Life Insurance Corporation of India Vs. M/s. India Automobiles & Co. & Ors.
EmailAppeal: Civil Appeal No. 1514 of 1979
Petitioner: Life Insurance Corporation of India
Respondent: M/s. India Automobiles & Co. & Ors.
Apeal: Civil Appeal No. 1514 of 1979
Judges: S.RANGANATHAN & K.N. SAIKIA, JJ.
Date of Judgment: Aug 01, 1990
Appearances:
Mr.K. Parasaran and Mr.T.S. Krishnamoorthy Iyer, Senior Advocates and Mr.
Head Note:
RES JUDICATA
Rent matter – Determination of fair rent – Denial of title of landlord – Rent Controller deciding the issue of title – Whether it constitutes res judicata? – Held no – Rent Controller does not have jurisdiction to decide questions of title and its decision cannot fetter a civil court from adjudicating upon the issues in a civil suit – Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, sections 4, 10(1), 10(2)(vii) and 19 – CPC, sections 9 and 11.
Held:
(i) … There are clear indications in the Act and rules that the Rent Controller does not have the jurisdiction to decide questions of title. In a proceeding under the Act, whether it be for fixation of fair rent or eviction, the tenant may raise several objections. He may, inter alia, take up the point that the opposite party is not the “landlord”. The definition of “landlord” under the Act is very wide and encompasses not only an owner but also persons “receiving or entitled to receive the rent of the building which has been let out or would be entitled to receive the rent of the building if it were let out to a tenant” in one of several capacities. Denial of title of the landlord is itself one of the grounds on which eviction can be sought (S.10(2)(vii)). Sri Krishnamoorthy Iyer is, therefore, certainly right in contending that the Act requires the Rent Controller to consider this issue, among others, while disposing the applications before him. But, we think, Sri Parasaran is right in saying that, since the Rent Controller has no jurisdiction to entertain an application except by a landlord or a tenant, the question of title to the property is one on which his very jurisdiction depends. It cannot be described as a matter that is squarely and directly in issue in these proceedings to which any finality can be attached, as the Rent Controller, by deciding the issue wrongly, cannot clothe himself with jurisdiction where none exists. All that the Rent Controller has to do is to satisfy himself that the person seeking eviction or fixation of fair rent is a “landlord” who has, prima facie, the right to receive the rents of the property in question. That the Rent Controller’s jurisdiction on this issue is limited is clear from the proviso to S.10(1) of the Act. In order to decide whether the denial of the landlord’s title by the tenant is bona fide, the Rent Controller may have to go into the tenant’s contentions on the issue but he is not to decide the question finally. He has only to see whether the tenant’s denial of the landlord’s title is bona fide in the circumstances of the case. He may reach a conclusion, on the merits, that the landlord has title; yet he cannot order eviction if the tenant’s action in denying the title was bona fide. Per contra, he may reach the conclusion on the the materials before him that the landlord has no title; yet, it seems, if he finds that the applicant is otherwise a landlord and that the grounds on which the tenant’s denial was based were not bona fide, he will have to order eviction. So also, in an application under S.4, the jurisdiction of the Rent Controller is to determine a fair or standard rent for the premises. He has no doubt to ensure that the person applying for the fair rent is the tenant or the landlord. He has also no doubt to satisfy himself as to the extent of the premises qua which the relationship of landlord and tenant exists and in respect of which rent is receivable or payable. For deciding these issues, he may have no doubt also to consider the oral and documentary evidence adduced by the parties. Yet, having regard to the manner in which he is required to come to this conclusion and having regard to the fact that at least in the Presidency Town an appeal from his order goes to the Court of Small Causes, it is difficult to escape the conclusion that the jurisdiction to be exercised by him is a limited and a prima facie one. It will be anomalous to hold that where an owner of property seeks to evict his tenant under S.10(2)(vii) but the Rent Controller refuses to pass the order of eviction – though satisfied about his title – because the tenant had acted bona fide, it would be open to the owner to seek eviction by having his title adjudicated upon in a civil court but that the owner cannot have a similar right in the matter of recovery of rent which is basically a relief for which he has to approach a civil court. A question of title may be a complex one involving difficult issues. For instance, the “owner” may claim title under an adoption or a will or a trust deed or a gift deed and there may be contentious claims among several persons which it will not be possible for the Rent Controller to decide. It is important to remember that when an owner files a suit for arrears of rent, it is open to the tenant, under the general law, to plead that no rent is payable in respect of the premises as, indeed, it belongs to him. The right to raise this issue cannot be taken away without a specific statutory provision. The terms of S.11 C.P.C., including Explanation VIII, are not comprehensive enough to cover the case. (Para 21)
(ii) … We are concerned with the jurisdiction of a civil court. The extensive jurisdiction conferred on civil courts under s.9 of the Code of Civil Procedure should not be curtailed without a specific statutory warrant or except on some clear principle. There is nothing in the Tamil Nadu Rent Control Act which, in any way, takes away, or narrows down, the civil court’s jurisdiction as, for example, there is in the Delhi Rent Control Act (s.50). As to principle, whether we look at it on the analogy of res judicata or adopt the approach of Sri Iyer as to whether the order in the earlier proceedings is to be treated as an order that is null and void or merely one that is valid until set aside, the answer has to turn on the true nature and scope of the jurisdiction conferred on the Rent Controller under the Act. Is it possible, we have to ask ourselves, having regard to the context, scheme and terms of the legislation, that the statute could have envisaged the Rent Controller (and the authorities to whom appeal or revision could be preferred from his orders) to be final authorities to adjudicate on issues of title also? The answer, in our opinion, has to be in the negative. Section 4 of the Rent Control Act, as already pointed out, provides only a machinery for fixation of fair rent in respect of certain premises. It is the quantum of fair rent that arises for determination by the Rent Controller. There is no doubt that, since an application for this purpose cannot lie except at the instance of a landlord or a tenant, the Rent Controller has to deal with this incidentally but this is not one of the direct issues before the Rent Controller. If, and only if, this relationship exists between the parties, the Rent Controller steps in for a limited purpose – to determine what the fair rent is – and then fades out of the picture. Where a fair rent is fixed by a Controller, the Rent Control Act does not provide for a machinery for recovery of the amount. The amount has to be recovered by the landlord only by recourse to a civil court. This gives an indication that the determination of the relationship that gives rise to the application is also not conclusive. This is indeed made clear by the provisions relating to eviction. We have already referred to the effect of the provisions of s.10 (2) (vii) read with the proviso to s.10(1) and pointed out how jurisdiction to decide questions of title is denied to the Rent Controller. The position cannot be different under s.4. Having regard to the much narrower scope of s.4, it would be anomalous to read a wider jurisdiction to the Rent Controller thereunder than under s. 10. In our opinion, on a proper construction of the Rent Control Act, the question on which the jurisdiction of the civil court is excluded is only the determination as to the fair rent of the premises. If the civil court in this case had come to the conclusion that there is a relationship of a landlord and a tenant and that the LIC was entitled to recover the rent from the tenants, it will have to pass a decree in favour of the LIC on the basis of the fair rent fixed by the Rent Controller. It will not be open to the civil court to re-determine the rent payable by the tenant to the landlord because that is a matter squarely and exclusively within the jurisdiction of the Rent Controller and, therefore, impliedly excluded from the purview of the civil court. But his decision is not final on the issue that opens up his jurisdiction and cannot preclude an owner from contending, in a civil court, that he should not be asked to pay rent for his own property to some one else. (Para 23)
Cases Reffered:
