Motilal Sareogi vs Chiranjilal Khaitan

D.N. Sinha, J.—This is a second appeal by the Defendant in a suit for ejectment which was filed in the Court of the Additional Subordinate Judge, Purulia, on May 29, 1952, being T.S. No. 2/2 of 1949/52. The facts are shortly as follows: The Plaintiffs are the owners of the two contiguous plots of land comprised in Holding Nos. 178 and 179 measuring 3 bighas which have been describe in Schedule I of the plaint. The case for the Plaintiffs is that ii 1935 they leased out a vacant portion of the land namely, portion described in Schedule II of the plaint, to one Chunila Ganapat Rai under a registered document for a term of sever years. After taking the lease, Chunilal Ganapat Rai constructed rooms on a portion of the demised land. The lease having expiree in 1942, Chunilal Ganapat Rai gave up possession and the lessors re-entered upon the property in July, 1942. In the latter part o June, 1943 the Plaintiffs let out a vacant portion of Schedule II land, described in Schedule III of the plaint, to the Defendant on monthly rental of Rs. 20 according to the English calendar. It is stated that this was an oral lease which the Defendant took for carrying on a motor business. The Defendant asked for permission to erect a temporary shed, but in 1947, behind the back of the Plaintiffs constructed several structures on the land without the knowing and consent of the Plaintiffs. It is stated that in August, 1948, the Defendant was requested to remove the structures which he failed to do. On or about September 19, 1948, the Plaintiffs served a notice to quit on the Defendant determining the tenancy with effect from November 1, 1948. The Defendant did not comply with the notice, nor did he make over possession and accordingly the Plaintiffs instituted the ejectment suit mentioned above, on January 3, 1949. The reliefs asked for in the plaint are for ejectment of the Defendant in respect of the Schedule III land for possession, removal of the constructions and other reliefs. The Defendant resisted the Plaintiff''s claim on various grounds. Some of the main grounds are as follows: It was stated that there was a lease in writing for a term of 30 years. Under the terms of the lease, the Defendant was authorised to erect structures on the land for the purpose of carrying a motor business and he made constructions in terms thereof. Towards the beginning of 1947, the Plaintiffs made a proposal for the sale of the entire Schedule I land to the Defendant and the Defendant agreed to buy the land for Rs. 40,000. Thereafter, land acquisition proceedings were commenced and it was contested by the Defendant and ultimately was dropped. In the meanwhile, by agreement between the parties, the Defendant made a construction costing about Rs. 30,000. Thereafter, the Plaintiffs would not sell the property for the agreed price and there was another agreement by which the consideration money was increased to Rs. 50,000. The necessary stamp paper was purchased and a draft conveyance was prepared and the unregistered agreement of lease of 30 years was returned to the Plaintiffs, in view of the impending sale. Thereafter, the Plaintiffs went back on the agreement of sale. It was pleaded that Section 53A of the Transfer of Property Act was a bar to the Plaintiff''s claim, that they were estopped from ejecting the Defendant from the suit land and in any event if the ejectment suit was decreed, the Court should order the Plaintiffs to compensate, the Defendant for the cost of the construction. Thereafter, a number of issues were raised upon these points of dispute and although the Defendant was successful on several issues in the result the learned trial Judge held that the Plaintiffs were entitled to a decree for ejectment and consequently on May 29, 1952, the learned Additional Subordinate Judge of Purulia decreed the suit and the Defendant was ordered to deliver vacant possession of the land described in Schedule III of the plaint to the Plaintiffs within three months from the date of the decree, by removing the building and other structures on the land and in default, the Plaintiffs would be entitled to recover possession and to get the structures removed at the cost of the Defendant. From that there was an appeal heard by the Additional District Judge, Purulia. The learned Judge has dealt with the issues exhaustively and has dismissed the appeal with costs. Some of the findings may be stated here. The learned Judge has held that the story about the written agreement of lease for 30 years had not been substantiated. He did not also believe the case made out by the Defendant about an agreement for sale of the land by the Plaintiffs to the Defendant. He came to the conclusion that the Defendant did make some constructions of which the Plaintiffs were aware. He held that the Defendant was a monthly tenant and the notice to quit served upon him was valid and sufficient in law. The learned Judge observed that a suit for specific performance was barred and the Defendant was not entitled to resist ejectment u/s 53A of the Transfer of Property Act. The learned Judge also held that there was no equitable estoppel as alleged by the Defendant that could be applied in this country and that if the Defendant had made constructions, he did so with the knowledge of his rights and liabilities. In the result, the appeal was dismissed with costs.

