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172 SUPR:EME COURT REPORTS [1971]2 S.C.R.
(2) On the face of it, all that the consent decree envisaged was that
though the judgment-debtors were liable to immediate eviction, the decree
holders aglreed to let them continue in possession for a period of 5 years,
and. since the concession was granted as a special case, the decree~holders
insisted on payment of mesn~ profits at a ~uch higher rate. :rhe terms
of the consent decree could tn no way be interpreted as creating a new
tenancy constituting the decree-holders as landlords and the judgment
debtors
as their tenants. [176 C-E, F-G]
13) Order 23, r. 3 and 0. 12, r. 6 of the Civil Procedure Code en
visage that in the same 01Jit there can· be more than one decree passed
at different stages [177 D-F]
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1460 of
1969.
Appeal
by special leave from the judgment and decree dated
January 16, 1969 of the Gujarat High
Court in '.etters Patent
Appeal No. 31 of 1966.
S. T. Desai, M. H. Chhatrapati, P. N. Tiwari and 0. C. Mathur,
for the appellants.
D .. v. Patel and I. N. Shroff, for respondents Nos. 1 and 3.
R. H. Dhebar, B. Datta and S. P. Nayar, for respondent No. 2.
The Judgment of the Court was delivered by
Uhar.gava, J. The predecessors-in-interest of plaintiff-respon
dents 1 to 3 gave, in 1895, land, bearing Serial Nos. 503 and 506
of Asarva within the limits of Ahmedabad Municipal Corporation.
on lease for a period of 49 years at an annual rent of Rs. 199/-,
to three persons, Shri Ramchandra Ambaram, Pan;lesi Sulilila!
Anandram and Mehta Bogha Mugatram. These original lessees,
during the currency of the lease, made transfers of their. rights and
also granted sub-leases. A number of chawls and some other
buildings were constructed 011 the land and some of them were let
out on rent.
In 1945, the lessors, after serving notice on the
occupants .to give vacant possession,
filed a suit for recovery of
possession. The suit
was decreed on 8th July, 1946 on the basis
of a consent decree as against some of the occupants including the
four defendant-appellants.
In the agreement, on the basis of
which the decree was passed,
jt was agreed that the defendant
appellants will continue in possession of the property for a period
of
five years and will hand over possession after the expiry of this pe:iod of five years. For this period, they undertook to pay
mesnc profits every month at various rates on the lands in their
possession. Between them, the four appellants were required to
,pay @ Rs. 227-10-Q per mensem making up an annual amount
of mesne profits of Rs. 2, 731-8-0. Similar terms were included
....
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BAI CHANCHAL v. JALALUDDIN (Bhargava, J.) 17 3
in the consent decree against other defendants who joined the Com
promise on the basis of which the decree was passed on 8th July,
1946. The remaining defendants in the suit entered into a later
compromise and,
as a result, another consent decree
w~as passed on
28th January, 1949 against those defendants. Under this decree,
these remaining defendants were also entitled
to continue in possession for a period of five years from the date of the decree,
but were required to pay mesne profits for this period. All the
defendants governed by the two decrees dated 8th July, 1946 and
28th January, 1949, had
to pay between them mesne profits
monthly which worked out to an amount of
Rs.
7,314-8-0 per
annum. Before the expiry of the period
of five years prescribed
by either of the two decrees, the
Custodian of Evacuee Property,
in 1950, took possession of all the properties, as one of the decree
holders had become an evacuee. After the property was released
by the Custodian of Evacuee Property, an application was filed by
the decree-holders on 26th March, 1953 for execution of the con,
sent decre.e dated 8th July, 1946 and, in that execution, possession
was sought against the appellants of the property which was in
their possession. Subsequently, a num~er of suits were filed for
recovery
of mesne profits also. The Exeq1tion
Co4rt directed
eviction of
the appellants after over-ruling the various objections
raised by them
in the execution proceedings. The decision of the
Execution Court on the objections taken by the appellants
was
cl!allenged in appeal before the District Judge, in second appeal
before a single Judge of the High Court of Gujarat, and by a
Letters Patent appeal before a Division Bench. All the Courts
rejected the objections raised
by the appellants and upheld the
order of the Execution Court directing delivery of possession. It
is against the judgment of the Division Bench in Letters Patent
appeal in this execution that the appellants have come
up to this
Court
in this appeal by special leave.
