It is true that there is no bar against a lessee to transfer
his/her leasehold interest in immovable property. This is well
recognized under Clause (j) of Part (B) of Section 108 of the T.P. Act.
But it is well settled that such transfer is always subject to the terms
of contract under which the lease is created and despite of such
transfer the lessee does not cease to be subject to any of the liabilities
attaching to the lease.
ORISSA HIGH COURT: CUTTACK
F.A.O. NO.511 OF 2011
From the order dated 28.10.2011 passed by the learned Civil Judge
(Senior Division), Bhubaneswar in I.A. No.179 of 2011 arising out of
C.S. No.286 of 2011.
__________
Jayalakshmi Patra
Versus
Shyama Kanta Mohanty & another ... ...
PRESENT :
THE HONOURABLE MR. JUSTICE RAGHUBIR DASH
Date of judgment : 07.08.2014
Citation;AIR 2014 Orissa 162
This appeal is in challenge of the order dated 28.10.2011
passed by the learned Civil Judge (Senior Division), Bhubaneswar in
I.A. No.179 of 2011 arising out of C.S. No.286 of 2011 dismissing the
application under Order 39 Rules 1 and 2 read with Section 151 of
the C.P.C.
2.
The appellant is the plaintiff-petitioner before the lower
court. She has filed the suit for specific performance of contract with
other ancillary reliefs. Her case is that the suit land measuring
2
Ac1.104 decimals located in Mouza Jayadev Vihar is a piece of
Government
land.
It
was
leased
out
to
Respondent
No.1,
Shyamakanta Mohanty, by the G.A. Department, Government of
Orissa (R-2) under a deed executed on 22.12.1984 which was
registered on 4.1.1985. As R-1 could not pay the premium dues, a
show cause notice was served on him for termination of the lease.
So, R-1 put forth an offer to the present appellant and late
Rajendranath Patra, predecessor-in-interest of proforma Defendant
Nos.3 to 5, for sale of the suit land which was accepted and
accordingly on 31.12.1991 an agreement for sale was entered into
between R-1 on one hand and the appellant and said Rajendranath
Patra on the other. On the same day, i.e., on 31.12.1991, R-1 also
executed one registered General Power-of-Attorney in favour of
appellant’s husband authorizing him, inter alia, to sell the suit land
on his behalf. On the very day of agreement for sale, possession of
suit land was delivered to the appellant and late Rajendranath Patra.
On the strength of such agreement for sale the appellant deposited
with the R-2 Rs.57,974/- towards arrear premium dues in respect of
the lease. Thereafter, on different dates part payments were made by
the appellant and late Rajendranath Patra to Respondent No.1
towards the consideration payable under the agreement for sale. On
23.12.1992 and 29.12.1993 the last two installments, at the rate of
Rs.8,282/-, towards payment of premium were paid to R-2 by the
3
appellant and Rajendranath Patra. Thus, R-2 has received the full
and final consideration/premium amount in respect of the suit
property. On 26.1.2011 the appellant and the legal heirs of
Rajendranath Patra requested R-1 to execute a sale deed in respect of
the suit property but he did not turn up to execute the same. Instead,
it is learnt from reliable source that R-1 is going to create third party
interest over the suit property. Therefore, the appellant has filed the
interim application with a prayer to restrain the respondents-O.Ps.
from taking any coercive action against the appellant as well as
proforma defendants and creating any third party interest in the suit
property during pendency of the suit.
Further
case
of
the
appellant-plaintiff
is
that
on
15.12.1998 a show cause notice was served on R-1 by R-2 for non-
utilisation of the suit land in terms of the lease to which R-1’s power
of attorney holder had responded by submitting show-cause. It is
further stated that on 4.11.2003 the suit land was mutated in favour
of R-1 and on 5.11.2003 the appellant and Rajendranath Patra had
approached the G.A. Department (R-2) to transfer the suit land in
their favour on the strength of the agreement for sale. Despite their
repeated approach, R-2 has not taken any steps in that regard. It is
further claimed that after getting possession of the suit land R-1 and
Rajendranath Patra developed the land spending huge amount. They
have constructed building over the land and they are paying ground
4
rent, holding tax, water tariff and electricity bills. They are running
business in the premises now existing over the suit land and have
obtained sales tax registration for their Firm which is running
business in the suit land.
