TMI Blog2016 (5) TMI 642X X X X Extracts X X X X X X X X Extracts X X X X ..... one especially a party such as the appellant who has the benefit of legal advice. We would not assume mala fides on the appellant’s part. If the necessity to specify the tenancy is obvious and if we are not to assume mala fides on the part of the appellant bank, it would follow that had the appellant actually been a tenant of the property it would have disclosed the same. That it did not do so is a strong indication that it was not a tenant. The appellant thereby by its own act and deed led the first respondent to believe that it did not possess any tenancy rights in respect of the property. The learned Judge, therefore, rightly held that the appellant is estopped from contending to the contrary. The first respondent or any auction purchaser would not be able to plead an estoppel against a third party who or which is not responsible for any incorrect statement or a failure to mention the relevant fact in the execution proceedings. The estoppel can certainly be pleaded against the decree holder who fails deliberately or otherwise to mention/disclose the right that it claims to have in respect of the property to be sold in execution. In these circumstances, it is not necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceedings. The appeal is against the latter finding. The first respondent has filed cross objections challenging the finding that the appellant is a tenant in respect of a portion of the property. We have dismissed the appeal and allowed the cross objections. In the result the first respondent succeeds in obtaining possession of the entire property. 4. The 2nd respondent i.e. the company in liquidation (hereinafter referred to as the company) availed financial facilities from the appellant to secure the repayment of which it mortgaged inter-alia the property which is the subject matter of these proceedings. The company having failed to pay its dues, the appellant filed a mortgage suit on 15.09.1980 for recovery of an amount of about ₹ 23 lacs. During the pendency of the suit the company was by an order dated 03.03.1987 directed to be wound up and the Official Liquidator of the company stood appointed as the liquidator. The Company Court, however, permitted the bank to continue the suit. The suit was, however, transferred to the file of the Company Court and was registered as Company Petition No. 29 of 1982. The suit was decreed. It is in execution of this decree that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed of with an order directing the official liquidator to deliver the possession of the property within three weeks from 31.10.1991. 8. The official liquidator, however, reported that the appellant was in possession of the premises and that the first respondent had, therefore, refused to take over the property. The first respondent, therefore, filed the said Company Application No. 104 of 1992 for an order directing the official liquidator to deliver the possession of the property or for an order directing the Sub Judge, Sonepat to execute the warrants of possession for delivery of possession of the property to the first respondent. The appellant filed a written statement contending inter-alia that the first respondent was not entitled to vacant possession of the premises as it was in occupation therefore as a tenant. The appellant claimed that there existed a relationship of landlord and tenant between the first respondent and itself which would continue qua the first respondents upon their having purchased the property at the auction. The first respondent filed a rejoinder inter-alia stating that in the mortgage suit the appellant had not mentioned the existence of the alleged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e made in this connection to paragraphs II 93 and 11 94 of Halsbury's Laws of England (Third Edition, Vol. 23) at pages 536-537. Hence, the use of the term rent' cannot preclude the landlord from pleading that, there was no relationship of landlord and tenant. The -question must, therefore, depend upon whether or not there was a relationship of landlord and tenant in the sense that there was a transfer of interest by the landlord in favour of the tenant. emphasis supplied . 14. The learned Judge firstly rejected the contention on behalf of the first respondent that there was no resolution passed by the company in liquidation creating a tenancy. The learned Judge accepted that the company would normally pass a resolution creating a tenancy but did not consider the absence of such a resolution as a factor in first respondent s favour observing that it was not possible at this stage to find out whether such a resolution had been passed or not as the company had been wound up. 15. We are unable to agree with these findings. We do not see how the company having been wound up it was not possible to find out if a resolution creating a tenancy had been passed or not. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant had no objection to and had agreed to the increased rent of ₹ 1250/- per month . The letter further stated that henceforth the company would be charging from the appellant monthly rent of ₹ 1250/- per month w.e.f. 01.02.1974. The letter concluded by requesting the appellant to pay the company increased rent w.e.f. 01.02.1974. (D) The learned Judge noted that there was internal correspondence of the bank in which its Regional Manager wrote to a Branch Manager that it cannot accede to the demand of increased rent. (E) By a letter dated 03.03.1975 addressed to the appellant, the Chairman of the company stated that the appellant would be required to pay an amount of ₹ 100/- on account of electricity consumption in addition to the personal monthly rent of ₹ 850/- for the banks premises constructed/provided by us . The letter further stated that this had been agreed upon to settle the issue of rental enhancement . (F) Lastly the learned Judge referred to a letter addressed by the company to the appellant stating inter-alia that since it had rented the building, there had been no enhancement of rent; that as per the prevailing rent in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of the lease except as to the rent. He was unable to give any particulars in respect thereof. He confirmed that he did not recollect the terms and conditions. 