2019 INSC 0069
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL Nos. 1237­1238 OF 2019
(Arising out of S.L.P.(C) Nos.28420­28421 of 2017)
Dr. H.K. Sharma     ….Appellant(s)
VERSUS
Shri Ram Lal       ….Respondent(s)
                 
J U D G M E N T
Abhay Manohar Sapre, J.
1. Leave granted.
2. These   appeals   are   directed   against   the   final
judgment   and   orders   dated   03.10.2017   in   Recall
Application   No.871   of   2017   in   W.P.(MS)   No.396   of
2016   and   dated   17.07.2017   in   W.P.(MS)   No.396   of
2016   passed   by   the   High   Court   of   Uttarakhand   at
Nainital. 
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3. In   order   to   appreciate   the   short   controversy
involved   in   these   appeals,   few   relevant   facts   need
mention  infra .
4. The   appellant   is   the   “opposite   party”   whereas
the   respondent   is   the   “applicant”   in   the   original
application out of which these appeals arise.
5. The   respondent   (applicant)   is   the   owner   of
house   bearing   No.5A,   Court   Road,   Nardev   Shastri
Road,   Dehradun   comprising   of   four   rooms,   one
kitchen,   two   verandahs   and   two   galleries.     The
respondent   has   let   out   a   portion   of   this   house
consisting   of   three   rooms,   one   kitchen,   latrine­
bathroom,   one   store   and   two   verandas   (hereinafter
referred to as the “suit house”) to the appellant on a
monthly   rent   of   Rs.750/­   as   per   the   tenancy
agreement   dated   22.07.1985   entered   into   between
them. 
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6. On   28.04.2008,   the   respondent   filed   an
application under Section 21(1) (a) of the U.P. Urban
Buildings   (Regulation   of   Letting   Rent   and   Eviction)
Act,   1972   (hereinafter   referred   to   as   “the   UP   Act”)
against   the   appellant   (opposite   party)   before   the
Prescribed   Authority   (Civil   Judge)   Sr.   Division,
Dehradun seeking his eviction from the suit house. 
7. The   eviction   was   sought   on   the   ground   of
respondent's   bona   fide   need   for   his   residence   and
also   the   members   of   his   family.   The   respondent
alleged   that   he   has   retired   from   the   services   and
has   no   other   suitable   house   of   his   own   where   he
can live and,  therefore,  requires the suit house for
his   personal   residence   as   also   for   the   residence   of
the members of his family. 
8. The   appellant   (opposite   party)   contested   the
application   by   filing   the   written   statement.   While
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denying   the   ground   of   bona   fide   need,   it   was
contended   that   the   appellant   has   entered   into   an
agreement   on   13.05.1993   with   the   respondent   for
purchase of the suit house and pursuant thereto he
has   also   paid   huge   amount   to   the   respondent.   It
was   contended   that   since   the   parties   have   already
entered   into   an   agreement   of   sale/purchase   of   the
suit   house,   the   relationship   of   landlord/tenant
between   them   has   ceased   to   exist   and   now   it   no
longer subsists and has come to an end. 
9. It   was   also   contended   that   consequent   upon
the   execution  of   the  agreement   between   the  parties
for  the purchase of the suit house, the appellant is
no longer in possession of the suit house as tenant
but is now in possession as a purchaser of the suit
house   in   part   performance   of   the   agreement   dated
13.05.1993  qua  the respondent. 
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10. In   other   words,   it   was   contended   that   the
relationship   of   landlord   and   tenant   between   the
parties has come to an end and now the same stood
converted   into   the   new   relationship   of   buyer   and
seller   of   the   suit   house.     It   was,   therefore,
contended   that   the   application   filed   by   the
respondent   under   Section   21(1)   (a)   of   the   UP   Act
against   the   appellant   for   his   eviction   from   the   suit
house is not maintainable and, therefore, it is liable
to be dismissed on this short ground.
11. The   Prescribed   Authority   by   order   dated
03.11.2010   dismissed   the   respondent's   application
and   held   that   since   the   parties   entered   into   an
agreement   dated   13.05.1993   for   sale   of   the   suit
house,   the   appellant   was   not   required   to   pay   any
monthly   rent   to   the   respondent   inasmuch   as
according   to   him   the   relationship   of   the   landlord
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and tenant between the parties has come to an end.
He also decided the issue of   bona fide   need against
the respondent and in appellant's favour.
12. The   respondent   felt   aggrieved   and   filed   an
appeal   before   the   Appellate   Court.   By   order   dated
19.12.2015,   the   Appellate   Court   dismissed   the
appeal   and   affirmed   the   order   of   the   Prescribed
Authority.   The   respondent   (applicant)   felt   aggrieved
and   filed   the   writ   petition   under   Article   227   of   the
Constitution   of   India   before   the   High   Court   of
Uttarakhand at Nainital. 
