# LIFE INSURANCE CORPORATION OF INDIA v. INDIA AUTOMOBILES AND CO. AND ORS

- **Citation:** [1990] 3 S.C.R. 545
- **Court:** Supreme Court of India
- **Decided:** 1990-08-01
- **Bench:** S. Ranganathan, K.N. Saikia
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/life-insurance-corporation-of-india-v-india-automobiles-and-co-and-ors-10766
- **Pages:** 27

## Headnote

Tamil Nadu Buildings Lease and Rent Control Act-Sections 4,
JO( I), 10(2)(vii) and 19-Whether Rent Controller had jurisdiction to
decide question of title.
Two separate properties bearing Door Nos. 2 and 3 admeasuring
41 grounds and 2005 sq. ft., which originally formed part of an extent
of land, situate at Mount Road, Madras belonged to several co-owners,
who leased out the same to the Respondent, by two separate lease-deeds
(Ex. P-1 and P-2}-item 1 and 2 in the Schedule A to the plaint. The
property contained in Door No. 2 which comprised an area of 4 grounds
and 151 sq. ft, with certain buildings was given on rent for Rs.150 p.m.,
whereas the property contained in Door No. 3 which also had some
buildings thereon was let out for Rs.200 p.m.
The owners sold the properties to the United India Life Assurance
Co. and the New Guardian of India Life Insurance Co. Ltd. in July 1953.
In 1956, the Life Insurance Corporation of India, the appellant stepped
into the shoes of the said companies. The appellant moved two applications before the Rent Controller for fixation of a 'fair rent' for each of·
the premises; In respect of the property in Door No. 2, the rent claimed
was Rs.2,399 ftl3 while in respect of the other, the rent claimed was
Rs.3266/50p. The tenants claimed that, under both the lease deeds,
what had been leased out to them was only a vacant land and since the
. superstructure had been built by them, they were entitled to relief
. under the Madras City Tenants' Protection Act. It was further con-
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tended that the ent ontroller had no jurisdiction to fix a fair rent.
The Rent Controller accepted the contention of the tenant so far as item
No. 1 (property at Door No. 2) was concerned but with regard to the
second property (Door No. 3), he fixed the fair rent at Rs.1451 p.m.
There were then two appeals to the Court of Small Causes. The
Small Causes Court came to the conclusion that the buildings on the
land leased vi de P -1 had also been conveyed to the appellant and that
the LI C was entitled to seek fixation of fair ren~ in respect of this premises also. However the order of the Rent Controller in regard to the
545
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SUPREME COURT REPORTS
I 1990] 3 S.C.R.
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other property in Door No. 3 was upheld. However, in certain earlier
proceedings for rixation of fair rent etc., it had been held by the Rent ..
Controller that item No. (Door No. 2) belonged to the LIC, but his order
of eviction had been set aside by the appellate court on some other
ground. The Court of Small Causes did not treat that decision as res
judicata. The tenants being aggrieved by the order of the Court of Small
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Causes filed revision petitions but they were dismissed on 20.11.1968.
The appellant thereupon filed Civil Suit against the tenantsrespondents for recovery of arrears of rent together with interests etc. -
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on the basis of the fair rent rixed. The respondents-tenants also filed a
chil suit claiming protection under the Madras City Tenants' Protecc tion Act but this suit and further appeals therefrom were dismissed. In
the suit for recovery of rent filed by the appellant, the tenants contended that since the subject mattter of the lease under Ex. P-1 was only
a vacant site, the Rent Controller had no jurisdiction to rix the fair rent '•
in respect thereof and that, therefore, the claim in the suit for arrears of
rent, based on the Rent Controller's order in respect of the premises
D covered by Ex. P-1 had to fail. The trial Judge in the High Court came
to the conclusion that Ex. P-1 did not, in law, create a valid lease
between the co-owners and the tenants. He further held that the superstructure constructed on the land had been conveyed to the vendee
under the sale deed dated 30.7.1953 and thus vested in LIC. On this
reasoning the High Court held that the Rent Controllet had jurisdiction
;.;_.
