Prabhu Vs. Ramdev and ors. - Court Judgment

Excerpt:
it was held that as per section 76(e) of the transfer of property act, 1882, a mortgagee had no right to create interest in the mortgaged property - the mortgagee can only improved the rights of the tenant admitted by him under the provision of section 15 of rajasthan tenancy act, 1955 - the said act came into effect during the continuance of the mortgage and therefore the respondent-tenant was entitled to claim the benefit of section 161 of the act - constitution of india articles 32 & 226; [s.b. sinha & h.s. bedi, jj] judicial review policy decisions held, it is not beyond pale of judicial review grounds available for review enumerated. articles 32 & 226; judicial review price fixation under housing scheme held, superior courts ordinarily would not interfere. but there does not exist any absolute ban. article 73; policy decision held, the decision to change / alter terms of contract is in realm of contract but not a policy decision delhi development act, 1957 -- section 57 & delhi development authority (management and housing estates) regulations, 1968, regulations 6 & 5: [s.b. sinha & h.s. bedi, jj] housing scheme allotment held, contract entered into with allottees by the authority emanates from a statute or is otherwise governed by it. such contracts can be judicially reviewed not only on touchstone of article 14 but also on touchstone of source of power under statute. section 57 & delhi development authority (management and disposal of housing estates) regulations, 1968, regulation 6: [s.b. sinha & h.s. bedi, jj] housing scheme fixation of cost of construction held, when fixation of cost of accommodation is done having regard to the relevant factors on the basis of which brochure as well as the notice inviting tender was issued, the superior courts may not interfere; but the same must be done in terms of the original contract and not dehors the same. the authority, even while exercising its residuary power, is required to act within the four corners of the contract. while doing so, the terms of the contract cannot be altered to include any other factors, which were not contemplated there under. while computing the extra cost, no additional factors, thus, can be taken into consideration. if such a power were conceded in the authority, the same would give rise to exercise of arbitrary power. it is not contemplated in law. section 57 & delhi development authority (management & disposal of housing estates) regulations, 1968, regulation 6: [s.b. sinha & h.s. bedi, jj] self financing housing scheme fixation of cost of construction held, the direction issued by the central government to levy conversion charges is binding on dda for converting the leasehold into freehold. however, such a power also must be exercised reasonably and fairly. conversion of the property from leasehold to freehold is a separate transaction. the same has nothing to do with the actions, qua contract. imposition of conversion charges, therefore, even if, per se, may not be held to be bad, the said factor cannot be taken into consideration for the purpose of computing construction costs. after 1996, the ordinary cost of construction of a flat was rs.2,00,000/- in south delhi but not only it formed the basis for computing the final cost but also 20% additional amount as also 20% surcharge were claimed there upon. sometimes interest also was charged as and when applicable. thus, so long the conversion charge is charged by way of a separate transaction, no exception can be taken. but., purported price fixation as has been done in the instant case cannot be approved. an executive officer, in the absence of any provision of a statute, cannot apply his own decision with a retrospective effect. a delegate is bound to act within the four corners of the delegation and not beyond the same. current cost has been calculated upon computing 20% over and above the actual cost. a provision for surcharge had also been made in terms whereof a premium of 2% over the disposals cost was worked out on current cost for the sfs floats in south delhi. imposition of surcharge is subject to the condition the real value in the market of dda flats would be much more than it had been charging as per the cost formula. parameters of computation of disposal price have been laid down. the authority having itself adopted a formula for computing the disposal cost, the same was binding upon the delegates. a delegate cannot take any action contrary to or inconsistent with the factors laid down for computation of disposal cost as defined in section 2(30) of the act. regulations 5 and 6 do not authorise the delegate to apply a formula which was not contemplated by the authority itself. it an executive authority in absence of any statutory provision cannot apply a decision with retrospective effect, the same would be ultra vires. indian contract act,1872[c.a.no.9/1872] -- section 29: [s.b. sinha & h.s. bedi, jj] vagueness price essential element of binding contract held, it is well settled that a definite price is an essential element of a binding agreement. although a definite price need not be stated in the contract, but assertion thereof either expressly or impliedly is imperative indian contract act,1872[c.a.no.9/1872] -- section 60: [s.b. sinha & h.s. bedi, jj] novation of contract held, it is well known principle of law that a person would be bound by the terms of the contract subject of course to its validity. a contract in certain situations may also be avoided. with a view to make novation of a contract binding and in particular some of the terms and conditions there of, the offeree must be made known thereabout. a party to the contract cannot at a later stage, while the contract was being performed, impose terms and conditions which were not part of the offer and which were based upon unilateral issuance of office orders, but not communicated to the other party to the contract and which were not even the subject matter of a public notice. terms and conditions of the contract can indisputably be altered or modified. they cannot, however, be done unilaterally unless there exists any provision either in contract itself or in law. novation of contract must precede the contract making process. the parties thereto must be ad idem so far as the terms and conditions are concerned. if a contracting party, intended to alter or modify the terms of contract, it was obligatory on its part to bring the same to the notice of the allocate. having not done