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CASE NO.:

Appeal (civil) 4526 of 1999

PETITIONER:

T.Lakshmipathi & Ors.

RESPONDENT:

P.Nithyananda Reddy & Ors.

DATE OF JUDGMENT: 31/03/2003

BENCH:

R.C. LAHOTI & ARUN KUMAR.

JUDGMENT:

J U D G M E N T

R.C. Lahoti, J.

A decree for eviction passed in favour of the respondent no.1 on

the grounds available under Section 10(2)(i) and 10(3)(b)(iii) of A.P.

Buildings (Lease, Rent & Eviction) Control Act, 1960 by the courts

below and upheld by the High Court is under challenge in this appeal

by special leave, filed by the persons in occupation of the premises.

The facts of the case are complex and litigations between the parties

are multiple. It will be useful to notice in brief the several litigations

between the parties which will have an incidental bearing on the

principal controversy and would enable precise appreciation of the

facts.

The suit premises are non-residential bearing Door No.18-7-4

situated in Ponniamman Koli Street of Chittoor town. This property

was initially owned by one P. Nayarana Reddy. In the year 1959 a suit

was instituted for partition of certain joint family properties wherein

the suit property was one of the items. P. Narayana Reddy had two

sons, namely, P. Nithyananda Reddy, the respondent no.1 and P.

Manohar Reddy and five daughters. Late P. Narayana Reddy, his wife

and his two sons were arrayed as plaintiffs. Partition of joint family

properties was sought for from the other branch of the family headed

by brother of late P. Narayana Reddy. P. Narayana Reddy expired in

the year 1981. By that time P. Manohar Reddy, the second son, had

pre-deceased the father. Five daughters and the widow of pre-

deceased son were brought on record by way of substitution in place

of late P. Narayana Reddy and his wife who had also expired. A

preliminary decree for partition was passed. At one stage in the

appeals pending against the preliminary decree there was a

compromise entered into by some of the parties in the year 1983. The

compromise had the effect of allotting the suit property to the share of

P. Nithyananda Reddy, the respondent no.1. However, the

compromise decree was recalled and set aside on an application filed

by some of the co-sharers who were not joined as parties to the

compromise. The appeal against the preliminary decree is still

pending. Final decree in the partition suit is yet to be passed.

Therefore, for all practical purposes though the shares of the parties to

partition stand declared by the decree of the trial court, the declaration

is still hanging fire in the pending appeal and partition by metes and

bounds is yet to take place.

Here it would be relevant to state that during the course of

hearing in the present appeal before us, some controversy was sought

to be raised as to the extent of share to which P. Nithyananda Reddy,

the respondent no.1, would be entitled to in the suit premises.

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However, we are not concerned with that controversy in the present

appeal and leave the same to be adjudicated upon in the partition suit

and the pending appeal and proceedings subsequent thereto. For the

purposes of the present appeal, we will proceed on an assumption that

P. Nithyananda Reddy, the respondent no.1, is a co-owner in the suit

premises and there are other co-owners as well; the exact extent or

proportion of co-ownership interests being irrelevant for the present

proceedings.

Late P. Narayana Reddy had inducted a tenant in the suit

premises, namely, G. Ethirajulu, the respondent no.2. On the death of

P. Narayana Reddy in the year 1981, the tenant, G. Ethirajulu

acknowledged P. Nithyananda Reddy as landlord of the property and

started paying rent solely to him. He also paid Rs.3000/- by way of

advance and incurred Rs.1300/- by way of repairs which was adjusted

in payment of rent for the period January 1982 to April, 1984. Upto

the end of April, 1985 the tenant G. Ithirajulu went on paying rent of

the suit premises to P. Nithyananda Reddy, the respondent no.1

treating him as landlord. Thereafter, P. Varadarajulu, the respondent

no.3, entered upon the scene. The respondent no.3 is the brother-in-

law of respondent no.2. The respondent no.3 claiming himself as

tenant, tendered rent in April 1986 to the respondent no.1 which he

refused to receive on the ground that the respondent no.3 had nothing

to do with the suit property and the respondent no.1 did not recognize

the respondent no.3 as tenant. Thereupon, the respondent no.3

initiated proceedings under Section 8(5) of the Act seeking permission

to deposit rent in the Court on account of respondent no.1 having

refused to receive the rent. In these proceedings the respondent no.3

claimed himself to be tenant and alleged and acknowledged the

respondent no.1 to be the owner. Rent upto January 1990 was

deposited in the proceedings under Section 8(5) of the Act. The

proceedings came to be dismissed in default of appearance of the

applicant therein.

