Further, the readiness
and willingness of a lessee to perform the part of the
contract also needs to be considered for getting benefit of
provision of section 53-A of the T.P Act. On this point also
the defendant has failed in the present case.
The oral and documentary evidence given in
the case show that from the year 1987 itself the defendant
stopped paying the rent. He was asked to pay rent even
after sale of the property to the plaintiff by the original
owner but the defendant failed to pay rent to the plaintiff.
Though the covenant like that the
lease runs with
immovable property, and section 53-A can be used against
the purchaser also, it was necessary for the defendant to
pay or tender the rent to the lessor and then to the
plaintiff regularly as it was month to month tenant. The
defendant disputed the title of the plaintiff and it claimed
that it was in possession under agreement of sale with the
previous owner. The defendant could not prove that there
was such agreement between it and the previous owner
but in spite of that it did not pay the rent. In view of these
circumstances, this Court holds that the defendant failed
to prove that it was ready and willing to perform its part
of the contract, to pay rent regularly. So the defendant is
not entitled to the protection under section 53-A also.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
First Appeal No.1214 of 2003
The Osmanabad Janata Sahakari
Bank Ltd.,
Versus
Pandarinath Gyanba Gunale
CORAM: T.V. NALAWADE, J.
Citation; 2014(6) ALLMR 250
Judgment delivered on : 1st August 2014.
The appeal is filed against the judgment and
decree of Special Civil Suit No.8/2001 (Old Special Civil
Suit No.232/1995) which was pending in the Court of the
Civil Judge, Senior Division, Ahmedpur, District Latur.
The suit filed by the present respondent No.1 for relief of
possession of immovable property and mense profit is
decided in his favour. Counter claim filed by the appellant,
defendant No.1, for specific performance of contract of
sale of the same immovable property is dismissed by the
trial Court. Both the sides are heard.
2)
Municipal House No.9 situated at Ahmedpur
having construction of godown of size of 50 x 40 ft and
of
three
rooms
and
also
open
space
construction
FA 1214 of 2003
surrounding the constriction is the suit property. The size
of the plot on which the construction is there is around
8680 square feet (155 x 56 ft). It is the case of the
plaintiff-respondent,
that
the
defendant
No.1
is
in
possession of the entire property. It is the case of the
ig
plaintiff that he purchased the suit property in auction
sale held by the Liquidator of Osmanabad Zilla Audyogik
Sewa Sahakari Society Ltd., and the sale deed was
executed in his favour on 18-1-1990. He purchased the
property for consideration of Rs.3.25 lakhs.
3)
It is the case of the plaintiff that the appellant-
defendant, got the possession of the suit property under a
document of lease dated 14-10-1982 from the previous
owner. It is contended that agreement was for the period
of ten years. It is contended that the owner society went
into liquidation and the Liquidator came to be appointed
on 27-9-1984. It is contended that there was public
auction
held
by
the
Liquidator
after
following
the
procedure and the plaintiff was highest bidder in the said
auction. It is the case of the plaintiff that sale made in his
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4
FA 1214 of 2003
favour was approved by the Government of Maharashtra
4)
on 8-12-1989 and after that the sale deed was executed.
It is the case of the plaintiff that the defendant
had challenged the legality of the auction by filing
proceeding before the authority constituted under the
Maharashtra Cooperative Societies Act but it failed in that
ig
attempt. It is contended that proceeding filed by the
defendant No.1 as against the order made by the authority
came to be dismissed in High Court on 25-5-1992. It is
contended that Writ Petition No.2779/1993 was also filed
by the defendant No.1 but it also came to be dismissed. It
is contended that while dismissing the writ petition filed
by the defendant No.1, the High Court observed that the
plaintiff needs to follow the procedure laid down by law
for taking possession as the defendant No.1 was in
possession as lessee and so he filed the present suit.
5)
It is the case of the plaintiff that he was not
aware of the agreement of lease dated 14-10-1982 which
was between defendant No.1 and the previous owner. He
contended that he is bona fide purchaser without notice
for valuable consideration and so the transaction between
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5
FA 1214 of 2003
the defendant No.1 and the previous owner is not binding
on him. It is contended that, previous owner had told that
after the sale deed the plaintiff would get possession.
6)
It is the case of the plaintiff that the Liquidator
asked the defendant No.1 to hand over possession to the
plaintiff by sending letter but the defendant No.1 did not
ig
hand over the possession. It is contended
that
the
defendant No.1 challenged the legality of the auction sale
and he also disputed the title of the plaintiff over the suit
property. It is the case of the plaintiff that due to such
contentions of the defendant No.1 and the aforesaid
circumstances, he is not entitled to keep the possession of
the property as tenant.
