Surajlal Shital Prasad Sahu vs Rajendraprasad Valsudeo Sahu (dead) Through Lrs. & Ors.

Heard learned counsel for the parties and perused the record.

Being aggrieved by the Judgment and Decree dated 19.04.2007 passed by the learned 10th Ad-hoc District Judge, Nagpur, in Regular Civil Appeal No. 223 of 2003, whereby the learned First Appellate Court set aside the Judgment and Decree dated 28.02.2003 passed by the learned 8th Joint Civil Judge, Junior Division, Nagpur, in Regular Civil Suit No. 763 of 2001, dismissed the original plaintiff’s suit and allowed the counterclaim filed by the original defendant.

The appellant is submitting second appeal on the following substantial questions of law:

The dispute relates to the ownership and possession of two shop blocks situated on Plot No. 39, Khasra No. 45/3, House No. 4683, Bhawani Nagar, Nagpur. The respondent/plaintiff claimed ownership based on a registered sale deed executed in his favour by Upasrao Tirpude in 1986 for Rs. 63,000/- and alleged that he had permitted the appellant/defendant, his uncle, to occupy two shops without rent. The appellant disputed the respondent's exclusive ownership and claimed that he had actually purchased the property from Upasrao Tirpude for Rs.48,000/-, but the sale deed was executed in the respondent's name pursuant to a family arrangement, and that he had constructed the house and three shops from his own funds.

The Trial Court held that the original plaintiff was the owner of the suit plot and that the original defendant was in permissive possession of two shops, and accordingly decreed the suit for possession while dismissing the counterclaim. The First Appellate Court upheld the plaintiff's ownership over the plot but held that the defendant had established his ownership over the shop blocks on the basis of their construction and possession; accordingly, it set aside the Trial Court's decree, allowed the counterclaim, and dismissed the suit.

Learned counsel for the appellant submitted that the learned First Appellate Court committed an error in recognising independent ownership of the shop structures in favour of the original defendant, deceased Rajendraprasad Sahu, when no independent document of title had been produced. It was submitted that the registered sale deed stood in the plaintiff’s name and that the finding of separate ownership of the structures was not supported by any registered instrument.

The counsel further submitted that construction bills, municipal tax receipts and oral evidence could not, by themselves, establish ownership of immovable property. Such evidence might indicate expenditure towards construction, payment of taxes or possession, but it would not necessarily establish a legal right of ownership. Reliance was placed on Suraj Lamp & Industries (P) Ltd. v. State of Haryana, (2012) 1 SCC 656; State of H.P. v. Keshav Ram, (1996) 11 SCC 257; and R.V.E. Venkatachala Gounder v. Arulmigu Viswesaraswami & V.P. Temple, (2003) 8 SCC 752.

It was further submitted that the First Appellate Court had rejected the original defendant’s claim that he had purchased the plot in the plaintiff’s name under a family arrangement. Having rejected that claim, the Court could not have recognised the original defendant’s independent ownership of the structures without identifying any separate legal basis for such ownership. According to the appellant, the finding of dual ownership of the land and structures was, therefore, legally unsustainable.

Learned counsel also relied upon Venkatesha v. K.M. Venkatamuniyappa (D) through LRs., 2026 SCC OnLine SC 1331, and Bachhaj Nahar v. Nilima Mandal, (2008) 17 SCC 491, to submit that a Court cannot grant relief on a case that was neither pleaded nor established in accordance with law. It was argued that the First Appellate Court could not introduce a new basis for ownership while reversing the findings of the trial Court.

Per contra, learned counsel for the respondents supported the judgment and decree passed by the First Appellate Court. It was submitted that the findings were based on the oral and documentary evidence on record and that the High Court could not reappreciate the evidence in a Second Appeal merely because another view was possible.

It was submitted that the original defendant had specifically stated that he had constructed the shop blocks and had incurred expenditure for that purpose. The construction bills were produced on record, and their genuineness was not disputed in cross-examination. The municipal tax receipts also showed payment of taxes in respect of the shop blocks. It was, therefore, submitted that the First Appellate Court had properly considered the evidence and its findings did not give rise to any substantial question of law.

Learned counsel for the respondents further submitted that the objection regarding court-fee was without substance because the suit and counterclaim arose from the same proceedings and were decided by a common judgment. Reliance was placed on Shankar Masu Dokare v. Shobha Subhash Dokare and Another, 2014 SCC OnLine Bom 1859, and Narhari v. Shankar, AIR 1953 SC 419; 1950 SCR 754. Reliance was also placed on Vijay Arjun Bhagat and Others v. Nana Laxman Tapkire and Others, (2018) 6 SCC 727, and Ramesh Chand v. Om Raj and Others, 2022 SCC OnLine HP 2094, regarding the scope of jurisdiction under Section 100 of the Code of Civil Procedure, 1908, and the principles governing appeals arising from suits and counterclaims.

Having considered the submissions on behalf of the parties, this Court finds it necessary to examine the nature of the counterclaim filed by the original defendant. Under Order VIII Rule 6-A of the Code of Civil Procedure, 1908, a defendant may raise a counterclaim against the plaintiff, subject to the conditions prescribed by law.

In the present case, the original defendant claimed that he had purchased the plot from Upasrao Tirpude on 15.12.1986, but the sale deed was executed in the name of the original plaintiff pursuant to a family arrangement. He further claimed that he had constructed the shop blocks from his own funds and, on that basis, sought possession of the shops. However, during the proceedings before the First Appellate Court, the claim concerning ownership of the plot was given up. The claim that remained for consideration was, therefore, the claim concerning the shop structures and the alleged right of the original defendant to possess them.

