Supreme Court Dismisses Appeal by Defendants in Co-owner Partition and Compensation Suit, Upholding High Court Decree That Bihar Rent Control Act Is Inapplicable to Co-owner Compensation Agreement. Mere Agreement to Pay Compensation for Occupation of Co-owner's Share Does Not Create Landlord-Tenant Relationship Under Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947, and Non-Joinder of Adopted Son Is Not Fatal When Adoption Is Admitted by Non-Denial Under Order VIII Rule 5 CPC.

Case Note & Summary

The dispute concerned a house situated within the limits of Bhagalpur municipality, jointly purchased on June 26, 1942 by five persons belonging to two Hindu undivided families, each family holding a half interest. One family was represented by the plaintiffs (respondents) and the other by the defendants (appellants). After eviction of the previous tenant and vacation by the Government, the defendants occupied the major portion of the house while a small portion remained with tenants paying rent of Rs 30 per month, half of which was realised by each family. The plaintiffs alleged that when the defendants entered possession, they agreed to pay Rs 200 per month as compensation for the plaintiffs' half share in the property. The defendants failed to pay any compensation, prompting the plaintiffs to file a suit for partition and separate possession of their half share and for recovery of compensation from May 2, 1947 to September 11, 1951 at Rs 200 per month with interest, and for future compensation until recovery of possession. In the plaint, the plaintiffs stated that Gajanand had another son named Shankarlal who had been given in adoption to Sreelal, and therefore he was not joined as a party. The defendants resisted the suit on grounds that Shankarlal was a co-owner and his non-joinder rendered the suit incompetent, that the suit was barred by the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947, and that the compensation agreement was unenforceable because there was no ouster of the plaintiffs. They also contended that the agreed compensation was Rs 50 per month, not Rs 200. The trial court dismissed the suit, holding that the Rent Control Act applied and barred the claim for eviction and compensation, and that the adoption of Shankarlal had not been proved. The Patna High Court reversed the trial court, holding that the Rent Control Act did not apply because the agreement between co-owners did not create a landlord-tenant relationship, that the defendants had not specifically denied the fact of adoption and no issue had been raised, and that the non-joinder of Shankarlal was not an impediment. The High Court accepted the plaintiffs' version that the compensation was Rs 200 per month and decreed the suit for partition and arrears of compensation, limiting arrears to three years prior to suit as per limitation. The High Court later allowed an application under Section 151 read with Order XX Rule 18 CPC for compensation from the date of suit until recovery of possession or three years from decree, whichever was earlier. The defendants appealed to the Supreme Court by special leave. The Supreme Court identified three main legal issues: first, whether the suit was maintainable without impleading Shankarlal as a co-owner; second, whether the suit was barred by the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947; and third, whether the agreement to pay compensation was enforceable without proof of ouster. The appellants argued that Shankarlal's adoption was not established and therefore he remained a co-owner whose non-joinder was fatal; that the Rent Act barred both eviction and compensation claims; and that without ouster, no compensation could be claimed. The respondents contended that the adoption was stated in the plaint and not specifically denied, that the Rent Act was inapplicable as no landlord-tenant relationship existed, and that co-owners could validly agree on terms of enjoyment. The Supreme Court held that under Order VIII Rule 5 CPC, the defendants' statement that they had no knowledge of the adoption was not a specific denial and therefore the fact of adoption stood admitted; oral evidence of adoption was admissible because a deed of adoption merely records the fact and does not itself bring about a change of status. On the rent control issue, the Court held that the mere agreement to pay compensation for occupation of a co-owner's share did not bring into existence a relationship of landlord and tenant; the parties never intended to create such a relationship. Consequently, the Bihar Act was inapplicable and the suit was not barred. Finally, the Court held that co-owners are legally competent to make any agreement for enjoyment of their undivided property, and ouster is not a sine qua non for claiming compensation from a co-owner in occupation. The agreement was therefore enforceable. The Supreme Court dismissed the appeal and affirmed the High Court's decree, allowing the plaintiffs' claim for partition, separate possession, and compensation.

Headnote

Issue of Consideration

Final Decision

Appeal dismissed; Supreme Court affirmed the Patna High Court's decree allowing the plaintiffs' suit for partition, separate possession, and payment of compensation, holding that the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947 was inapplicable, the suit was not barred by non-joinder of the adopted son, and the compensation agreement was enforceable without proof of ouster.

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