Before us, Mr. Sen Gupta appearing on behalf of the Appellant has argued only one of the points taken in the Courts below, namely, that of estoppel. But apart from this, he has taken a point which is entirely a new one, not taken in the Courts below. This is a pure point of law and advance notice was given to the other side that the point will be agitated in Court and no objection has been taken by the Respondents. The point has been, formulated as follows: It will be remembered that the land in question was situated in Purulia. Under the Bihar arid West Bengal (Transfer of Territories) Act, 1956 (Act No. 40 of 1956) which came into operation on September I, 1956, certain territories forming a part of the State of Bihar were transferred to the State of West Bengal as and from the "appointed day", which meant November 1, 1956. The land in question in this case is situated in the transferred territory. The suit had been filed on January 3, 1949 and the judgment of the trial Court was passed on May 29, 1952 and of the first appellate Court on July 11, 1956. On September 7, 1956, a second appeal No. 1009 of 1956 was filed by the Defendant in the Patna High Court and was pending there on the appointed day. u/s 48 of the Transfer of Territories Act, the appeal which was pending before the High Court at Patna was transferred to this Court. Under Part VII of the Transfer of Territories Act, the law then in force in the transferred territories was to continue until otherwise provided by a competent legislature or other competent authority. In 1958 was passed the West Bengal Transferred Territories (Assimilation of Laws) Act, 1958. u/s 3 of the Assimilation of Laws Act, all State laws which immediately before the appointed date, extended to, or were in force in, the State of West Bengal were extended to and brought into force in the transferred territories. The laws which were previously in operation in those territories but were not in operation in the State of West Bengal were repealed. The Act was to come into operation on such date as the State Government may, by notification in the Official Gazette, appoint. The State Government by notification dated June 24, 1959, appointed July 1, 1959, as the date of the coming into force of the said Assimilation of Laws Act in the transferred territories. One of the West Bengal laws which accordingly came into operation in the transferred territories is the West Bengal Non-Agricultural Tenancy Act (W.B. Act 20 of 1949) (hereinafter referred to as the Said Act, It will be necessary to deal with the provisions of the said Act in greater detail but briefly speaking, the defence taken, which is based on this Act, is as follows: It is argued that the land in question is non-agricultural land and the tenancy is, therefore, a non-agricultural tenancy coming within the mischief of the said Act. It is urged that u/s 9(c)(iii) of the said Act, a non-agricultural tenant can only be ejected on the ground that his tenancy has been terminated by the landlord after giving six months notice in writing expiring at the end of the year of the tenancy and served on the tenant in the prescribed manner. It is also provided that under such circumstances a tenant shall hoi be liable to ejectment on such grounds except on payment of such reasonable compensation as may be agreed upon between the landlord and the tenant or if they do not agree, as may be determined by the Court on the application of the landlord or such tenant. In other words, it is argued that since the tenancy is a non-agricultural tenancy it could not be determinated by a notice to quit u/s 106 of the Transfer of Property Act, that is to say, on 15 days notices, but there would have to be a six months notice together with compensation. In this case, of course, no such notice has been served and no compensation has been allowed. The first objection is that the tenancy of the Defendant had already been terminated under the law when prevailing before the said Act was made applicable to the transferred territories. Indeed, the said Act came into force on May 15, 1949, in West Bengal and on that date, the notice to quit had already become operative. Upon this question the Defendant takes the help of Section 88 of the said Act which runs as follows:

Applications.--The provisions of this Act shall have effect in respect of all suits, appeals or proceedings including proceedings in execution for ejectment of a non-agricultural tenant which are pending at the date of commencement of this Act.

I have already mentioned that the date of commencement of this Act was May 15, 1949. On that date, the appeal was pending in the Patna High Court which has subsequently been transferred to this Court. It is argued that for this reason, namely pendency of the appeal, the Defendant is entitled to all the rights given by the said Act to a non-agricultural tenant. It is argued that although the notice to quit had become operative before the said Act came into operation, because the suit was pending on such date and the appeal was pending when the said Act was made applicable to the transferred territories, the Defendant can take advantage of Section 9 and therefore, defeat the suit for ejectment. Thus there are two points that have been taken before us. One is that the Plaintiffs were prevented by the application of the principles of equitable estoppel from ejecting the Defendant or in any event, ejecting him with compensation and secondly, no decree of ejectment could at all be passed as a result of the bar imposed by the Section 9 of the said Act read with Section 88. I will proceed to consider these points.