13. By   impugned   order   dated   17.07.2017,   the
High   Court   allowed   the   writ   petition   and   set   aside
the order of the Appellate Court and the Prescribed
Authority.   The   appellant   felt   aggrieved   and   filed
recall   application.   The   High   Court   by   order   dated
03.10.2017 dismissed the recall application. 
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14. The   High   Court   held   that   mere   agreement   to
sell   the   suit   house   would   not   result   in   termination
of   landlord­tenant   relationship   between   the   parties
unless there is a stipulation in the agreement itself
to   that   effect.   It   was   also   held   that   since   the
agreement   in   question   relied   on   by   the   appellant
(opposite party) is not a registered agreement, he is
not   entitled   to   raise   the   plea   of   part   performance
based   on   Section   53­A   of   the   Transfer   of   Property
Act,   1882   (for   short   “the   TP   Act”)   against   the
respondent.   The   High   Court   further   held   that   the
respondent being an old man has every right to live
in   his   house   in   the   last   leg   of   his   life   and   more   so
when   he   has   no   other   house   of   his   own   in   the   city
and, therefore, he has made out a case of   bona fide
need   for   his   residence   as   also   for   the   members   of
his family.
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15. It   is   against   these   two   orders   of   the  High   Court,
the   opposite   party,   i.e.,   the   tenant   has   filed   these
appeals by way of special leave in this Court.
16. So,   the   short   question,   which   arises   for
consideration   in   these   appeals,   is   whether   the   High
Court   was   justified   in   allowing   the   respondent's
application filed under Section 21(1) (a) of the UP Act. 
16A. Heard   Mr.   Jitendra   Mohan   Sharma,   learned
senior   counsel   for   the   appellant   and   Mr.   Narender
Hooda, learned senior counsel for the respondent.
17. Mr.  Jitendra   Sharma,   learned   senior   counsel   for
the   appellant   while   assailing   the   legality   and
correctness   of   the   impugned   order   has   essentially
argued one point. 
18. Placing   reliance   on   the   decision   reported   in   R.
Kanthimathi   &   Anr.   vs.   Beatrice   Xavier   (Mrs.)
[(2000)   9   SCC   339],     learned   counsel   contended   that
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the   High   Court   erred   in   allowing   the   application   filed
by the respondent against the appellant. 
19. It was his submission that the issue raised by
him in support of his submission remains no longer
r es   integra   and   stands   decided   by   the   decision
rendered   in   the   case   of   R.   Kanthimathi   (supra)   in
appellant's favour. 
20. Learned counsel elaborated his submission by
contending   that   the   moment   the   landlord   and   the
tenant enters into an agreement of sale/purchase of
the   tenanted   property   while   subsistence   of   the
tenancy and the tenant pursuant to such agreement
pays part consideration to the landlord towards sale
price   of   the   tenanted   premises,   the   relationship   of
landlord and tenant comes to an end and ceases to
exist,   i.e.,   it   results   in   termination   of   the   tenancy
agreement   ipso   facto   and   in   its   place   brings   into
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existence   a   new   relationship   between   the   parties,
namely,   that   of   the   purchaser   and   the   seller   of   the
tenanted premises. 
21. It was his submission that it is for this reason,
the   application   filed   by   the   respondent   as   landlord
of   the   tenanted   premises   to   seek   the   appellant's
eviction   as   his   tenant   from   the   suit   house   was
wholly misconceived and not maintainable for want
of   any   subsisting   relationship   of   landlord­tenant
between   them.   It   was,   therefore,   rightly   dismissed
by   the   Prescribed   Authority   and   the   Appellate
Authority but wrongly allowed by the High Court by
the impugned order.
22. In   reply,   learned   counsel   for   the   respondent
(applicant­landlord)   supported   the   impugned   order
and   contended   that   no   case   is   made   to   interfere   in
the impugned order.
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23. Having   heard   the   learned   counsel   for   the
parties and on perusal of the record of the case, we
find no merit in these appeals.
24. The question, which arises for consideration in
these   appeals,   is   when   the   lessor   and   the   lessee
enters   into   an   agreement   for   sale/purchase   of   the
tenanted   premises   where   the   lessor   agrees   to   sell
the   tenanted   premises   to   his   lessee   for
consideration   on   certain   conditions,   whether,   as   a
result   of   entering   into   such   agreement,   the   Jural
relationship   of   lessor   and   the   lessee   in   relation   to
the   leased   property   comes   to   an   end   and,   if   so,
whether it results in determination of the lease.
