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2016 (5) TMI 642 - PUNJAB AND HARYANA HIGH COURT

2016 (5) TMI 642 - PUNJAB AND HARYANA HIGH COURT - TMI - Entitlement to possession of the entire property including the portion in respect of which the appellant claims to be a tenant - Held that:- Even assuming that the first respondent was aware of the appellant’s use and occupation of the premises it would make no difference. It is not necessary that a party possesses or occupies a property only as a tenant. The possession and occupation may also be on the basis of a licence including a gratu .....

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the tenancy in view of Order 21 Rule 66 (2) (e) of the Code of Civil Procedure is so obvious that it would occur to anyone 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 .....

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ent 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 to consider the provisions of Section 13 of the Haryana Urban (Control of Rent & Eviction) Act, 1973. It was relied upon on behalf of the appellant to contend that .....

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s. Neeru Thakur, Advocates For The Respondent : Mr. Rahul Garg, Advocate S.J.VAZIFDAR, ACTING CHIEF JUSTICE: This is an appeal against the order and judgment of the learned Company Judge dated 08.02.2000 allowing the first respondent s application and directing the appellant to handover the vacant possession of the premises to the first respondent within two months. 2. The first respondent is the purchaser of an immovable property belonging to the 2nd respondent M/s Rubber Industries Pvt. Ltd., .....

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ession thereof as a tenant. Admittedly, the appellant at whose instance the property was brought to sale in execution proceedings did not disclose in the proclamation or otherwise and at any time prior to the sale that it claimed to be in possession of a part of the property as a tenant. 3. The question, therefore, is whether the first respondent is entitled to possession of the entire property including the portion in respect of which the appellant claims to be a tenant. The learned Judge held .....

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ucceeds 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 .....

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the mortgaged property to be sold. By an order dated 29.04.1988, the Executing Court directed warrant of sale of the mortgaged property to be issued returnable on 12.08.1988. The Official Liquidator was directed to assist in making the mortgaged property available for sale. The appellant was directed to publish an advertisement with regard to the sale of the mortgaged property in three newspapers at its costs. The learned Judge directed the proclamation for sale to be drawn at the office in acc .....

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amation merely stated that the right and interest of the company in the property will be put up for sale and sold to the highest bidder. It mentioned the details of the claim and the decree and the particulars of the mortgage deeds and the mortgaged properties. The proclamation also referred to the decree as having provided that the sale proceeds would be paid in Court and would be applied towards the payment of the decretal amount and other costs, charges and expenses as may be payable under Or .....

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8377; 16,50,000/-. The sale was confirmed by the Court on 03.11.1988 and on 08.02.1990 a certificate of sale was ordered to be issued to the first respondent. The sale certificate was thereafter issued on 26.08.1991. The first respondent filed Company Appeal No. 168 of 1991 which was disposed 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 posse .....

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e 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 tenancy. The .....

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mand. 10. On 05.11.1988 the learned Company Judge framed the following issues:- 1. Whether the Bank is in occupation of the part of the building as a tenant, if so to what effect? Onus to prove on objector. 2. Whether the objector bank is estopped from raising the plea of tenancy, as indicated in the pleadings of the parties? Onus on parties. 3. Relief. 11. The parties led oral and documentary evidence. The appellant examined four witnesses and the first respondent examined himself as the sole p .....

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rightly held that mere payment of rent does not create a relationship of landlord and tenant and that the relationship of landlord and tenant comes into existence only when there is an intention to create a demise in the property. The Supreme Court held as follows:- It was also contended that it was admitted by the respondent that rent was received and receipts for rent were granted by its agents. The use of the word "rent' is, not conclusive of the matter. It may be used in the legal .....

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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 liquidatio .....

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ion creating a tenancy had been passed or not. The record of the company was with the liquidator. It was for the appellant to have inspected the record and produced the resolution if any. Secondly, the appellant did not even make an attempt to ascertain whether such a resolution had been passed or not. No efforts were made in this regard. The appellant did not even call upon the Official Liquidator to produce such a resolution. The onus was upon the appellant to establish the tenancy. The first .....

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held in favour of the first respondent. They are factors that militate against the appellant s case that it is the tenant of the property. 16. Equally, if not more important, the appellant has not even produced any resolution by its Board of Directors or any of its authorized representative to accept a tenancy of the premises. 17. The learned Judge thereafter relied upon the correspondence between the appellant and the company-respondent No.2 for coming to the conclusion that there was a demise .....

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st running payment as per its request contained in its letter dated 22.09.1971. (B) By a letter dated 15.11.1971 the company asked the appellant to make an application to the Haryana State Electricity Board for a connection. (C ) By a letter dated 19.01.1974 addressed to the appellant, the Chairman of the company stated that the appellant had not replied to its letter and that from its silence in the matter it was assumed that the appellant had no objection to and had agreed to the increased ren .....

