Judgment:
B.S.A. Swamy, J.
1. The Defendants 1 and 2 in OS No. 57 of 1984 are the appellants before this Court. Both the Courts concurrently disbelieved the plea set up by them and decreed the suit. Hence this second appeal.
2. The main contention raised by Mr. Vilas V. Afzulpurkar, the learned Counsel for the appellants in this second appeal is that both the Courts below ought to have held that the plaintiff - first respondent herein impliedly surrendered his tenancy over the suit schedule mulgi by his conduct and ought to have dismissed the suit. The undisputed facts of the case are that the suit schedule mulgi abutting main road admeasuring 200 Sq.ft forms part and parcel of whole mulgi bearing No. 15-9-360 ad measuring 460 sq.ft. situated in Muktiar ganj, Hyderabad and the first respondent herein and his predecessor in title were the tenants of the entire mulgi for over 75 years. It is also their case that this is the wakf property endowed to Hazi Tippukhan Bahadur. As the plaintiff was not having finances to do business he seemed to have entered into a partnership with Defendants No. l and 2 along with another person on 12-9-1977 and did business in pulses and grains under the name and style of Mahavir Traders. Subsequently, in the year 1979, the other person retired from partnership and in those circumstances a fresh deed of partnership was executed between the first respondent and the appellants herein on 26-10-1979. As per the terms of the- partnership the capital required for carrying on business shall be invested by the appellants herein on such terms and conditions to be agreed between the partners from time to time and the books of accounts shall be maintained in regular course of business and shall be closed by filing profit and loss account every year. The accounting year is from Diwali to Diwali each year. Under Clause 7 of the Partnership deed the sharing of profits and losses are specified which is extracted below:
'7. Profits and/or losses arising out of the business shall be divided amongst or borne by the partners as the case may be, in the following proportion:--------------------------------------------------------S.No. Name of the Partner Share in the case of profit or loss --------------------------------------------------------1. Sri Mangilal 35 40 2. Sri Badrilal 40 55 3. Sri Madhavaiah 25 5 ----- -----100 100--------------------------------------------------------
Some disputes arose between the parties and the first respondent herein issued a legal notice dated 9-10-1983 dissolving the partnership firm with effect from 9-10-1983. He also made it clear that the firm shall not carry on any business till the accounts are finalized. He also stated that the business has been carried on with his leave and licence and in consideration of his allowing the premises to be used for the purpose of business he was given specified share in profits and losses. Since the partnership business came to an end he is entitled to take possession of the mulgi and to keep the same under his lock and key and can be used for his own use. From the pleadings it came to light that on 1-12-1983 the appellants herein obtained a lease deed from the second respondent herein who happened to be Secretary of the Wakf Board. Having come to know of this the first respondent filed a suit OS. No. 57 of 1984 on the file of the IV Additional Judge, City Civil Court, Hyderabad for declaration that the leasehold rights in the suit premises which forms part of bigger mulgi bearing No. 15-9-360 continue to vest in the plaintiff and for recovery of possession from the Defendants 1 and 2 and also for recovery of past and future mesne profits from them. The suit was resisted by the appellants as well as the second respondent herein by contending that immediately after dissolution of the partnership accounts were settled and the first respondent herein has to pay about Rs. 12,000/- to the appellants herein in lieu over and above the profits drawn by him. For the excess amount drawn by him from the partnership business, he agreed to attorn tenancy in favour of the appellants and all of them approached the second respondent for attornment of the tenancy. Ultimately on 1-12-1983 second respondent executed a fresh lease deed in favour of the appellants herein. Hence the suit is liable to be dismissed. Both the Courts considering the oral and documentary evidence concurrently held that the plea of the appellants herein that the accounts of the partnership were settled and first respondent owed Rs. 12,000/- to them over and above the amounts is not true. Likewise both the Courts also disbelieved the contention of the appellants that the first respondent agreed to attorn the tenancy in favour of the appellants in lieu of the amount payable by him. The plea of the second respondent is that all the three persons i.e., the appellants and the first respondent approached the second respondent seeking attornment of the tenancy was also disbelieved by the two Courts below. Having taken the said view they decreed the suit as prayed for and granted past and future mesne profits at the rate of Rs. 200/- per month.
