Sunday, 12 July 2015

Whether Family arrangement by which party take share in property amounts to conveyance of property?



A family arrangement, on the contrary, is a 
transaction between members of the same family for the benefit 
of the family so as to preserve the family property, the peace 
and   security   of   the   family,   avoidance   of   family   dispute   and 
litigation and also for saving the honour of the family. Such an 
arrangement   is   based   on   the   assumption   that   there   was   an 

antecedent title in the parties and the agreement acknowledges 
and defines what that title is. It is for this reason that a family 
arrangement by which each party takes a share in the property 
has been held as not amounting to a "conveyance of property" 
from a person who has title to it to a person who has no title. ”
Thus,   the   Apex   Court   has   held   that   the   family 
arrangement, by which party takes share in the property, will 
not amount to a conveyance of the property.
There is no dispute that the suit house was allotted to the 
share  of   present   petitioner   and   his   name   is   mutated   in   relevant 
revenue record on 24.7.1986.  Thus, n view of the dictum in the case 
of  Sk.Sattar   Sk.Mohd.   Choudhari  by   the   Apex   Court,   the   lower 
appellate   court   ought   to   have   seen   that   the   facts   in   the   case   of 
N.N.Engineer are clearly distinguishable and the ratio laid down by 
the Apex Court in said case is not applicable to the case I hand. 
Since the landlord has successfully pointed out that the 

tenant was in arrears of rent for more than six months, he was not 
entitled for the protection, and therefore, the lower appellate court, in 
my view, has committed a mistake in upsetting the well  reasoned 
judgment and decree passed by the learned trial court.{21,22}


IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
AURANGABAD BENCH, AURANGABAD
 WRIT PETITION NO. 1597 OF 2001
     Subhash Narsopant Saundankar,

VERSUS
Chandrakant Babanrao Salunke,

CORAM  :  V.M.DESHPANDE, J.
                DATED   :  8   January, 2015
Citation;AIR 2015(NOC)765 BOM


Unsuccessful landlord before the appellate court, who 
reversed the decree in favour of the landlord for possession is 
before this court. 
2]
A suit was filed in the court of 5 th  Joint Civil Judge, 
Junior Division, Dhule.  The said suit was registered as Regular 
Civil Suit No. 458 of 1985.  The said suit was contested by the 
present   respondent   no.1   and   the   predecessor­in­title   of 
respondent   nos.   2   to   5.     The   said   suit   was   decreed   by   the 
learned trial court and the defendants in the suit were directed 

to hand over vacant possession of the suit premises and they 
were   also   directed   to   pay   Rs.152.50   Ps.   as   arrears   of   rent, 
Rs.35/­ towards damages and Rs.65/­ by way of notice charges 
by judgment and decree dated 16.11.1991.
3]
Appeal was carried.  The said appeal was registered 
as Regular Civil Appeal No.2 of 1992 and was on the file of 

Extra Joint District Judge, Dhule.  The learned lower appellate 
court   vide   judgment,   dated   2.2.2000   allowed   the   appeal   and 
thereby   reversed   the   judgment   and   decree   of   the   trial   court 
granting possession.  It is against this reversal of judgment, the 
present Writ Petition is filed by the landlord.
4]
Facts   giving   rise   to   the   present   Writ   Petition   are 
stated hereunder.
On 16.7.1985 Shantabai w/o Narsopant Saundankar, 
the   mother   of   the   present   petitioner   filed   a   suit   against   the 
defendants   (1)   Chandrakant   Babanrao   Salunke   and   (2) 
Babanrao Khemaji Salunke.
The   said   suit   was   filed   for   recovery   of   vacant 
possession   of   the   suit   property   admeasuring   30   x   8   ft. 
consisting of two rooms standing on sheet No. 2209/2 at Lane 
No.7 within the limits of municipal council, Dhule.

It was stated in the plaint that Chandrakant Salunke 
defendant   no.1   was   tenant   and   his   tenancy   was   a   monthly 
tenancy   commencing   on   each   10 th  day   of   calendar   month, 
which expires on 9th day of next calendar moth.  It was further 
stated that the agreed rent was Rs.15.25 Ps. Plaint discloses 
that the house in question was taken by the defendant no.1 for 
his own residence.

