Case Note & Summary
The dispute arose from a suit for eviction filed by the respondent-landlady, who had purchased a property from a trust, against the appellant-tenants who had been inducted by the trust. The respondent issued a notice of attornment and later filed a suit for recovery of rent in the Small Cause Court. In that suit, the tenants denied the respondent's title, prompting her to withdraw the rent suit and issue a notice of forfeiture of tenancy under Section 111(g) of the Transfer of Property Act, 1882. She then filed a suit for possession on the ground of forfeiture. The trial court held that the tenants had forfeited their tenancy by denying the plaintiff's title and decreed eviction; the lower appellate court affirmed this decree. In second appeal, the High Court framed three substantial questions of law: whether mere denial of derivative title amounts to forfeiture, whether the original landlord after sale is a third person for the purpose of Section 111(g), and whether the suit was maintainable without permission from the Rent Controller under the C.P. & Berar Letting of Houses & Rent Control Order, 1949. The court noted that the respondent-plaintiff held a derivative title, as she had purchased the property from the original landlord-trust. Relying on precedents, the court observed that mere denial of derivative title does not ipso facto result in forfeiture; the denial must be not bona fide. Further, the original landlord does not become a third person after transfer. The court also held that since forfeiture was not established, the suit for possession required permission from the Rent Controller, which had not been obtained. The appeal was allowed, the decree for eviction was set aside, and the suit was dismissed with no order as to costs.
Headnote
A) Transfer of Property - Forfeiture of Tenancy - Denial of Derivative Title - Transfer of Property Act, 1882, Section 111(g) - Denial of the landlord's title by a tenant must be not bona fide to constitute forfeiture; mere denial of derivative title, without more, does not automatically result in forfeiture - The tenant denied the derivative title of the plaintiff who purchased the property from the original landlord-trust, but such denial was held not to amount to forfeiture as the title was derivative and the denial was not shown to be mala fide - Held that forfeiture was not established (Paras 9-10). B) Transfer of Property - Meaning of Third Person - Transfer of Property Act, 1882, Section 111(g) - The original landlord who transfers title does not become a third person for the purpose of forfeiture under Section 111(g); the section contemplates a third party distinct from the original landlord - After sale, the Fouzdar Trust was not a third person as against the tenant - Held that requirement of third person was not satisfied (Paras 9-10). C) Rent Control - Suit for Possession - C.P. & Berar Letting of Houses & Rent Control Order, 1949 - Where forfeiture is not established, the suit for possession must comply with rent control legislation; permission from the Rent Controller is necessary to determine tenancy - The suit was filed on the basis of forfeiture without seeking permission from the Rent Controller; since forfeiture was not proved, the suit was not maintainable without such permission - Held that suit was dismissed (Paras 9, 11-12). D) Evidence - Estoppel of Tenant - Indian Evidence Act, 1872, Section 116 - The rule of estoppel under Section 116 is limited to denial of title at the commencement of tenancy and does not estop a tenant from questioning the derivative title of a transferee landlord - The tenant denied the derivative title of the plaintiff, and the estoppel under Section 116 was held inapplicable (Paras 13-14). E) Civil Procedure - Substantial Questions of Law - Code of Civil Procedure, 1908, Section 100 - In a second appeal, the High Court can frame substantial questions of law and decide the case accordingly; the court framed three questions relating to forfeiture and maintainability and answered them in the negative, allowing the appeal (Paras 9, 10).
Issue of Consideration
Whether mere denial of derivative title of the plaintiff by the defendants amounted to forfeiture of tenancy under Section 111(g) of the Transfer of Property Act; whether the original landlord after sale could be considered a 'third person' for the purpose of Section 111(g); and whether the suit for possession was maintainable without permission from the Rent Controller under the C.P. & Berar Letting of Houses & Rent Control Order, 1949.
Final Decision
Second Appeal is allowed. Suit filed by the respondent-plaintiff is dismissed with no order as to costs.
Law Points
- Mere denial of derivative title does not ipso facto result in forfeiture of tenancy
- Forfeiture requires denial to be not bona fide
- Estoppel under Section 116 Evidence Act limited to denial at commencement of tenancy
- Original landlord after transfer is not a third person for Section 111(g)