E to rix the fair rent in respect of the premises. The tenants filed an
appepJ. The appellate Bench conrmned the decree in re

## Text

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LIFE INSURANCE CORPORATION OF INDIA
v.
INDIA AUTOMOBILES AND CO. AND ORS.
AUGUST 1, 1990
[S. RANGANATHAN AND K.N. SAIKIA, JJ.]
Tamil Nadu Buildings Lease and Rent Control Act-Sections 4,
JO( I), 10(2)(vii) and 19-Whether Rent Controller had jurisdiction to
decide question of title.
Two separate properties bearing Door Nos. 2 and 3 admeasuring
41 grounds and 2005 sq. ft., which originally formed part of an extent
of land, situate at Mount Road, Madras belonged to several co-owners,
who leased out the same to the Respondent, by two separate lease-deeds
(Ex. P-1 and P-2}-item 1 and 2 in the Schedule A to the plaint. The
property contained in Door No. 2 which comprised an area of 4 grounds
and 151 sq. ft, with certain buildings was given on rent for Rs.150 p.m.,
whereas the property contained in Door No. 3 which also had some
buildings thereon was let out for Rs.200 p.m.
The owners sold the properties to the United India Life Assurance
Co. and the New Guardian of India Life Insurance Co. Ltd. in July 1953.
In 1956, the Life Insurance Corporation of India, the appellant stepped
into the shoes of the said companies. The appellant moved two applications before the Rent Controller for fixation of a 'fair rent' for each of·
the premises; In respect of the property in Door No. 2, the rent claimed
was Rs.2,399 ftl3 while in respect of the other, the rent claimed was
Rs.3266/50p. The tenants claimed that, under both the lease deeds,
what had been leased out to them was only a vacant land and since the
. superstructure had been built by them, they were entitled to relief
. under the Madras City Tenants' Protection Act. It was further con-
&,·
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tended that the ent ontroller had no jurisdiction to fix a fair rent.
The Rent Controller accepted the contention of the tenant so far as item
No. 1 (property at Door No. 2) was concerned but with regard to the
second property (Door No. 3), he fixed the fair rent at Rs.1451 p.m.
There were then two appeals to the Court of Small Causes. The
Small Causes Court came to the conclusion that the buildings on the
land leased vi de P -1 had also been conveyed to the appellant and that
the LI C was entitled to seek fixation of fair ren~ in respect of this premises also. However the order of the Rent Controller in regard to the
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SUPREME COURT REPORTS
I 1990] 3 S.C.R.
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other property in Door No. 3 was upheld. However, in certain earlier
proceedings for rixation of fair rent etc., it had been held by the Rent ..
Controller that item No. (Door No. 2) belonged to the LIC, but his order
of eviction had been set aside by the appellate court on some other
ground. The Court of Small Causes did not treat that decision as res
judicata. The tenants being aggrieved by the order of the Court of Small
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Causes filed revision petitions but they were dismissed on 20.11.1968.
The appellant thereupon filed Civil Suit against the tenantsrespondents for recovery of arrears of rent together with interests etc. -
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on the basis of the fair rent rixed. The respondents-tenants also filed a
chil suit claiming protection under the Madras City Tenants' Protecc tion Act but this suit and further appeals therefrom were dismissed. In
the suit for recovery of rent filed by the appellant, the tenants contended that since the subject mattter of the lease under Ex. P-1 was only
a vacant site, the Rent Controller had no jurisdiction to rix the fair rent '•
in respect thereof and that, therefore, the claim in the suit for arrears of
rent, based on the Rent Controller's order in respect of the premises
D covered by Ex. P-1 had to fail. The trial Judge in the High Court came
to the conclusion that Ex. P-1 did not, in law, create a valid lease
between the co-owners and the tenants. He further held that the superstructure constructed on the land had been conveyed to the vendee
under the sale deed dated 30.7.1953 and thus vested in LIC. On this
reasoning the High Court held that the Rent Controllet had jurisdiction
;.;_.
