Suiti Devi and anr. Vs. Banarsidas Bhagwandas - Court Judgment

1. This is a defendants' appeal in a suit for possession and damages. The material facts are as follows : Karaundia Industrial Development Co. Ltd., owned a flour mill and an ice factory situated at Aisbbagh, Lucknow. The company went into liquidation and the liquidators appointed by the Avadh Chief Court sold to two brothers. Rangnath Khemraj and Srini-vas Khemraj, the said mill and ice factory for & consideration of Rs. 7,61,000. Rangnath Khemraj and Srinivas Khemraj carried on business in Bombay under the firm name 'Messrs. Khemraj. Srikishendas.' The purchasers created an equitable mortgage over the said mill and factory in favour of the Central Bank of India Ltd., for a consideration of Rs. 4,50,000. The two brothers were adjudicated insolvent on 9th September 1930, and the property owned by them, including the said mill and the factory, vested in the official assignee. On 17th December 1930, the Central Bank of India Ltd., filed a suit in the High Court of Bombay (Original Side) to enforce their mortgage. The official assignee was made a party to this suit. During the pendency of the suit the High Court appointed Mr. H. C. Captain, the then Secretary of the Central Bank, receiver of the mortgaged property, with power either to work the mill or lease the same for a period not exceeding three years. The receiver was directed; to pay the profits or the rent to the mortgagee bank in part settlement of the claim. On 28th January 1931, a preliminary decree for sale was passed in favour of the said bank. This was followed by a decree absolute on 28th August 1931. The receiver Mr. H. C. Captain granted a lease of the mill and factory to one Devidut Sukhramdas for a period of one year (1st March 1931 to 28th February 1932), on a monthly rent of Rs. 5000. The terms of the lease provided that in case the demised premises were sold either by private sale, or in pursuance of a decree that may. be passed in the mortgage suit instituted by the bank, the lessor could determine the lease earlier by giving three months' notice to the lessee. Devidut Sukhramdas, who carried on business under the firm name 'SukBramdas Devidut,' had executed a power of attorney in favour of Lala Jaganath Bansidhar Banka who was managing the said mill on his behalf.

2. After the expiry of the period of one year, though no fresh lease was executed, the lessee continued in possession and paid the monthly rent till his death on 11th January 1942, Devidut Sukhramdas left his widow Mt. Manbhari alias Suitidevi as his sole hair. On 15th January 1942, Mt. Suitidevi executed a general power of attorney in favour of Lala Jagannath Banka who continued to manage the mill and the ice factory.

3. In execution of the decree passed in the mortgage suit under an order of the Bombay High Court (Original Side) the mill and the factory were sold and purchased by the respondent Seth Banarsidas Bhagwandas for a consideration of Rs. 8,03,000, on 17th April 1943. On 26th May 1943, under instructions from Mr. Captain the receiver, Ardesir Hormusji and Dinshaw & Co. Solicitors issued a notice to the firm Sukhramdas Devidut to vacate the premises and to give over possession of the properties sold to the purchaser Seth Banarsidas Bhagwandas by the end of August 1943. The sale in favour of Seth Banarsidas Bhagwandas was confirmed by the High Court of Bombay on 21st September .1943, and the receiver was directed to deliver possession to the purchaser forthwith. Possession, however, was not delivered to the purchaser, whereupon another notice was issued by Mr. Captain to the firm Sukhramdas Devidut and to Bai Manbhari, widow of Devidut Sukhramdas, calling upon them to forthwith vacate and hand over possession of the said mill and ice factory to Seth Banarsidas Bhagwandas. Having failed to obtain possession, Seth Banarsidas Bhagwandas instituted the suit, which has given rise to the present appeal, for ejectment, and damages amounting to Rs. 36.000. (1) Firm Sukhramdas Devidut; (2) Manbhari alias Suitidevi widow of Devidut Sukhramdas; and (3) Lala Jagannath Bansidher Banka were impleaded as defendants.