7)
It is the case of the plaintiff that under the
agreement between the defendant No.1 and the previous
owner some period was fixed in respect of lease and after
expiry of the period, the defendant No.1 did not exercise
option
to
continue
the
possession
as
lessee.
It
is
contended that due to this reason also the defendant is
liable to be evicted.
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6
It is the case of the plaintiff that after the
8)
FA 1214 of 2003
disposal of the writ petition on 30-11-1994 cause of action
arose for filing the suit. It is contended that possession of
the defendant No.1 is illegal. It is contended that as per
the rent prevailing in the market in respect of similar
for
premises, the the suit premises can be given on rent
ig
Rs.30,000/- per year. It is contended that, the premises is
situated in commercial area and the plaintiff is entitled to
get mense profit for the period starting from 15-10-1992,
the date on which the period of lease of 10 years expired.
It is the case of the plaintiff that he is entitled to the relief
of mense profit of Rs.5,72,880/- per annum considering
the size of the property. He had claimed the mense profit
of Rs.20,43,640/- in respect of the period of three years
preceding the date of the suit.
9)
The defendant No.1 filed written statement. It
is the case of the defendant No.1 that the Liquidator had
given the offer to the defendant No.1 to purchase the
property as per the price fixed by the Public Works
Division. It is contended that to the letter of offer given on
3-1-1987 response was given by the defendant No.1 on 23-
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7
FA 1214 of 2003
1-1987 and the defendant No.1 had accepted the offer. It
is contended the PWD determined the value of the
property as Rs.3,21,000/- and the defendant No.1 was
ready
to purchase it for such price. It is contended that
the defendant No.1 is ready and willing to purchase the
It is the case of the defendant No.1 that the
ig
10)
property at such price.
plaintiff in collusion with the Liquidator created false
record of public auction for sale of the suit property and
purchased the property in the said auction. It is contended
that in view of the aforesaid agreement, sale made in
favour of the plaintiff is not binding on the defendant
No.1. It is contended that after learning about the
intention to sell the property in public auction, the
defendant No.1 had given public notice and had informed
about its rights.
11)
It is the case of the defendant No.1 that it is in
possession of the suit property under agreement of lease
since 14-12-1982. It is contended that initial lease period
was of 10 years and after that defendant had right to
continue possession as lessee for further period of five
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8
FA 1214 of 2003
years. It is contended that, rent fixed by the PWD initially
for the year 1982 was Rs.555/- per month. It is contended
that as per the agreement, the defendant is entitled to
continue the possession as lessee till 16-12-1997. It is
contended that there was no cause of action as the suit
12)
ig
was filed prior to 16-12-1997.
It is the case of the defendant that the
Liquidator had no right to give notice to the defendant
and to ask to deliver the possession. The defendant has
denied that its possession is like of a trespasser. It has
denied cause of action for filing the suit arose after
dismissal of the writ petition. It has denied that it is liable
to pay mense profit of Rs.20,43,640/-.
13)
It is the case of the defendant that in view of
Section 164 of the Maharashtra Cooperative Societies Act,
1960, (in short, "said Act") notice needs to be given to it
as it is a cooperative society and as no such notice was
issued the suit itself is not tenable.
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9
that
it
is
entitled
to
relief
of
specific
contended
The defendant No.1 filed counter claim and it
14)
FA 1214 of 2003
performance of the aforesaid agreement of sale made by
the Liquidator with the defendant. It is the case of the
defendant that the defendant continued possession under
the agreement of sale. It is contended that the sale in
ig
favour of the plaintiff made by the liquidator is not binding
on the defendant. The defendant prayed for the relief of
declaration that the sale made in favour of the plaintiff is
not binding on it.
15)
The plaintiff filed written statement to the
aforesaid counter claim and the plaintiff denied the
contentions made in the counter claim. The plaintiff
contended that in view of the decision of the High Court in
Writ Petition No.2779/1997 the defendant cannot contend
that it is entitled to purchase the property and the
decision of the writ petition operates as res judicata
against the defendant.
16)
It is the case of the plaintiff that in spite of
knowledge of auction sale proceeding, the defendant did
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10
FA 1214 of 2003
not participate in the auction proceeding. It is contended
auction has become final.
that, as per the provisions of the said Act, sale made by
It is the case of the plaintiff
that there was no valid agreement between the defendant
and the Liquidator as no approval was obtained from the
authority created under section 105(1)(c) of the said Act
17)
ig
and also Rule 89 of the Rules framed under the said Act.