E to rix the fair rent in respect of the premises. The tenants filed an
appepJ. The appellate Bench conrmned the decree in respect of Item 2
but as regards Item No. 1, the Appellate Bench vacated the decree
passed by the trial Court. It held that there was a valid lease between
the owners and the tenants under Exts. P-1 and P-2. The appellant
Bench held that the Rent Controller had no jurisdiction to entertain the
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application for rixation of fair rent in respect of the property which was
only a vacant piece ofland. Thus, the Court held that the LIC could not
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maintain the suit for recovery of rent based on the order made by the
statutory tribunal under the Rent Control Act. The tenants' appeal was
accordingly partly allowed.
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LIC came up in appeal to this Court against the said order, after
obtaining special leave.
Two questions arose for determination by this Court viz., (l) Was --
the LIC the vendee only of a vacant land with no title to the buildings
standing on the site in Item I, and (2) It it open for the tenants to
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contend that the order of the Court of Small Causes in the earlier rent
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L.J.C. v. INDIA AUTOMOBILES
547
control proceedings deciding to the contrary, and fixing the fair rent of
item I could be completely ignored as an order passed totally without
jurisdiction though it bad become final between the parties?
Dismissing the appeal, this Court,
HELD: There are clear indications in the Act and rules that the
Rent Controller does not have the jurisdiction to decide questions of
title. In a proceeding under the Act, whether it be for fixation of fair
rent or eviction, the tenant may raise several objections. He may, inter
alia, take the point that the opposite party is not the landlord. [56IC-D]
All that the Rent Controller has to do is to satisfy himself that the
person seeking eviction or fixation of fair rent is a 'landlord' who has,
prima facie, the right to receive the rent of the property in question.
That the Rent Controller's jurisdiction on this issue is limited is clear
from the proviso to Section 10(1) of the Act. [56 IF-G]
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The extensive jurisdiction conferred on civil courts under Section
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9 of the Code of Civil Procedure should not be curtailed without a
specific statutory warrant or except on some clear principle. There is
nothing in the Tamil Nadu Rent Control Act which, in any way, takes
away, or narrows down, the civil court's jurisdiction as, for example1
_JO
there is in the Delhi Rent Control Act (Section 50). [569G-H]
Section 4 of the Rent Control Act provides only a machinery for
fixation of fair rent in respect of certain premises. It is the quantum of
fair tent that arises for determination by the Rent Controller. There is
no doubt that, since an application for this purpose cannot lie except at
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the instance of a landlord or a tenant, the Rent Controller has to deal
with this incidentally but this is not one of the direct issues before the
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Rent Controller. If and only if, this relationship exists between the
parties, the Rent Controller steps in for a limited purpose-to determine what the fair rent is-and then fades out of the picture. Where a
fair rent is fixed by a Controller, the Rent Control Act does not provide
for a· machinery for recovery of the amount. The amount has to be
recovered by the landlord only by recourse to a civil court. This gives an
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indication that the determination of the relationship that gives rise to
the application is also not conclusive. This is indeed made clear by the
provisions relating to eviction. [570B-E]
If the civil court in the instant case, had come to the conclusion
that there is a realtionship of a landlord and a tenant, and that the LIC
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SUPREME COURT REPORTS
[ 1990] 3 S.C.R.
was entitled to recover the rent from the tenants, it will have to pass a
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decree in favonr of the LIC on the basis of the fair rent fixed by the Rent · '"!
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Controller. It will not be open to the civil court to re-determine the rent
payable by the tenant to the landlord because that is a matter squarely
and exclusively within the jurisdiction of the Rent Controller and,
therefore, impliedly excluded from the purview of the civil court.