The counterclaim did not seek ownership of the entire plot as its surviving relief. It was directed towards possession of the shop structures. Therefore, the court must examine the question of ownership of the plot separately from the question of the original defendant’s entitlement to possession of the shops. The rejection of the original defendant’s claim to the plot does not, by itself, determine the counterclaim. Equally, the fact that the counterclaim concerned only the shops does not automatically establish an independent right of ownership over those structures.

The original defendant was required to establish the legal basis of his claim to possession of the shop structures. Merely asserting that he had spent money on construction could not, by itself, confer ownership or an enforceable right to remain in possession against the person holding title to the land. The Court was required to consider whether the original defendant had established any agreement, arrangement, grant or other legally recognised basis under which he could claim possession of the structures independently of the title to the plot.

The evidence relied upon by the original defendant consisted principally of his oral testimony, bills relating to the purchase of construction materials and municipal tax receipts. The First Appellate Court referred to the bills marked as Exhibits 43-A, 43-B and 53-C to 53-J, which related to the purchase of construction materials in 1995. It also considered the application made to the Municipal Corporation and the tax receipts marked as Exhibits 55-D to 55-G. These documents may indicate expenditure on construction and payment of municipal taxes. However, they do not, by themselves, establish ownership of the structures or a legal right to claim possession against the holder of the registered sale deed.

The First Appellate Court was, therefore, required to distinguish between proof of expenditure on construction and proof of a legally enforceable right to the shop structures. The fact that the original defendant might have purchased building materials or paid municipal taxes could not dispense with the requirement of establishing the legal basis of his counterclaim. In the absence of evidence establishing such a right, those circumstances alone could not justify a decree for possession in his favour.

The original defendant had also asserted that he had actually purchased the plot but caused the sale deed to be executed in the name of the original plaintiff. This assertion, in substance, raised a claim of benami ownership. The alleged transaction took place on 15.12.1986, and the suit was instituted in 2001. The legal effect of the plea must be examined in the light of the applicable provisions of the Prohibition of Benami Property Transactions Act, 1988, including Sections 2(9) and 4, as applicable to the transaction and proceedings, and the principles explained by the Supreme Court in R. Rajagopal Reddy v. Padmini Chandrasekharan, (1995) 2 SCC 630.

The original defendant did not establish his alleged ownership of the plot through any registered instrument in his favour. On the contrary, the registered sale deed stood in the name of the original plaintiff. The original defendant’s counsel also gave up the claim concerning ownership of the plot before the First Appellate Court. In these circumstances, the original defendant’s allegation that he had provided the consideration for the purchase could not be accepted as sufficient proof of ownership of the plot. The statutory bar applicable to a claim founded on an alleged benami transaction must also be considered before any such claim can be recognised.

The claim concerning the shop structures cannot, however, be treated as a benami claim merely because the original defendant had earlier asserted that he purchased the plot benami. The two claims rest on different factual and legal foundations. Nevertheless, after the claim concerning the plot was given up, the original defendant was required to establish an independent and legally enforceable basis for the relief sought in the counterclaim. The evidence of construction expenditure and payment of taxes, without more, did not establish such a right.

The principle that ownership of land and ownership of a structure may, in appropriate circumstances, vest in different persons does not assist the original defendant unless the facts establish a legally recognised basis for such separation. No such right can be presumed merely from the fact that a person claims to have constructed a building on land standing in another person’s name. The issue is not whether separate ownership is legally impossible in every case, but whether the original defendant established the particular right asserted by him in the present proceedings.

The appellant’s reliance on Suraj Lamp & Industries (P) Ltd. v. State of Haryana, (2012) 1 SCC 656, State of H.P. v. Keshav Ram, (1996) 11 SCC 257, and R.V.E. Venkatachala Gounder v. Arulmigu Viswesaraswami & V.P. Temple, (2003) 8 SCC 752, must be considered in the context of the distinction between title, possession and the evidentiary value of documents. Construction bills and municipal tax receipts may be relevant circumstances, but they are not conclusive proof of title. The original defendant was required to establish the legal right on which his claim to possession was founded.

The principle laid down in Bachhaj Nahar v. Nilima Mandal, (2008) 17 SCC 491, is that a Court cannot grant relief on a case that was neither pleaded nor properly in issue. In the present case, the original defendant pleaded that he had incurred expenditure on construction and sought possession of the shop structures. The question, therefore, is not simply whether the relief was outside the pleadings, but whether the pleaded facts and the evidence established a legally enforceable right to the relief granted. Evidence of expenditure cannot substitute for proof of the legal basis of the claim.

As regards the maintainability of the Second Appeal, Section 100 of the Code of Civil Procedure, 1908, permits interference where a substantial question of law arises from the judgment and decree under challenge. The appellant cannot succeed merely by asking this Court to reassess the evidence. However, where the decree rests on the proposition that expenditure on construction and payment of municipal taxes, without proof of a legally enforceable right, are sufficient to establish entitlement to possession, the legal correctness of that approach may be examined under Section 100 CPC.

In view of the above discussion, the appellant has failed to establish that the judgment and decree passed by the First Appellate Court suffer from a substantial error of law warranting interference under Section 100 of the Code of Civil Procedure, 1908. The substantial questions of law are answered accordingly.