It is unnecessary for us to mention all the various objections
that 'were taken at various stages
by the appellants in the Execu
tion Court, in the
Court of the District Judge, or before the single
Judge or the Division Bench in the High Court. Only three of the
points raised have been urged before
us and, therefore, we are
called upon to deal with'these three points only.
The
first point raised is that the decree which was passed on
8th July, 1946 was a nuUity, because it was passed in contraven
tion of seetion 11 (I) of the Bombay Rent Restriction Act No. XVl
of 1939 (hereinafter referred to as "the Act"). This objection
has been over-ruled by the High Court on the ground that the pro•
visions of the Act were not attracted by the lease in question on
the expiry of which the suit for ejectment was decreed under the.
174 SUPREME COURT REPORTS [1971] 2 S.C.R.
consent decree date& 8th July, 1946. Counsel appearing for the
appellants urged
that the terms of the decree passed as well.as the
terms contained
in the
lease-deed of 1895 show that the Act was
applicable because the land, to which the suit for ejectment related,
was covered by the definition of "'premises'.' to which the ~ct
applies.. Th.e expression "premises" is defined in section 4 (2) of
the Act as meaning-
'
(a) ?"ny building or part of a building-let seprir~tely
for any ·purpo$e whatever, including any land let
therewith, or·
(b) any land let separately for the purpose of being
·used principally for business or ·trade.
Admittedly, the lease of 1895 was-n~t)n respect of any building
or part of a building let separntely for any ·purpose whatever
Reliance was placed on section 4(2)'(b) cf the Act on the con
tention that the land had been let for the purpqse of being· med
principally for busine:;s or trade. Having gone through the doc~1-
·ments ~elied l)pon by' counsel for the appellants, we are ~1nable
·to accept this submission .. In the plaint of the suit, as well as
in the decree .dated 8th July, 1946, there is no mention of th~
purpose for which the land was let out by the lea:;e of 1895.
Rcl~ancc was, 'however, placed on .one of th,e pleadings in thi:
plaint whjch had been reproduced in the decree in which the plain
tiff-respondents recited one of the terms of the Lease in the folkm·
ing words:-
"Oi1 the expiry of the period of 49 year!i, the land
shall be handed over without raisin'g any dispute or .ob
jection or causing any obstruction
1
after remov:ng :what
ever structures that might have been erc:ted thereon
and aft.'!r making it as-tlear as it is."
The argument was that this pleading indicates that tha land was
Jet out for making stfuctures and those structures could only be
ntilised . by being Jet out on rent. This purpose would constitute
business
or trade. We are unable to see any justification for such
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an inference. The mere fact that there was a mention that struc· G
tures that might have been :erected will be removed can in no·way
lead to a reasonable cCncJ'Usion tqat the principal purpose bf the
lease was
the use of the land for
bu!iiQ~r trade.
Reference,
in this connection, was also made to the terms of
the lease of 1895; but we are unable to liold that it establishes the
c~i'se of the appellants that the lease }\'as taken principally· for the H
purpose of using the land for busine1~ or trade. All. that the ]ease
mentions is
that it is for
constructin!~hduses and, at a later stage,
BAI CHANCHAL v_. JALALUDDIN (Bhargava, J.) 17 s
A there is a menti0n that "in the said fields, the lessees could con
struct houses in any manner or use it in any manner." The other
parts of the lease, on which reliance has been placed are 8-5
follows:-
"l. On the land of those fields we can build houses
in any manner and
we
will receive ii:come t):iereof-and
you will not raise any dispute or obstruction in respect
thereof. We can spend any amouni on_ the construction
of those· houses which we will not demand from you for
whatever reason nor
we will
have the right to" deduct·
frotn rent payable to you.
c
2. If. any houses are consfructed thereon, we will re
move the super-structures. ff we do not 'remove the
structures then you· will -be·the owners of the said struc
tures. If .. you ·take them, then we and our heirs and
representatives will not object."