4. Defendants 1 and 2 put the plaintiff to proof of his title to the property in suit. They contended that they were the lessees of the property to whom Section 116, Transfer of Property Act was applicable, and as the lease was for manufacturing purposes, it could not be terminated except by a six months' notice, expiring with the end of February in any year. A plea was also raised to the effect that the Bombay High Court had no jurisdiction to sell the mill and consequently the plaintiff had acquired no title under the auction sale.

5. On an examination of the evidence led before him the learned Civil Judge of Malihabad held that the Bombay High Court had jurisdiction to sell the properties in question and that the plaintiff Seth Banarsidas Bhagwandas had acquired a good title to the same. He further held that a valid notice to quit had been served upon the defendants and that they were trespassers liable to ejectment. He held the plaintiff entitled to damages, but the amount of damages was left over to be determined at a subsequent stage. A decree for ejectment was accordingly passed. Dissatisfied with this decision the present appeal was preferred by Suitidevi and firm Sukhramdas Devidut.

6. Only two points were urged by the learned Counsel for the appellants at the hearing of the appeal : (1) That the Bombay High Court had no power to execute the decree passed by it in the mortgage suit instituted by the Central Bank of India Ltd., inasmuch as the entire property covered by the mortgage lay outside the jurisdiction of that Court, and (2) that the appellants who had held over after the expiry of the period of limitation of the original lease granted to Devidut Sukhramdas could not be ejected except by a six months' notice expiring with the end of February in any year.

7. As regards the first point, the learned Counsel for the appellant argued that no Court had a right to sell property which lies outside its territorial jurisdiction. He conceded that, there were certain exceptions to this general rule, but the present case, according to him, did not fall under any of these exceptions, Reliance in support of this contention was placed on Section 39, Civil P.C. which, it was argued, applied as much to the Bombay High Court in exercise of its ordinary original civil jurisdiction as to any other civil Court. The sale, according to him, was a nullity. Reference was made by the learned Counsel to, Balkrishna v. Debi Prasad A.I.R. (17) 1930 Oudh 305; Sri Rajah Satrucherla Sivakanda Raju Bahadur Garu v. Rajah of Jeypore A.I.R. (14) 1927 Mad. 627; Sakti Nath Roy Choudhuri v. Registered Jessore United Bank, Ltd. I.L.R. : AIR1939Cal403 ; British India Steam Navigation Co. Ltd. v. A.M. Jiwanjee and Co A.I.R. (23) 1936 Sind 11; Ambika Ranjan Mujumdar v. Manikganj Loan Office Ltd. : AIR1929Cal818 ; Sreenath Chak-ravarti v. Priyanath Bandopadhya : AIR1931Cal312 ; Gokal Chand v. Kishori Lal A.I.R. (29) 1942 Lah. 123 and Khirod Chandra Ghosh v. Panchu Gopal Sadhukham A.I.R. (26) 1939 Pat. 532.

8. In determining the question which arises for consideration we should not lose sight of the fact that the decree, in execution of which the sale was held, was passed by the Bombay High Court in exercise of its ordinary original civil jurisdiction. Under Clause 12 of the Letters Patent creating that Court, the Bombay High Court have jurisdiction to receive, try and determine suits of every description if, in the case of suits for land or other immovable property, such land or property be situated within the local limits of the ordinary original civil jurisdiction of that Court. The same clause confers upon that Court jurisdiction in all other cases (cases other than those for land or other immovable property) if the cause of action shall have arisen wholly or in part or (if the leave of the Court was obtained) if the defendant at the time of the commencement of the suit dwelt or carried on business within the local limits of the ordinary original civil jurisdiction of that Court. The Bombay High Court has always treated suits to enforce equitable mortgages relating to property which lay wholly outside its ordinary original civil jurisdiction as suits other than suits for land or other immovable property. (See His Highness Shrimant Maharaj Yasvantrav HolKar v. Dadabhai Cursetji Ashburner, 14 Bom. 353; Kessowji Damodhar v. Khimji Jairam 51 Bom. 551 (F.N.) and Hatimbhai Hassanally v. Framroz Eduljee Dinshaw A.I.R. (14) 1927 Bom. 278 F.B. In this state of' the authorities, the appellants' counsel could not argue that the Bombay High Court could not entertain the suit, but he maintained that it could not execute the decree passed by it as the entire property lay outside the jurisdiction of that Court.