On 24.1.1990, the appellants no. 3 to 5 before us got a sale

deed of the suit premises executed in their favour from four daughters

of P. Narayana Reddy and the widow of pre-deceased son late

Manohar Reddy. P. Nithyananda Reddy, the respondent no.1 and his

one sister, did not join in the execution of sale deed and therefore

their rights, to the extent they may be, do not stand transferred to the

appellants. P. Varadarajulu, respondent no.3 claims himself to be the

tenant in the suit premises, while according to respondent no.1, it is

the respondent no.2 who is the tenant and P. Varadarajulu was

inducted illegally as a sub-tenant. The fact remains that subsequent

to the execution of the sale deed dated 24.1.1990 referred to

hereinabove, P. Varadarajulu, respondent no.3 has with the consent,

express or implied, of G. Ithirajulu, respondent no.2, handed-over

possession over the suit premises to the appellants no. 3 to 5 herein.

The rights and interests of the respondents no.2 and 3, have come to

vest in the appellants no. 3 to 5 apart from theirs being purchasers of

interest of some of the co-owners of the joint property.

On 26.3.1990 the respondent no.1 initiated the present

proceedings for eviction of the respondent nos. 2 and 3 (allegedly the

tenant and the sub-tenant) under Section 13 of the A.P. Buildings

Control Act. It was alleged that the respondent no.1 required the

premises bona fide for his own use and that the tenant was in arrears

of rent and had also sub-let the premises parting with possession in

favour of a third person. In these proceedings the appellants no. 3 to

5 herein sought for intervention and being joined as parties to the

proceedings. The prayer for impleadment was rejected by the learned

Rent Controller vide his order dated 14.2.1992. However, in revision

preferred by the appellants no. 3 to 5, the prayer for their

impleadment was allowed by the High Court vide order dated

16.4.1992 in view of their having entered into possession of the

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premises. On 17.7.1993 appellants nos. 3 to 5 transferred their right

and interest in the property along with possession in favour of the

appellant nos. 1 and 2 through a registered deed of sale. They were

also joined as parties and this is how the five appellants are parties to

the eviction proceedings.

On 10.4.1990 the respondent no.1 filed Original Suit No. 59 of

1990 seeking an injunction against the appellant nos. 3 to 5

restraining them for interfering with the possession over the suit

premises. The Trial Court granted the temporary injunction.

However, the Appellate Court, vide its order dated 1.10.1990 directed

the injunction to be vacated recording a finding that the appellant nos.

3 to 5 had entered into actual possession of the property in the

purported exercise of their title under the sale deed dated 24.1.1990,

and therefore the temporary preventive injunction against them was

uncalled for.

Reverting back to the present proceedings, the appellant nos. 3

to 5, on having been joined as parties to the eviction proceedings, filed

a written statement on 12.7.1994, taking a plea that they were owners

in possession of the property and there was no landlord-tenant

relationship between them and the respondent no.1. On being joined

as parties to the proceedings, the appellant nos. 1 and 2 also filed

their written statement on 7.3.1996 raising a similar plea.