But his decision is not final on the issue that opens up his jurisdiction and cannot preclude an owner from contending, in a civil court,
that he should not be asked to pay rent for his own property to some
one else. [570F-H]
There is no reason to hold that contract between a person with
himself and others is invalid. [57 IA]
Krishnamurthy v. Parthasarathy, AIR 1949 Mad. 780; Manibhai
Hathibhai v. Arbuthnot, AIR 1947 Born. 413; Rai Brij Raj v. Shaw,
[ 1951] SCR 145 at 147, 150; Official Trustee v. Sachindranath, [1969] 3
SCR 92 & 99 pp. Antulay v. Nayak, [1988] 2 SCC 602 at 649, 677 and
D °/00; Trideshwar Dayal v. Maheshwar Dayal, (1989] 2 SCA LE 1436 at
1437; Shiv Chander Kapoor v. Amar Bose, [1990] l SCC 234 paras 22
and 23; Palaniappa Chettiar and Ors. v. Vairavan Chettiar, [1963J 76
L.W. 21; Palaniappa Chettiar v. Babu Sahib alias Sheik Mytheen Sahib
and Ors., ]1964] 77 LW 551; Salay Mohamed Sait etc. v. Jaffer
Mohamed Sail's Memorial Dispensary Charity and Ors., Jl969] I
E Andhra Weekly Reporter (S.C. 16); Bhagwan Dayal v. Reoti Devi,
[ 1962] 3 SCR 440; Desika Charyulu v. State of Andhra Pradesh and
Anr., AIR 1964 SC 807; Dhulabhai v. State, [1968] 3 SCR 662; Mathura
Prasad Bajoo Jaiswal and Ors. v. Dossibai N.B. Jeejeebhoy, [1070] 3
SCR 830; Jeeth Kaur and Ors. v. Smt. P. Rondalamma and Anr., AIR
1983 A.P. 219 and State of Tamil Nadu v. Ramalinga Samigal Madam
F and Ors., [ 1985] 4 SCC IO.
CIVIL APPELLATE JURISDICTION: Civil Appeal No 1514
of 1979.
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From the Judgment and Order dated 17.6.1977 of the Madras
High Court in O.S.A. 62 of 1973.
T.S. Krishnamurthy Iyer, M.J. Paul and Kailash Vasudev for the
Appellant.
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K. Parasaran, P.O. Sharma, T.K. Seshadri and K. Swami for the
Respondents.
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L.l.C. v. INDIA AUTOMOBILES [RANGANATHAN, J.]
549
The Judgment of the Court was delivered by
RANGANATHAN, J. A very interesting question comes up for
consideration in this appeal. The qustion to be ultimately decided falls
within a very narrow compass but it is necessary to set out the facts
leading to the present appeal at some length.
The property, which is the subject matter of the present dispute,
originally formed part of an extent of land situated on Mount Road,
~- Madras, bearing door Nos. 2 and 3 and measuring 41 grounds and 2005
sq. ft. It belonged to several co-owners. These co-owners had leased
out the properties under two lease deeds in favour of M/s. India Automobiles, which was then the sole proprietary concern of one of
themselves, Ganshyamdas Girdhardas (G.G.), but was converted subsequently, in 1961, into a partnership concern of G.G. and his four
sons. The firm and its partners are hereinafter compendiously referred
to as 'the tenants'. The first lease (Ext. P-1) was dated 22.9.1947 and
related to Door No. 2 (Item No. I in Schedule A to the plaint). This
was a property comprising of an area of 4 grounds and 151 square feet
with certain buildings thereon. The rent for the premises was Rs.150
per month. The second lease deed (Ext. P-2), dated 3.10.1947, relating to Door No. 3 (Item 2 in Schedule A to the plaint) covered an area
of 8700 sq. ft. and some building thereon. The rent as per lease deed
was Rs.200 per month.
On 30. 7 .1953, all the co-owners of the property (including G.G.)
sold the property to the United India Life Assurance Company and the
New Guardian of India Life Insurance Company Ltd. In 1956, the Life
Insurance Corporation of India (LIC) stepped into the shoes of these
two insurance companies and became the owner of the property.