9. The cases referred to by the learned Counsel do not establish the proposition contended for by him. They are cases in which it has been held that if an attachment is necessary in order to sell immovable property in execution of a decree, the sale can be effected only by the Court having jurisdiction over the local limits within which such property lies. But these cases further hold that in a mortgage suit-where no attachment is necessary-the Court which has Jurisdiction to entertain the suit (as some of the property affected lies within its jurisdiction) has also jurisdiction to sell the mortgaged property which lies outside its territorial jurisdiction. (See Gokal Chand v Kishori Lal A.I.R. (29) 1942 Lah. 123 and Sakti Nath Roy Chaudhury v. Jessore United Bank Ltd. A.I.R. (26) 1939 Cal. 403. If a Court can, in a mortgage suit, sell property which lies outside its territorial jurisdiction, if It had acquired jurisdiction to entertain the suit as some of the mortgaged property lay within its territorial jurisdiction, there is nothing in principle which should incline us to hold that in mortgage cases, a Court which can entertain a suit for any other reason cannot sell the property affected by the mortgage even if it lies outside its jurisdiction.

10. As a general proposition, says Freeman, any judicial tribunal having jurisdiction to pro-pounce a judgment has authority to award execution. Execution, as has often been held, is only a continuation of the suit. To our mind, there is nothing in the Indian law which, gene-rally speaking, forbids a Court from dealing in execution with property in relation to which it can pronounce judgment. A reference to the provisions of the Code of Civil Procedure will make it clear that of various modes in which a decree can be executed, one is by appointment of a receiver. And there is abundant authority for the proposition that a Court can appoint a receiver in respect of property which lies outside its jurisdiction. Alagappa Chetty v. S.A. Krishmswami Iyer A.I.R. (8) 1921 Mad. 119; Promothanath Nalia v. H.V. Low and Co : AIR1930Cal502 ; Jawala Prasad Bhartia v. Hanumanbux Poddar 40 C.W. N. 1065 and Sunder Singh Giyani v. Ganga Ram A.I.R. (25) 1938 Lah. 93. English Courts have appointed receivers in respect of property in Ireland, in West Indies, in India, in Canada, in China, in Italy, in America, in New South Wales, in Jersey, in Brazil and in Peru (See Kerr on Receivers 120-21). Thus, there can be no doubt that a Court which passes a decree can, in execution of the same, deal with property which lies outside its jurisdiction by appointment of a receiver. It has also been shown that, in cases where a Court entertains a mortgage suit, because part of the mortgaged property lies within its jurisdiction, it can in execution of the decree passed by it, sell mortgaged property which lies outside its jurisdiction. There is in our opinion no good reason to hold that a Court cannot do the same in cases where it acquires jurisdiction in a mortgage suit which relates to property wholly outside the local limits of its jurisdiction.

11. But apart from these general considerations we are of opinion that the matter is clinched by the provisions of Act V (the Decree and Orders Validating Act) of 1936. Section 2 of that Act provides as follows:

No decree passed or order made by the High Court of Judicature at Port William in Bengal, the High Court of Judicature at Madras, or the High Court of Judicature at Bombay in the exercise of its ordinary original civil jurisdiction under Clause 12 of Its Letters Patent, or by the High Court of Judicature at Rangoon, in exercise of its original civil jurisdiction under Clause 10 of its Letters Patent, shall be called in question in any proceedings before any other Court on the ground that the High Court passing the decree or making the order had no jurisdiction to pass or make the decree or order.