At the outset, I might dispose of the point of equitable estoppel, Mr. Sen Gupta argues that his client was induced to make structures on the land, not only with the permission of the landlords, but they actually encouraged him in doing so. In fact, it is alleged that the landlords sold building materials to him. He argues that there is accordingly an equitable estoppel and the Plaintiffs cannot eject him from the land and the structures. In order to consider this point several facts will have to be borne in mind. The first is that the lease was oral and the alleged written agreement for lease for 30 years was not proved. The second point is that the Defendant has not filed a suit for specific performance, which is now barred by limitation. Under these circumstances the principles laid down in Ariff v. Jadunath AIR 1931 Cal. 762 are applicable. The facts in that case were as follows. In 1913, the Appellant having verbally agreed with the Respondent to grant him a permanent lease of a plot of land at Rs. 80 per month let him into possession. Shortly afterwards, the Respondents, with the knowledge and approval of the Appellant, erected structures on the land at a cost of over Rs. 10,000. In December, 1918, the Appellant definitely refused to grant to the Respondent the agreed lease and in 1923 sued to eject him after a month''s notice to quit. The Respondent''s right to sue for specific performance became barred in December, 1921. It was held by the Judicial Committee that there being no lease made by a registered document as required by Section 107 of the Transfer of Property Act, 1882, the Appellant was entitled to eject the Respondent, with liberty to him to remove the structures. The English equitable doctrine of part performance referred to in Madison v. Alterson (1882) 8 App. Case, 467 was not applicable so as to contravene a specific provision of the Indian Law. The principle laid down in Ramsden v. Dyson (1866) L.R.I.R.L. 129 was riot applicable because the alleged contract could no longer be enforced and there was no estoppel u/s 115 of the Indian Evidence Act, 1872. The case of Walsh v. Lonsdale (1882) 21 Ch. D. 9 was also held not applicable for a similar reason.

The point has now been made clear by a Bench decision of this Court-- Subodh Chand Mitter Vs. Bhagwandas Sha, . The facts in that case were as follows: One S was the owner of a land and P was in possession as monthly tenant. S obtained a decree for arrears of rent against P. In execution of the decree one B purchased the old huts on the land for the purpose of repairing the same and living therein. S himself suggested that B should demolish the huts and raise a substantial structure and assured him that if he did so he would never be ejected from the land. S himself carried out negotiation with the Municipal Corporation to obtain necessary sanction and B erected substantial structures under the encouragement of S, but no lease was ever executed and the right to institute a suit for specific performance was barred when in 1940 S sued for ejectment of B. Following Ariff v. Jadunath (Supra) it was held that the defence of part performance u/s 53A of the T.P. Act was not available and the mere fact that Section encouraged or assisted in the construction of the buildings, did not give rise to any equitable estoppel. Applying these principles to the facts of the present case, it is clear that the doctrine of part performance contained in Section 53A of the T.P. Act does not apply and there was no principle of equitable estoppel, that could be applied. Mr. Sen Gupta has relied on a decision of the Supreme Court-- Bishan Das and Others Vs. The State of Punjab and Others, , but I do not see how that case has any application here in that case what happened was that one R, with the permission of the State, built a Dharamsala temple and shops on lands belonging to the State. The Dharamsala was built for the benefit of the travelling public and the members of the public offered worship at the temple. Upon the death, of the Petitioners were in possession and were managing the same. The S.D.O. by an executive order treated the Petitioners as trespassers arid threw them out by force. It was held that he could not do so. The Petitioners were not trespassers and could only be evicted by taking proper legal action and not by executive fiat, without even giving them an opportunity of removing the structures, which they were entitled to do under the law. Obviously, this decision has no application to the facts in the instant case, where legal proceedings have been instituted and nothing has been done by mere executive fiat.

I now come to the second and more substantial point urged in this case, under the provisions of the West Bengal Non-agricultural Tenancy Act. I have already indicated the point above and will now deal with it more fully. In effect the argument is that the suit having been filed in January, 1949 and the appeal being filed in September 1956 and having been pending when the said Act came into force, Section 88 applied and the Appellant being a non-agricultural tenant could not be evicted, unless in conformity with the provisions of the said Act. Before I deal with the argument advanced, it would be useful to set out certain dates.