It is the case of the plaintiff that the Liquidator
had asked the defendant to vacate the premises by letter
dated 1-7-1987 and this letter is sufficient to show that the
contract was rescinded. It is contended that auction was
held on working day when the defendant No.1-bank was
running its business but the bank did not participate in
the auction.
18)
In view of the aforesaid pleadings as many as
21 issues were framed by the trial Court. Both the sides
gave evidence. In answer to issue No.2, the Trial Court
held that possession of the defendant is illegal since 15-
10-1992 i.e. on expiry of period of 10 years given in the
document of lease. But in the reasoning, the trial Court
has mentioned at a place that possession became unlawful
on 13-12-1997 i.e. the date on which the period of 15
years expired. The trial Court has granted mense profit for
the period starting from 15-10-1992. The trial Court has
held that the plaintiff is entitled to get possession and the
suit was tenable on the date when it was filed. The trial
property and it failed to prove that
purchase the suit
Court has also held that the defendant has no right to
there was enforceable agreement between it and the
previous owner of the property. The trial Court has held
that the defendant is not entitled to protection of
possession under section 53-A of the Transfer of Property
Act.
19)
The document of lease which was executed by
the previous owner in favour of the defendant is exhibited
at Exhibit 51/A by the trial Court. This document was
written on general stamp of Rs.5/- denomination and it
was not registered. It was executed on 14-12-1982. The
initial period fixed was 10 years and after the expiry of it,
option was given to the lessee to get renewal of the lease
for further period of five years. Rent was to be determined
by the PWD, Government department. Thus the lease was
for period exceeding one year. Rent was fixed at Rs.555/-
per month but no stamp duty was paid on the document of
lease.
20)
The point of entitlement of the defendant to
keep possession under the aforesaid document is the main
point involved in the matter. This point needs to be
considered first. This point is relevant for determination of
many points. The point of requirement of notice under
section 106 of the Transfer of Property Act, the point of
expiry of term of period fixed in the document (the
application of Sections 107, 111(a) of the Transfer of
Property Act), the application of provisions of section
111(g) of the Act regarding forfeiture of tenancy, point of
starting point of period of unlawful possession for
determination of mense profit etc., all these points depend
on this point.
21)
The definition of “lease” is given in section 105
of the Transfer of Property Act, 1882 (for short, “T.P Act').
The definition says that lease is
transfer
of
interest,
transfer of right to enjoy the immovable property and it
the rights and liabilities of lessor and lessee, it is a
of
can be for limited period or it can be in perpetuity. In view
bilateral transaction. As the relationship of lessor and
lessee is created by the bilateral transaction, rate of rent,
the duration of lease and other terms of lease are all
Section 106(1) of the T.P Act reads as under :-
22)
governed by the terms of the contract.
“106. Duration of certain leases in absence of
written contract or local usage.-- (1) In the
absence of a contract or local law or usage to
the contrary, a lease of immovable property for
agricultural or manufacturing purposes shall be
deemed to be a lease from year to year,
terminable, on the part of either lessor or
lessee, by six months' notice; and a lease of
immovable property for any other purpose shall
be deemed to be a lease from month to month,
terminable, on the part of either lessor or
lessee, by fifteen days' notice.”
Wording of the aforesaid section shows that if there is no
specific contract about the duration of lease for property
like present one, the lease shall be deemed to be a lease
from month to month. The term “contract” used in section
106(1) is necessarily an agreement enforceable under the
Contract Act. In section 4 of the T.P Act it is made clear
that the provisions of the Contract Act 1872 are applicable
whenever any section of the T.P Act relates to contract.
Section 4 further shows that for the purpose of Section
107 of the T.P Act provisions of Indian Registration Act
1908 are applicable. There is similar mention in Section
49 of the Indian Registration Act. In section 17 of the
Indian Registration Act there is also reference to the lease
which is compulsorily registrable.
Section
107
of
the
T.P
act
gives
mode,
23)
procedure for making the lease which reads as under :-
“107. Leases how made.-- A lease of
immovable property from year to year, or for
any term exceeding one year, or reserving a
yearly rent, can be made only by a registered
instrument.
All other leases of immovable property may be
made either by a registered instrument or by
oral agreement accompanied by delivery of
possession.
Where a lease of immovable property is made
by a registered instrument, such instrument or,
where there are more instruments than one,
each such instrument shall be executed by both
the lessor and the lessee :
Provided that the State Government may from
time to time, by notification in the Official
Gazette, direct that leases of immovable
property, other than leases from year to year,
or for any term exceeding one year, or
reserving a yearly rent, or any class of such
leases, may be made by unregistered
instrument or by oral agreement without
delivery of possession.”
This section says that if period of lease is exceeding one
year, lease can be made only by a registered instrument.