1. Shiv Chander Kapoor v. Amar Bose, JT 1989 (4) SC 431 = 1990 (1) SCC 234.
2. Trideshwar Dayal v. Maheshwar Dayal, 1989 (2) Scale 1436.
3. Antulay v. Nayak, JT 1988 (2) SC 325 = 1988 (2) SCC 602.
4. State of Tamil Nadu v. Ramalinga Samigal Madam and Ors., 1985 (4) SCC 10 – Relied.
5. Jeeth Kaur and Ors. v. Smt.P. Kondalamma and another, AIR 1983 AP 219 – Relied.
6. Gangabai v. Chhabubai, 1982 91) SCR 1176 – Relied.
7. Raval & Co. v. Ramachandran, 1974 (1) SCC 424.
8. Mathura Prasad Bajoo Jaiswal & Ors. v. Dossibai N.B. Jeejeebhoy, 1970 (3) SCR 830 – Relied.
9. Official Trustee v. Sachindranath, 1969 (3) SCR 92.
10. Salay Mohamed Sait etc. v. Jaffer Mohamed Sait’s Memorial Dispensary Charity and others, (1969) 1 Andhra Weekly Reporter (SC) 16.
11. Dhulabhai v. State, 1968 (3) SCR 662 – Relied.
12. Palaniappa Chettiar v. Babu Sahib alais Sheik Mytheen Sahib and others, (1964) 77 LW 551 – Overruled in (1969) 1 Andhra Weekly Reporter (SC) 16.
13. Desika Charyulu v. State of Andhra Pradesh and another, AIR 1964 SC 807 – Relied.
14. Palaniappa Chettiar and others v. Vairavan Chettiar, (1963) 76 LW 21 – Overruled in (1969) 1 Andhra Weekly Reporter (SC) 16.
15. Bhagwan Dayal v. Reoti devi, 1962 (3) SCR 440.
16. Kiran Singh v. Chaman Paswan, 1955 SCR 117.
17. Venkatarama Rao & Ors. v. Musunuru Venkayya and Ors., AIR 1954 Madras 788 – Approved in 1962 (3) SCR 440.
18. Bhatia Cooperative Society Ltd. v. Patel, 1953 SCR 185.
19. Rai Brij Raj v. Shaw, 1951 SCR 145.
20. Krishnamurthy v. Parthasarathy, AIR 1949 Madras 780.
21. Manibhai Hathibhai v. Arbuthnot, AIR 1947 Bom. 413.
22. Nageswara v. Ganesa, AIR 1942 Mad. 675.
23. Girish Chandra v. Srinath, 3 CLJ 141.
2. Trideshwar Dayal v. Maheshwar Dayal, 1989 (2) Scale 1436.
3. Antulay v. Nayak, JT 1988 (2) SC 325 = 1988 (2) SCC 602.
4. State of Tamil Nadu v. Ramalinga Samigal Madam and Ors., 1985 (4) SCC 10 – Relied.
5. Jeeth Kaur and Ors. v. Smt.P. Kondalamma and another, AIR 1983 AP 219 – Relied.
6. Gangabai v. Chhabubai, 1982 91) SCR 1176 – Relied.
7. Raval & Co. v. Ramachandran, 1974 (1) SCC 424.
8. Mathura Prasad Bajoo Jaiswal & Ors. v. Dossibai N.B. Jeejeebhoy, 1970 (3) SCR 830 – Relied.
9. Official Trustee v. Sachindranath, 1969 (3) SCR 92.
10. Salay Mohamed Sait etc. v. Jaffer Mohamed Sait’s Memorial Dispensary Charity and others, (1969) 1 Andhra Weekly Reporter (SC) 16.
11. Dhulabhai v. State, 1968 (3) SCR 662 – Relied.
12. Palaniappa Chettiar v. Babu Sahib alais Sheik Mytheen Sahib and others, (1964) 77 LW 551 – Overruled in (1969) 1 Andhra Weekly Reporter (SC) 16.
13. Desika Charyulu v. State of Andhra Pradesh and another, AIR 1964 SC 807 – Relied.
14. Palaniappa Chettiar and others v. Vairavan Chettiar, (1963) 76 LW 21 – Overruled in (1969) 1 Andhra Weekly Reporter (SC) 16.
15. Bhagwan Dayal v. Reoti devi, 1962 (3) SCR 440.
16. Kiran Singh v. Chaman Paswan, 1955 SCR 117.
17. Venkatarama Rao & Ors. v. Musunuru Venkayya and Ors., AIR 1954 Madras 788 – Approved in 1962 (3) SCR 440.
18. Bhatia Cooperative Society Ltd. v. Patel, 1953 SCR 185.
19. Rai Brij Raj v. Shaw, 1951 SCR 145.
20. Krishnamurthy v. Parthasarathy, AIR 1949 Madras 780.
21. Manibhai Hathibhai v. Arbuthnot, AIR 1947 Bom. 413.
22. Nageswara v. Ganesa, AIR 1942 Mad. 675.
23. Girish Chandra v. Srinath, 3 CLJ 141.
Foreign Case Referred:
Rye v. Rye, 1962 AC 496.