3.1.1949--Suit for ejectment (T.S. 2/2 of 1949-52).

15.5.1949--The West Bengal Non-Agricultural Tenancy Act. (20 of 1919) came into force in the State of West Bengal.

29.5.1952--Suit decreed by Additional Subordinate Judge of Purulia Court.

11.7.1956--Appeal dismissed by the 1st Appellate Court.

1.9.1956--The Bihar and W.B. (Transfer of Territories) Act, 1956 (Act 40 of 1956) passed.

10.9.1956--Second Appeal admitted in Patna High Court.

24.9.1958--The West Bengal Transferred Territories (Assimilation of Laws) Act, 1958 passed, to come into force on "appointed day".

1.7.1959--The "appointed day" fixed by notification No. 5407 dated 24.6.1959.

It is argued that at the "date of commencement" of the said Act, namely May 15, 1949, the suit was pending and therefore Section 88 applied and the Appellant was entitled to the protection thereof. It is not disputed that the tenancy is a non-agricultural one and prima facie the point taken appears to be a sound one Mr. Mitra however has advanced an argument which must be carefully considered. He argues that the provisions of Section 88 really attempts at giving a retrospective operation to the said Act see Binapani Devi v. Bankim Behari 54 C.W.N. 581 and it is the established principle of interpretation that in such cases, the statute must be strictly construed and no more retrospective operation should be given than is strictly necessary. The first case cited is a Bench decision of this Court--Kanak Kanti Ray v. Kripanath Gain ILR Cal. 817. The facts in that case were as follows: The Appellant was a tenant of land which he occupied since 1896 or 1897. In 1922, his landlord brought a suit for eviction. At the time of the filing of the suit he could not claim to be a settled raiyat, but he became so by an amendment of the Bengal Tenancy Act in 1925, by which Sub-section (1A) was introduced in Section 20. It was held that, in the absence of clear words, the amendment could not be made applicable to pending proceedings. The learned Judges said as follows:

This sub-section declared that, in construing Section 20 a person shall be deemed...to have continuously held land in a village; notwithstanding that such village was defined, surveyed and recorded as, or declared to constitute a village of at a "date subsequent to the commencement of the said period of twelve years." The general rule as to the retrospective effect of a statute has been concisely stated by Lindley J. in Lawri v. Ronad (1892) 3 Ch. 402, 421. "It is a fundamental rule of English law that no statute shall be construed to have a retrospective operation unless its language is such as plainly to require such a construction and the same rule involves another and subordinate rule to the effect that a statute is not to be construed so as to have a greater retrospective operation than its language renders necessary." Now, it is plain, upon a reading of the sub-section that it is an ex post facto law and like all ex post facto legislation, is retrospective in the sense that it created for a person, who was not a settled raiyat under the law as it stood before, the status of a settled raiyat and on the other hand took away such vested rights of the landlord, as he may have had, on the ground of that person not having been a settled raiyat. In that way, no doubt, the sub-section was retrospective in its effect. But the other question at once arises and is to what extent is its retrospective operation rendered necessary by its language. In other words, it is necessary to interpret the sub-section as indicating that the sub-section was intended to control the section as it stood even before the sub-section was introduced. There are in our Opinion no words in the Act by which the sub-section was enacted which may be construed as indicating such an intention. It is well settled that in general, when the law is altered during the pendency of an action, the rights of the parties are decided according to the law as it existed when the action was begun, unless the new statute shows a clear intention to vary such rights. Maxwell, 7th ed. p. 192. In the present case no such intention appears.

The point is formulated as follows: It is argued that Section 88 brings into its mischief all suits appeals and proceedings including execution proceedings, pending on the date when the said Act commenced, that is to say on May 15, 1949, but that can only mean, suits, appeals and proceedings pending in the State or West Bengal on that date, since a State Act cannot'' have extraterritorial jurisdiction. The point may be put in another way. It is argued that Section 88 makes the provisions of the said Act applicable to suits, appeals and proceedings, pending in West Bengal on May 15, 1949. All that the Assimilation of Laws Act, 1958, provides is that Section 88 will be applicable to Purulia as and from July 1, 1959. It is an ex-post-facto legislation making the rights retrospective. Its scope cannot be extended by holding that it would also apply to suits, appeals and proceedings pending in the State of Bihar. Two answers have been given upon this point. The first is as follows: It is argued that Section 88 affects suits, appeals and proceedings pending at the "date of commencement" of the said Act. Section 3(9) of the Bengal General Clauses Act (1 of 1899) defines the word "commencement" used with reference to an Act, to mean the day when the Act comes into force. So far as the rest of West Bengal is concerned, there is no doubt that the commencement of the said Act was May 15, 1949, as it came into force in that area on that date. But what about the transferred territories? When did the said Act commence or come into force in the transferred territories? Section 3 of the Assimilation of Laws Act, 1959, is in the following terms:

Assimilation of State Laws--(1) All state laws, which immediately before the appointed day, extend to, or arc in force in, the State of West Bengal, but do hot extend to, or are not in force in the transferred territories shall as from that day, extend to or, as the case may be, come into force in, the transferred territories....

The said Act was "in force" in the State of West Bengal on the appointed day, but it came into force in the transferred territories, only on and from the "appointed day", which is July 1, 1959, Therefore, according to Section 3(9) of the Bengal General Clauses Act, the "commencement of the said Act in the transferred territories, could only be on the same day and not earlier. Mr. Mitra objects by saying that an Act cannot have two dates for its commencement. I do not see why not. If the territorial area within which an Act operates is extended, then it is not unreasonable to say that in the extended area, the Act commences when it comes into force in that area and begins to apply. To Say that an Act has commenced in an area where it has not yet come into force is absurd and violative of the definition of the "commencement" of an Act under the General Clauses Act. If, of course, the commencement of the said Act in Purulia is on July 1, 1959, then the problem is solved, because on that date, the appeal had already been transferred to this High Court, under the Transfer of Territories Act, 1956 and was pending. I think this point should be decided in favour of the Appellant. The second answer is in general terms. It is pointed out that in Section 88 there is no mention of the situs of the suit appeal or proceedings which should be pending on the date of commencement. If the legislature made Section 88 applicable to the added territories, it did with the knowledge that it had a retrospective operation and intended that the benefit of the retrospective operation should be extended to those who are brought within the net of the operation of the said Act, Otherwise, those who had suits appeals or proceedings pending in the transferred territories between the date of the earlier commencement of the said Act in May 1949 and the "appointed" day namely July 1, 1959, would lose the benefits of the local law as it existed in the transferred territories as well as the local laws in the State of West Bengal during the period, while their counterparts in West Bengal would enjoy it. This could never have been intended.

The matter may be put in another way. The said Act contains provisions some of which are prospective and others, like the provisions of Section 88, are retrospective. The legislature must be deemed to be aware of this and when it extended the provisions of the said Act as a whole to the transferred territories, the intention must have been that both the prospective as well as retrospective provisions should be operative. Since the Act came into operation sometime after its original commencement, it follows that in making the retrospective parts of the said Act operative in the transferred territories, the intention was that the Act should be deemed to have been in force retrospectively in the said territories. After all, to say that an Act operates retrospectively means that it affects rights and liabilities which have accrued even before the Act comes into operation, otherwise there is no meaning in providing for a retrospective operation. Therefore all we have got to see is whether on the date of the commencement of the Act any suit, appeal or proceeding was pending for ejectment of a non-agricultural tenant. It is immaterial to consider as to what law was applicable to such suit, appeal or proceeding before they came within the mischief of the said Act. All that Section 88 requires is that on the date of the commencement of the said Act there should be either a suit or an appeal or proceeding including proceeding in execution for ejectment of a non-agricultural tenant, pending. As soon as this condition is satisfied, it comes within the mischief of Section 88 and the non-agricultural tenant concerned is entitled to its protection. Even assuming that the date of the commencement of the'' said Act was July 1, 1959, we find that on that date an appeal was pending in respect of a decree for ejectment passed against the Appellant who is a non-agricultural tenant. In our opinion, he is entitled to the protection of Section 88. In other words, the provision of the said Act applies to the Appellant and he is entitled to lake the advantage of Section 9(c)(iii). As there has not been served the requisite notice of six months in the prescribed manner, no decree of ejectment could be passed in the suit. Also, under, the proviso, no decree for ejectment could be passed without granting compensation. If a suit for ejectment is filed now, the Appellant may have other defences under the said Act.

For the reasons given above, this point ought to succeed and the appeal must be allowed and the decree passed in the Courts below must be set aside and the suit dismissed. In view of the fact that the point upon which the Appellant has succeeded had not been taken in the Courts below, but for the first time, before us, we order that the parties should bear and pay their own costs throughout.

Masud, J.

I agree.