title to such immovable property…”

Arguments

Appellants’ Arguments:

• The appellants argued that they are the owners of the premises and had leased it to the respondents via a lease deed dated 16.05.2006.
• They contended that the respondents did not specifically deny their ownership in the initial written statement.
• The appellants highlighted that the respondents, during cross-examination, admitted to the lease agreement and did not dispute the appellants’ ownership.
• They argued that the respondents are estopped from disputing their title under Section 116 of the Indian Evidence Act, 1872.
• The appellants submitted that the High Court was wrong in allowing the amendment of the written statement, and the Rent Controller’s order should be restored.

Respondents’ Arguments:

• The respondents argued that the appellants are not the actual owners of the premises but are merely attorneys of Smt. Raj Nanda.
• They contended that the appellants cannot seek eviction for their personal necessity as they are not the owners.
• The respondents asserted that the High Court was correct in allowing the amendment of the written statement.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section, but the core issue was:

• Whether the High Court was correct in allowing the amendment of the written statement to dispute the landlord’s title, given the provisions of Section 116 of the Indian Evidence Act, 1872 and the conduct of the tenant.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Court considered the following authorities:

Cases:

• Badat and Company v. East India Trading Company (1964) 4 SCR 19: This case was cited to emphasize that a defendant must specifically deny statements in the plaint, and evasive denials amount to admissions.
  
  Ratio: Evasive denial would amount to an admission of the allegation made in the plaint.
• Sushil Kumar v. Rakesh Kumar (2003) 8 SCC 673: This case was cited to support the principle that a written statement must specifically deal with each allegation in the plaint.
  
  Ratio: Failure to make specific denial amounts to an admission.
• M. Venkataramana Hebbar (dead by LRs) v. M. Rajagopal Hebbar (2007) 6 SCC 401: This case was cited to further support the principle that failure to make specific denial amounts to an admission.
  
  Ratio: Failure to make specific denial amounts to an admission.
• Mt. Bilas Kunwar v. Desraj Ranjit Singh & Ors. AIR 1915 Privy Council 96: This case was cited to support the principle that a tenant cannot deny the landlord’s title.
  
  Ratio: A tenant cannot deny his landlord’s title, however, defective it may be, so long as he has not openly restored possession by surrender to his landlord.
• Bansraj Laltaprasad Mishra v. Stanley Parker Jones (2006) 3 SCC 91: This case was cited to explain the policy underlying Section 116 of the Evidence Act, 1872.
  
  Ratio: The principle of estoppel arising from the contract of tenancy is based upon a healthy and salutary principle of law and justice.
• S. Thangappan v. P. Padmavathy (1999) 7 SCC 474: This case was cited to emphasize that Section 116 of the Evidence Act, 1872, puts an embargo on a tenant to deny the landlord’s title.
  
  Ratio: Section 116 puts an embargo on a tenant of an immovable property, during the continuance of his tenancy to deny the title of his landlord at the beginning of his tenancy.
• Keshar Bai v. Chhunulal (2014) 11 SCC 438: This case was cited to support the principle of estoppel between landlord and tenant.
  
  Ratio: A tenant is precluded from denying the title of the landlady on the general principle of estoppel between the landlord and the tenant.
• Estralla Rubber v. Dass Estate (P) Ltd. (2001) 8 SCC 97: This case was cited by the respondents to argue that amendment should be allowed to elaborate the defence. However, the court distinguished this case.
  
  Ratio: Amendment ought to be allowed where the purpose of amendment is to elaborate the defence and take additional pleas in support of the case.
• Suraj Lamp & Industries (P) Ltd. (2) v. State of Haryana & Anr. (2012) 1 SCC 656: This case was cited by the respondents to argue that power of attorney sales do not convey title. However, the court distinguished this case.
  
  Ratio: Immovable property can be legally transferred/conveyed only by a registered deed of conveyance.

Legal Provisions:

• Section 13 of the East Punjab Urban Rent Restriction Act, 1949: This provision deals with grounds for eviction.
• Order 8 Rule 3 of the Code of Civil Procedure, 1908: This rule requires a defendant to specifically deny statements made in the plaint.
• Order 8 Rule 5 of the Code of Civil Procedure, 1908: This rule states that if a defendant fails to make a specific denial, it can be considered an admission.
• Section 116 of the Indian Evidence Act, 1872: This section deals with the estoppel of a tenant.