JUDGEMENT:
RANGANATHAN, J. :
1. A very interesting question comes up for consideration in this appeal. The question to be ultimately decided falls within a very narrow compass but it is necessary to set out the facts leading to the present appeal at some length.
2. The property, which is the subject matter of the present dispute, originally formed part of an extent of land situated on Mount Road, Madras, bearing door nos. 2 and 3 and measuring 41 grounds and 2005 sq. ft. It belonged to several co-owners. These co-owners had leased out the properties under two lease deeds in favour of M/s. India Automobiles, which was then the sole proprietary concern of one of themselves, Ganshyamdas Girdhardas (G.G.) but was converted subsequently, in 1961, into a partnership concern of G.G. and his four sons. The firm and its partners are hereinafter compendiously referred to as ‘the tenants’. The first lease (Ext.P-1) was dated 22.9.1947 and related to Door No. 2 (Item No. 1 in Schedule A to the plaint). This was a property comprising of an area of 4 grounds and 151 square feet with certain buildings thereon. The rent for the premises was Rs. 150/- per month. The second lease deed (Ext.P-2), dated 3.10.1947, relating to Door No. 3 (Item 2 in Schedule A to the plaint) covered an area of 8700 sq.ft. and some building thereon. The rent as per lease deed was Rs. 200/- per month.
3. On 30.7.1953, all the co-owners of the property (including G.G.) sold the property to the United India Life Assurance Company and the New Guardian of India Life Insurance Company Ltd. In 1956, the Life Insurance Corporation of India (LIC) stepped into the shoes of these two insurance companies and became the owner of the property.
4. On 20.7.65, the LIC moved two applications (being HRC Nos. 3310 and 3311 of 1965) in the court of the Rent Controller (Sri A. Varadarajan who later became a judge of this Court) for fixation of a “fair rent” for each of the premises. The fair rent claimed was computed at Rs. 2,399.03 per month in respect of item no.1 as against the rent of Rs. 150 p.m. fixed under the lease deed. In respect of item 2 the fair rent claimed was Rs. 3266.50 as against Rs. 200 p.m. payable under the lease deed. The defendants (G.G.and his sons) filed their objections to the above applications. They claimed that, under both the lease deeds, what had been leased out to them was only a vacant land and that the superstructure had been built by them. They claimed, therefore, that they were entitled to relief under the Madras City Tenants’ Protection Act and that the Rent Control Court had no jurisdiction to fix a fair rent.
5. The Rent Controller accepted the above argument so far as item 1 was concerned. So far as item 2 was concerned, it appears that, at the time of the hearing, it was conceded before the Rent Controller that the respondents were tenants of the entire properties covered by the lease deed and that they had not constructed any of the premises thereupon. In view of this the Rent Controller dismissed H.R.C. 3310/65 relating to item no.1 and, in H.R.C. 3311/65, fixed the fair rent in respect of item no.2 at Rs. 1451 p.m. The order of the Rent Controller was dated 9.3.1966.
6. There were appeals to the Court of Small Causes. In respect of item No. 1 in HRA. 534/66, the Court, on a perusal of the sale deed dated 30.7.53 filed by the LIC before it, came to the conclusion that the buildings on the land leased under Ex.P-1 had also been conveyed to the LIC and that the LIC was entitled to seek fixation of fair rent in respect of this premises also. The fair rent fixed by the Rent Controller at Rs. 994 p.m. was upheld. The order of the Rent Controller in respect of item 2 was also upheld. It may be mentioned here that, even in certain earlier proceedings for fixation of fair rent and eviction (H.R.C. 867/73 and H.R.C. 2557/64), it had been held by the Rent Controller that item no. 1 (door no. 2) belonged to the LIC but his order of eviction had been set aside by the appellate court on some other ground. In the circumstances, the Court of Small Causes, in the appeals now being referred to (H.R.A. 534/66) did not treat the earlier decision as res judicata but came independently to the same conclusion that item no.1 belonged to the LIC. this was on 19th April, 1967. The tenants filed revision petitions against the order of the Court of Small Causes but these were dismissed on 20.11.1968.
7. After the Civil Revision Petitions by the tenant were dismissed, the LIC filed C.S. 64/1969 on the original side of the Madras High Court against the tenants for recovery of arrears of rent on the basis of the fair rents fixed, which were computed at Rs. 98,250.97 in respect of the two items of property. Further interest at the rate of 12% thereon from date of plaint to the date of decree and at 6% thereafter till the date of realisation was also claimed.
8. It may be mentioned here that the tenant filed C.S. 87 of 1972 claiming protection under the Madras City Tenants’ Protection Act but the suit and further appeals therefrom have been dismissed. Turning now to C.S.No. 54 of 1969 (which was disposed of along with C.S. No. 87 of 72 by a common judgment dated 23.10.1972), the contention urged on behalf of the tenants was that, since the subject matter of the lease under Ex.p-1 was only a vacant site, the Rent Controller had no jurisdiction to fix the fair rent in respect thereof and that, therefore, the claim in the suit for arrears of rent, based on the Rent Controller’s order in respect of the premises covered by Ex.P-1 had to fail. The Court addressed itself to this question. It came to the conclusion that Ex.P-1 did not, in law, create a valid lease between the co-owners and the tenants. After referring to the terms of the sale deed (Ex.P-3), the superstructure constructed on the land was held to have been conveyed to the vendee under the sale deed dated 30.7.1953 and to have thus vested in LIC. The Rent Controller was, therefore, held to have had jurisdiction to fix the fair rent in respect of the premises. It was, therefore, held that the plaintiff’s claim in the suit should succeed. The suit was decreed accordingly.