The aforesaid provision shows that if the lease is for
period less than one year, it can be made even by oral
agreement accompanied by delivery of possession.
24)
In the case reported as AIR 1968 SC 794 (Delhi
Motor Co. v. V.A. Basrurkar) the Apex Court has discussed
the provisions of Sections 106 and 107 of the T.P Act. The
Apex Court has laid down that when the lease period
exceeds one year and it is not registered, the transaction
itself is invalid and if the transaction is invalid, both sides
to such transaction cannot claim the enforcement of the
terms of such transaction. Learned Senior Counsel for the
respondent placed reliance on case reported as (2011)
14 SCC 66 (SMS Tea Estates (P) Ltd. v. Chandmari Tea
Co. (P) Ltd). In this case the Apex Court has reiterated
that such unregistered agreement is not enforceable.
Thus, the agreement contained in such unregistered
document, is not excepted under section 106 of the T.P
Act. The term “contract to contrary” used in the starting
line of section 106 of the T.P Act, cannot be used with
reference to such unregistered instrument. However, the
aforesaid provisions show that even oral lease is possible
and so the party can plead that there was agreement of
lease and the lessee came in possession under such
agreement.
25)
Section 49 of the Registration Act, 1908 (for
short, “the Registration Act”)
also comes in way of the
parties to the transaction like the present one. Section
49(a) and (c) and the proviso read as under :-
“49. Effect of non-registration of documents
required to be registered .-- No document
required by section 17 or by any provision of
the Transfer of Property Act, 1882 (4 of 1882),
to be registered shall --
(a) affect any immovable property comprised
therein, or
(b) .....
(c) be received as evidence of any transaction
affecting such property or conferring such
power,
unless it has been registered :
Provided that an unregistered document
affecting immovable property and required by
this Act or the Transfer of Property Act, 1882
(4 of 1882), to be registered may be received
as evidence of a contract in a suit for specific
performance under Chapter II of the Specific
Relief Act, 1877 (3 of 1877), or as evidence of
part performance of a contract for the
purposes of section 53A of the Transfer of
Property Act, 1882, (before amendment of
year 2001) or as evidence of any collateral
transaction not required to be effected by
registered instrument.”
26)
Clause (a) of Section 49 of the Registration Act
shows that when transaction which is required to be
registered is not registered, such transaction does not
affect the property. Thus, no powers or rights are
conferred by the document on the parties to such
transaction. In view of Section 107 of the T.P Act and
Section 49 of the Registration Act, such transaction needs
to be treated as void. As it is void agreement, it does not
create title or interest which cannot be transferred
without registration. Section 49(c) of the Registration Act,
creates further bar by saying that, such document cannot
be read in evidence to create, declare or limit the rights of
27)
the parties to such document.
The proviso to Section 49 of the Registration
Act shows that such unregistered document can be used
for getting specific performance of contract which is
possible under Chapter II of the Specific Registration Act.
It also shows that the document can also be used for the
purpose of Section 53-A of the T.P Act, as amendment
.
deleting this portion was made in the year 2001. The
proviso further shows that the document can be used for
collateral purpose in evidence.
28)
So far as right to get specific performance as
mentioned in the proviso is concerned, it can be said that
the present transaction of lease does not fall under
Chapter II of the Specific Relief Act. By the present
transaction, the demise in the property was created and
under section 107 of the T.P Act it was compulsory to
register the document. In view of provision of Section 107
of the T.P Act the transaction itself was invalid. So, in the
.
present
case
there
was
no
question
of
specific
performance of contract under Chapter II of the Specific
Relief Act. In any case, no such relief was claimed by the
defendant under the aforesaid document.
29)
The
defendant
has
claimed
protection
of
possession by using Section 53-A of the T.P Act. The
.
aforesaid provision of Section 49 of the Registration Act
and the provision of Section 53-A of the T.P Act need to be
.
under :-
read together. Section 53-A of the T.P Act reads as
.