On 12.3.1996 the Rent Controller directed the eviction petition

to be decreed. According to the Rent Controller the respondent no.1

was landlord of the suit premises and the respondent nos. 2 and 3

were the tenants having attorned in favour of respondent no.1, and

therefore, the persons inducted into possession by them were also

liable to be evicted along with them. On 24.7.1998 the Principal

Senior Civil Judge dismissed the appeal, confirming the order of the

Rent Controller. The Civil Revision preferred before the High Court also

came to be dismissed on 2.12.1998. Two relevant facts may be stated

here by way of clarification. The judgment of the High Court records

under a mistaken apprehension as to the facts either on the part of the

Court or on the part of the learned counsel for the appellants that the

two sale deeds executed respectively in favour of the appellant nos. 3

to 5 and then appellant nos. 1 and 2 were unregistered and therefore

did not have the effect of transferring title to them. It was conceded

at the Bar and very fairly by the learned counsel for both the parties

before us that the sale deeds are in fact registered and the statement

of fact contained in the judgment of the High court in that regard is

incorrect. Both the learned counsels appearing before us made their

submissions proceeding on the foundation that the two sale deeds are

registered. The other point is that the only plea raised before the High

Court on behalf of the appellants was that they being transferees in

possession from some of the co-owners, they would also acquire the

status of co-owner and they can never be tenants of the respondent

no.1 who is just one of the co-owners and therefore the eviction

proceedings based on landlord-tenant relationship are fundamentally

misconceived and deserve to be dismissed so far as they are

concerned. The remedy of one co-owner against the other co-owner in

possession is by way of suit for partition and not by way of eviction. It

is noteworthy that before the High Court no challenge was laid to the

findings on the availability of the grounds of eviction arrived at by the

courts below. The result is that the finding as to availability of

grounds of eviction has achieved a finality and is immune from

challenge before this Court. Very fairly the learned senior counsel for

the appellants has not made any submissions in that regard. The

controversy surviving for decision is as to the nature and character of

possession of the appellants over the suit premises. If the appellants

can be held to be co-owners in possession of the property the suit for

eviction would not lie, submits Shri P.P. Rao, the learned senior

counsel for the appellants. On the contrary, the stand taken by Shri

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Lalit, the learned counsel for the respondent no.1, is that the

appellants have been inducted into possession by the tenants in the

suit property, without consent of the landlord-respondent no.1, and

therefore, it is a clear case of parting with possession by the tenant.

The fact that the appellants have also acquired title from some of the

co-owners would not make any difference. The respondents nos.2 and

3 have acknowledged and attorned the respondent no.1 as landlord of

the property. They have not surrendered possession to the

respondent no.1. They have admittedly transferred possession to the

appellants nos.3 to 5 who have in their turn transferred the possession

to appellants nos. 1 and 2. They are inducted into possession of the

tenancy premises by the tenants or the tenant and his sub-tenant.

Simply because the appellants have also acquired title of some of the

co-owners it would not have the effect of merging the tenancy with

ownership and bringing the landlord-tenant relationship between the

respondent no.1 and respondent nos.2 and 3 to an end so as to get rid

of their obligation of placing the landlord in possession of the tenancy

premises on the tenancy coming to an end.

It is not disputed that the tenancy premises have been

demolished and new premises have been reconstructed in place of the

old one by the transferees in connivance with the tenants.

We have set out the facts in brief incorporating the bare

essential details by way of backdrop. Certain neat questions of law

arise for decision in this appeal. For dealing with those questions, we

sum up and set out as follows the factual foundation on which we are

now proceeding. Out of the several co-owners of the property, the

respondent No.1 was a landlord dealing with the tenants as such and

his landlordship was attorned to and acknowledged by the tenants; the

respondents No.2 and 3 shall both be treated as tenants, as they

themselves claim to be, without entering into the controversy whether

one of them is tenant and other is a sub-tenant or a person inducted

in possession by the tenant; the tenants i.e. respondents No. 2 and 3

have parted with possession in favour of the appellants without the

consent, express or implied, of the respondent no.1, who is landlord-

cum-co-owner of the suit premises; and the appellants being

transferees from some of the co-owners of the property, have acquired

partial proprietory interest (to the extent of the interest held by their

predecessors in interest) in the suit premises. These facts are beyond

any pale of controversy so far as the present appeal is concerned.

The first question which arises for decision is whether the

appellants are absolved of their obligation of delivering possession

over the suit premises to the landlord-respondent No.1 because the

tenancy rights in the suit premises held by respondents No.2 and 3

and transferred by them to the appellants have merged in the

ownership entailing determination of tenancy. The learned senior

counsel for the appellants has placed strong reliance on the doctrine of

merger.

