Supreme Court Upholds Mandatory Injunction for Booth Possession: Madan Mohan Singh vs. Ved Prakash Arya (2021)

Introduction

Date of the Judgment: March 05, 2021

Citation: 2021 INSC 147

Judges: Ashok Bhushan, J., R. Subhash Reddy, J.

Can a person who was initially a partner in a business, and later claimed to be a tenant, be legally compelled to vacate a property when the original allottee seeks possession? The Supreme Court of India addressed this issue in a recent case, focusing on the validity of a mandatory injunction for restoring property possession. This case revolves around a dispute over a booth in Chandigarh, where the defendant claimed tenancy, but the court found no evidence to support the claim.

Case Background

The case involves a property dispute concerning Booth No. 186 in Sector 35-D, Chandigarh. The appellant, Madan Mohan Singh, was allotted the booth by the Chandigarh Administration on June 20, 1972. The allotment letter explicitly prohibited the transfer of rights and subletting. Madan Mohan Singh entered into a partnership with Ved Prakash Arya, the respondent, on December 18, 1976, to run a cycle repair business at the booth.

Later, Ved Prakash Arya claimed that he was a tenant, not a partner, and refused to vacate the premises. The Estate Officer, Chandigarh, had previously terminated the hire-purchase agreement due to misuse of the premises but this order was later revoked. Madan Mohan Singh, unable to regain possession, filed a civil suit seeking a mandatory injunction against Ved Prakash Arya to restore possession of the booth.

Timeline

Course of Proceedings

The trial court dismissed Madan Mohan Singh’s suit, holding that Ved Prakash Arya was a tenant, despite the absence of any tenancy documents. The First Appellate Court reversed this decision, granting a mandatory injunction in favor of Madan Mohan Singh, stating there was no evidence of tenancy. The High Court, in a second appeal, overturned the First Appellate Court’s judgment, leading to the current appeal before the Supreme Court.

Legal Framework

The case primarily revolves around the interpretation of the allotment letter dated June 20, 1972, specifically clauses 12, 13, and 19. Clause 12 states:

“You will have no right to transfer your rights under this lease directly or indirectly. You will not sublet the premises or any part thereof. If there is any dispute as to whether the premises have been sublet or not the decision of the Chief Administrator, Chandigarh, on the point shall be binding on the parties, no fragmentation of the building be permissible.”

Clause 13 specifies that “The building shall be used only for the purpose it is leased out cattle poultry feed and for no other purpose.” Clause 19 grants the Estate Officer the authority to enforce compliance with the terms of the allotment.

The Public Premises (Eviction of Unauthorised Occupants) Act, 1971 was also considered in the case.

Arguments

Appellant (Madan Mohan Singh)’s Arguments:

• Madan Mohan Singh argued that he was the original allottee of the booth and had entered into a partnership with Ved Prakash Arya, which was later dissolved.
• He contended that Ved Prakash Arya was initially a partner and later became an employee, not a tenant, and was therefore bound to vacate the premises.
• Madan Mohan Singh relied on the order of the Chief Administrator, Chandigarh, which had held that Ved Prakash Arya was a servant of the hirer, Madan Mohan Singh.
• He argued that the defendant failed to produce any evidence of tenancy, such as rent receipts or a rent agreement.
• He sought a mandatory injunction to regain possession of the booth.

Respondent (Ved Prakash Arya)’s Arguments:

• Ved Prakash Arya claimed that he was a tenant of the premises, having taken it on rent from Madan Mohan Singh on December 18, 1976, at a monthly rent of Rs. 450.
• He argued that the partnership deed was a sham document, created to circumvent the prohibition on subletting in the allotment letter.
• He contended that he had been in exclusive possession of the premises as a tenant since December 18, 1976, and had been paying rent.
• He stated that Madan Mohan Singh had never issued rent receipts and had been refusing rent since October 1982.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in the judgment. However, the core issue was:

1. Whether the High Court was correct in setting aside the judgment of the First Appellate Court, which had granted a mandatory injunction in favour of the appellant?

Treatment of the Issue by the Court

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

Authorities

The Supreme Court considered the following authorities:

Judgment

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

How each authority was viewed by the Court?

• The Supreme Court followed C.M. Beena and another vs. P.N. Ramachandra Rao, 2004 (3) SCC 595* to determine the intention of the parties based on their conduct.
• The Court interpreted the terms of the Allotment Letter dated 20.06.1972, specifically clauses 12, 13 and 19, to emphasize the restrictions on subletting and the authority of the Estate Officer.
• The Supreme Court relied on the order of the Chief Administrator, Chandigarh dated 04.03.1986, stating that it is binding on the parties as per clause 12 of the allotment letter, and the respondent was held to be a servant of the hirer.

What weighed in the mind of the Court?

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

• Lack of Evidence for Tenancy: The respondent failed to produce any evidence, such as rent receipts or a rent agreement, to support his claim of tenancy. The court noted that the trial court itself had acknowledged the absence of any documents pertaining to tenancy.
• Binding Nature of Chief Administrator’s Order: The order of the Chief Administrator, Chandigarh, which declared Ved Prakash Arya to be a servant of the hirer, was considered binding on both parties, as per clause 12 of the allotment letter.
• Partnership Deed: The court noted that the respondent could not simply wish away the consequences of signing the partnership deed.
• Conduct of Parties: The court considered the conduct of the parties, noting that the respondent had not maintained any record of rent payments and had not produced any evidence to support his claim of tenancy.

The court’s reasoning was based on a combination of factual analysis (lack of evidence for tenancy) and legal considerations (binding nature of the Chief Administrator’s order and interpretation of the allotment letter).

The Supreme Court emphasized that the High Court had erred in not considering Clause 12 of the Allotment Letter and the finding of the Chief Administrator. The Court noted that the High Court had misread the record, as the Chief Administrator had indeed considered the arguments of both parties before coming to the conclusion that the respondent was a servant of the hirer.

Key Takeaways

• A claim of tenancy must be supported by credible evidence, such as rent receipts or a rent agreement.
• Orders passed by competent authorities, such as the Chief Administrator in this case, are binding on the parties and cannot be ignored.
• Courts will consider the conduct of parties and the surrounding circumstances to determine the true nature of their relationship.
• The original allottee of a property has a right to regain possession if the occupant fails to establish a valid claim to tenancy or other legal right to possession.

Directions

The Supreme Court directed the Estate Officer, Chandigarh Administration, to ensure that the appellant is immediately put in possession of the premises of Booth No. 186. The Court also allowed the appellant to take appropriate proceedings to recover damages and mesne profits for the use of the premises by the respondent.

Development of Law

The ratio decidendi of this case is that a mandatory injunction can be issued to restore possession of a property to the original allottee when the occupant claims to be a tenant but fails to prove the same, and a competent authority has already declared the occupant to be a servant of the allottee. This judgment reinforces the principle that a claim of tenancy must be supported by evidence and that orders from competent authorities are binding.

Conclusion

The Supreme Court allowed the appeals, restoring the judgment of the First Appellate Court, which had granted a mandatory injunction in favor of Madan Mohan Singh. The Court emphasized the lack of evidence supporting Ved Prakash Arya’s claim of tenancy and the binding nature of the Chief Administrator’s order. This decision underscores the importance of providing concrete evidence to support claims of tenancy and the binding nature of orders from competent authorities.