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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-ali .....

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receipt of rent. Based on this correspondence, the learned Judge answered issue No.1 in favour of the appellant. 19. We are unable to agree with this conclusion. Firstly, the correspondence merely refers to the payment of rent. It has no reference to the creation of a tenancy or of the intention of either of the parties to create a relationship of landlord and tenant between themselves. As held by the Supreme Court in Dr. H.S.Rikhy s case (supra), the use of the word rent is, not conclusive of .....

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ant and that the question depends upon whether there was a relationship of landlord and tenant. 20. Nothing was brought on record to indicate the creation of a tenancy. The evidence does not even indicate when the tenancy came into existence. Nor are there are any particulars or details about the creation of a tenancy. 21. The appellant examined four witnesses. PW1 was the Manager of the branch which was established on 27.12.1971. He identified the signatures on the Account Opening Form of the c .....

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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 .....

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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 the appellant. He merely made a bald assertion in his examination-in-chief that the appellant is the tenant and the rent was deposited in the account of the company and was not deposited in the first respondent s account. He admitted that he had worked in the branch. Apart from denying the case put to him that the bank w .....

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h tenancy which it failed to discharge. 27. On the other hand, the surrounding circumstances support the first respondent s case that the appellant was not a tenant of the premises. Firstly, as we have already mentioned, there is no resolution of either the appellant or of the company in liquidation agreeing to the creation of a tenancy. Further, there is no evidence indicating any attempt on the part of the appellant to ascertain whether there was any such resolution. It is reasonable, therefor .....

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lies the existence of the tenancy. 28. There is an even more important fact that militates against the appellant s case of it being a tenant. The appellant never mentioned in the course of proceedings that it was a tenant. It never even referred to the tenancy. It is only when the first respondent after purchasing the property sought possession of the premises that the appellant for the first time contended that it was a tenant. We will for the present ignore the first respondent s contention th .....

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agee 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 wa .....

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here was a relationship of landlord and tenant between the appellant and the company. 30. We will assume that the aforesaid correspondence contains admissions on behalf of the company that there was a relationship of landlord and tenant between the appellant and the company in view of the reference of demand and the payment of rent by the appellant to the company. We will assume that these admissions in the correspondence in the absence of any evidence to the contrary would justify the presumpti .....

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egards issue No.1 as well. We mentioned earlier that the appellant never disclosed its claim of tenancy in respect of the premises. Most important, the appellant failed to disclose the same even in the proceedings relating to the execution of decree No. 21/L/97 taken out by it. Rules 13 and 66 of Order 21 of the Code of Civil Procedure read as under:- 13. Application for attachment of immovable property to contain certain particulars:- Where an application is made for the attachment of any immov .....

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Proclamation of sales by public auction:- (1) Where any property is ordered to be sold by public auction in execution of a decree, the Court shall 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 suffic .....

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otice 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 the Court to enter in the proclamation of sale its own estimate of the value of the property, but the proclamation shall include the estimate, if any, given, by either o .....

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rt may summon any person whom it thinks necessary to summon and may examine him in respect to any such matters and require him to produce any document in his possession or power relating thereto. 32. Sub rule (2) of rule 66 requires the proclamation to be drawn up after notice to the decree-holder i.e. the appellant and the judgment-debtor i.e. respondent No.2. We will for the present ignore clause (c) of sub rule (2) of rule 66 which requires the proclamation to specify any encumbrance to which .....

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hing which affects the value of the property must be specified/disclosed. It can hardly be suggested that the value of a property is not affected by a tenancy created in respect thereof. The value of a property with a sitting tenant can never be the same as its value without a tenant. It is axiomatic, therefore, that clause (e) of Rule 66 (2) requires a proclamation to specify a tenancy in respect of a property to be sold in auction. Any Court would consider a tenancy to be a material thing/aspe .....

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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 tena .....

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ble to assume that the property was valued without taking into account the effect of the tenancy on its price. 34. Even assuming that the first respondent was aware of the appellant s use and occupation of the premises it would make no difference. It is not necessary that a party possesses or occupies a property only as a tenant. The possession and occupation may also be on the basis of a licence including a gratuitous licence. If it is a bare licence it can be terminated at any time. It is not .....

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ous that it would occur to anyone 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. 36. If on the other hand .....

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under sub rule (2) of Order 21 Rule 66 is to be drawn up by the Court and not by the decreeholder and, therefore, the decree-holder such as the appellant cannot be held responsible for anything stated or omitted to be stated therein is not well founded. Sub rule (2) of Rule 66 cannot 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 a .....

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