Apollo Zipper India Limited vs W. Newman and Co. Ltd.

(ii) ownership of the plaintiff was not clear moreso for want of attornment made by the tenant of plaintiff ’s ownership (iii) there is dispute as regards the amount of monthly rent – Single Judge of High Court declining to grant leave to defend decreed the suit – In appeal, Division Bench of High Court granted unconditional leave to defend the suit – On appeal, held: Change of ownership from original owner to the State and then from State to the plaintiffcompany is a matter of record – In the facts of the case, ownership of the plaintiff was also attorned and accepted by the defendanttenant – Therefore, the tenant cannot raise plea questioning the title of the plaintiff and the plea of attornment – The evidence on record proves that the monthly rent of the premises was Rs. 40,000/- and not Rs. 16,00/- – Since the monthly rent of the premises exceeded the limit prescribed u/s. 3(f) of Tenancy Act, the Tenancy Act would have no application to the premises – Therefore, summary suit taking recourse to Transfer of Property Act r/w r.1(B) of Rules, is maintainable – Defendant-tenant failed to raise any arguable and substantial defence as required u/r. 6 r/w r.9 – Rent Control and Eviction – Transfer of Property Act, 1882 – s. 106 – West Bengal Premises Tenancy Act, 1997 – s. 3(f) – Great Eastern Hotel (Taking Over of Management) Act, 1975 – Great Eastern Hotel (Acquisition of Undertaking) Act, 1980 – ss. 3(1) 3(2) and 5(11).

Evidence:

Standard of proof – To prove title – In eviction suit – Held: In eviction suit landlord is not expected to prove his title like what he is required to prove in a title suit – Rent Control and Eviction.

Rent Control and Eviction:

Eviction suit – Challenge to the title of the landlord – Scope of – Held: By virtue of s. 116 of Evidence Act, tenant is estopped from challenging the title of his landlord – However, tenant is entitled to challenge the derivative title of an assignee of the original landlord – However, this right of the tenant is subject to the caveat that tenant has not attorned to the assignee – If the tenant pays rent to the assignee or otherwise accepts the assignee’s title, it results in creation of attornment, which, in turn deprives the tenant to challenge the derivative title – Evidence Act, 1872 – s. 116.

Allowing the appeal, the Court

HELD: 1. The grounds, which were pressed in service by the respondent, to seek leave to defend the suit are neither arguable nor have any prima facie merit therein and, therefore, there does not arise any need to have any trial in the suit on merits on such grounds. [Para 43] [385-D]

2. In an eviction suit filed by the landlord against the tenant under the Rent Laws, when the issue of title over the tenanted premises is raised, the landlord is not expected to prove his title like what he is required to prove in a title suit. [Para 45] [385-F] Sheela & Ors. v. Firm Prahlad Rai Prem Prakash (2002)

(3) SCC 375 : [2002] 2 SCR 177; Boorugu Mahadev & Sons & Anr. v. Sirigiri Narasing Rao & Ors. (2016) 3 SCC 343 : [2016] 1 SCR 530 – relied on.

3. Though by virtue of Section 116 of the Evidence Act, the tenant is estopped from challenging the title of his landlord, yet the tenant is entitled to challenge the derivative title of an assignee of the original landlord of the demised property in an action brought by the assignee against the tenant for his eviction under the Rent laws. However, this right of a tenant is subject to one caveat that the tenant has not attorned to the assignee. If the tenant pays rent to the assignee or otherwise accepts the assignee’s title over the demised property, then it results in creation of the attornment which, in turn, deprives the tenant to challenge the derivative title of the landlord. [Para 47][386-B-C] Bismillah De (dead) by Legal Representatives v. Majeed Shah (2017) 2 SCC 274 : [2016] 8 SCR 719 – relied on.

4. Attornment does not create any new tenancy, but once the factum of attornment is proved then by virtue of such attornment, the old tenancy continues. Attornment can be proved by several circumstances including taking into consideration the conduct of the tenant qua landlord. [Paras 48, 63] [386-D; 388G] Uppalapati Veera Venkata Satyanarayanaraju & Anr. v. Josyula Hanumayamma & Anr. AIR 1967 SC 174 : [1962] SCR 910 – relied on.