Law Lexicon (P. Ramanatha Aiyar, Second Edition, 1997) defines

"merger" as the "destruction or 'drowning' by operation of law of the

less in the greater of two estates coming together and vesting without

any intervening estate in one and the same person in the same right."

"Whenever a greater estate and a less coincide and meet in one and

the same person without any intermediate estate, the less is

immediately annihilated, or in the law phrase is said to be merged that

is, sunk or drowned in the greater (2 Black. Com.177; Tomlins Law

Dic.). According to Foa (General Law of Landlord and Tenant, Eighth

Edition, p.642), a lease may be determined by merger. A merger

takes place where a tenant acquires the immediate reversion: for

when a greater estate and a less coincide in the same person without

any intermediate estate, the less is said to be merged in the greater. .

. . . . For merger, however, to take place, the two interests must

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come to one and the same person in one and the same right."

The common law doctrine of merger is statutorily embodied in

Transfer of Property Act, 1882. Section 111 (d) provides:-

"111. Determination of lease.___ A lease of

immovable property determines___

xxx xxx xxx xxx

(d) in case the interests of the lessee and

the lessor in the whole of the property become

vested at the same time in one person in the same

right;

xxx xxx xxx xxx"

A bare reading of the doctrine of merger, as statutorily recognized in

India, contemplates (i) coalescence of the interest of the lessee and

the interest of the lessor (ii) in the whole of the property (iii) at the

same time (iv) in one person (v) in the same right. There must be a

complete union of the whole interests of the lessor and the lessee so

as to enable the lesser interest of the lessee sinking into the larger

interest of the lessor in the reversion.

In Badri Narain Jha & Ors. Vs. Rameshwar Dayal Singh &

Ors., 1951 SCR 153, it was held by this Court that if the lessor

purchases the lessee's interest, the lease no doubt is extinguished as

the same man cannot at the same time be both a landlord and a

tenant, but there is no extinction of the lease if one of the several

lessees purchased only a part of the lessor's interest. In such a case

the leasehold and the reversion cannot be said to coincide.

In Shaikh Faqir Bakhsh Vs. Murli Dhar & Ors., AIR 1931 PC

63, the plaintiff was holding on lease a portion of the entire property.

Subsequently, plaintiff and defendant became pro indiviso joint

proprietors of the property by purchasing shares from the earlier

owners. The lease was subsisting when the shares were bought by the

parties. In a suit for accounts filed by the plaintiff it was held that the

plaintiff's rights under lease of a part do not merge in his rights as

joint proprietor of the whole of the property and as between the

parties the plaintiff held a valid and subsisting lease.

A Division Bench of Patna High Court in Parmeshwar Singh &

Ors. Vs. Mt. Sureba Kuer & Ors., AIR 1925 Patna 530, held that

Section 111(d) applies only to a case where the interests of the lessee

and of the lessor in the whole of the property become vested at the

same time in one person in the same right. Where a co-proprietor in

the property purchased for himself, the interest of the lessees of the

whole property, there could be no merger. On purchase of a partial

interest in tenancy rights by the owner, the onus of proving that the

distinction between the interests continued to be kept alive

subsequently also cannot be placed on the party alleging that the

distinction was so kept alive. To the same effect is the view of the law

taken in Lala Nathuni Prasad & Ors. Vs. Syed Anwar Karim &

Ors., 1919 IC 16 (Patna). Merger is largely a question of intention,

dependent on circumstances, and the courts will presume against it

when it operates to the disadvantage of a party, as was held by this

Court in Nalakath Sainuddin Vs. Koorikadan Sulaiman, (2002) 6

SCC 1 (Para 20).

In the case at hand, it cannot be denied, nor has it been denied,

that the appellants herein are not purchasers of the entire ownership

interest in the property. What they have purchased is interest of some

out of all the co-owners of the property. The interest of the

respondent No.1, whatever be its extent, has not come to vest in the

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appellants. The appellants have also acquired the tenancy rights in

the property. Thus they have acquired partial ownership and full

tenancy rights. It cannot be said that the interests of the lessee and

the lessor in the whole of the property have become vested in the

appellants at the same time and in the same right. The lease cannot

be said to have been determined by merger. So long as the interests

of the lessee, the lesser estate and of the owner, the larger estate do

not come to coalesce in full either the water of larger estate is not

deep enough to enable annihilation or the body of lesser interest does

not sink or drown fully.