It   was   stated   that   defendant   no.1   is   a   habitual 
defaulter   in   making   the   payment   of   agreed   rent.     He   was   in 
arrears of rent from the month of 10 th July, 1984.  Plaintiff was 
required   to   issue   a   registered   notice   on   15.4.1985   by   which 
arrears   of   rent   were   demanded   and   also   possession   was 
claimed.     The   said   notice   was   served   on   the   defendant   on 
16.4.1985.     Instead   of   complying   with   the   said   notice,   the 
defendant   only   sent   Rs.43.20   Ps.   by   money   order   towards 
educational cess.
The said money order was claimed under 
protest.  It was further stated in the plaint that since the tenant 
was in arrears of rent from 10.7.1984, till filing of the plaint he 
was not entitled to claim any protection under the Bombay Rent 
Act.   The plaint further discloses that the tenant has damaged 
the tenanted premises.
Further it was stated in the plaint that defendant no.1 
has constructed a house about 11⁄2 years back on Plot No.30 

and is residing there.   Further, he has also constructed another 
house at  Navjeevan locality at Dhule.  The said house is also in 
possession of the defendant.  Therefore, it was pointed out that 
since   last   11⁄2   years   the   tenants   are   not   using   the   tenanted 
premises for their residence.   
It   was   further   alleged   that   the   defendant   no.1   after 
shifting his residence to his own house without the consent of 
the landlord illegally sub­let it to the defendant no.2 Babanrao 
Salunke and he is using the same as godown.
With   these   allegations   and   statements   of   fact,   the 
plaintiff claimed  vacant possession of the tenanted premises.
5]
On being summoned, both the defendants filed their 
joint   written   statement.     Same   is   on   record   at   Exh.11   of   the 
court   below.       Sum   and   substance   of   the   written   statement 
shows that the rent is being paid up to 9.8.1984 and receipts 
are given by the landlord.   It was further stated in the written 
statement   that   amount   of   Rs.110/­   was   given   to   Narsopant 
Saundankar in the month of July 1985.   Considering the said 
amount of Rs.110/­, at the most there are arrears of rent from 
10.3.1985 and the said amount is deposited by the tenant in the 
court. 

6]

During   the   pendency   of   the   suit,   an   application 
(Exh.15)   was   filed   by   the   plaintiff   Shantabai   Saundankar   on 
13.1.1988.  By the said application Shantabai submitted that in 
view   of   the   family   partition   and   since   the   suit   property   was 
allotted to the share of her son Subhash Saundankar in the said 
family   partition,   her   name   may   be   deleted   and   name   of 
Subhash   Narsopant   Saundankar   may   be   substituted   as   the 
plaintiff.
Subhash   Saundankar   also   submitted   an   application 
on the said  date, which   is at Exh.16 and prayed before the 
court that his name be substituted  in view of the fact that now 
he   is   owner.     The   said   application   was   contested   by   the 
defendants.       However,   on   2.9.1988   the   learned   trial   court 
allowed   both   these  applications   and  name of  original  plaintiff 
Shantabai   Narsopant   Saundankar   was   substituted   by 
incorporating the name of Subhash Narsopant Saundankar  as 
the   plaintiff.       The   said   order   was   not   challenged   by   the 
defendants.  Subsequent to his substitution, the suit was further 
contested by Subhash Saundankar.
7]
As   observed,   the   decree   was   reversed   by   the 
appellate court.  The learned lower appellate court reversed the 
decree on the ground that, in view of the provisions of Section  

109 of the Transfer of Property Act for arrears of rent Subhash 
will not be entitled to obtain decree on that count because the 
said claim will be an actionable claim.   Further, the appellate 
court was of the view that it cannot be held that Rs.15.25 ps. 
was not a standard rent with permitted increases.
It is pertinent to note that in  appeal the tenant raised 
8]

a   plea   that   the   substitution   of   Subhash   in   place   of   original 
plaintiff was not legal.   The learned lower appellate court has 
framed a point that :­
  “ Whether substitution of original plaintiff Shantabai 
by the present plaintiff Subhash can be challenged in 
the present appeal ?” 
However, the learned lower appellate court correctly 
reached to the conclusion that it was not open for the tenant to 
challenge  the  substitution in the appeal, and accordingly, the 
appellate   court   found   that   the   substitution   of   Subhash 
Saundankar was proper.
The said issue of substitution is not challenged by the 
original   defendants   in   the   present   Writ   Petition   and   thus   the 
said point has attained finality. 
9]
The learned counsel for the petitioner Shri S.P.Shah 
submitted   that   though   in   the   plaint   on   various   grounds   the 

