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CASE NO.:

Appeal (civil) 7791 of 2001

PETITIONER:

SHASHI KAPILA

Vs.

RESPONDENT:

R.P. ASHWIN

DATE OF JUDGMENT: 08/11/2001

BENCH:

K.T. Thomas & S.N. Variava

JUDGMENT:

THOMAS, J.

Leave granted.

The tenant of a residential building, situate at

Jayamahal Extension, Bangalore who has been occupying

it for nearly quarter of a century is now at the peril

of being evacuated therefrom by his landlord. To

resist the action launched by the landlord for

evicting the tenant he has adopted a defence that his

continuation in the building from April 1986 onwards

was under a separate jural linkage on account of an

agreement of sale executed by the landlord. But the

said line of resistance did not succeed thus far. The

partial relief he secured from the High Court, as per

the impugned order, was not enough to thwart the

impending eviction hence the tenant has filed the

appeal by special leave.

The respondent landlord applied for an order of

eviction of the appellant on two grounds envisaged

under Section 21(1) of the Karnataka Rent Control Act.

One was on the allegation that the tenant defaulted

paying rent of the building for a few months and the

other was that the landlord himself requires the

building bona fide for his own occupation. Though the

Rent Control Court (the Court of Small Causes Judge,

Bangalore) granted the order of eviction on both

grounds the High Court, in revision, restricted the

order to the ground of bona fide need of the landlord.

According to the appellant, the landlord had

entered into an agreement on 17.4.1986 with a firm by

name M/s Shiva and Co. of which the appellant is one

of the partners as per which the landlord had agreed

to sell the building for a sale consideration of

Rupees twelve lacs, within three months of the said

date, and a sum of Rupees one lac had already been

received by the landlord as advance amount. On the

strength of the said agreement appellant sought to

non-suit the landlord.

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The Rent Control Court did not accept the above

contention. The court found that the landlord made

out both the grounds and hence the order of eviction

was passed. The High Court concurred with the Rent

Control Court in respect of the ground of bona fide

need of the landlord. The following is what the

learned single judge of the High Court has stated

about it:

The contention of the learned counsel

for the petitioner that he is in

permissive possession as an agreement

holder and not as a tenant is difficult

to accept. He has produced Ex.R.1, a

copy of the sale agreement which shows

that the respondent-landlord has

entered into an agreement with a firm

represented by Mr. Yati Kumar. There

is no evidence on record to show that

the present petitioner is a part of

M/s. Shiva and Co. The lease agreement

produced by the parties in those

proceedings disclosed that the premises

had been taken on lease by the

petitioner himself and not by the

company. I have perused the terms and

conditions of the sale agreement.

There is no term or agreement between

the parties recognising the present

petitioner as an agreement holder and

not as a tenant and therefore it is

difficult to accept his submission that

the petitioner is no longer a tenant of

the petition premises.

Sri Sudhir Chandra, learned Senior Counsel

adopted a twin contention on the basis of the

agreement dated 17.4.1986. First is that the

appellant can lawfully resist the eviction of the

landlord on the strength of Section 53A of the

Transfer of Property Act. Second is that the said

agreement is enough to nullify the bona fides of the

claim of the landlord that he requires the building

for his own occupation. According to the learned

Senior Counsel the agreement reflects the intention of

the landlord to part with his rights in the building

and hence the ground urged for eviction is

inconsistent with the desire limned in the agreement.

While dealing with the first contention, a

reference has to be made to Section 53A of the

Transfer of Property Act. It applies to a person who

contracts to transfer immovable property in writing.

If the proposed transferee in the agreement has taken

possession of the property, or he continues in

possession thereof being already in possession, in

part performance of the contract and has done some act

in furtherance of the contract, and transferee has

performed or is willing to perform his part of the

contract, the transferor shall be debarred from

enforcing any right in respect of the property. This

is the kernel of the principle incorporated in Section

53A of the Transfer of Property Act.

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The agreement dated 17.4.1986 was between the

respondent landlord on the one part and M/s Shiva and

Co. on the other part. The hurdle which the appellant

has to surmount initially was to show that he was a

partner of the firm M/s Shiva and Co. We will assume,

for the present, that he was a partner and hence for

all practical purposes he could also represent the

firm. Of course, the agreement is totally silent of

the fact that appellant was partner of M/s Shiva and

Co. Even assuming that he was a partner thereof it is

legally impermissible for him to individually claim

all the rights of the firm. Nor can he project

himself as a transferee under the agreement.

A partnership firm is an association of persons.

But in spite of that unity between themselves, every

partner can have his own separate existence from the

firm. Any right which a partner has over any property,

other than the partnership property, would remain as

his individual asset. The mere fact that the

particular person has chosen to include himself as a

partner of a firm will not result in incorporation of

all his individual properties as the assets of the

partnership. Section 14 of the Indian Partnership Act

1932 says: Subject to contract between the partners,

the property of the firm includes all property and

rights and interests in property originally brought

into the stock of the firm, or acquired, by purchase

or otherwise, by or for the firm, or for the purposes

and in the course of the business of the firm, and

includes also the goodwill of the business.