3. In the second appeal Mr. Vilas V. Afzalpurkar appearing for the appellants strenuously contends that the very conduct of the first respondent in not filing a suit for rendition of accounts and approaching the third respondent proves that the plea raised by his clients is a bona fide one, the Court ought to have felt that there was settlement of accounts of the partnership firm. I am afraid that I cannot agree with the contention raised by the learned Counsel for the appellants.
4. It is seen from Ex.A4, the legal notice the plaintiff-first respondent herein clearly informed the defendants that unless the accounts of the partnership firm are settled the appellants cannot carry on business in the name of the firm. If really accounts are settled, the appellants being well versed with business they would not have kept quite and the terms of the settlement would have been reduced to writing or at least they would have obtained a receipt from the first respondent to the effect that the accounts are settled and the first respondent herein owes about Rs. 12,000/- to these appellants and he has attorned he tenancy in lieu of the same. No such document was executed by the first respondent herein. It is also interesting to note that when serious disputes have arisen between the partners definitely some mediations would have taken place for settlement of accounts. If the accounts are really settled due to mediation the appellants would have definitely examined one or two mediators to prove their claim. That was also not done in this case. The main argument of Mr. Vilas V. Afzal Purkar is that the entires in Exs.B2 to B.22, account books, are admitted by the first respondent and the admission clearly proves that he has drawn about Rs. 12,000/- in excess of the profits payable to him in the business. If we peruse the evidence of the first respondent it is seen that generally he was taking about Rs. 400/- to 500/- every month and at times he might have taken more amount. As per Clause 7 of the agreement he is entitled to claim 25% share in profits of business from the date the business came into existence till partnership is dissolved by the first respondent. Except marking some entries in the ledgers relating to withdrawals by the respondent, the appellants did not produce any evidence to show the profit and loss account for every year and after receiving the amount due to the first respondent he owes an amount of Rs. 12,000/- only. Hence it cannot be definitely said that the first respondent is liable to pay this Rs. 12,000/- to the appellants herein. Assuming for a moment that there is dissolution of trade in the building by the appellants nothing prevented the appellants from filing suits for recovery of the amount from the first respondent. The first respondent filed suit for declaration of lease hold rights of the mulgi as the possession continues with him. Since the events have taken in quick succession i.e., notice of dissolution was given on 9-10-1983 and on 1-12-1983 the appellants-defendants have entered into agreement with the second respondent herein and executed a fresh lease deed and in January, 1984 the plaintiff-first respondent herein filed a suit against them. Merely on the ground that the first respondent did not file a suit for rendition of accounts we cannot jump at the conclusion that the plea raised by the appellants that there was settlement of accounts is true and a bona fide one. Perhaps the first respondent might have thought that when once he goes to the Court seeking rendition of accounts the appellants may show losses in the business and they may ask him to reimburse them to the extent of his share or since as he has not invested any money in carrying on business he might have felt that whatever amount he received serves his purpose. Hence both the Courts rightly held that the plea of settlement of accounts after issuance of legal notice Ex.A.4 as pleaded by the appellants herein is not true and genuine one.