9. The tenants filed and appeal being O.S.A. No. 62 of 1973. The Appellate Bench confirmed the decree in respect of item no.2 subject to certain modifications which are not here relevant. However, so far as item no.1 was concerned, the Appellate Bench vacated the decree passed by the trial court. It held that there was a valid lease between the quondam owners and the tenants under Exts. p-1 & p-2. Having regard to the express recitals in Ex. p-3, the Appellate Bench held that it was impossible to hold that the buildings, which admittedly belonged to the defendants and had been constructed by them on the vacant land taken on lease under Ex. p-1, ever were or could be the subject matter of the sale under Ex. p-3. In view of this finding, it was held that the Rent Controller had no jurisdiction to entertain the application for fixation of fair rent in respect of the property which was only a vacant piece of land. In consequence, it was held, the LIC could not maintain the suit for recovery of rent based on the order made by the statutory tribunal under the Rent Control Act and claim the difference between the so called fair rent and the contract rent. The claim of the LIC for recovery of Rs. 39,224.71, as arrears of rent, in respect of item 1 was thus held to be not maintainable. O.S.A. 62 of 1973 was, therefore, allowed to that extent. The present appeal, by Special Leave granted on 3.7.1979, is from the order of the Division Bench rejecting the appellant’s claim for arrears of rent in respect of item no- 1 of the property set out in Schedule A to the plaint based on the difference between the fair rent fixed by the Rent Controller and the rent payable therefor under Ex.p-1.
10. The questions to be decided in this appeal, on the above facts, boil down to these: (1) Was the LIC the vendee only of a vacant piece of land with no title to the buildings standing on the site in item 1? (2) Is it open for the tenants to contend that the order of the Court of Small Causes in the earlier rent control proceedings deciding to the contrary and fixing the fair rent of item 1 at Rs. 994 p.m. should be completely ignored as an order passed totally without jurisdiction, although it has become final as between the parties? Two interesting aspects may be pointed out in regard to these two questions. The first is that if either question is answered in the negative, the other will not arise for consideration and the appeal will have to be allowed. But an affirmative answer to either question will necessitate an answer to the other. The second is that, though the claim in issue before us is only a money claim for arrears of rent, any decision given by us, based, as it will have to be, on the issue whether the LIC owns the superstructure or not and whether the tenants are the lessees only of vacant land or of both land and buildings, will have repercussions not only on the claim in this suit (which by now has accumulated to more than Rs. 3 lakhs) but also on any other proceedings by way of ejectment or otherwise which the LIC may have in contemplation against the tenants. The decision in this appeal will, therefore , be of great moment for the L.I.C.
11. So far as the first question is concerned, we have no doubt that the Division Bench of the High Court has come to the correct conclusion. In our view, the conclusion of the learned Single Judge that the lease Ex-P-1, executed by the co-owners of the property in favour of one of them, was invalid, was erroneous. S.5 of the Transfer of Property Act, 1882, clearly envisages transfers of property by a person to “one or more living persons or to himself, or to himself and one or more other living persons”. Whatever may be the position, in spite of this provision, in respect of a purported transfer by a person to himself alone (which is very often the position in the case of trusts) – which was considered by the House of Lords in Rye v. Rye (1962 AC 496), there is no reason to hold that a contract between a person with himself and others is invalid. The Division Bench, we think, has rightly distinguished the decisions in Girish Chandra v. Srinath(3 C.L.J. 141) and Rye v. Rye (1962 AC 496). The observations of Lord Denning, extracted by the learned Judges, are quite apposite to the situation in the present case.
12. Once this objection is out of the way, the question is whether the constructions put upon the leased land by the lessees formed part of the property conveyed to the L.I.C. Sri Parasaran pointed out that they did not and drew our attention to subsequent correspondence between the parties to show that even the LIC. had not claimed at any stage any rent in respect of the superstructures (apart from the contractual rent, which was in respect of the land) and that both parties have all along been proceeding on the footing that the superstructure on item 1 belonged to the lessees. This appears to be correct but it cannot be conclusive of the rights of the parties. We have therefore gone carefully into the terms of Ex.P.1 and Ex.P-3. They clearly make out that the superstructures put up by the lessee under Ex.P-1 were not included in the property conveyed under the terms of Ex.P-3 and that, whatever may be the rights of the LIC to evict the tenant with liberty to demolish the superstructure on the termination of the lease, it had no property in the superstructure so long as the lease subsisted. We, therefore, answer the first question posed by us in the affirmative.
13. This brings us, then, to the second, the really crucial, question posed earlier viz. whether despite the above conclusion, we are precluded, by principles of, or analogous to, res judicata, from going behind the findings to the contrary given in the earlier rent control proceedings by the Court of Small Causes which have become final on the dismissal of the C.R.P. filed thereagainst.
14. Sri. T.S.Krishnamoorthy Iyer, learned counsel for the appellant, submitted that the Courts now are precluded from going behind the findings of the Court of Small Causes in the earlier proceedings. He conceded that no legal consequences can flow from a totally void order (see,Kiran Singh v. Chaman Paswan, 1955 SCR 117 @ 121). He also conceded that there may be a difference in principle between a civil court and a court of limited jurisdiction. While the former has an inherent jurisdiction to decide a question raised about its own jurisdiction and such a decision cannot be challenged in another court after it has become final: ( See: Bhatia Cooperative Society Ltd. v. Patel (1953 SCR 185) and Nageswara v. Ganesa (AIR 1942 Mad. 675)), the latter is strictly confined to the terms of the statute creating it. But, he submitted, even the decision of a Tribunal or a Court of limited jurisdiction cannot be called in question so long as it acts within the scope of the jurisdiction conferred on it by the relevant statutes. He, therefore, invited us to peruse the provisions of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 (hereinafter referred to as the Rent Control Act). Under the said Act, he pointed out, a petition for fixation of fair rent under s.4 could be filed by either a landlord or a tenant: (Raval & Co. v. Ramachandran, 1974-1 SCC 424). This is what the LIC purported to do when it filed H.R.C. Nos. 3310 and 3311/64. When a petition under s.4 is filed, the Rent Controller, in the language of s.4 has to decide: (1) whether the applicant is a tenant in, or landlord of, the building and (2) what the fair rent of the premises should be in accordance with the provisions of the Act. In the present case both the points had been put in issue. The respondents denied that the L.I.C was the landlord or they the tenants in respect of the property. They claimed to be the owner of the superstructure and admitted tenancy only in respect of the site. The Rent Controller and, on appeal, the Court of Small Causes were therefore, called upon to give their decision on this question which was completely within their statutory jurisdiction and this decision certainly constitutes res judicata between the parties: see also, Explanation VIII to S.11 of the Code of Civil Procedure. At any rate, it is not open to one of the parties to contend that the decision given by the Court of Small Causes, which has become final between the parties, is a total nullity which can be completely ignored. It was, therefore, not open to the High Court to entertain a collateral attack on the validity or binding nature or correctness of the order of the Court of Small Causes and to consider and determine afresh the issue as to whether the LIC is the owner of the premises as claimed or not.