3.
Respondent No.1 has taken the stand that on the basis of
the lease he took over possession of the suit land on 18.1.1985. Since
the lease was for the purpose of running one Cinema Hall, he started
construction of a Cinema Hall over the suit land but due to some
difficulties could not complete the construction within the stipulated
period for which R-2 issued show cause notice on 15.5.1998. His
reply to the show cause was not taken into consideration and the
lease was cancelled vide order dated 2.1.1999. He approached this
Court by filing W.P. (C) No.12214 of 2006 which was disposed of with
a direction to R-2 to consider his grievance. After receiving the order
of this Court, R-2 rejected his prayer for revocation of the order of
cancellation of lease. So, he moved the Chief Secretary, Government
of Orissa who did not take any action. He preferred a writ application
vide W.P.(C) No.591 of 2007 and this Court directed the Chief
Secretary to consider his case sympathetically. But the Chief
Secretary rejected his prayer for reconsideration of the order of
cancellation of lease. He challenged that order before this Court in
W.P. (C) No.16118 of 2008 which was disposed of with a direction to
the Chief Secretary to reconsider his case and take a decision on the
5
same by the end of March 2011. He put forth a fresh proposal before
the Chief Secretary for consideration of his case which is still
pending.
Since the lease has been cancelled, it is pleaded, the
agreement for sale executed by R-1 is not enforceable inasmuch as he
has no valid title over the suit property. It is further contended that at
no point of time possession of the suit land was delivered to the
appellant and late Rajendra Patra.
4.
Respondent No.2 filed objection taking the stand that the
G.A. Department leased out the suit land in favour of R-1 for the
purpose of a Cinema Hall. But R-1 having failed to utilize the suit
land for the specific purpose, the Government issued notice for
determination of the lease and ultimately the lease was cancelled.
Further stand is that R-2 has got no knowledge about any agreement
for
sale
between R-1
on one
hand
Rajendranath Patra on the other.
and
the
appellant
and
R-2 has not received any
representation from R-1 for transfer of the suit land in favour of any
one. Without the permission of the Government, R-1 cannot make
any transaction with anybody and in case any transaction is there,
that is void. Therefore, the appellant is not entitled to any interim
relief.
5.
Learned lower Court has observed that the agreement for
sale was brought into existence without the consent or knowledge of
6
the owner of the land. It is also observed that there is no scrap of
paper indicating that the State in any manner has recognized the
appellant’s possession. It is also observed that the lease deed
executed on behalf of the State has been determined vide order dated
2.1.1999 for which the agreement for sale is not enforceable under
the law. Thus, it is observed by the learned lower court, the appellant
has no prima facie case in her favour.
6.
Challenging the impugned order learned counsel for the
appellant argues that the interest of the appellant is protected under
Section 53-A of the Transfer of Property Act read with Section 19 of
the Specific Relief Act. It is also contended that there is no bar
against the lessee to transfer or assign his leasehold interest in the
suit land. It is also submitted that there being no requirement of
permission of the owner of the land for making transfer of such
leasehold interest, absence of consent or knowledge of the State is of
no consequence. Even otherwise also, it is submitted, there are
materials on record showing that the G.A. Department of the State
has got knowledge about the agreement for sale. Further submission
made by the learned counsel for the appellant is that the cancellation
of lease being subsequent to the execution of the agreement for sale,
the cancellation is of no consequence. It is also submitted that all the
three ingredients for grant of interim injunction are well made out by
the appellant.
7
7.
Learned counsel for the State has argued in support of
the impugned order with further submission that as against the State
there is no prima facie case and the suit itself is not maintainable.
Learned counsel for R-1 also supports the impugned order submitting
that in view of cancellation of the lease, the Court cannot grant the
relief of specific performance of contract as against R-1.
8.
It is true that there is no bar against a lessee to transfer
his/her leasehold interest in immovable property. This is well
recognized under Clause (j) of Part (B) of Section 108 of the T.P. Act.