On 20.7.65, the LIC moved two applications (being HRC Nos.
3310 and 3311 of 1965) in the court of the Rent Controller (Sri
A. Varadarajan who later became a Judge of t!Je this Court) for fu'ation of a "fair rent" for each of the premises. The fair rent claimed was
computed at Rs.2,399.03 per month in respect of item No. 1 as against
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the rent of Rs.150 p.m. fixed under the lease deed. In respect of item 2 G
the fair rent claimed was Rs.3266.50 as against Rs.200 p.m. payable
under the lease deed. The defendants (G.G. and his sons) filed their
objections to the above applications. They claimed that, under both
the lease deeds, what had been leased ·out to them was only a vacant
land and that the superstructure had been built by them. They
claimed, therefore, that they were entitled to relief under the Madras H
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SUPREME COURT REPORTS
[ 1990] 3 S.C.R.
City Tenants' Protection Act and that the Rent Controller Court had
no jurisdiction to fix a fair rent.
The Rent Controller accepted the above argument so far as item
I was concerned. So far as item 2 was concerned, it appears that, at the
time of the hearing, it was conceded before the Rent Controller that
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the respondents were tenants of the entire properties covered by the
lease deed and that they had not constructed any of the premises
thereupon. In view of this the Rent Controller dismissed H.R.C. 3310/ ~.
65 relating to item No. I and, in H.R.C. 3311/65, fixed the fair rent in
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respect of item no. 2 at Rs.1451 p.m. The order of the Rent Controller
was dated 9.3.1966.
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There were appeals to the Court of Small Causes. In respect of
item No. I, in H.R.A. 534/66, the Court, on a perusal of the sale deed
dated 30.7.53 filed by the UC before it, came to the conclusion that '"·
the buildings on the land leased under Ex. P-1 had also been conveyed
to the UC and that the LIC was entitled to seek fixation of fair rent in
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respect of this premises also. The fair rent fixed by the Rent Controller
at Rs.994 p.m. was upheld. The order of the Rent Controller in respect
of item 2 was also upheld. It may be mentioned here that, even in
certain earlier proceedings for fixation of fair rent and eviction
(H.R.C. 867n3 and H.R.C. 2557/64), it had been held by the Rent
Controller that item No. I (door No. 2) belonged to the LIC but his
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order of eviction had been set aside by the appellate court on some
other ground. In the circumstances, the Court of Small Causes, in the
appeals now being referred to (H.R.A. 534/66), did not treat the
earlier decision as res judicata but came independently to the same
conclusion that item No. I belonged to the LIC. This was on 19th
April, 1967. The tenants filed revision petitions against the order of
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the Court of Small Causes but these were dismissed on 20.11.1968.
After the Civil Revision Petitions by the tenant were dismissed,
the UC filed C.S. 64/1969 on the original side of the Madras High
Court against the tenants for recovery of arrears of rent on the basis of
the fair rents fixed, which were computed at Rs.98,250.97 in respect of
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the two items of property. Further interest at the rate of 12% thereon
from date of plaint to the date of decree and at 6% thereafter till the
date of realisation was also claimed.
It may be mentioned here that the tenant filed C.S. 87 of 1972
claiming protection under the Madras City Tenants' Protection Act
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but this suit and further appeals therefrom have been dismissed. Turn-
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L.I.C. v. INDIA AUTOMOBILES [RANGANATHAN. J.]
551
If
ing now to C.S. No. 54 of 1969 (which was disposed of along with C.S.