On 26th August 1935, a Full Bench of the Nagpur Judicial Commissioner's Court in Gangaram Tekchand Firm v. Dharamsi Jetha Co. Bombay A.I.R. (22) 1935 Nag. 250 took the view that a suit for sale on a mortgage could not be regarded as a suit in personam to recover a debt because the decree which is passed in such a suit directly affects the title to and disposition of the land mortgaged. Accordingly a suit on a mortgage is one for land and is, therefore, excluded from the cognizance of the Bombay High Court unless the mortgaged property is situated within the jurisdiction of that Court. The same Court again held in Murlidhar Shriniwas v. Gorakhram Sadhuram Firm, Bombay A.I.R. (23) 1936 Nag. 1 that the Bombay High Court had no jurisdiction to pass a decree on the basis of an equitable mortgage when no part of the property over which the decree is intended to operate is situated within the jurisdiction of the Court. It further held that the Bombay High Court had no jurisdiction to sell mortgaged property which lay outside its jurisdiction in execution of the decree passed. This view was against what has been held for a long time in the Bombay High Court in exercise of its ordinary original civil jurisdiction. A highly anomalous situation was thus created and the legislature had to intervene by passing Act V [5] of 1936, Section 2 whereof has already been reproduced. Section 3 of that Act provides that where in any proceedings concluded on or after 26th August 1935, any such decree or order has been found to be invalid on such ground (ground mentioned in Section 2) by any Court such finding shall be void and of no effect, and that Court shall, notwithstanding anything to the contrary in the Limitation Act, 1908, or any other law for the time being in force, on application made within six months from the commencement of this Act by any person prejudicially affected by such finding, restore the proceedings at and continue the proceedings from the stage reached immediately before the order embodying or based on such finding was made. The date mentioned in Section 3 (the 26th day of August 1935) is noteworthy. That is the date on which the decision in Ganga-ram Tekchand Firm v. Dharamsi Jetha Co., Bombay A.I.R. (22) 1935 Nag. 250 was pronounced.

12. It was contended by the learned Counsel for the appellants that the word 'order' in the expression 'no decree passed or order made by the High Court etc.' in Section 2 does not refer to orders in execution of decrees but is confined to orders made in the suit. We-see no good ground to limit the word 'order' as used in that section so as to exclude from its ambit orders passed in execution of decrees. Under Clause 12 of its Letters Patent the Bombay High Court is empowered, in the exercise of its ordinary original civil jurisdiction to receive, try and determine suits of every description provided certain conditions are fulfilled. It was pointed out by the Judicial Committee in Thakur Prasad v. Fakirullah 22 I.A. 44 an execution proceeding is essentially a continuation of the suit. If Clause 12, Letters Patent empowered the Bombay High Court to receive, try and determine suits, it necessarily follows that it has jurisdiction to execute the decrees passed by it. When Section 2 mentions decrees as well as orders and deals with them on the same footing, there is no reason to confine the word 'order' to orders passed in the suit as distinct from execution proceedings. We 'are clear that this contention of the learned Counsel for the appellants is without substance) and must be rejected.

13. The whole of the argument advanced by the learned Counsel for the appellants on this part of the case was based on the provisions or the Code of Civil Procedure. It may be pointed out,' however, that as observed in Central Bank of India Ltd, v. Nusserwanji H. Bharucha A.I.R. (19) 1932 Bom. 642 at p. 644, so far as the High Court of Bombay is concerned, the machinery to carry out the decree which it might ultimately pass in exercise of its ordinary original civil jurisdiction is provided in the High Court Rules. Rule 581 of the rules framed by that High Court lays down that the rules which provide for the sale of the property by the Commissioner are applicable to sales ordered by Court under mortgage decrees. It is, therefore, clear that when a Commissioner, in carrying out the decree passed in a mortgage suit proceeds to sell the property, he does not adopt the machinery of the Code of Civil Procedure, but does so under the rules framed by the High Court in that respect. We are strengthened in the view we take of the matter by the decision of Bajpai and Dar JJ. in Murlidhar v. Messrs. Gorakhram Sadho Ram : AIR1941All358 . The learned Judges held that Section 2 of Act V [5] of 1936 declared sacrosanct not only the decrees passed by a Presidency High Court in the exercise of its original civil jurisdiction but also the proceedings in execution of those decrees ordered by such High Courts. The appellants' learned Counsel challenged the correctness of this decision but the grounds on which he relied in support of his contention have already been examined by us and found to be without substance.