so, it, relying on or on the basis of the purported office orders which is not backed by any statute, new terms of contract could not be thrust upon the other party to the contract. indian evidence act,1872[c.a.no.1/1872] section 115: [s.b. sinha & h.s. bedi, jj] estoppel housing scheme by development authority allotment letter stipulating norms for fixing price, payment schedule of instalments and interest chargeable for default office order issued subsequently to levy 20% surcharge for restoration authority despite office order condoning default of allottee as per terms of allotment letter and restoring his allotment conduct of development authority estop it from raising a plea as regards application of office order. - this petition, however, failed and was dismissed by the high court. that test is clearly satisfied by the three respondents in the present case. harbans narain singh and others [1952]1scr775 ,this court has held that as a general rule a person cannot, by transfer or otherwise, confer a better title on another than he himself had. such a case is clearly an exception to the general rule prescribed by the transfer of property act. that is precisely what has happened in the present case.1. the appellant prabhu is the owner of agricultural land bearing khasra nos. 224, 215, 244, 299, 320, 506, 617 and 687 situated in village nilakpur, tehsil behror, district alwar, in the state of rajasthan. the appellant's father jora had executed a usufructuary mortgage of the said land in about 1936 for a period of twenty years in favour of one ganga din. after the expiry of the period prescribed by the said mortgage, the appellant obtained a decree for redemption on july 16, 1956. this decree declared that the mortgage and all encumbrances created by the mortgagee or any person claiming under him were extinguished and directed the mortgagee to deliver possession of the mortgaged property to the appellant. 2. it appears that during the continuance of the mortgage, the mortgagee ganga din had let out the aforesaid land to respondents 1 to 3 ramdev, yadram and nathu respectively. 3. meanwhile, on october 15, 1955 the rajasthan tenancy act, 1955 (no. 3 of 1955) (hereinafter called 'the act') had come into force. on july 28, 1956, the appellant instituted the present suit for possession of the land in question against the three respondents. this suit was tried by the sub-divisional officer, behror. in this suit the appellant had alleged that after the redemption decree had been passed in favour of the appellant, the respondents had in fact delivered possession of the property to the appellant, but a few days thereafter they had trespassed into the property and obtained its possession wrongfully. this plea was resisted by the respondents on the ground that they had not surrendered possession of the property to the appellant as alleged by him and that under the relevant provisions of the act they were entitled to remain in possession of this property. on these pleadings the learned sub-divisional officer framed two issues. they were : no. 1. whether the respondents are trespassers in respect of the fields and are liable for ejectment; and no. 2 to what relief, if any, the appellant is entitled to 4. he found that the respondents were not trespassers as alleged by the appellant and as such the appellant was not entitled to any relief. in the result, the appellant's suit was dismissed. 5. against this decision the appellant preferred an appeal before the additional commissioner, ajmer. the appellate authority reversed the finding of the trial court and held that the appellant was entitled to eject the respondents. the respondents challenged the correctness of this order by preferring a second appeal before the board of revenue for rajasthan, ajmer. their appeal succeeded and in consequence, the order passed by the appellate authority was set aside and that passed by the trial judge was restored. the board has held that by virtue of the provisions of s. 15 of the act, the possession of the respondents as unassailable and they could be ejected only in accordance with the relevant section of the said act. since none of the grounds available to the appellant under the act had been proved, he was not entitled to a claim for ejectment. 6. the validity of the board's decision was challenged by the appellant by moving the rajasthan high court in its writ jurisdiction under art. 226of the constitution. it was urged by the appellant before the high court that the order passed by the board was plainly erroneous in law and as such should be set aside. this petition, however, failed and was dismissed by the high court. it is against this decision that the appellant has come to this court by special leave. 7. the relevant facts, in the light of which the question of law raised before us by mr. misra on behalf of the appellant has to be considered, are no longer in dispute. the appellant's father created a usufructuary mortgage of the land and during the continuance of the said mortgage the respondents were admitted as tenants. the mortgage was eventually redeemed and in spite of the redemption decree the respondents continued in possession of the land. on these facts the question which arises for our decision is : whether the respondents, who have been inducted into the land as tenants by the usufructuary mortgagee, can be ejected by the appellant on the ground that the mortgage in question has been redeemed. the answer to this question depends upon the effect of s. 15 of the act. 8. before dealing with the specific provisions of the said section we may refer to two definitions which are relevant. 'tenant' has been defined by s. 5(43) of the act as meaning a person by whom rent is or but for a contract, express or implied, would be payable and except when the contrary intention appears, shall include a co-tenant or a grove-holder or a village servant or a tenant of khudkasht or a mortgagee of tenancy rights but shall not include a grantee at a favourable rate of rent or an ijaredar or a thekadar or a trespasser. that is how the definition stood at the relevant time. the test prescribed by this definition is that the person can claim to be a tenant if it is shown that rent is payable by him in respect of the land. that test is clearly satisfied by the three respondents in the present case. 9. the next definition to which it is necessary to refer is that of a trespasser. the appellant, in his present suit, has contended that the respondents are trespassers. a 'trespasser' has been defined by s. 5(44) of the act as meaning a person who takes or retains possession of unoccupied land without authority or who prevents another person from occupying land duly let out to him. that is how the definition read at the material time. it is plain that the respondents do not fall within the definition of 'trespasser' as prescribed by this clause. 