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No. 87 of 72 by a common judgment dated 23.10.1972), the contention
urged on behalf of the tenants was that, since the subject matter of the
lease under Ex. P-1 was only a vacant site, the Rent Controller had no
jurisdiction to fix the fair rent in respect thereof and that, therefore,
the claim in the suit for arrears of rent, based on the Rent Controller's
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order in respect of the premises covered bv Ex. P-1 had to fail. The
Court addressed itself to this question. It came to the conclusion that
-'{ Ex. P-1 did not, in law, create a valid lease between the co-owners and
the tenants. After referring to the terms of the sale deed (Ex. P-3), the
superstructure constructed on the land was held to have been conveyed to the vendee under the sale deed dated 30.7 .1953 and to have
thus vested in the LIC. The Rent Controller was, therefore, held to c
have had jurisdiction to fix the fair rent in respect of the premises. It
.....- ;was, therefore, held that the plantiff's claim in the suit should succeed .
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The suit was decreed accordingly.
The tenants filed an appeal being O.S.A. No. 62 of 1973. The
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Appellate Bench confirmed the decree in respect of item No. 2 subject
to cerfain modifications which are not here relevant. However, so far
as item No. 1 was concerned, the Appellate Bench vacated the decree
passed by the trial court. It held that there was a valid lease between
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the quondam owners and the tenants under Exts. P-1 & P-2. Having
regard to the express recitals in Ex. P-3, the Appellate Bench held that
it was impossible to hold that the bui!dings, which admittedly belonged
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to the defendants and had been constructed by them on the vacant land
taken on lease under Ex. P-1, ever were or could be the subject matter
of the sale under Ex. P-3. In view of this finding, it was held that the
...
Rent Controller had no jurisdiction to entertain the apphcation for
fixation of fair rent in respect of the property which was only a vacant
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piece of land. In consequence, it was held, the LIC could not maintain
the suit for recovery of rent based on the order made by the statutory
tribunal under the Rent Control Act and claim the difference between
the so called fair rent and the contract rent. The claim of tile LIC for
recovery of Rs.39,224.71, as arrears of rent, in respect of item 1 was
thus held to be not maintainable. O.S.A. 62 of 1973 was, therefore,
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allowed to that extent. The present appeal, by Spedal Leave granted
on 3.7.1979, is from the order of the Division Bench rejecting the
__,....,_
appellant's claim for arrears of rent in respect of item No. 1 of the
property set out in Schedule A to the plaint based on the difference
between the fair rent fixed by the Rent Controller and the rent payable
therefor under Ex. P-1.
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SUPREME COURT REPORTS
[ 1990] 3 S.C.R.
The questions to be decided in this appeal. on the above facts,
boil down to these: (1) Was the LIC the vendee only of a vacant piece
of land with no title to the buildings standing on the site in item 1? (2)
It is open for the tenants to contend that the order of-the Court of
Small Causes in the earlier rent control proceedings deciding to the
contrary and fixing the fair rent of item 1 at Rs.994 p.m. should be
completely ignored as an order passed totally without jurisdiction,
although it has L·~comc iim:l as berw •. o:!l the pa. ties? Two interesting
aspects may be pointed out in regard to these two questions. The first
is that if either question is answered in the negative, the other will not
arise for consideration and the appeal will have to be allowed. But an
affirmative answer to either question will necessitate an answer to the
other. The second is that, though the claim in issue before us is only a
C money claim for arrears of rent, any decision given by us, based, as it
will have to be, on the issue whether the LIC owns the superstructure
or not and whether the tenants are the lessees only of vacant land or of
both land and buildings, will have repurcussions not only on the claim
in this suit (which by now has accummulated to more than Rs.3 lakhs)
o but also on any other proceedings by way of ejectment or otherwise
which the LIC may have in contemplation against the tenants. The
decision in this appeal will, therefore, be of great moment for the
L.l.C.