15. In support of his contention, counsel referred to Krishnamurthy v. Parthasarathy (AIR 1949 Madras 780) reversing the decision in the same case reported in AIR 1949 Madras 397. The appellant landlord had filed an eviction petition under the Rent Control Act without giving notice under s. 111 (h) of the Transfer of Property Act (which, in those days, was considered to be a condition precedent even to the filing of an eviction petition under the Rent Control Act) and obtained an order of eviction. In these proceedings no contention had been raised by the tenant on the non-issue of the notice under the Transfer of Property Act. An appeal by the tenant also failed but here again the above point was not taken. Thereafter the tenant filed a suit for a declaration that the order of the Rent Controller was ultra vires in that no notice to quit had been given as required by law. This plea was upheld by the learned Single Judge but was rejected in appeal. The Division Bench observed:-
“…..We agree with the learned Judge that this Court can entertain a suit to set aside an order of the Rent Controller if the Rent Controller exceeded the powers conferred on him. A Court or tribunal can, however, be said to have no jurisdiction to entertain a suit or application only if it has no jurisdiction with regard to the subject-matter of the suit or application…. But even these rules are subject to the qualification that, if the jurisdiction of the Court depends upon the ascertainment of facts and the Court, upon the facts found, holds that it has jurisdiction, then the decree of that Court cannot be ignored or set aside in collateral proceedings.”
After reference to certain other decisions of the Court, it was observed :-
“If a lessor brings a suit for eviction, he is to prove the existence of a lease, the relationship of lessor and lessee between himself and the defendant and the determination of the lease. If he fails to prove this, the plaint is not returned because the suit is one which the Court has no jurisdiction to entertain; but the suit is dismissed as revealing no cause of action….. In a suit by a landlord against his tenant for eviction, the determination of the tenancy is merely one of the constituents of the cause of action that the landlord has to prove against his tenant in order to succeed in the suit. We are of opinion that a tenant can waive notice to quit; but even if he cannot, notice has not to be proved as a condition precedent to the institution of the suit…… Mr. Srinivasa Ayyangar concedes that if a landlord filed a suit in ejectment and failed to say that the tenancy had been determined, the Court would dismiss the suit and not return the plaint. In the same way, the Rent Controller would have to dismiss the application if it were not alleged in the affidavit that notice had been given or if it found, upon hearing the parties and considering the evidence, that notice had not been given. It would follow from this, therefore, that if notice to quit was necessary it would be merely one of the issues to be decided by the Rent Controller and would not in any way affect his jurisdiction to entertain the application. That being so, if the Rent Controller did not decide that question properly, the matter would have to be raised in appeal to the Court of Small Causes and would give this court no jurisdiction to entertain a suit by the defeated party; for such a suit would be barred by S.12(4) of the Act.”
16. Again, in Manibhai Hathibhai v. Arbuthnot, (A.I.R. 1947 Bom 413) a writ petition was filed to challenge the validity of an order passed by the Rent Controller on the ground that the circumstances for the invocation of S.13(b) of the Bombay Rent, Hotel Rates and Lodging House Rates (Control) Act, 1944 had not been fulfilled. It is sufficient for our present purposes to extract the observations in paragraph 16 of the judgment :-
“16. It was sought to be argued on behalf of the petitioners that the respondent had no jurisdiction to determine the question as to whether the premises were at one time let out as a whole and then let out in parts as was sought to be contended by the applicants…. The jurisdiction of the Rent Controller, (xxx) is a statutory jurisdiction which is vested in the Rent Controller by the terms of the Act itself. A regular tribunal is established by the Act which functions in those cases where the standard rent of the premises as laid down in S.3 of the Act exceeds Rs.80 per month. The tribunal owes its existence to the Act and not to any act of the parties, and it has, therefore, jurisdiction to determine what are the cases which fall within its jurisdiction. If there is any dispute which arises between the parties as to whether the particular application falls within the jurisdiction of the tribunal, it is the tribunal which is competent to decide that dispute and determine whether the particular matter falls within its jurisdiction. If the tribunal decided it wrongly, there is an appeal provided against its decision. It cannot, therefore, be contended, as the petitioners have done, that the respondent has no jurisdiction to determine the question as to whether the premises were at one time let out as a whole and then let out in parts as contended by the applicants.”
Shri Iyer submits that the appellants’ case here is on a stronger footing than in the two decisions cited above because here, in the earlier proceedings before the Rent Controller and the Court of Small Causes, a specific point had been taken that the tenant was only a tenant of the land and not of the premises (which belonged to him) and that this contention had been specifically over-ruled by the appellate court after a consideration of the relevant material. Sri Krishnamoorthy Iyer also contended that even if it may be an arguable question as to whether the decision in the earlier petitions constitutes res judicata or not and it may plausibly be argued that it does not constitute res judicata, the question for our consideration really is whether the order passed in the earlier eviction petition can be treated as a nullity being passed by a court totally without jurisdiction. He submitted that if the tenants had filed a suit for declaration that the order passed in the earlier proceedings as a nullity that would have been bound to fail. Shri Iyer also relied on certain observations of this Court in the decisions reported as Rai Brij Raj vs. Shaw (1951 S.C.R. 145 @ 147, 150), Official Trustee v. Sachindranath (1969-3 S.C.R. 92 @ pp.99, 100), Antulay v. Nayak (1988-2 S.C.C. 602 at pp.649, 677 and 700), Trideshwar Dayal v. Maheshwar Dayal (1988 – 2 SCALE 1436 at p.1437) and Shiv Chander Kapoor v. Amar Bose (1990-1 S.C.C. 234, paras 22 and 23).