25. In   other   words,   the   question   that   arises   for
consideration   is   when   the   lessor   enters   into   an
agreement to sell the tenanted property to his lessee
during   the   subsistence   of   the   lease,   whether
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execution of such agreement would   ipso facto  result
in   determination   of   the   lease   and   severe   the
relationship   of   lessor   and   the   lessee   in   relation   to
the leased property.
26. In our considered opinion, the aforementioned
question   has   to   be   decided   keeping   in   view   the
provisions   of   Section   111   of   the   TP   Act   and   the
intention   of   the   parties   to   the   lease   ­   whether   the
parties intended to surrender the lease on execution
of   such   agreement   in   relation   to   the   tenanted
premises   or   they   intended   to   keep   the   lease
subsisting   notwithstanding   the   execution   of   such
agreement.  
27. Chapter   V   of   the   TP   Act   deals   with   the   leases
of   Immovable   property.   This   chapter   consists   of
Section 105 to Section 117. 
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28. A   lease   of   an   immoveable   property   is   a
contract   between   the   lessor   and   the   lessee.   Their
rights     are   governed   by   Sections   105   to   117   of   TP
Act   read   with   the   respective   State   Rent   Laws
enacted by the State. 
29. Section   111   of   the   TP   Act   deals   with   the
determination of lease. Clauses (a) to (h) set out the
grounds   on   which   a   lease   of   an   immoveable
property can be determined. 
30. Clauses   (e)   and   (f)   with   which   we   are
concerned   here   provide   that   a   lease   can   be
determined   by   an   express   surrender;   in   case,   the
lessee   yields   up   his   interest   under   the   lease   to   the
lessor by mutual agreement between them  whereas
Clause (f) provides that the lease can be determined
by implied surrender.
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31. This   Court   in   the   case   of     Shah   Mathuradas
Maganlal & Co.   vs.   Nagappa Shankarappa Malage
&  Ors.,   (1976) 3  SCC   660    considered the scope of
clauses  (e) and  (f) of  Section  111  of  the  TP  Act  and
laid   down   the   following   principle   in   Para   19     as
under.
“ 19. A   surrender   under   clauses   (e)   and   (f)
of   section   111   of   the   Transfer   of   Property
Act,   is   an   yielding   up   of   the   term   of   the
lessee's   interest   to   him   who   has   the
immediate   reversion   or   the   lessor's   interest.
It   takes   effect   like   a   contract   by   mutual
consent on the lessor's acceptance of the act
of   the   lessee.   The   lessee   cannot,   therefore,
surrender   unless   the   term   is   vested   in   him;
and   the   surrender   must   be   to   a   person   in
whom   the   immediate   reversion   expectant   on
the   term   is   vested.   Implied   surrender   by
operation   of   law   occurs   by   the   creation   of   a
new   relationship,   or   by   relinquishment   of
possession.   It   the   lessee   accepts   a   new   lease
that   in   itself   is   a   surrender.   Surrender   can
also   be   implied   from   the   consent   of   the
parties   or   from   such   facts   as   the
relinquishment   of   possession   by   the   lessee
and   taking   over   possession   by   the   lessor.
Relinquishment   of   possession   operates   as   an
implied surrender. There must be a taking of
possession, not necessarily a physical taking,
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but   something   amounting   to   a   virtual   taking
of possession. Whether this has occurred is a
question of fact. 
  32. It   is   in   the   light   of   the   aforementioned   legal
principle,   the   question   involved   in   this   case   has   to
be examined.
33. Perusal of Agreement to Sell dated 13.05.1993
(Annexure   P­1)   shows   that   though   the   agreement
contains   9   conditions   but   none   of   the   conditions
provides much less in specific terms as to what will
be   the   fate   of   the   tenancy.   In   other   words,   none   of
the conditions set out in the agreement 13.05.1993
can   be   construed   for   holding   that   the   parties
intended to surrender the tenancy rights. 
34. A   fortiori,   the   parties   did   not   intend   to
surrender   the   tenancy   rights   despite   entering   into
an   agreement   of   sale   of   the   tenanted   property.     In
other   words,   if   the   parties   really   intended   to
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surrender   their   tenancy   rights   as   contemplated   in
clauses   (e)   or   (f)   of   Section   111   of   the   TP   Act   while
entering into an agreement to sell the suit house, it
would  have   made   necessary   provision  to  that   effect
by   providing     a   specific   clause   in   the   agreement.   It
was, however, not done. On the other hand,  we find
that the conditions set out in the agreement do not
make out a case of express surrender under clause
(e)   or   implied   surrender   under   clause   (f)   of   Section
111 of the TP Act.   