14. We hold accordingly that the sale in favour of Seth Banarsi Das Bhagwan Das was not bad for want of jurisdiction in the Bombay High Court to sell properties lying outside its jurisdiction.

15. The next point urged on behalf of the appellants was that inasmuch as the lessee held over after the expiration of the period of the lease, it being a lease for manufacturing purposes, could not be terminated except by a six months' notice expiring with the end of February in any year. In support of his contention the appellants' learned Counsel relied on the provisions of Sections 106 and 116, T. P. Act. It may be well to recall, at this stage the facts connected with the grant of the lease in question. After Rangnath Khemraj and Srinivas Khemraj were adjudicated insolvent in September 1930, the property owned by them, including that in question, vested in the official assignee. The Official Assignee was made a party to the suit brought by the Central Bank of India Ltd., to enforce their mortgage. Mr. H.O. Captain, Secretary of the Central Bank of India, was appointed receiver of the mortgaged property with power either to work the mill or lease the same for a period not exceeding three years. The receiver granted a lease of the mill and ice factory to Devidut Sukhramdas for a period of one year (1st March 1931, to 28th February 1932). After the expiry of one year, though no fresh lease was executed, the lessee remained in possession and continued to pay the monthly rent till his death in- January 1943. His heir and legal representative was his widow Mt. Suitidevi alias Bai Manbhari. Four days after her husband's death Mt. Suitidevi executed a general power of attorney in favour of Lala Jagannath Banka who continued to manage the mill and factory as before. There is on the record a letter Ex. 1 signed by Jagannath Banka to Mr. H.C. Captain, Receiver in suit No. 2720 of 1930. Para-graph l of this letter reads as follows:

We beg to note that we have agreed to continue the lease of the property formerly known as Lucknow Flour Mills and Iee Factory and now called Shri Venkateshwar Flour Mills situated in the industrial area at Aish Bagh in Lucknow for three years on the same terms and conditions as are contained in the Indenture of lease dated 24th March 1931, but except that the rent of the premises payable by us will be Rs. 3000 per month and we undertake to pay the said rent on the 10th day of each and every month punctually without any objection.

Objection was taken on behalf of the appellants to the admissibility of this document which ` 9 referred to in the list of documents as 'copy of agreement dated 27th July 1942, executed by Jagannath Banka'. Obviously this is a misdescription. It is not a lease, but only a letter confirming what appears to have been agreed to verbally. It is written on a stamped paper of Re. 1. Even if treated as a memorandum of agreement it is not inadmissible for insufficiency of stamp duty. It is clear therefore that the lessee held over on the terms of the original lease.

16. It was contended by Mr. Tandon on be half of the appellants, that in view of the provisions of Section 116, T. P. Act, the terms contained in the original lease, that the lessor could deter, mine it by giving three months notice to the lessee, could hot bind his clients. He was, Mr. Tandon argued, entitled under the law as a matter of right to six months notice under Section 106 read with Section 116, T. P. Act. Section 116 reads as follows:

If a lessee or under-lessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or under-lessee, or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased, as specified in Section 106.