1. A very interesting question comes up for consideration in this appeal. The question to be ultimately decided falls within a very narrow compass but it is necessary to set out the facts leading to the present appeal at some length.
2. The property, which is the subject matter of the present dispute, originally formed part of an extent of land situated on Mount Road, Madras, bearing door nos. 2 and 3 and measuring 41 grounds and 2005 sq. ft. It belonged to several co-owners. These co-owners had leased out the properties under two lease deeds in favour of M/s. India Automobiles, which was then the sole proprietary concern of one of themselves, Ganshyamdas Girdhardas (G.G.) but was converted subsequently, in 1961, into a partnership concern of G.G. and his four sons. The firm and its partners are hereinafter compendiously referred to as ‘the tenants’. The first lease (Ext.P-1) was dated 22.9.1947 and related to Door No. 2 (Item No. 1 in Schedule A to the plaint). This was a property comprising of an area of 4 grounds and 151 square feet with certain buildings thereon. The rent for the premises was Rs. 150/- per month. The second lease deed (Ext.P-2), dated 3.10.1947, relating to Door No. 3 (Item 2 in Schedule A to the plaint) covered an area of 8700 sq.ft. and some building thereon. The rent as per lease deed was Rs. 200/- per month.
3. On 30.7.1953, all the co-owners of the property (including G.G.) sold the property to the United India Life Assurance Company and the New Guardian of India Life Insurance Company Ltd. In 1956, the Life Insurance Corporation of India (LIC) stepped into the shoes of these two insurance companies and became the owner of the property.
4. On 20.7.65, the LIC moved two applications (being HRC Nos. 3310 and 3311 of 1965) in the court of the Rent Controller (Sri A. Varadarajan who later became a judge of this Court) for fixation of a “fair rent” for each of the premises. The fair rent claimed was computed at Rs. 2,399.03 per month in respect of item no.1 as against the rent of Rs. 150 p.m. fixed under the lease deed. In respect of item 2 the fair rent claimed was Rs. 3266.50 as against Rs. 200 p.m. payable under the lease deed. The defendants (G.G.and his sons) filed their objections to the above applications. They claimed that, under both the lease deeds, what had been leased out to them was only a vacant land and that the superstructure had been built by them. They claimed, therefore, that they were entitled to relief under the Madras City Tenants’ Protection Act and that the Rent Control Court had no jurisdiction to fix a fair rent.
5. The Rent Controller accepted the above argument so far as item 1 was concerned. So far as item 2 was concerned, it appears that, at the time of the hearing, it was conceded before the Rent Controller that the respondents were tenants of the entire properties covered by the lease deed and that they had not constructed any of the premises thereupon. In view of this the Rent Controller dismissed H.R.C. 3310/65 relating to item no.1 and, in H.R.C. 3311/65, fixed the fair rent in respect of item no.2 at Rs. 1451 p.m. The order of the Rent Controller was dated 9.3.1966.
6. There were appeals to the Court of Small Causes. In respect of item No. 1 in HRA. 534/66, the Court, on a perusal of the sale deed dated 30.7.53 filed by the LIC before it, came to the conclusion that the buildings on the land leased under Ex.P-1 had also been conveyed to the LIC and that the LIC was entitled to seek fixation of fair rent in respect of this premises also. The fair rent fixed by the Rent Controller at Rs. 994 p.m. was upheld. The order of the Rent Controller in respect of item 2 was also upheld. It may be mentioned here that, even in certain earlier proceedings for fixation of fair rent and eviction (H.R.C. 867/73 and H.R.C. 2557/64), it had been held by the Rent Controller that item no. 1 (door no. 2) belonged to the LIC but his order of eviction had been set aside by the appellate court on some other ground. In the circumstances, the Court of Small Causes, in the appeals now being referred to (H.R.A. 534/66) did not treat the earlier decision as res judicata but came independently to the same conclusion that item no.1 belonged to the LIC. this was on 19th April, 1967. The tenants filed revision petitions against the order of the Court of Small Causes but these were dismissed on 20.11.1968.
7. After the Civil Revision Petitions by the tenant were dismissed, the LIC filed C.S. 64/1969 on the original side of the Madras High Court against the tenants for recovery of arrears of rent on the basis of the fair rents fixed, which were computed at Rs. 98,250.97 in respect of the two items of property. Further interest at the rate of 12% thereon from date of plaint to the date of decree and at 6% thereafter till the date of realisation was also claimed.
8. It may be mentioned here that the tenant filed C.S. 87 of 1972 claiming protection under the Madras City Tenants’ Protection Act but the suit and further appeals therefrom have been dismissed. Turning now to C.S.No. 54 of 1969 (which was disposed of along with C.S. No. 87 of 72 by a common judgment dated 23.10.1972), the contention urged on behalf of the tenants was that, since the subject matter of the lease under Ex.p-1 was only a vacant site, the Rent Controller had no jurisdiction to fix the fair rent in respect thereof and that, therefore, the claim in the suit for arrears of rent, based on the Rent Controller’s order in respect of the premises covered by Ex.P-1 had to fail. The Court addressed itself to this question. It came to the conclusion that Ex.P-1 did not, in law, create a valid lease between the co-owners and the tenants. After referring to the terms of the sale deed (Ex.P-3), the superstructure constructed on the land was held to have been conveyed to the vendee under the sale deed dated 30.7.1953 and to have thus vested in LIC. The Rent Controller was, therefore, held to have had jurisdiction to fix the fair rent in respect of the premises. It was, therefore, held that the plaintiff’s claim in the suit should succeed. The suit was decreed accordingly.