35. It is for  this reason, the law laid down by  this
Court in the case of  R. Kanthimathi  (supra) has no
application to the facts of this case and is, therefore,
distinguishable on facts. Indeed, it will be clear from
mere   perusal   of   para   4   of   the   said   decision   quoted
hereinbelow:
  “ 4.   As   aforesaid,   the   question   for
consideration is, whether the status of tenant
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as   such   changes   on   the   execution   of   an
agreement   of   sale   with   the   landlord.   It   is
relevant at this junction first to examine the
terms   of   the   agreement   of   sale.   The   relevant
portions of the agreement of sale records the
following:
“ I   the   aforesaid   Mrs.   Beatrice   Xavier
hereby   agree   out   my   own   free   will,   to   sell,
convey and transfer the property to you Mrs.
R.   Kanthimathi   wife   of   Mr.   S.   Ramaswami,
435   Trichy   Road,   Coimbatore   for   a   mutually
agreed sale consideration of Rs.25,000/­.
I shall be proceeding to Coimbatore and
shall   execute   the   sale   deed   and   present   the
same   for   admission   and   registration   before
the   Registering   Authority,   accepting   and
acknowledge   payment   of   the   balance   of
consideration   of   Rs.   5000/­   (Rupees   five
thousand   only)   at   the   time   of   registration
and   shall   complete   the   transaction   of   sale
and conveyance as the property demised has
already   been   surrendered   to   your
possession .”           (Emphasis in Original)
36. The   words   highlighted   in   italics   of   the
agreement   were   construed   by   Their   Lordships   for
holding that these italicized words in the agreement
clearly  indicate that the parties had really intended
to surrender their tenancy rights on execution of the
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agreement   of   sale   and   bring   to   an   end   their   jural
relationship of  the landlord and tenant.
37. As   observed   supra,   such   is   not   the   case   here
because we do not find any such clause or a clause
akin thereto in the agreement dated 13.05.1993 and
nor   we   find   that   the   existing   conditions   in   the
agreement   discern   the   intention   of   the   parties   to
surrender the tenancy agreement either expressly or
impliedly. 
38. In the light of the foregoing discussion, we are
of   the   considered   opinion   that   the   tenancy   in
question   between   the   parties   did   not   result   in   its
determination   as   contemplated   under   Section   111
of   TP   Act   due   to   execution   of   the   agreement   dated
13.05.1993   between   the   parties   for   sale   of   the   suit
house   and   the   same   remained   unaffected
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notwithstanding   execution   of   the   agreement   dated
13.05.1993 
39. A   fortiori,     the   respondent   (lessor)   was   rightly
held   entitled   to   file   an   application   against   the
appellant (lessee) under Section 21 (1) (a) of the UP
Act   and   seek   the   appellant's   eviction   from   the   suit
house after determining the tenancy in question.
40. Before   parting,   we   make   it   clear   that   we
examined   the   terms   of   the   agreement   dated
13.05.1993   only   for   deciding   the   question   as   to
whether the execution of agreement, in any manner,
resulted   in   determination   of   the   existing   tenancy
rights   between   the   parties   in   relation   to   the   suit
house   in   the   context   of   the   TP   Act   and   the   UP   Act
and not beyond it.
41. Coming to the next question as to whether the
respondent   has   made   out   a   case   of   his   bona   fide
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need   for   his   residence   and   the   members   of   his
family   as contemplated  under   the UP  Act, suffice  it
to   say,   it   being   a   question   of   fact,   the   finding
recorded   by   the   High   Court   on   this   question   does
not   call   for   any   interference   in   this   appeal.     It   is
binding   on   this   Court.     Even   otherwise,   we   find   no
good   ground   to   interfere   in   the   finding   for   the
reason   that   the   respondent   being   a   landlord   and   a
retired man has every right to live in his house with
his   family.     Therefore,   there   is   no   perversity   in   the
finding of the High Court on this issue.
42. In   the   light   of   the   foregoing   discussion,   we
concur   with   the   reasoning   and   the   conclusion
arrived at by the High Court in the impugned order.
It does not call for any interference.
43. The   appeals   thus   fail   and   are   accordingly
dismissed. 
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44. The   appellant   is,   however,   granted   three
months’ time to vacate the suit house subject to the
appellant   furnishing   usual   undertaking   in   this
Court   within   two   weeks   from   the  date   of  this   order
and   paying   entire   arrears   of   rent   upto   date
including   three   months   rent   to   be   paid   in   advance
to   the   respondent   to   enable   him   to   remain   in
possession   for   a   period   of   three   months   from   the
date of this order.  The arrears of rent,  as directed,
be   paid   by   the   appellant   to   the   respondent   within
one month from the date of this order.  
             ………...................................J.
[ ABHAY MANOHAR SAPRE ]
                         
                                                
....……..................................J.
        [DINESH MAHESHWARI]
New Delhi;
January 28, 2019.
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