“53-A. Part performance.-- Where any person
contracts to
transfer for consideration any
immovable property by writing signed by him or
on his behalf from which the terms necessary to
constitute the transfer can be ascertained with
reasonable certainty,
and the transferee has, in part performance of
the contract, taken possession of the property or
any part thereof, or the transferee, being already
in possession, continues in possession in part
performance of the contract and has done some
act in furtherance of the contract,
and the transferee has performed or is willing
to perform his part of the contract,
then, notwithstanding that where there is an
instrument of transfer, that the transfer has not
been completed in the manner prescribed
therefor by the law for the time being in force,
the transferor or any person claiming under him
shall be debarred from enforcing against the
transferee and persons claiming under him any
right in respect of the property of which the
transferee has taken or continued in possession,
other than a right expressly provided by the
terms of the contract:
Provided that nothing in this section shall
affect the rights of a transferee for consideration
who has no notice of the contract or of the part
performance thereof”
Fourth part of Section 53-A shows that this section is
applicable not only to enforceable agreement but also to
instruments of transfer where transfer has not been
completed in the manner prescribed therefor by law for
the time being in force. In the present case transaction
mentioned in the instrument is invalid in view of Section
107 of the T.P Act and so there was no question of transfer
of any interest under the document to the defendant. In
strict sense it can be said that unregistered document
cannot be used to show that the rights, which could not
have been transferred under the document, like the lease
for a period of ten years, were transferred and for that
matter the person who got possession, cannot be treated
as transferee under this provision.
21
In the case reported as AIR 1984 SC 143
30)
FA 1214 of 2003
(Satish Chand v. Govardhan Das) and in the case of SMS
Tea Estates (cited supra), the Apex Court has discussed
the purpose for which such unregistered lease document
can be used. It is laid down that to ascertain nature of
possession, whether it is lawful, whether it is of lessee, the
document can be used. However, the terms and conditions
of the lease which are not enforceable in view of the
provisions of section 107 of the T.P Act cannot be read in
evidence. Thus, for collateral purpose, to ascertain nature
of possession, the possession as lessee, this document can
be read in evidence. Only to that extent the protection is
available under section 53-A of the T.P Act. The lessee
cannot be allowed to say that he is entitled to keep
possession for the period mentioned in the unregistered
document as that will amount to enforcing the terms of
transaction which is not permissible under section 107 of
the T.P Act and under Section 49 of the Registration Act.
The lease for period of less than one year can be made
orally or by instrument and so the document can be read
only to ascertain nature of possession.
The discussion made above shows that when
31)
under unregistered document, like in the present case,
lessee gets possession and lessor accepts the rent after
the execution of the document, the document can be used
in
evidence
for
the
aforesaid
limited
purpose,
for
As the period
mentioned in the document
document.
ascertaining the relationship between the parties to the
cannot be read, the lessee becomes month to month
tenant as provided under section 106 of the T.P Act. In
such a case the
provisions with regard to the lease of
fixed period cannot be used, like the provision of Section
111(a).
32)
For the appellant, learned counsel has placed
reliance on a reported case AIR 1950 SC 1 (Maneklal v.
H.J. Ginwalla & Sons).
In this case, the Apex Court has
discussed the provision of Section 53-A of the T.P Act. The
Apex Court had observed that the tenant can retain the
possession by using Section 53-A of the T.P Act. The
.
provision of section 49 of the Registration Act was also
considered by the Apex Court. The facts of the reported
case were, however, little bit different. This Court has
quoted the subsequently decided cases of the Hon'ble
Apex Court on the same point which need to be used as
the precedent in the present case. Further, the readiness
and willingness of a lessee to perform the part of the
contract also needs to be considered for getting benefit of
provision of section 53-A of the T.P Act. On this point also
33)
the defendant has failed in the present case.
The oral and documentary evidence given in
the case show that from the year 1987 itself the defendant
stopped paying the rent. He was asked to pay rent even
after sale of the property to the plaintiff by the original
owner but the defendant failed to pay rent to the plaintiff.
Though the covenant like that the
lease runs with
immovable property, and section 53-A can be used against
the purchaser also, it was necessary for the defendant to
pay or tender the rent to the lessor and then to the
plaintiff regularly as it was month to month tenant. The
defendant disputed the title of the plaintiff and it claimed
that it was in possession under agreement of sale with the
previous owner. The defendant could not prove that there
was such agreement between it and the previous owner
but in spite of that it did not pay the rent. In view of these
circumstances, this Court holds that the defendant failed
to prove that it was ready and willing to perform its part
of the contract, to pay rent regularly. So the defendant is
not entitled to the protection under section 53-A also.
It is already observed that in the case like the
34)
present one, provision of Section 106 of the T.P Act needs
.
to be used. There is the record like notices issued by the
vacate
lessor, to the defendant asking it to
previous owner,
the premises and the tenancy was terminated.
Even written information was given by the previous owner
that the property was purchased by the present plaintiff.
Various notices were given for asking to vacate the
premises and they were given on 3-1-1987, 17-2-1987, 27-
11-1987. After many months of expiry of the
prescribed
period (under section 106 of T.P Act) the suit was filed for
.
possession.
On
the
requirement
of
statutory
notice
provided under section 106 of the T.P Act, learned Senior
.