9. The tenants filed and appeal being O.S.A. No. 62 of 1973. The Appellate Bench confirmed the decree in respect of item no.2 subject to certain modifications which are not here relevant. However, so far as item no.1 was concerned, the Appellate Bench vacated the decree passed by the trial court. It held that there was a valid lease between the quondam owners and the tenants under Exts. p-1 & p-2. Having regard to the express recitals in Ex. p-3, the Appellate Bench held that it was impossible to hold that the buildings, which admittedly belonged to the defendants and had been constructed by them on the vacant land taken on lease under Ex. p-1, ever were or could be the subject matter of the sale under Ex. p-3. In view of this finding, it was held that the Rent Controller had no jurisdiction to entertain the application for fixation of fair rent in respect of the property which was only a vacant piece of land. In consequence, it was held, the LIC could not maintain the suit for recovery of rent based on the order made by the statutory tribunal under the Rent Control Act and claim the difference between the so called fair rent and the contract rent. The claim of the LIC for recovery of Rs. 39,224.71, as arrears of rent, in respect of item 1 was thus held to be not maintainable. O.S.A. 62 of 1973 was, therefore, allowed to that extent. The present appeal, by Special Leave granted on 3.7.1979, is from the order of the Division Bench rejecting the appellant’s claim for arrears of rent in respect of item no- 1 of the property set out in Schedule A to the plaint based on the difference between the fair rent fixed by the Rent Controller and the rent payable therefor under Ex.p-1.
10. The questions to be decided in this appeal, on the above facts, boil down to these: (1) Was the LIC the vendee only of a vacant piece of land with no title to the buildings standing on the site in item 1? (2) Is it open for the tenants to contend that the order of the Court of Small Causes in the earlier rent control proceedings deciding to the contrary and fixing the fair rent of item 1 at Rs. 994 p.m. should be completely ignored as an order passed totally without jurisdiction, although it has become final as between the parties? Two interesting aspects may be pointed out in regard to these two questions. The first is that if either question is answered in the negative, the other will not arise for consideration and the appeal will have to be allowed. But an affirmative answer to either question will necessitate an answer to the other. The second is that, though the claim in issue before us is only a money claim for arrears of rent, any decision given by us, based, as it will have to be, on the issue whether the LIC owns the superstructure or not and whether the tenants are the lessees only of vacant land or of both land and buildings, will have repercussions not only on the claim in this suit (which by now has accumulated to more than Rs. 3 lakhs) but also on any other proceedings by way of ejectment or otherwise which the LIC may have in contemplation against the tenants. The decision in this appeal will, therefore , be of great moment for the L.I.C.
11. So far as the first question is concerned, we have no doubt that the Division Bench of the High Court has come to the correct conclusion. In our view, the conclusion of the learned Single Judge that the lease Ex-P-1, executed by the co-owners of the property in favour of one of them, was invalid, was erroneous. S.5 of the Transfer of Property Act, 1882, clearly envisages transfers of property by a person to “one or more living persons or to himself, or to himself and one or more other living persons”. Whatever may be the position, in spite of this provision, in respect of a purported transfer by a person to himself alone (which is very often the position in the case of trusts) – which was considered by the House of Lords in Rye v. Rye (1962 AC 496), there is no reason to hold that a contract between a person with himself and others is invalid. The Division Bench, we think, has rightly distinguished the decisions in Girish Chandra v. Srinath(3 C.L.J. 141) and Rye v. Rye (1962 AC 496). The observations of Lord Denning, extracted by the learned Judges, are quite apposite to the situation in the present case.
12. Once this objection is out of the way, the question is whether the constructions put upon the leased land by the lessees formed part of the property conveyed to the L.I.C. Sri Parasaran pointed out that they did not and drew our attention to subsequent correspondence between the parties to show that even the LIC. had not claimed at any stage any rent in respect of the superstructures (apart from the contractual rent, which was in respect of the land) and that both parties have all along been proceeding on the footing that the superstructure on item 1 belonged to the lessees. This appears to be correct but it cannot be conclusive of the rights of the parties. We have therefore gone carefully into the terms of Ex.P.1 and Ex.P-3. They clearly make out that the superstructures put up by the lessee under Ex.P-1 were not included in the property conveyed under the terms of Ex.P-3 and that, whatever may be the rights of the LIC to evict the tenant with liberty to demolish the superstructure on the termination of the lease, it had no property in the superstructure so long as the lease subsisted. We, therefore, answer the first question posed by us in the affirmative.
13. This brings us, then, to the second, the really crucial, question posed earlier viz. whether despite the above conclusion, we are precluded, by principles of, or analogous to, res judicata, from going behind the findings to the contrary given in the earlier rent control proceedings by the Court of Small Causes which have become final on the dismissal of the C.R.P. filed thereagainst.
14. Sri. T.S.Krishnamoorthy Iyer, learned counsel for the appellant, submitted that the Courts now are precluded from going behind the findings of the Court of Small Causes in the earlier proceedings. He conceded that no legal consequences can flow from a totally void order (see,Kiran Singh v. Chaman Paswan, 1955 SCR 117 @ 121). He also conceded that there may be a difference in principle between a civil court and a court of limited jurisdiction. While the former has an inherent jurisdiction to decide a question raised about its own jurisdiction and such a decision cannot be challenged in another court after it has become final: ( See: Bhatia Cooperative Society Ltd. v. Patel (1953 SCR 185) and Nageswara v. Ganesa (AIR 1942 Mad. 675)), the latter is strictly confined to the terms of the statute creating it. But, he submitted, even the decision of a Tribunal or a Court of limited jurisdiction cannot be called in question so long as it acts within the scope of the jurisdiction conferred on it by the relevant statutes. He, therefore, invited us to peruse the provisions of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 (hereinafter referred to as the Rent Control Act). Under the said Act, he pointed out, a petition for fixation of fair rent under s.4 could be filed by either a landlord or a tenant: (Raval & Co. v. Ramachandran, 1974-1 SCC 424). This is what the LIC purported to do when it filed H.R.C. Nos. 3310 and 3311/64. When a petition under s.4 is filed, the Rent Controller, in the language of s.4 has to decide: (1) whether the applicant is a tenant in, or landlord of, the building and (2) what the fair rent of the premises should be in accordance with the provisions of the Act. In the present case both the points had been put in issue. The respondents denied that the L.I.C was the landlord or they the tenants in respect of the property. They claimed to be the owner of the superstructure and admitted tenancy only in respect of the site. The Rent Controller and, on appeal, the Court of Small Causes were therefore, called upon to give their decision on this question which was completely within their statutory jurisdiction and this decision certainly constitutes res judicata between the parties: see also, Explanation VIII to S.11 of the Code of Civil Procedure. At any rate, it is not open to one of the parties to contend that the decision given by the Court of Small Causes, which has become final between the parties, is a total nullity which can be completely ignored. It was, therefore, not open to the High Court to entertain a collateral attack on the validity or binding nature or correctness of the order of the Court of Small Causes and to consider and determine afresh the issue as to whether the LIC is the owner of the premises as claimed or not.