Here it is an admitted fact that appellant was a

tenant of the building even earlier than the formation

of the firm M/s Shiva and Co. In such a situation

the tenancy right of the appellant in respect of the

building is a separate right available to the

appellant individually over which the partnership has

no claim. Appellant never contended that he had

offered the suit property as an asset of the

partnership firm. Nor did the firm at any time claim

that appellant threw the tenancy right over the

building into the hotchpot of the partnership at any

time. On the contrary, the agreement has taken care

that the building is in the personal possession of the

appellant. The following recital in the agreement

would bear testimony for it:

The purchaser is aware that the tenant

is in possession of the said premises

and after the purchaser he must obtain

the possession of the said premises in

due course at his own cost and

responsibilities. The seller does not

hold himself responsible in any way to

get him vacant possession. In fact,

the purchaser has agreed to take up

this responsibility.

Even that apart, when a suit was filed by M/s

Shiva and Co. for specific performance of the

agreement dated 17.4.1986 the firm made it abundantly

clear in the plaint itself that appellants right in

the building as a tenant is in his personal capacity

and not as a partner of the firm. The relevant

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portion of the plaint is extracted below:

The suit schedule property, at the

time of agreement of sale, was in the

occupation of Mr. Shashi Kapila in his

personal capacity. Hence it is agreed

that the defendant would not be

responsible to place the plaintiff in

vacant possession of the suit property

and the plaintiff agreed for the same.

The suit schedule property continues to

be tenanted by Mr. Shahi Kapila in his

personal capacity who is also one the

partners of the plaintiffs firm.

(Mr. Shashi Kapila, mentioned in the above portion,

is the appellant in this case).

Thus the appellant cannot lay any claim on the

strength of Section 53A of the Transfer of Property

Act, even assuming that the agreement is still binding

on the parties thereto.

The second limb of the contention is that when

the landlord himself had agreed to transfer his rights

to others, such a stance is negatory to his claim that

he genuinely needs the building for his own

occupation. At the first blush the argument appeared

forceful because the bona fides of the landlords need

could possibly get eclipsed when the landlord himself

wanted his rights in the building to be alienated to

other persons. But when we delved into the matter we

found that genuineness of the landlords need remains

unimpaired despite his earlier inclination to sell the

building. We shall now state the reasons.

We pointed out above that the agreement to sell

was executed on 17.4.1986. It has been stipulated

therein that the sale deed should be executed and

registered within three months from the said date. It

is the admitted case that the sale deed was not

executed within that time. The landlord filed a

petition for eviction only 6 years thereafter. In the

petition for eviction he has stated that he was

residing at Mysore and he shifted his residence to

Bangalore and has been staying in a temporary

accommodation as the building belonging to another

person was given for his occupation. He further said

that he is unable to continue in the said building for

various reasons. It is not disputed that the landlord

is now residing in the building belonging to somebody

else.

M/s. Shiva & Co. had filed a suit in 1986 for

specific performance of the agreement. The said suit

was vehemently resisted by the landlord. At some

point of time the said suit was withdrawn by the firm

and later in 1989 the same firm filed a second suit

for specific performance of the agreement dated

17.4.1986. Landlord opposed the second suit also on

all grounds. He contended, inter alia, that the

agreement itself could not be acted on as he was

deceived by Mr. Yati Kumar who represented the firm

and it was never disclosed to the landlord that the

appellant was a partner of that firm. At any rate, it

was clear beyond doubt that the landlord was totally

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opposed to the performance of the terms of the

agreement dated 17.4.1986. That stand of the landlord

was proclaimed long before he launched the present

litigation for eviction of the appellant on the ground

of his need to occupy the building. The above

developments would indicate that the need of the

landlord for occupying the suit building arose only

long after 17.4.1986. Therefore, he cannot be

preempted from claiming the relief merely on the

ground that six years prior to it he was willing to

sell the building. Hence, we are unable to agree with

the contention of the appellant that the landlord can

be non-suited on the basis of the afore-mentioned

agreement.

Learned senior counsel for the appellant relied

on the decision of this Court in P. Veerappa vs. M.A.

Mohammad Amanulla {1996(1) SCC 415} in support of his

contention that the agreement would foreclose the

landlords claim that he needs the building bona fide

for his own use. The following passage in the

judgment is enough to show that the said decision is

of no use to the appellant:

So long as the agreement subsists, it

is settled law that the lesser right of

tenancy stood merged with larger rights

accrued under the agreement. But

unfortunately in the compromise itself

it was recognised that the appellant

was to pay arrears of rent till the

date of compromise. In other words,

the appellant recognised the reversion

to his pre-existing rights as tenant up

to the date of the compromise. In

other words, subject to compliance of

the terms of the contract, his tenancy

rights continued. The terms have not

been complied with and the agreement

came to an end. Thereby, the

appellants pre-existing rights as a

tenant stood revived and the appellant

and the respondent were bound by the

relationship of landlord and tenant.

We do not find any merit in any of the

contentions of the appellant and hence we dismiss this

appeal. However, time for vacating the building would

stand extended by six months from today on condition

that appellant gives an unconditional undertaking in

this Court in the form of an affidavit, within three

weeks, that he would vacate the building and put the

landlord in possession thereof on or before the expiry

of six months from today. If the said undertaking is

not furnished within the time mentioned above,

appellant will forfeit the benefit for extension of

time to vacate. Appeal is thus disposed of.

J

[ K.T. Thomas ]

J

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[ S.N. Variava ]

November 8, 2001.