It was submitted by the learned senior counsel for the

appellants that assuming if the tenancy has not determined by merger

still what was held by the respondents No.2 and 3 on tenancy was

'building' or super structure only and not the land beneath.

Admittedly, the building has been demolished. As tenancy premises

have ceased to exist, the tenancy has come to an end in view of the

very subject matter of tenancy having ceased to exist. Assuming also

that the act of the appellants is wrongful still the remedy of the

respondent No.1 who is only a co-owner in the property would be to

sue for partition and seek recovery of damages; a suit based on

landlord-tenant relationship and seeking recovery of possession is

misconceived and must fail, submitted the learned senior counsel Shri

P.P. Rao.

The tenancy cannot be said to have been determined by

attracting applicability of the doctrine of frustration consequent upon

demolishing of the tenancy premises. Doctrine of frustration belongs

to the realm of Law of Contracts; it does not apply to a transaction

where not only a privity of contract but a privity of estate has also

been created inasmuch as lease is the transfer of an interest in

immovable property within the meaning of Section 5 of the Transfer of

Property Act (wherein the phrase 'the transfer of property' has been

defined), read with Section 105, which defines a lease of immovable

property as a transfer of a right to enjoy such property. (See

observations of this Court in this regard in Raja Dhruv Dev Chand

Vs. Raja Harmohinder Singh & Anr., 1968 (3) SCR 339). It is

neither the case of the appellants nor of the respondents No.2 and 3

that the subject matter of lease was the building and the building

alone, excluding land whereon the building forming subject matter of

tenancy stood at the time of creation of lease.

In Woodfall's Laws of Landlord and Tenant (28th Edition, Vol.1)

the relevant law is so stated:-

"Where the lessee covenants to pay rent at

stated period (without any exception in case of

fire), he is bound to pay it, though the house be

burnt down; for the land remains, and he might

have provided to the contrary by express

stipulation, if both parties had so intended. And

this rule applies, although the lessee's covenant to

repair contain an exception in case of fire.

Similarly, an action for use and occupation still lies

in respect of the whole period of the tenancy

notwithstanding the destruction of the premises by

fire." (Para 1-0778)

"In a lease of land with buildings upon it the

destruction of even the entirety of the buildings

does not affect the continuance of the lease or of

the lessee's liabilities under it, unless so provided

by express contract." (Para 1-2055)

"A demise must have a subject-matter,

either corporeal or incorporeal. If the subject-

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matter is destroyed entirely, it is submitted that

the lease comes automatically to an end, for there

is no longer any demise. The mere destruction of a

building on land is not total destruction of the

subject-matter of a lease of the land and building,

so the demise continues. But if by some convulsion

of nature the very site ceases to exist, by being

swallowed up altogether or buried in the depths of

the sea, it seems clear that any lease of the

property must come to an end." (Para 1-2056)

A lease of a house or of a shop is a lease not only of the

superstructure but also of its site. It would be different if not only the

site but also the land beneath ceases to exist by an act of nature. In

the present case the appellants who are the successors of the tenancy

right have demolished the superstructure but the land beneath

continues to exist. The entire tenancy premises have not been lost.

Moreover, the appellants cannot be permitted to take shelter behind

their own act prejudicial to the interest of the respondent No.1 under

whom the respondents no.2 and 3 were holding as tenants and then

inducted the appellants.

In D.G. Gouse & Co. (Agents) Pvt. Ltd. Vs. State of Kerala

& Anr., (1980) 2 SCC 410, while dealing with Entry 49 of List II of the

Seventh Schedule of the Constitution, making a reference to Oxford

English Dictionary, this Court has held that the site of the building is a

component part of the building and therefore inheres in the concept or

ordinary meaning of the expression 'building'. Referring to

Corporation of the City of Victoria Vs. Bishop of Vancouver

Island, AIR 1921 PC 240, it was held that the word 'building' must

receive its natural and ordinary meaning as 'including the fabric of

which it is composed, the ground upon which its walls stand and the

ground embraced within those walls".