10. let us now refer to s. 15 as it stood at the relevant time. section 15 provides, inter alia, that subject to the provisions of s. 16 every person who, at the commencement of this act, is tenant of land, shall, subject to the provisions of this act and subject further to any contract not contrary to s. 4 be entitled to all the right conferred and be subject to all the liabilities imposed on khatedar tenants under the act. in other words, as soon as s. 15 came into operation on october 15, 1955, the possession of the respondents, who had been inducted into the land by the mortgagee was substantially altered and they became khatedars by virtue of the statutory provisions prescribed by s. 15. section 161 of the act provides that no tenant shall be ejected from his holding otherwise than in accordance with the provisions of this act. the position thus is clear that as soon as the act came into force the respondents were entitled to the benefits of s. 15 and cannot be ejected except under the provisions of the act in view of s. 161. it is because of these provisions that the appellant was driven to make the plea that the respondents were trespassers inasmuch as they had voluntarily surrendered possession of the land to him after the redemption decree was passed and had wrongfully entered into possession thereafter. that plea has not been proved and the matter falls to be considered squarely within the provisions of section 15 and 161 of the act. it is true that s. 183 of the act provides for the ejectment of a trespasser but that section has no application to this case inasmuch as the respondents cannot be held to be trespassers at all. 11. mr. misra, however, contends that there are two decisions of this court which support his case that tenants introduced by the mortgagee during the continuance of the mortgage can have no claim to remain in possession of the land after the mortgage itself has been redeemed and he argues that the said principle would justify the appellant's claim for ejecting the respondents in the present case. inmahabir gope and others v. harbans narain singh and others : [1952]1scr775 , this court has held that as a general rule a person cannot, by transfer or otherwise, confer a better title on another than he himself had. a mortgagee cannot, therefore, create an interest in the mortgaged property which will enure beyond the termination of his interest as mortgagee. in consequence any lease granted by a mortgagee in possession must come to an end at redemption. a mortgagee, cannot, during the subsistence of the mortgage, act in a manner detrimental to the mortgagor's interests such as by giving a lease which may enable the tenant to acquire permanent or occupancy rights in the fields thereby defeating the mortgagor's right to khas possession; such an act would fall within the provisions of s. 76, sub-clause (e) of the transfer of property act. it is on these observations that mr. misra founds his argument. 12. it must be remembered that these observations were made by reference to the normal relationship between the mortgagor and the mortgagee and their respective rights and obligations as determined by relevant provisions of the transfer of property act. having made these observations, however, this court has taken the precaution to point out that even in regard to tenants inducted into the land by a mortgagee cases may arise where the said tenants may acquire rights of special character by virtue of statutory provisions which may, in the meanwhile come into operation. a permissible settlement by a mortgagee in possession with a tenant in the course of prudent management and the springing up of rights in the tenant conferred or created by statute based on the nature of the land and possession for the requisite period, it was observed, was a different matter altogether. such a case is clearly an exception to the general rule prescribed by the transfer of property act. it will thus be seen that while dealing with the normal position under the transfer of property act, this court specifically pointed out that the rights of the tenants inducted by the mortgagee may conceivably be improved by virtue of statutory provisions which may meanwhile come into operation. that is precisely what has happened in the present case. during the continuance of the mortgage s. 15 of the act came into operation and that made the respondents khatedars who are entitled to claim the benefit of s. 161 of the act. 13. the other decision on which mr. misra relies is harihar prasad singh & another v. must. of munshi nath prasad & others. : [1956]1scr1 . in that case it was held that the persons inducted by mortgagees could be raiyats within the meaning of s. 5(3) of the bihar tenancy act so as to acquire any rights of occupancy under s. 21 of the said act. this conclusion, however, flows from the basic fact that the mortgagees who inducted the tenants into the land were neither proprietors nor tenure holders as defined by the said act. section 5(3) of the said act provides that a person shall not be deemed to be a raiyat unless he holds land either immediately under a proprietor or immediately under a tenure-holder; and so, when tenants claimed the status of a raiyat, in that case it became necessary to consider whether they held the land under a proprietor or under a tenure holder and since it was clear that the mortgagees were neither proprietors nor tenure-holders, the tenants inducted by them could not claim the benefit of s. 5(3). it would thus be seen that this decision turns inevitably upon the relevant provisions of the bihar act and the said provisions show that no statutory benefit had been conferred on the tenants as claimed by them under s. 5(3) of the said act. this decision therefore does not lay down any general proposition on which mr. misra can possibly rely. 14. in the result, the view taken by the board about the status of the respondents is right and the high court was, therefore, justified in dismissing the appellant's writ petition filed before it. the appeal therefore fails and is dismissed with costs. costs in favour of respondent no. 1. 15. appeal dismissed.