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The Court followed the principles laid down in Badat and Company v. East India Trading Company (1964) 4 SCR 19*, Sushil Kumar v. Rakesh Kumar (2003) 8 SCC 673*, and M. Venkataramana Hebbar (dead by LRs) v. M. Rajagopal Hebbar (2007) 6 SCC 401* to emphasize the importance of specific denials in written statements.
• The Court relied on Mt. Bilas Kunwar v. Desraj Ranjit Singh & Ors. AIR 1915 Privy Council 96*, Bansraj Laltaprasad Mishra v. Stanley Parker Jones (2006) 3 SCC 91*, S. Thangappan v. P. Padmavathy (1999) 7 SCC 474*, and Keshar Bai v. Chhunulal (2014) 11 SCC 438* to uphold the principle of estoppel of a tenant under Section 116 of the Indian Evidence Act, 1872.
• The Court distinguished Estralla Rubber v. Dass Estate (P) Ltd. (2001) 8 SCC 97* and Suraj Lamp & Industries (P) Ltd. (2) v. State of Haryana & Anr. (2012) 1 SCC 656*, stating that these cases did not deal with the application of Section 116 of the Indian Evidence Act, 1872.

What weighed in the mind of the Court?

The Court was primarily influenced by the principle of estoppel under Section 116 of the Indian Evidence Act, 1872, which prevents a tenant from denying the landlord’s title during the continuation of the tenancy. The Court also emphasized that the respondents did not specifically deny the ownership of the appellants in their initial written statement and admitted the same during cross-examination. The court noted that the amendment was sought at a belated stage. The court’s reasoning was based on the need to maintain the integrity of the landlord-tenant relationship and prevent tenants from taking undue advantage of their possession.

The court’s reasoning was based on the principle that a tenant who has been put in possession of a property by the landlord cannot later deny the landlord’s title. The court emphasized that the tenant is estopped from denying the landlord’s title under Section 116 of the Indian Evidence Act, 1872. The court also noted that the tenant did not specifically deny the landlord’s title in the initial written statement and admitted the same during cross-examination. The court further noted that the amendment was sought at a belated stage.

The court quoted Section 116 of the Indian Evidence Act, 1872, stating, “No tenant of immovable property, or person claiming through such tenant, shall, during the continuance of the tenancy, be permitted to deny that the landlord of such tenant had, at the beginning of the tenancy, a title to such immovable property…”

The court also quoted from Bansraj Laltaprasad Mishra v. Stanley Parker Jones (2006) 3 SCC 91, stating, “The underlying policy of Section 116 is that where a person has been brought into possession as a tenant by the landlord and if that tenant is permitted to question the title of the landlord at the time of the settlement then that will give rise to extreme confusion in the matter of relationship of the landlord and tenant and so the equitable principle of estoppel has been incorporated by the legislature in the said section.”

The court further stated, “The principle of estoppel arising from the contract of tenancy is based upon a healthy and salutary principle of law and justice that a tenant who could not have got possession but for his contract of tenancy admitting the right of the landlord should not be allowed to launch his landlord in some inequitable situation taking undue advantage of the possession that he got and any probable defect in the title of his landlord.”

Key Takeaways

• A tenant is generally estopped from denying the landlord’s title during the continuation of the tenancy, especially if they were put in possession by the landlord.
• Under Section 116 of the Indian Evidence Act, 1872, a tenant cannot deny the landlord’s title at the beginning of the tenancy.
• Evasive denials in a written statement can be considered an admission of the allegations made in the plaint.
• Amendments to written statements that contradict initial admissions or are sought at a belated stage may not be allowed.
• The principle of estoppel is based on the idea that a tenant should not take undue advantage of the possession they gained through a contract of tenancy.

Directions

The Supreme Court set aside the order of the High Court dated 21.02.2015 and restored the order of the Rent Controller dated 25.07.2013. There was no order as to costs.

Development of Law

The ratio decidendi of this case is that a tenant is estopped from denying the landlord’s title under Section 116 of the Indian Evidence Act, 1872, during the continuation of the tenancy, especially after being put in possession by the landlord. This case reinforces the existing legal position on tenant estoppel and clarifies that tenants cannot challenge the landlord’s title after initially acknowledging it.

Conclusion

The Supreme Court’s decision in this case reaffirms the principle that a tenant cannot dispute the landlord’s title during the continuation of the tenancy, especially after being put in possession by the landlord. The Court emphasized the importance of specific denials in written statements and the application of Section 116 of the Indian Evidence Act, 1872. The Court’s decision ensures that tenants cannot take undue advantage of their possession by challenging the landlord’s title at a later stage.