But it is well settled that such transfer is always subject to the terms
of contract under which the lease is created and despite of such
transfer the lessee does not cease to be subject to any of the liabilities
attaching to the lease. Annexure-2 to the appeal memo is the lease
deed. Under the terms of the lease deed the lease is for a period of 90
years on payment of premium payable in 10 equal installments on or
before stipulated dates. It is also subject to payment of rent as
specified in the deed. Under the terms of the lease, the lessee is to
hold and use the leasehold property only for commercial purpose
which is none other than running of a Cinema Hall by raising
structures in strict conformity with the plan annexed to the lease
deed. The lease is also subject to the condition that the lessee should
complete construction of the Cinema Hall within 36 months or within
such time as would be extended by the lessor from time to time. It is
8
also found from the lease deed that the lessor has reserved the right
of re-entry for any breach of the covenants under (v) or (xiii) of Clause
2 of the lease deed. But what the appellant has pleaded in her W.S.
makes it clear that the term of the lease has been clearly violated
after execution of the agreement for sale. The appellant claims to have
developed the suit land making huge investment and presently the
Firm, in the name and style: M/s. Shree Jagatnath Auto Mobiles, is
running its wholesale distribution business from the building now
standing over the suit land. Such use of the suit premises is in clear
violation of covenant (xiii) of the lease deed which lays down that the
lessee shall not, without the consent in writing of the lessor, use or
permit the use of the land for any purpose other than that for which
it is leased. It also contravenes the covenant (v) of the lease deed
which lays down that the lessee shall not erect or build or permit to
be erected or built on the demised premises any building other than
that specified in a plan approved by the lessor, nor shall he make any
addition to any existing building or structures at any time except with
the written approval of the lessor. For such contravention, the owner
of the land has got right of re-entry into the suit premises as well as
the right to prevent use of the suit land for any purpose other than
what
is
specified
in
the
lease
deed.
For
these
subsequent
developments appellant cannot be said to have come to the Civil
Court with a clean hand. So, as against R-2, no interim injunction
9
can be granted preventing R-2 to take any coercive action against the
appellant and the proforma Defendants. That apart, since an interest
in the leasehold has been created in respect of the suit land, the State
cannot be directed to execute a sale deed in favour of the appellant
and the proforma Defendant which is the main prayer made in the
plaint. Therefore, the learned lower court has rightly observed that
the plaintiff-appellant has no prima facie case as against the State.
That apart, under Section 19 of the Specific Relief Act such specific
performance of contract cannot be enforced against the State.
9.
The plaintiff-appellant has filed the suit claiming that the
State has executed a lease-cum-sale deed in favour of R-1 which is
incorrect. Nothing is there in the lease deed wherefrom it can be
inferred that it is a lease-cum-sale deed. This is indicative of the fact
that the appellant has not approached the Civil Court with a clean
hand.
10.
It is true that there is a possibility of revalidation of the
lease, inasmuch as R-1’s application for reconsideration of the order
of cancellation of the lease is pending consideration. However, unless
and until the order of determination of the lease is revoked and the
lease in question is revalidated, R-1 cannot be directed to assign even
the leasehold rights. In that view of the matter, no decree of specific
performance of contract can be passed against R-1 until the order of
cancellation of the lease is revoked. Therefore, the learned lower court
10
has rightly observed that the plaintiff-appellant has not made out a
prima facie case.
11.
In view of the discussion made above, the appeal stands
dismissed with cost.
12.
Before parting with, this Court considers it necessary to
make it clear that the observations made herein above shall not be
deemed to have been made on the merit of the case. Further, to
emphasize the procedural law, it is indicated that if a prayer is made
on behalf of the defendant-Respondent No.2 before the learned trial
court to take up the maintainability of the suit as against D-2 as a
preliminary issue, the same shall be taken up and after giving
opportunity to the parties of being heard in the matter, the learned
trial court shall pass a reasoned order thereon. Learned trial court
may, suo motu, take up the matter regarding existence of any cause
of action as against the State and pass necessary order under Order
7 Rule 11 of C.P.C.
..............................
R. Dash, J.
Orissa High Court, Cuttack
The 7th August, 2014/A.K.Kar, Secretary
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