5. It is not in dispute that the Company (The original owner of the suit premises) who had created the original contract of tenancy with the respondent was acquired by the State by The Great Eastern Hotel (Taking Over of Management) Act, 1975 and the The Great Eastern Hotel (Acquisition of Undertaking Act, 1980, as a consequence thereof, the suit premises stood vested in the State Authority by operation of law as per Section 3 read with Section 5 of the Act 1980 with effect from 17.07.1980 and 22.06.1981. It is also not in dispute that the respondent (defendant) accepted this change of ownership and accordingly started paying monthly rent to the State Authority from 1980 as its monthly tenant and which they paid till 2005. It is also not in dispute that in terms of the notification issued by the Governor on 05.10.2005 under Section 3(2) of the Act of 1980, the suit premises then stood transferred and vested in the appellant-Company and the appellant accordingly became the owner of the suit premises with effect from 05.10.2005. It is further not in dispute that the State Authority and their lawyer, vide letters dated 24.02.2006 and 28.04.2006, informed the respondent about the change of ownership of the suit premises and the appellant acquiring the ownership of the suit premises vide notification dated 05.10.2005. These undisputed facts, which are matter of record, are sufficient to hold in the eviction suit that the appellant became the owner of the suit premises with effect from 05.10.2005. [Paras 49-54] 386-E-H; 387-A-B]

6. When the appellant sent a quit notice to the respondent under Section 106 of the Transfer of Property Act, 1882 determining the tenancy and calling upon the respondent to pay the arrears of rent and vacate the suit premises, despite receipt of the quit notice, they did not reply to it. It amounts to waiver on their part to challenge the invalidity or infirmity of the quit notice including the ownership issue raised therein. The respondent by letters dated 13.06.2006, 27.06.2006, 05.07.2006 and 11.07.2006, sent to the appellant on the question of ownership of the suit premises and payment of rent had expressed their willingness to attorn and continue the tenancy with the appellant and also offered to pay rent to the appellant. The respondent also in their civil suit filed against the appellant admitted the ownership of the appellant and went to the extent of seeking the mandatory injunction against the appellant directing them to accept the monthly rent of the suit premises from the respondent. The conduct of the respondent, therefore, disentitles them to now raise a new plea questioning the title of the appellant over the suit premises and a plea of attornment. Both are wholly misconceived pleas and, therefore, deserve to be rejected. [Paras 56, 57, 60, 61 and 62] [387-D-E; 388-C-D, F]

Parwati Bai v. Radhika AIR 2003 SC 3995 – relied on.

7. Thus the appellant was prima facie able to prove their title over the suit premises so also was able to prove the factum of “attornment” made by the respondent in relation to the suit premises in appellant’s favour thereby entitling the appellant to determine the contractual tenancy which was devolved upon them by operation of law. [Para 64] [388-H]

8. The monthly rent of the suit premises was Rs.40,000/-. The respondent had been paying Rs.40,000/- per month to their previous landlord – for a long time; the bifurcation of Rs.40,000/was being sought by the respondent so that they may get the benefit of applicability of the Tenancy Act to defend therein tenant’s right which they failed to prove. The rent receipts filed by the parties clearly proved that the monthly rent of the suit premises was Rs.40,000/- and not Rs.1600/-. [Para 67] [389-D]

9. The appellant rightly filed the suit by invoking the provisions of the Transfer of Property Act. The monthly rent of the suit premises was Rs.40,000/- Once the monthly rent of the suit premises was found to exceed the limit prescribed under Section 3(f) of West Bengal Premises Tenancy Act, 1997 the provisions of the Tenancy Act had no application to the suit premises. Therefore, the appellant was well within their right to file summary suit against the tenant’s eviction and for recovery of the arrears of rent by taking recourse to the provisions of the TP Act read with Rule 1(B) of The Rules of High Court of Calcutta (Original Side), 1914, applicable to the suits filed on the original side jurisdiction of the High Court at Calcutta. [Paras 69-71] [389F-H; 390-A]

10. The respondent failed to raise any arguable and substantial defense as required under Rule 6 read with Rule 9 of the Rules and the three grounds raised for seeking leave to defend the suit were only for the sake of raising and had no factual or/and legal foundation to stand for trial in the suit and hence no leave can be granted to the respondent on such grounds under Rule 9 of the Rules. It was, therefore, rightly declined by the Single Judge of High Court. [Para 72] [390-B]