decree   is   claimed,   the   landlord   is   pressing   for   revival   of   the 
decree of the trial court only on the ground of arrears of rent. 
He submitted that even from the pleadings of the tenant in the 
written statement, it is clear that the tenant was in arrears of 
rent and was not entitled for protection.
He   further   submitted   that   at   no   point   of   time   any 
dispute was raised by the tenant about the rent and at no point  
of time any application for fixation of interim standard rent was 
filed by him.  He, therefore, submitted that there is no doubt that 
the tenant is in arrears of rent.
He submitted that the appellate court has incorrectly 
applied the provisions of Section 109 of the Transfer of Property 
Act.     He   further   submitted   that   the   ratio   in   the   case   of 
N.M.Engineer and others vs Narendra SinghVirdi [AIR 1995 
SC 448] was incorrectly applied by the learned lower appellate 
court.
10]
Per   contra,   the   learned   counsel   Shri 
N.B.Suryawanshi strenuously urged before me that an amount 
of   Rs.110/­   was   already   paid   to   Narsopant   Saundankar,   and 
therefore, it could not be said that the tenant was in arrears of 
rent.   He supported the reasoning given by the learned lower 
appellate court and argued that the appellate court has correctly 

reached to the conclusion that the claim of rent in arrears, if 
any,   may be an actionable claim in so far as present plaintiff 
Subhash is concerned.
11]
Since there is no dispute and in view of the fact that 
the finding given by the appellate court regarding substitution of 
12]
ig
Subhash as plaintff, this court will not dilate on the said issue.
Notice,   dated   15.4.1985   (Exh.48)   was   given   to 
Chandrakant Salunke, defendant no.1.  In the said notice, it has 
been specifically asserted that he was in arrears of rent from 
10th  July,   1984.       It   was   also   pointed   out   in   the   notice   that 
monthly   rent   was   Rs.15.25   Ps.     It   was   further   stated   in   the 
notice   that   education   cess   was   also   not   given   by   the   tenant 
from beginning.
13]
Postal   receipt   (Exh.49)   shows   that   the   said   notice 
was sent.  Exh. 50 is the acknowledgement of Chandrakant.  In 
view of the acknowledgement (Exh.50), it is clear that the notice 
was duly received by Chandrakant.  In fact, there is no dispute 
about   the   receipt   of   the   notice   on   the   part   of   tenant 
Chandrakant.

Though   notice   Exh.48   was   duly   received   by 
Chandrakant, the said notice was not replied by him.   
If we examine the pleadings, it is clear that according 
to the plaintiff the rent was paid till 9.7.1984; whereas as per the 
written statement the rent was paid up to 9.8.1984.  
If   the   pleadings   in   the   written   statement   are   read 
correctly, then it is clear that there is no whisper in the written 

statement   about   the   payment   of   rent   from   9.8.1984   till 
15.4.1985 when the notice was issued.  Thus, it is clear that the 
tenant   has   admitted   in   the   written   statement   that   he   was   in 
arrears of rent for more than six months.
14]
Section 12 of the Bombay Rents, Hotel and Lodging 
Houses Rates Control Act, 1947 (for short, “the Bombay Rent 
Act”) states that there cannot be any ejectment for the tenant 
who pays or is ready and willing to pay the standard rent and 
permitted increases.  
Section 12 of the Bombay Rent Act reads as under :­
“ 12 (1)
A   landlord   shall   not   be   entitled   to   the 
recovery of possession of any premises so long as the 
tenant pays, or is ready and willing to pay, the amount of 
the   standard  rent   and   permitted   increases,   if  any,  and 
observes   and   performs   the   other   conditions   of   the 
tenancy,   in   so   far   as   they   are   consistent   with   the 
provisions of this Act.
(2)
No suit for recovery of possession  shall  be 

instituted by a landlord against a tenant on the ground of 
non­payment of the standard rent or permitted increases 
due, until the expiration of one month next after notice in 
writing of the demand of the standard rent or permitted 
increases has been served upon tenant in the manner 
provided in section 106 of the Transfer of Property Act, 
1882 (IV of 1882).