Counsel for the plaintiff has placed reliance on a case
reported as 2006 (4) Mh.L.J. 154 (Bombay High Court)
(Division Bench) (Allahabad Bank v. Prakash Shankar
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25
FA 1214 of 2003
Wagh). This Court has considered the amended provision
of Section 106 of the T.P Act and this Court has held that
.
the amended provision is applicable to the pending
proceeding also. In view of the amendment and the effect
which needs to be given to the amendment,
this Court
has laid down that after expiry of 15 days period from the
ig
date of receipt of the notice, the suit can be filed and in
that case the Courts need to hold that it was sufficient and
valid notice. The ratio of this reported case needs to be
applied in the present case. Thus even if it is presumed
that the defendant was lessee and the lease was month
to month basis, there was termination of lease by notice
as required under section 106 of the T.P Act.
.
35)
The defence of the defendant that it has right
to purchase the suit property and there was agreement
between it and the Liquidator, can be used against the
defendant. On one hand the defendant wanted protection
of Section 53-A of the T.P Act under unregistered lease
.
and on the other hand, it claimed the relief of specific
performance of agreement of sale. The question arises as
to whether the defendant can take a defence in such a
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26
FA 1214 of 2003
36)
case that there was no notice of termination of tenancy.
The learned Senior Counsel for the respondent
placed reliance on one more case reported as (1989) 4
SCC 732 (Majati Subbarao v. P.V.K. Krishna Rao) . The
proceeding was filed under the provision of A.P Buildings
.
(Lease, Rent and Eviction) Control Act, 1960, and in the
ig
said proceeding, in view of the provisions of the said Act,
the Apex Court held that the suit was maintainable on the
ground of denial of title of landlord by the tenant. In that
case the Apex Court laid down that no forfeiture of the
rights was necessary in such a case. Similar observations
are made by the Apex Court in
a decision delivered in
Civil Appeal No.106/2014 (Kesharbai v. Chhunulal) . This
Court has gone through the provision of Section 111 of
the T.P Act. The procedure is different and it shows that
.
termination of lease is possible by forfeiture provided that
the lessor gives notice in writing to the lessee of his
intention to terminate the lease on such ground. In view of
this specific provision in the T.P Act, this Court holds that
.
the observations made by the Hon'ble Apex court in the
aforesaid two cases are of no help to the plaintiff.
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27
FA 1214 of 2003
Admittedly, there was no such forfeiture in the present
case (as provided in section 111(g) of the T.P Act). There
.
was only notice of termination of the lease as provided
under section 106 of the T.P Act and it can be said that
.
the lease came to an end after the expiration of this notice
The various notices given by the Liquidator to
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37)
period as provided under section 111(h) of the T.P Act.
.
the defendant which can be found in the documents dated
the
1-7-1987, 18-7-1987, 13-12-1987 and 7-2-1990 show that
defendant
was
asked
to
pay
arrears
of
rent.
Admittedly PWD had fixed monthly rent at Rs.555/- for the
year 1982. On that basis the arrears were calculated and
mentioned in letter dated 13-12-1987 and they were of
Rs.3,577.50 paise. The defendant was asked to hand over
the possession and also to pay arrears. It is not the case
of the defendant that after the notice dated 13-12-1987 it
paid arrears of Rs.3577.50. It was to pay rent for further
period also starting from 31-12-1987 and admittedly that
rent was also not paid. It can be said that as per the
procedure, the PWD would have again made assessment
and would have again fixed the rent in subsequent years.
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FA 1214 of 2003
The witness Vasant, DW 1, examined by
the defendant.
But there is no such record produced by the plaintiff or by
the defendant has not given evidence that rent was paid
subsequent to 13-12-1987. Thus there was virtually no
case to defend.
The other case of the defendant that there was
38)
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agreement of sale between it and the Liquidator is tried to
be proved in the evidence of Vasant and by producing
some correspondence between the Liquidator and the
defendant Bank. At Exhibit 116 there is a letter dated 3-1-
1987 in which the Liquidator had asked the defendant
Bank as to whether it was ready to purchase the suit
property
at the price which may be fixed by the PWD. In
letters dated 17-2-1987 and 27-11-1987 the defendant-
bank expressed that it was ready to purchase the
property. Then there is correspondence made with Deputy
Registrar, Cooperative Societies. The correspondence
shows that the Deputy Registrar had not given approval
for this transaction and on the contrary direction was
given by the Deputy Registrar in January 1987 to sell the
property by public auction (Exhibit 130). After publication
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FA 1214 of 2003
of the notice of public auction by the Liquidator the
defendant took some steps like taking objections to the
sale to the third party and published its objections in news
papers. This step cannot be called as the proper step, if
the defendant-bank wanted to get specific performance of
the so called agreement of sale. If the defendant-bank was
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really interested in purchasing the property it would have
participated in auction sale which was held at its door
step. On 8-5-1985 auction sale was held and the plaintiff
was the highest bidder. The plaintiff purchased the
property for a consideration of Rs.3.25 lakh. Sale was
conducted as per the Rules 1961 made under the said Act.