According to the argument of the learned Counsel the words 'in the absence of an agreement to the contrary' occurring in the last portion of the section, refer not to the terms of the notice but to the existence of an agreement against holding over. In support of his contention the learned Counsel relied on Dasarathi Kumar v. Sarat Chandra Ghose : AIR1931Cal135 , That case no doubt supports the appellants' contention. But a contrary view has been taken in Oudh as well as in Allahabad. It was held by Pandit Sunder Lal J. C. in Khuda Bakhsh v. Abid. Husain 12 C.C. 279, that a tenancy created by holding over is a tenancy on the same terms as those on which the original tenancy was created subject to the modification that it will be from month to month or from year to year according to the purpose for which the land was let. In that case a house was let out to the defendant as a tenant under a sarkhat for a term of one year. He had agreed to vacate the premises as soon as the landlord desired him to do so. Notwithstanding the expiration of the term of one year, the defendant was allowed to remain in possession. The suit was contested on the ground among others that no legal notice for ejectment as required by the provisions of the Transfer of Property Act had been served on the defendant. Pandit Sunder Lal in disposing of the contention observed as follows:

Under Section 106, T. P. Act, a lease like this would be a lease from month to month terminable by 15 days' notice expiring with the end of the month of tenancy. The notice must be signed by or on behalf of the person giving it and delivered to the tenant or his authorised agent. But this is so only in the absence of a contract to the contrary. Now if the defendant held the land on the expiration of one year on the same terms as were embodied in the original lease with this variation that it was to be a monthly tenancy, the mode in which this tenancy could be terminated was the mode prescribed in the sarkhat of 10th October 1902. The provisions as to notice contained in Section 106, are inapplicable where there is an express contract as to the mode in which the tenancy is to be terminated. Now under the terms of this contract the defendant agreed to vacate the premises as soon as the landlord desired him to do so. His position was similar to that of a tenant at sufferance under the English law.

The learned Judicial Commissioner held that no notice to quit as required by 8/106, T. P. Act was necessary in such a case. All that was required by the contract was a communication on the part of the plaintiff of a desire that the defendant should vacate the premises.

17. This was followed in Lalman v. Mt. Mullo which laid down that if a new tenancy is created by reason of the landlord allowing the tenant to hold over after the original lease terminated, then in the absence of any terms in respect of the new tenancy, the terms governing the original lease will be deemed to have been accepted by the parties, and if there was a provision in the original tenancy dispensing with a notice to quit, the same applies with regard to the new tenancy.

18. These cases were followed in Badal v. Ram Bharosa : AIR1938All649 , where view similar to that taken by the Judicial Commissioner's Court was adopted.

19. With regard to the Calcutta decision on which reliance was placed by the learned Counsel for the appellants it is sufficient to say that it is in conflict with the view which has been taken in Avadh as well as in Allahabad. It is also in conflict with an earlier decision of Calcutta High Court in Monmotha Nath Santra Madak v. Pearey Mohan Mukherjee A.I.R. (6) 1919 Cal. 54. It was held by Sir Ernest Fletcher and Walmsley JJ. in that case that where a tenant for a term of years of homestead land situated in a town holds over on the terms of the expired lease the tenancy may be determined by reasonable notice or by a notice on the terms of the expired lease.

20. With the greatest respect we find it difficult to follow the reasoning of the decision in Dasarathi Kumar v. Sarat Chandra Ghose : AIR1934Cal135 . Under Section 116, in the absence of an agreement to the contrary, if a tenant remains in possession of the property leased to him after the determination of the period of the lease, and the lessor accepts the rent from him, the tenancy is renewed from year to year or from month to month according to the purpose for which the property is leased as specified in Section 106. Referring to that section we find that a lease for agricultural or manufacturing purposes is deemed to be a leass from year to year terminable by six months notice expiring with the end of a year of the tenancy. This is, however, subject to any contract which the parties may enter into to the contrary. In the case before us the contract was that if the property leased was sold either by a private sale or in pursuance of a decree that might be passed in the mortgage suit instituted by the Bank, the lease could be determined by the lessor with three months' notice to the lessee. In view of such a contract as regards the notice required for determination of the lease, it cannot be successfully contended that the notices issued by Mr. Captain were not good and valid notices as required by the law. The second contention of the learned Counsel for the appellants must also, therefore, be rejected. We are of opinion that the Court below came to a correct conclusion.

21. The appeal fails and is dismissed with costs.