22. This witness s evidence, therefore, does not establish the tenancy. He did not even suggest that any lease deed had been executed to his knowledge. He fairly admitted that he did not know the terms and conditions of the lease. His reference to the rent was only on the basis of the letter which he stated was signed in his presence. 23. PW2 served the bank. He identified certain signatures on the letters. He, however, knew nothing of any lease. He did not even suggest that he knew anything about the existence of the lease or the relationship of landlord and tenant. He merely identified the signatures on the correspondence. His evidence, therefore, cannot possibly establish the existence of a tenancy. 24. PW3 was a Daftri-cum-Record Keeper with the appellant. He merely stated that he had seen the documentary evidence. His evidence goes no further then. Understandably this witness was not cross-examined further. He did not even purport to suggest that there was any tenancy. 25. PW4 was the Chief Manager of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereof. However, the appellant not having referred to the tenancy at all material times indicate as a matter of fact that its possession of the premises was not as a tenant thereof. This is not a case where the appellant filed the execution proceedings and brought the property to sale in execution of a decree and where a third party claimed to be a tenant in respect thereof. This is a case where the appellant being the mortgagee conducted the entire proceedings leading to the sale of the property including the preparation of the proclamation of the sale and never once during the course of these proceedings contended that it was the tenant of the premises. Whether it was estopped from raising a case of tenancy or not is a separate matter. This conduct indicates and in any event justifiably raises the presumption that the appellant was not a tenant of the premises. It is reasonable to presume that if the appellant was a tenant of the premises it would have said so at the first instance or in any event at least at some stage especially in the proclamation of sale. It having not done so indicates that it was not a tenant. 29. Even if any of the above factors by themselves do not mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause a proclamation of the intended sale to be made in the language of such Court. (2) Such proclamation shall be drawn up after notice to the decree holder and the judgment-debtor and shall state the time and place of sale, and specify as fairly and accurately as possible, (a) the property to be sold [or, where a part of the property would be sufficient to satisfy the decree, such part] (b) the revenue assessed upon the estate or part of the estate, where the property to be sold is an interest in an estate or in part of an estate paying revenue to the Government; (c) any encumbrance to which the property is liable; (d) the amount for the recovery of which the sale is ordered; and (e) every other thing which the Court considers material for a purchaser to know in order to judge of the nature and value of the property: [Provided that where notice of the date for setting the terms of the proclamation has been given to the judgment-debtor by means of an order under rule 54, it shall not be necessary to give notice under this rule to the judgment-debtor unless the Court otherwise directs: Provided further that nothing in this rule shall be construed as requiring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not any special value in respect thereof. In the present case that would makes no difference. A tenancy substantially affects the monetary value of any property. 33. There is yet another fact that belies the appellant s case that it is a tenant of the property. It is the fact that the property was put to sale and was sold without accounting for the tenancy. There is nothing to indicate that the property was sold at a price which took into consideration the value of the tenancy. The burden is upon the appellant to establish the tenancy. The appellant also alleges that the first respondent was aware of the tenancy as the first respondent was aware of the appellant s possession in respect of the premises. One of the important factors or indications to establish the tenancy is the value of the property. The appellant could have adduced evidence to establish that the first respondent purchased the property at the auction at a substantially lower price on account of the tenancy. The appellant has not produced any evidence to this effect. Nor is there anything on record which even suggests that the appellant purchased the property at a lower price after discounting the value on accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be read in isolation. It must be read inter-alia with sub rule (3) of Rule 66. It requires the application for an order for sale to be accompanied by a statement signed and verified in the manner prescribed so far as they are known and can be ascertained by the person making the verification the matters required by sub rule (2) to be specified in the proclamation. We have already held that the tenancy is a matter that was required by clause (e) of sub rule (2) to be specified in proclamation. The application for an order of sale was made by the appellant. It was mandatory, therefore, for the appellant who verified the application to specify the same in the statement signed and verified under sub rule (3). The appellant failed to comply with this mandatory requirement. 40. Whether the appellant failed to mention the tenancy deliberately or inadvertently makes no difference. The appellant thereby by its own act and deed led the first respondent to believe that it did not possess any tenancy rights in respect of the property. The learned Judge, therefore, rightly held that the appellant is estopped from contending to the contrary. The first respondent or any auction purchaser wo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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