(3)(a)
Where the rent is payable by the month and 
there is no dispute regarding the amount of standard rent 
or permitted increases, if such rent or increases are in 
arrears for a period of six months or more and the tenant 
neglects to make payment thereof until the expiration of 
the period of one month after notice referred to in sub­
section (2), the [Court shall pass a decree] for eviction in 
any such suit for recovery of possession.
(b)
In any other case, no decree for eviction shall 
be passed in any such suit if, on the first day of hearing 
of the suit or on or before such  other date as the Court 
may fix, the tenant pays or tenders in Court the standard 
rent   and   permitted   increases   then   due   and   thereafter 
continues to pay or tender in Court regularly such rent 
and permitted increases till the suit is finally decided and 
also pays costs of the suit as directed by the Court.
................. .....................”
15]
Admittedly,   after   receipt   of   the   notice   (Exh.48),   the 
tenant did not reply the notice nor paid the rent as claimed in 
such   notice,   however,   he  sent  money   order  for  Rs.43.20  ps. 
towards the education cess. 
16]
In   view   of   the   remittance   of   Rs.43.20   ps.   towards 
education cess in pursuance to the notice (Exh.48), it is crystal 

clear     that   the   contents   of   the   notice   were   admitted   by   the 
tenant   since   in   the   notice   (Exh.48)   it   has   been   specifically 
averred that the tenant is in arrears of education cess.
17]
In   the   notice   (Exh.48),   the  rent  was  claimed  at  the 
rate of Rs.15.25 Ps.  Since the said notice was not replied and 
in the light of remittance of the education cess, there is no other 

option   but   to   reach   to   the   conclusion   that   agreed   rent   was 
18]
Rs.15.25 Ps. 
Further, clause (a) of Sub­section (3) of Section 12 of 
the Bombay Rent Act, 1947 shows that the tenant is entitled to 
pay the arrears within a period of one month from the receipt of 
the notice.   Even if we accept the version made in the written 
statement   about   the   payment   of   Rs.110/­   to   Narsopant 
Saundankar, who died prior to filing of the written statement, it 
is   clear   that   even   the   written   statement   shows   that   the   said 
amount was given to deceased Narsopant in the month of July, 
1985, which is clearly outside the one month of receipt of the 
notice (Exh.48), since Exh.50 shows that notice (Exh.48) was 
received by Chandrakant on 16.4.1985.
Further,   if   there   was   any   dispute   about   the   agreed 
rent it was open for the tenant to raise the dispute about the 

same.  In absence of raising such dispute, it is impermissible to 
take the different view about the agreed rent.
The   learned  lower  appellate  court,  in  my  view,  has 
misdirected himself.   According to the learned lower appellate 
court, plaintiff Subhash in the examination­in­chief has admitted 
that in the year 1975 another room was let out and previously 
rent was Rs.7/­ only.  Reliance is also placed on three receipts 

Exhs.   43,   44   and   45,   which   show   that   rent   was   Rs.7/­   and 
Rs.8/­.   The said receipts pertain to the year 1969 and 1974, 
however Exh.46 receipt for the month of August, 1984 clearly 
shows that the rent was Rs.15.25 Ps.  With this and in absence 
of anything contrary, the learned lower appellate court, in my 
view, has incorrectly reached to the conclusion that Rs.15.25 
Ps. was not agreed standard rent.   In that view of the matter, 
the finding recorded by the learned lower appellate court that 
the tenant was not in arrears of rent for more than six months 
needs to be set aside. 
19]
Another   ground,   which   weighed   in   the   mind   of   the 
learned   Judge   of   the   appellate   court   to   upset   the   decree   is 
Section   109   of   the   Transfer   of   Property   Act,   which   reads   as 
under :­
“  109.   Rights   of   lessor's   transferee.   —  If   the   lessor 
transfers the property leased, or any part thereof, or any 