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We are unable to find even in these quotations.frc:>m the lease any
mention that the land
.is going
.to· be used ,prihcipally for the pur·
pose of business or trade: · 1'he le.a~e· does m.~n!ion · that it . was
being.taken for constructing-houses. ~There was no·Ijlentibn,_ at an,
however, of the ·manner in which the constructed houses were to
be utilised. Further, there is a clear option given ·ip the le>sees
that they could. use the l::ind in any manner if tlley did not construct
any
houses._
Theoe are terms on the basis of -which it cannot. be"
said that !'lie··1and 'iv_as. being let out ·for busniess purposes. -
The submission o{ counsel for the appellants was that, if the
purpo,;e was· to construct ho4ses and let them out on rent, that
would constitute the use of" the land for the purpose of business
ii!asmnch as the lessees would be _earning income from letting out
those houses. We are unable to accept this submission, bec_a1,l6e'
'we do not think that the word "business' or "trade" used in the
definition ·of "premises" in section 4 (2) (b) oI the Act compre
hends within it a -lease which is merely for constructiµg houses.
Learned counsel Cited before us a. number of decisions of Indian
and English Cou.ris, including dedsions of the frivy Council-a11d
this Court, in wjiich the' scope of ti)e word "business" was inter
pTeted.
That
interpretation was given in-connection with the
word "business'· as used either-in income:tax law or· in the terms
of a covenant or the Companies Act, etc. We
do not -consider
that it
wi!l be at all profitable to refer to them when interpreting
the word
"business" or "trade" _as used in section 4(2) (b) of the
Act, because none of those interpretations will cover a case similar
to the
one before us,-where the lease was merely
a permissive one
giving a right to the lessees to construet houses and let them outr
or to use the land in any manner. When the purpose of the lease
176 SUPREME COURT REPORTS [l 971] 2 S.C.R.
was expressed _in this way, it is impossible to hold that the princi-A
pal use, to which the land was to be put by the lessees, was busi-
ness or trade. As a consequence of this interpretation it has to
be held that the Act was not applicable to the lease of i895 and
there~ore, no question arises of the decree of 8th July, 1946 being
mvahd on the ground of contravening section 11 ( 1) of the Act.
The second point urged by learned counsel was that, by the
consent decree itself, a new tenancy
was created which was to
continue for five
, years and, in the meantime, the Bombay Rents
Hotel
& Lodging House Rates Control Act, 194 7 came into force
and the appellants were protected from ejectment under the pro
visions of that Act. The consent decree does not state that a new
tenancy
is being created. The argument was that the terms of
that consent decree should be interpreted
as indicating an intention
to create a new tenancy. We are unable to
fin" any such terms.
On the face of it, all that the consent decree envisaged was that,
though the judgment-debtors were liable to immediate eviction,
the decree-holders agreed to let them continue in p0ssession for a
period of
five years.
Since this. concession was being granted as
a special case, the decree-holdt:rs insisted that mesne profits should
be paid at a much higher rate so much so that between all the
defendants, governed by the two decrees of 8th July, 1946 and
28th January, 1949, the amount payable
as mesne profits became
Rs.
7,314-8-<J per annum which had no relation with the origi
nal rent of Rs
.. 199 /-per
annum for the entire land fixed by the
lease of 1895.
Tn fact, the decree-holders sought further protec
tion by
r~quiring the judgment-debtors to pay the mesne profits in
monthly mstalments, and the instalments 'Were so fixed that the
mesne profits due .for five years were to be paid within a period of
three years. There
was the further clause that, in
case of default
of payment of the mesne profits, the defaulting judgment-debtors
could
be
irilmediately called upon to deliver possession. These
terms can, in no way, be interpreted as creating a new tenancy
constituting the decree-holders as landlords and the judgment
debtors
as their tenants.
The·terms of the consent decree neither
constituted a tenancy nor a licence.
AlJ. that the
decree-holders
did was to allow the judgment-debtors to continue in possession
for
five years on oavment of me:sne profits as a
~ncession for
·entering into a compromise. The argument advanced must, there-
fore,
be rejected.
'
Reference was made by learned counsel for the appellants, in
· supoort of his argument, to a decision of the Bombay High Court
in Gurupadappa, Shivl/ngappa ltgi v. Sayad Akbar Sayad Budan
.Kadri (
1
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'but that case,
in our opinion, bas no application. In
(I) S2 B.L.R. 143.