Section 105(1)(c) of the said Act read with rule 89(14)(i)
of the Rules, 1961 show that sale of property of
cooperative society can be done only after approval of the
Registrar. In the rules, there are provisions for sale and
attachment like rules 107 and 156. Rule 107(13)(i) shows
that stages are provided for taking objections to the
proposed sale and the persons like the present defendant
can raise objections. Rule 107(19)(c) shows that such
objector can file suit to establish the interest, the rights in
the property and subject to the decision of the suit the
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30
under the rules
by the authority shall be
order made
FA 1214 of 2003
final. It can be said that if there was some right with the
defendant in the property, it was open to it to go to Civil
Court and establish its rights. However, the aforesaid
record and circumstances show that there was no
approval to the so called proposal given by the Liquidator
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and no enforceable agreement had come to in existence.
In any case when the property is belonging to a society it
is always desirable that the property is sold by public
auction and not by private negotiations. Highest price of
Rs.3.25 lakh was received as against the price of Rs.3.21
lakh fixed for sale. Thus, there is no case with the
defendant on this point also and the trial Court has not
committed any error in refusing the relief of specific
performance to the defendant.
In support of the case of
the defendant that it is entitled to get relief of specific
performance learned counsel for appellant placed reliance
on one case reported as AIR 1963 SC 1685 (Union of
India v. Rallia Ram) . The facts of this reported case were
altogether different. This Court holds that this reported
case has no application to the facts of the present case.
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31
One of the points argued by the learned
39)
FA 1214 of 2003
counsel for the appellant-defendant is that, the defendant
itself is a cooperative society and so notice under Section
164 of the Maharashtra Cooperative Societies Act
was
necessary before filing suit against it. Learned counsel
for the defendant placed reliance on a case reported as
ig
2002(3) Mh.L.J. 837 (Bombay High Court) (Suprabhat Co-
operative Housing Society Ltd. v. Span Builders) . In view
of the facts of that case, considering the business of the
society, the Court had held that notice under section 164
Considering the business of the present
was necessary.
defendant and the transaction which was made with the
previous owner, the ratio of the reported case has no
application to the present case. On the other hand,
learned Senior Counsel for plaintiff placed reliance on a
case reported as 2005 (1) Mh.L.J. 24 (Bombay High Court)
(Solapur Taluka Khadi Gramodyog Utpadak Sahakari
Society v. Dattatraya Shankarrao Kondekar) . This Court
has laid down that if the transaction is not touching the
business of the society, no notice under section 164 of the
said Act is necessary. No such notice was necessary in
this case.
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32
For ascertaining the mense profit, the date of
40)
FA 1214 of 2003
wrongful possession needs to be ascertained first. In this
regard provision of Order 2 Rule 12 and Order 20 Rule 12
of the Code of Civil Procedure need to be kept in mind.
The provisions show that the Court is expected to
ascertain the profit, the person in wrongful possession
ig
actually received or would have received for determining
the mense profit and the Court can give even interest on
such amount. However, the profits due to improvements
made by the persons in wrongful possession cannot be
considered while ascertaining the damages. When there is
claim for damages, no rigid rule for determining the
amount of mense profit is there and the amount needs to
be ascertained in every case by proper exercise of
jurisdiction.
The
Court
can
take
into
account
the
prevailing rent, the probable increase etc. Mense profit
includes the profit of the property and interest on such
profit. The interest can be payable from the date of
preliminary decree as it depends upon determining of
point of unlawful possession. The mense profit need to be
calculated on the prevailing rent and not on the agreed
rent as it is to be calculated in respect of the period for
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33
FA 1214 of 2003
which the party was in unlawful possession. The provision
shows that decree can be given for possession and also for
past mense profit and interest on it and inquiry can be
directed for ascertaining mense profit in respect of the
period starting from the date of the suit. The first part of
the decree can be treated as final decree. When the
ig
defendant has been in possession for long period then it is
the duty of the Court to decide the mense profit and it
can be done even for period upto the date of decree. In
the present case past mense profit is awarded by the trial
Court and enquiry is directed in respect of future period.