15. In support of his contention, counsel referred to Krishnamurthy v. Parthasarathy (AIR 1949 Madras 780) reversing the decision in the same case reported in AIR 1949 Madras 397. The appellant landlord had filed an eviction petition under the Rent Control Act without giving notice under s. 111 (h) of the Transfer of Property Act (which, in those days, was considered to be a condition precedent even to the filing of an eviction petition under the Rent Control Act) and obtained an order of eviction. In these proceedings no contention had been raised by the tenant on the non-issue of the notice under the Transfer of Property Act. An appeal by the tenant also failed but here again the above point was not taken. Thereafter the tenant filed a suit for a declaration that the order of the Rent Controller was ultra vires in that no notice to quit had been given as required by law. This plea was upheld by the learned Single Judge but was rejected in appeal. The Division Bench observed:-
“…..We agree with the learned Judge that this Court can entertain a suit to set aside an order of the Rent Controller if the Rent Controller exceeded the powers conferred on him. A Court or tribunal can, however, be said to have no jurisdiction to entertain a suit or application only if it has no jurisdiction with regard to the subject-matter of the suit or application…. But even these rules are subject to the qualification that, if the jurisdiction of the Court depends upon the ascertainment of facts and the Court, upon the facts found, holds that it has jurisdiction, then the decree of that Court cannot be ignored or set aside in collateral proceedings.”
After reference to certain other decisions of the Court, it was observed :-
“If a lessor brings a suit for eviction, he is to prove the existence of a lease, the relationship of lessor and lessee between himself and the defendant and the determination of the lease. If he fails to prove this, the plaint is not returned because the suit is one which the Court has no jurisdiction to entertain; but the suit is dismissed as revealing no cause of action….. In a suit by a landlord against his tenant for eviction, the determination of the tenancy is merely one of the constituents of the cause of action that the landlord has to prove against his tenant in order to succeed in the suit. We are of opinion that a tenant can waive notice to quit; but even if he cannot, notice has not to be proved as a condition precedent to the institution of the suit…… Mr. Srinivasa Ayyangar concedes that if a landlord filed a suit in ejectment and failed to say that the tenancy had been determined, the Court would dismiss the suit and not return the plaint. In the same way, the Rent Controller would have to dismiss the application if it were not alleged in the affidavit that notice had been given or if it found, upon hearing the parties and considering the evidence, that notice had not been given. It would follow from this, therefore, that if notice to quit was necessary it would be merely one of the issues to be decided by the Rent Controller and would not in any way affect his jurisdiction to entertain the application. That being so, if the Rent Controller did not decide that question properly, the matter would have to be raised in appeal to the Court of Small Causes and would give this court no jurisdiction to entertain a suit by the defeated party; for such a suit would be barred by S.12(4) of the Act.”
16. Again, in Manibhai Hathibhai v. Arbuthnot, (A.I.R. 1947 Bom 413) a writ petition was filed to challenge the validity of an order passed by the Rent Controller on the ground that the circumstances for the invocation of S.13(b) of the Bombay Rent, Hotel Rates and Lodging House Rates (Control) Act, 1944 had not been fulfilled. It is sufficient for our present purposes to extract the observations in paragraph 16 of the judgment :-
“16. It was sought to be argued on behalf of the petitioners that the respondent had no jurisdiction to determine the question as to whether the premises were at one time let out as a whole and then let out in parts as was sought to be contended by the applicants…. The jurisdiction of the Rent Controller, (xxx) is a statutory jurisdiction which is vested in the Rent Controller by the terms of the Act itself. A regular tribunal is established by the Act which functions in those cases where the standard rent of the premises as laid down in S.3 of the Act exceeds Rs.80 per month. The tribunal owes its existence to the Act and not to any act of the parties, and it has, therefore, jurisdiction to determine what are the cases which fall within its jurisdiction. If there is any dispute which arises between the parties as to whether the particular application falls within the jurisdiction of the tribunal, it is the tribunal which is competent to decide that dispute and determine whether the particular matter falls within its jurisdiction. If the tribunal decided it wrongly, there is an appeal provided against its decision. It cannot, therefore, be contended, as the petitioners have done, that the respondent has no jurisdiction to determine the question as to whether the premises were at one time let out as a whole and then let out in parts as contended by the applicants.”
Shri Iyer submits that the appellants’ case here is on a stronger footing than in the two decisions cited above because here, in the earlier proceedings before the Rent Controller and the Court of Small Causes, a specific point had been taken that the tenant was only a tenant of the land and not of the premises (which belonged to him) and that this contention had been specifically over-ruled by the appellate court after a consideration of the relevant material. Sri Krishnamoorthy Iyer also contended that even if it may be an arguable question as to whether the decision in the earlier petitions constitutes res judicata or not and it may plausibly be argued that it does not constitute res judicata, the question for our consideration really is whether the order passed in the earlier eviction petition can be treated as a nullity being passed by a court totally without jurisdiction. He submitted that if the tenants had filed a suit for declaration that the order passed in the earlier proceedings as a nullity that would have been bound to fail. Shri Iyer also relied on certain observations of this Court in the decisions reported as Rai Brij Raj vs. Shaw (1951 S.C.R. 145 @ 147, 150), Official Trustee v. Sachindranath (1969-3 S.C.R. 92 @ pp.99, 100), Antulay v. Nayak (1988-2 S.C.C. 602 at pp.649, 677 and 700), Trideshwar Dayal v. Maheshwar Dayal (1988 – 2 SCALE 1436 at p.1437) and Shiv Chander Kapoor v. Amar Bose (1990-1 S.C.C. 234, paras 22 and 23).