We are, therefore, of the opinion that in the event of the

tenancy having been created in respect of a building standing on the

land, it is the building and the land which are both components of

subject matter of demise and the destruction of the building alone

does not determine the tenancy when the land which was site of the

building continues to exist; more so when the building has been

destroyed or demolished neither by the landlord nor by an act of

nature but solely by the act of the tenant or the person claiming under

him. Ample judicial authority is available in support of this proposition

and illustratively we refer to George J. Ovungal Vs. Peter, AIR 1991

Kerala 55, Rahim Bux & Ors. Vs. Mohammad Shafi, AIR 1971

Allahabad 16, Hind Rubber Industries Pvt. Ltd. Vs. Tayebhai

Mohammedbhai Bagasarwalla & Ors., AIR 1996 Bombay 389 and

Jiwanlal & Co. & Ors. Vs. Manot & Co., Ltd., 64 CWN 932. The

Division Bench decision of Kerala High Court in Dr. V. Sidharthan Vs.

Pattiori Ramadasan, AIR 1984 Kerala 181, appears to take a view to

the contrary. But that was a case where the building was totally

destroyed by fire by negligence of the tenant. It is a case which

proceeds on very peculiar facts of its own and was rightly dissented

from by Bombay High Court in Hind Rubber Industries Pvt. Ltd.

Vs. Tayebhai Mohammedbhai Bagasarwalla & Ors., (supra).

In the facts and circumstances of the case, no defence or

shelter is available to the appellants behind the plea that they have

acquired interest of some of the co-owners. The law as to co-owners

is well settled. Where any property is held by several co-owners, each

co-owner has interest in every inch of the common property, but his

interest is qualified and limited by similar interest of the other co-

owners. One co-owner cannot take exclusive possession of the

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property nor commit an act of waste, ouster or illegitimate use, and if

he does so he may be restrained by an injunction. A co-owner may,

by an arrangement, expressed or implied, with his other co-owners,

possess and enjoy any property exclusively. Such a co-owner can also

protect his possession against the other co-owners and if he is

dispossessed by the latter, he can recover exclusive possession. (See

Jahuri Sah & Ors. Vs. Dwarika Prasad Jhunjhunwala & Ors.,

(1966) Supp SCR 280). It is beyond any controversy that on the

death of late P. Narayana Reddy, his rights devolved upon the several

heirs including respondent no.1. The respondent no.1 is the only male

person in the body of the co-owners, all others being women. It may

be for this reason, or otherwise, that the respondent no.1 was in

possession of the property, through tenants, realizing the rent

peacefully and with the consent, expressed or implied, of other co-

heirs of late P. Nithyananda Reddy. So far as the respondents no.2

and 3 are concerned, by operation of Section 116 of the Evidence Act,

they were estopped from challenging or denying the ownership of the

respondent no.1 and his rights in the tenancy premises. As held in

Vasudeo Vs. Balkishan, (2002) 2 SCC 50, the rule of estoppel

between landlord and tenant continues to operate so long as the

tenancy continues and unless the tenant has surrendered possession

to the landlord. The estoppel would cease to operate only on the

tenant openly restoring possession by surrender to the landlord.

Neither the respondents no. 2 and 3 nor their successors in interest or

the persons claiming under them could have denied the title of the

respondent no.1 during the continuance of the tenancy and even

thereafter unless they had restored possession over the tenancy

premises to the respondent No.1. Looking at the status of the

appellants whether as co-owners or as persons inducted in possession

by the tenants they have no legs to stand on. If other co-owners

could not have dispossessed the respondent no.1 or demolished the

property without the consent of respondent no.1 it is difficult to

conceive how their transferees could have demolished the tenancy

premises and raised their own construction over the land on which the

tenancy premises stood earlier.

For the foregoing reasons, we find the appeal devoid of any

merit and liable to be dismissed. It is dismissed accordingly and with

costs. The judgment and decree of the Trial Court as upheld by the

High Court are maintained.