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BAI CHANCP.AL v. JALALUDDIN (Bhargava, J.) 177
that case, in the consent decree itself, the first clause was that the
defendant admits that he is a monthly tenant of the plaintiff and
is to continue in possession till January 31, 1948. This clause
specifically and clearly, in the language used, made it manifest that
the defendant was a monthly tenant and was to continue in that
capacity in possession.
It was in these circumstances that it was
held that a new tenancy had been created from the date of the
consent decree.
In the case before us, the terms of the consent
decree are in no way comparable with the
terms used in the con
sent decree in that case. The language used in the consent d.ecree
in the present case contains no indication of any intention to create
a tenancy, so that the Bombay Rent Control Act, 1947 could
never apply to the case of the appellants.
The third point raised by learned counsel was that, since there
was one single suit based on the lease
of 1895 for ejectment of persons in possession, there could be only one single, decree in that
suit and the Court was incompetent to pass two separate decrees
on 8th July, 1946 and 28th January, 1949. Counsel, in this
connection, relied on the provisions of rules 1 and 12
of Order
XX of the Code of Civil Procedure which relate to the pronounce"
ment of judgment and the Court passing a decree in a suit. These
rules have really no relevance. On the other hand, rule 3 of
Order XXIII, C.P.C., clearly envisages a decree being passed in
respect of part of the subject-matter of the suit on a compromise,
and rule 6 of Order XII, C.P.C., permits the passing of a judg
ment at any stage without waiting for determination of other ques
tions. Thus, it is clear that, in the same suit, there can be more
than one decree passed at different stages.
In the present case,
the
first decree of 8th July, 1946, was based on a compromise bet
ween the plaintiffs and some of the defendants, while the .second
decree dated 28th January, 1949 decided the rights of the remain
ing defendants. The two decrees were separate and independent
and neither of them could be treated as a nullity.
In these circumstances, the Execution Couri was right in
re
jecting all the objections raised by the appellants and in directing
delivery of possession. The appeal fails and is dismissed with
costs.
V.P.S. Appeal dismii.sed.
In the pivotal property law case of Bai Chanchal & Ors. v. Syed Jalaluddin & Ors., the Supreme Court of India delivered a crucial judgment clarifying the scope of the Bombay Rent Restriction Act and the legal standing of a Consent Decree Legality. This landmark ruling, available on CaseOn, delves into the nuanced distinction between a permissive land lease for construction and a lease for 'business or trade', setting a vital precedent for eviction proceedings and the interpretation of compromise decrees.
The dispute's origins trace back to 1895 when the respondents' predecessors leased a parcel of land in Ahmedabad for 49 years at an annual rent of Rs. 199. The lease was permissive, granting the lessees the right to construct houses and let them out, or to use the land in any other manner. Over the decades, the original lessees and their successors built several chawls and buildings, which were sublet to various occupants, including the appellants in this case.
Upon the lease's expiry, the lessors filed a suit for recovery of possession in 1945. The litigation resulted in two separate consent decrees:
Both decrees were based on a compromise where the defendants were allowed to remain in possession for five years. However, instead of rent, they were required to pay substantial monthly 'mesne profits', which totaled over Rs. 7,000 per annum—a stark contrast to the original rent. A critical clause stipulated that any default in payment would entitle the decree-holders to seek immediate possession. When the decree-holders initiated execution proceedings in 1953 to evict the appellants, the latter raised several legal objections, leading the matter through multiple courts and eventually to the Supreme Court.
The appellants presented three primary legal challenges against the execution of the consent decree, which the Supreme Court meticulously examined.
Analyzing the nuances of statutory interpretation, like the definition of 'premises' in this case, can be complex. For legal professionals pressed for time, CaseOn.in offers 2-minute audio briefs that distill the core arguments and rulings of such pivotal judgments, enhancing comprehension and research efficiency.
The Supreme Court dismissed the appeal, upholding the decisions of the lower courts. It systematically dismantled each of the appellants' arguments, ruling that:
The Execution Court's order directing the delivery of possession was, therefore, held to be valid and enforceable.
This case is a cornerstone for legal practitioners and students for several reasons:
Disclaimer: The information provided in this analysis is for educational and informational purposes only. It does not constitute legal advice. For specific legal issues, it is recommended to consult with a qualified legal professional.
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