41)
The plaintiff has examined witnesses to prove
the damages, the prevailing rent. It is contended in the
plaint that he is entitled to Rs.5,72,880/- as damages as
annual rent. The suit was
filed on 21-11-1995 and the
mense profit was claimed for the period starting from 15-
10-1992. In view of the discussion already made and the
finding given that the possession became unlawful after
expiry of period given in the notice of possession, the
plaintiff was entitled to claim mense profit for period
starting from 15-12-1992. The only question is about rate
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34
FA 1214 of 2003
It is admitted that the suit property is situated
42)
at which the amount can be given.
near main road of Ahmedpur town and it is commercial
area. It is the case of plaintiff that a shop admeasuring 15
x 30 ft. fetches rent of Rs.30,000/- per year. The suit
premises includes a godown of 50 x 40 ft three rooms and
ig
open space. The size of the plot with construction is
around 8680 square feet. The evidence given by the
plaintiff is consistent with this pleading.
Two witnesses like Sharad and Bhutada are
43)
examined by the plaintiff to prove the prevailing rent in
that locality. Sharad is owner of one shop having size 15 x
30 and in that premise one person runs a grocery shop. In
the year 1997 the annual rent was Rs.35,000/-. Rent
receipt is proved. But the assessment list is not produced
to show that said rent is shown by municipality and tax is
charged on the basis of such assessment. The grocery
shop is situated on the road. The suit premises is situated
at some distance from the road. The trial Court has
granted
mense
profit
as
claimed
by
the
plaintiff,
Rs.5,72,880/- per annum.
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35
Though there is nothing in rebuttal from the
44)
FA 1214 of 2003
side of the defendant, it was necessary for the plaintiff to
prove that the property of witness Sharad is comparable
to the suit property.
The evidence on the record shows
that the godown was given on lease and the defendant
bank was required to spend to make it suitable for bank
ig
business. Though the area of the suit premises is much
bigger than the area of shop premises of Sharad, there are
aforesaid circumstances and there are provisions of the
CPC which are already quoted. In view of the facts and
circumstances of the case, it is not possible to determine
the mense profit on the basis of evidence given by Sharad
or Bhutada or the claim made by the plaintiff.
As the
amount needs to be fixed and there are no particulars
available, this Court holds that some method needs to be
evolved.
The
suit
property
was
purchased
for
consideration of Rs.3.25 lakh in the year 1989. We have to
ascertain the price in the year 1992 the year from which
the mense profit is claimed. By giving increase of 10% in
the price it can be said that in the year 1992 the price of
the suit property was around Rs.4.35 lakhs.
It can be
presumed that the suit property would have fetched the
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36
FA 1214 of 2003
rent of at least 10% of the price. In the year 1992 the rent
per year would have been Rs.43,000/-. Accordingly the
rent for further period can be calculated and the rent
would be around Rs.1.42 lakh. As per the contract, the
PWD had fixed monthly rent of Rs.555/- in the year 1982.
If in similar manner the rent is calculated, it would be
ig
around Rs.21,000/- per annum. As damages cannot be
fixed at contracted rate, and if the
prevailing rent is
highest, the prevailing market rent needs to be given, this
Court holds that in the year 1992 the profit of Rs.43,000/-
per annum would have been made by the defendant-bank
and this would have increased at least by 10% in
subsequent years till the date of the suit. This Court holds
that the amount of Rs.1.42 lakh can be given as mense
profit for the period ending on the date of the suit. The
trial
Court
has
granted
huge
amount,
amount
of
Rs.17,18,640/- as mense profit and it is certainly on higher
side. In view of the facts and circumstances of the case
which are already discussed, this Court holds that
correction is required in that part of the decision.
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37
In the result, the appeal is partly allowed. The
45)
FA 1214 of 2003
judgment and decree of the trial Court is modified only in
respect of past mense profit. The defendant is directed to
pay past mense profit of Rs.1.42 lakh (one lakh forty two
thousand). This finding will not be binding for ascertaining
future mense profit which is to be done as per the enquiry
ig
ordered by the trial Court. The interest at the rate of 8.5%
per annum is available on the amount of Rs.1.42 lakh from
the date of decree of trial Court till the date of realization
of the amount. The other part of the decision of the trial
Court is kept in tact. Decree is to be prepared accordingly.
46)
Learned counsel for the appellant requested for
stay of six weeks. In view of the observations which are
made by this Court and considering right of the appellant,
defendant, to challenge the decision, time of five weeks is
given after hearing the other side for challenging the
decision. Till then the judgment and decree of eviction is
not to be executed but subject to condition that the
defendant needs to deposit Rs. One lakh in this Court
within one week from today.
rsl
Sd/-
(T.V. NALAWADE, J.)
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