5. Nextly the Counsel vehemently contended that the Courts ought to have held under Section 111-F of the Transfer of Property Act there should be an implied surrender by virtue of the conduct of the first respondent. In support of his contention he cited a decision in P.M.C. Kunhiraman Nair v. P. Naganatha Iyer, : [1992]3SCR371 , in which their Lordships of the Supreme Court observed in Paragraph 10 is as follows:
'under Clause (f) of Section 111 of the Transfer of Property Act, 1908, implied surrender is a mode for determination of a lease of immovable property. In English Law, delivery of possession by the tenant to a landlord and his acceptance of possession effects a surrender by operation of law. It is also called implied surrender in contradistinction to express surrender which must be either by deed or in writing. It has been held that directing the occupier to acknowledge the landlord as his landlord, i.e., to atom to the landlord, is a sufficient delivery of possession by the tenant to the landlord. It has also been held that receipt of rent from a person in possession may be evidence of the landlord's acceptance of him as tenant, whether he is a stranger, or whether he was already in possession as sub-tenant. (See: Halsbury's Laws of England, 4th Edn., Vol.27, Paras 444, 445, 446 and 450; and Note (1) to Para 446.) Under the illustration to clause (f) of Section 111 of the Transfer of Property Act, there would be an implied surrender of the former lease if a lessee accepts from his lessor a new lease of the property leased to take effect during the continuance of the existing lease. The said illustration is, however, not exhaustive of the cases in which there may be an implied surrender of the lease. Just as under the English Law, there can be an implied surrender under the law of transfer of property in India, if the lessor grants a new lease to a third person with the assent of the lessee under the existing lease who delivers the possession to such person or where the lease directs his sub-tenant to pay the rent directly to a lessor (See Konijeti Venkayya v. Thammana Peda Venkata Subbarao, AIR 1957 A.P. 619 at pp. 624 and 625; and Noratmal v. Mohanlal, AIR 1966 Raj 89 at pp.90 and 91)'
From the facts of the case therein it is seen that the Respondents 1 to 5 after death of their father entered into an agreement with the appellant on 7-2-1954 whereunder the appellant advanced Rs. 4,500/- to Respondents 1 to 5 and the respondents entrusted the management of the mill to the appellant on payment of Rs. 300/- per month out of which Rs. 125/- was to be appropriated towards the advance given. But they could not entrust the management of the mill before 5th March, 1954 and as such they entered into a fresh agreement on 13-4-1954 modifying the terms of the previous agreement that was entered into between the respondents and the appellant. From the above it is seen that any implied surrender in contra distinction to surrender must be either by deed or in writing and if the lessor grants a new lease to a third person with the assent of the lessee under the existing lease who deliveres the possession to such person or where the lease directs his sub-tenant to pay the rent directly to a lessor. Here in this case the Counsel stressed on the point that as per the evidence of second respondent herein the first respondent also accompanied the appellants herein and requested him to attorn the tenancy. The fact of approaching the second respondent along with the appellants was flatly denied by first respondent in the witness box. There remains the solitary testimony of the second respondent to that effect. If we examine the evidence given by him in the witness box under the present lease deed also the appellants have to pay Rs. 200/-per month for a portion of the mulgi. While as per the lease deed was executed by respondent the rent payable is Rs. 400/-for the entire mulgi. Admittedly the total extent of the mulgi is about 480 Sq.ft. and the suit portion of the mulgi relates to 200 Sq.ft abutting the main road. Since about 280 Sq.ft. area of the mulgi still remains in the hands of the first respondent, second respondent comes up with the plea that he has given notice to the first respondent fixing the rent for rear portion of mulgi at Rs. 75/- per month. But no evidence whatsoever is forthcoming i.e., the alleged notice said to have been given by the second respondent has neither seen the light of the day nor a suggestion was made to the first respondent when he was in the witness box that he was paying Rs. 75/-towards rent for rear side of the mulgi or second respondent initiated proceedings for recovery of the rent by initiating legal proceedings. Nextly the second respondent deposed that initially first respondent and appellants came to him and the first respondent told him that he is surrendering his tenancy in favour of the appellants because he is due to pay the appellants under the business accounts. The second respondent categorically admitted in the witness box that 'I have not taken any letter or document executed by plaintiff acknowledging that he is relinquishing his lease hold rights in the suit schedule property after the execution of the lease deed in favour of first and second defendants. I did not communicate the fact of execution of the lease