part of his interest therein, the transferee, in the absence of 
a contract to the contrary, shall possess all the rights, and, 
if the lessee so elects, be subject to all the liabilities of the 
lessor as to the property or part transferred so long as he is 
the owner of it; but the lessor shall not, by reason only of 
such transfer cease to be subject to any of the liabilities 
imposed upon him by the lease, unless the lessee elects to 
treat the transferee as the person liable to him:
Provided   that  the   transferee   is  not  entitled   to 
arrears   of   rent   due   before   the   transfer,   and   that,   if   the 
lessee, not having reason to believe that such transfer has 
been made, pays rent to the lessor, the lessee shall not be 
liable to pay such rent over again to the transferee.
The lessor, the transferee and the lessee may 
determine what proportion of the premium or rent reserved 
by the lease is payable in respect of the part so transferred, 
and,   in   case   they   disagree,   such   determination   may   be 
made by any court having jurisdiction to entertain a suit for 
the possession of the property leased. ”
According   to   the   learned   lower   appellate   court   and 
which   is   the   submission   of   the   learned   counsel   for   the 
respondent,   in   view   of   the   provisions   of   Section   109   of   the 
Transfer of Property Act, present petitioner will not be entitled to 
the decree on the basis of arrears of rent which were there prior 
to allotment of suit house to his share. 
The learned lower appellate court placed reliance on 
the reported case of  N.M.Engineer and others vs Narendra 
Singh Virdi [AIR 1995 SC 448]; and Smt.Champabai Manilal 
Shah and anr. Vs Anandrao Ramchandra and another [1993 
Bombay Rent Cases Pg. 351].  According to the learned lower 
appellate court, therefore, at the most the arrears of rent was 

mere an actionable claim, since according to the learned lower 
appellate   court   if   some   of   the   co­landlords   relinquished   their 
right in favour of other landlords, it operates a transfer within the 
meaning of Section 109 of the Transfer of Property Act.
20]
The Apex court has dealt with such issue in detail in 
the case of  Sk. Sattar Sk. Mohd. Choudhari vs Gundappa 

Amabadas Bukate [1997 (2) Bom.C.R.690].  Section 5 of the 
Transfer of Property Act reads as under :­
“  5. “Transfer of property” defined. —  In the following 
sections “transfer of property” means an act by which a 
living person conveys property, in present or in future, to 
one or more other living persons, or to himself and one or 
more other living persons; and “to transfer property” is to 
perform such act.
In   this   section   “living   person”   includes   a   company   or 
association or body of individuals, whether incorporated or 
not, but nothing herein contained shall affect any law for 
the time being in force relating to transfer of property to or 
by   companies,   associations   or   bodies   of   individuals.  ”
While dealing with the said Section, the Apex Court in 
para 22 of the said judgment has observed as under :­
“  22.   This   Section   contemplates   transfer   of   property   by   a 
person who has a title in the said property to another person 
who has no title. A family arrangement, on the contrary, is a 
transaction between members of the same family for the benefit 
of the family so as to preserve the family property, the peace 
and   security   of   the   family,   avoidance   of   family   dispute   and 
litigation and also for saving the honour of the family. Such an 
arrangement   is   based   on   the   assumption   that   there   was   an 

antecedent title in the parties and the agreement acknowledges 
and defines what that title is. It is for this reason that a family 
arrangement by which each party takes a share in the property 
has been held as not amounting to a "conveyance of property" 
from a person who has title to it to a person who has no title. ”
Thus,   the   Apex   Court   has   held   that   the   family 
arrangement, by which party takes share in the property, will 
not amount to a conveyance of the property.
There is no dispute that the suit house was allotted to the 

21]
share  of   present   petitioner   and   his   name   is   mutated   in   relevant 
revenue record on 24.7.1986.  Thus, n view of the dictum in the case 
of  Sk.Sattar   Sk.Mohd.   Choudhari  by   the   Apex   Court,   the   lower 
appellate   court   ought   to   have   seen   that   the   facts   in   the   case   of 
N.N.Engineer are clearly distinguishable and the ratio laid down by 
the Apex Court in said case is not applicable to the case I hand. 
Since the landlord has successfully pointed out that the 
22]
tenant was in arrears of rent for more than six months, he was not 
entitled for the protection, and therefore, the lower appellate court, in 
my view, has committed a mistake in upsetting the well  reasoned 
judgment and decree passed by the learned trial court.
23]
In that view of the matter, the Writ Petitioner succeeds in 
the present Writ Petition.  The petition is allowed.  The judgment and 
decree passed by the Extra Joint District Judge, Dhule in  Regular 

Civil Appeal No.2 of 1992, dated 2.2.2000 is hereby set aside. 
Instead the judgment and decree passed by the 5 th  Joint Civil 
Judge,   Junior   Division,   Dhule   on   16.11.1991   in   Regular   Civil 
Suit No. 458 of 1985 is hereby restored.  Rule is made absolute 
accordingly.  In the circumstances of the case, there shall be no 
order as to costs. 
      
  [V.M.DESHPANDE, J.] 


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