deed in favour of first defendant to the plaintiff. Witness adds: Plaintiff came and asked me whether I have executed the rental deed in favour of first defendant. I informed him orally and I said 'Yes' '. From this it is evident that first respondent has neither given any letter giving up leasehold rights over the property or is a party to the execution of the fresh lease deed in favour of the appellants. The second respondent executed lease deed in favour of the appellants behind the back of the first respondent. Having come to know of the execution of the lease deed first respondent came and approached the appellants to ascertain the truth and otherwise of the fact. The appellants informed the first respondent that they have already got a lease deed in their favour. A man may speak lies but documents does not speak lie. Ex.A-4 is the legal notice issued by him and the relevant portion of the notice is extracted as hereunder :
'It is further represented before me that by virtue of Clause 12 of the said partnership deed the firm's business premises bearing No. 15-9-360, Muktiar Gunj, Hyderabad, belongs to my client in whose favour there is a tenancy in which the partnership has no right or concern whatsoever and the business has been carried on with the leave and licence and in consideration of my client allowing the premises to be used for the purpose of the business. As such, my client does not wish the partnership to continue and the same shall stand dissolved with effect from today, i.e., 9-10-1983, and my client is entitled to refuse to allow you to carry on the business in the said premises since my client is no longer a partner of the said firm hereafter. He is entitled to the possession and custody and to keep the same under lock and key and to use the same for his own personal business. In the stocks as on this day i.e., 130 bags of redgram and Bengal-gram and 10 bags of sugar and other foodgrains and also in the assets of the firm my client has got a share according to the partnership.
You are, therefore, hereby called upon to surrender the possession of the premises bearing No. 15-9-3 60(front portion), Muktiar Gunj, Hyderabad to my client for his own personal business. You are not entitled to carry on the business in the name of the partnership without my client's consent and being partner in the said premises. My client is entitled to the lock and key of the said premises.
You are accordingly informed.'
The above portion of the legal notice clinches the issue beyond doubt. In the beginning itself even at the time of revoking the partnership first respondent made his intention very clear that he wants to get possession of the mulgi and appellants have no business to continue the business after dissolution of partnership as they were doing business as licensees. The first respondent categorically reiterated this intention in the cross-examination in so many words and it is highly impossible to believe that he attorned the tenancy orally. If there is any truth in the version of appellants or second respondent, atleast the second respondent would have insisted the first respondent to sign as a witness on the lease deed. That was not done. Hence I have no hesitation to hold that the second respondent in collusion with the appellants brought into existence a fresh lease deed behind the back of first respondent to defeat his tenancy rights over the mulgi.
6. Nextly, Mr. Vilas V. Afzal Purkar strenuously contended that the property is governed by Wakf Act and the Rent Control Act has no application to the said mulgi and the tenancy is oral from month to month and first respondent cannot claim any tenancy rights over the suit schedule mulgi and cannot claim declaration of lease hold rights over the mulgi. The fact remains that from his fore fathers the mulgi is under their occupation and even if the tenancy has no statutory recognition, the second respondent cannot throw him out of the mulgi without due process of law and he cannot take law into his own hands or try to circumvent the rights of the parties by resorting to clandestine methods.
7. Nextly, Mr. Vilas V. Afzal Purkar contended that the property belongs to the trust and any suit filed against the Secretary without making the trust a party-defendant the suit is not maintainable in law. Admittedly the Wakf properties are administered by the Wakf Board constituted under the Act. It is not the case of second respondent that as per the resolution of the Board he entered into a lease agreement with the appellants. He on his own volition entered into agreement without there being any authority vested in him. As the very act of him is not legal, first respondent is justified in filing a suit making the second respondent as third defendant in favour of the appellants and for that the Court cannot find fault with him. At any rate on that ground also first respondent cannot be thrown out of the mulgi. Viewed from any angle I find no merit in this second appeal and it has to fail.
8. Accordingly the second appeal is dismissed as devoid of merits and the judgment and decree of the Trail Court as confirmed by the Appellate Court is confirmed in all respects. Since the appellants are carrying on business activities in the mulgi they are given three months time from today to vacate the premises. No costs.