So far as the first question is concerned, we have no doubt that
E the Division Bench of the High Court has come to the correct conclusion. In our view, the conclusion of the learned Single Judge that the
lease Ex. P-1, executed by the co-owners of the property in favour of
one of them, was invalid, was erroneous. S.5 of the Tmasfer of Property Act, 1882, clearly envisages transfers of property by a person to
"one or more living persons or to himself, or to himself and one or
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more other living persons". Whatever may be the position, in spite of
this provision, in respect of a purported transfer by a person to himself
alone (which is very often the position in the case of trusts)-which
was considered by the House of Lords in Rye v. Rye, [1962] A.C. 496,
there is no reason to hold that a contract between a person with himself and others is invalid. The Division Bench, we think, has rightly
G distinguished the decisions in Girish Chanara v. Srinath, (3 C.L.J. 141)
and Rye v.Rye, [1962] A.C. 496. The observations of Lord Denning,
extracted by the learned Judges, are quite apposite to the situation in
the present case.
Once this objection is out of the way, the question is whether the
H construction put upon the leased Jana by the lessees formed part of the
L.l.C. v. INDIA AUTOMOBILES [RANGANATIIAN, J.]
553
,._ property conveyed to the L.I.C. Sri Parasaran pointed out that they
did not and drew our attention to subsequent correspondence between
the parties to show that even the L.I.C. had not claimed at any stage
any rent in respect of the superstructures (apart from the contractual
rent, which was in respect of the land) and that both parties have all
along been proceeding on the footing that the superstructure on item 1
belonged to the lessees. This apppears to _be correct but it cannot be
conlusive of the rights of the parties. We have therefore gone carefully
~--into the terms of Ex. P. 1 and Ex. P-3. They clearly make out that the
superstructures put up by the lessee under Ex. P-1 were not included in
the property conveyed under the terms of Ex. P-3 and that, whatever
may be the rights of the LIC to evict the tenant with liberty to demolish
the superstructure on the termination of the lease, it had no property
in the superstructure so long as the lease subsisted. We, therefore,
answer the first question posed by us in the affirmative.
;.---
This brings us, then, to the second, the really crucial, question
posed earlier viz. whether, despite the above conclusion, we are precluded, by principles of, or analogous to, res judicata, from going
behind fhe findings to the contrary given in the earlier rent control
proceedings by the Court of Small Causes which have become final on
the dismissal of the C.R.P. filed th.ereagains.t
Sri T.S. Krishnamurthy Iyer, learned counsel for the appellant,
submitted that the Courts now are precluded from going behind the
findings of the Court of Small Causes in the earlier proceedings. He
conceded that no legal consequenes can flow from a totally void order
(see, Kiran Singh v. Chaman Paswan, [1955] S.C.R. 117@ 121). He
also conceded that there may be a difference in principle betWeen a
civil court and a court of limited jurisdiction. While the former has an
inherent jurisdiction to decide a question raised about its own jurisdiction and such a decision cannot be challenged in another court after it
has become final: (See: Bhatia Cooperative Society Ltd. v. Patel, [1953]
S.C.R. 185 and Nageswara v. Canesa, AIR 1942 Mad. 675), the latter
is strictly confined to the terms of the statute creating it. But, he
submitted, even the decision of a Tribunal or a Court of limited jurisdiction cannot be called in question so long as it acts within the scope
of the jurisdiction conferred on it by the relevant statutes. He, therefore, invited us to peruse the provisions of the Tainil Nadu Buildings
{Lease and Rent Control) Act, 1960 {hereinafter referred to as the
Rent Control Act). Under the said Act, he pointed out, a petition for
fixation of fair rent under S. 4 could be filed by either a landlord or a
tenant: (Raval & Co. v. Ramachandran, [1974] 1 SCC 424). This is
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SUPREME COURT REPORTS
[ 1990] 3 S.C.R.
what the LIC purported to do when it filed H.R.C. Nos. 3310 and
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3311/64. When a petition under S. 4 is filed, the Rent Controller, on
the language of S. 4 has to decide: ( 1) whether the applicant is a tenant
in, or landlord of, the building and (2) what the fair rent of the premises should be in accordance with the provisions of the Act. In the
present case both the points had been put in issue. The respondents
denied that the L.I.C. was the landlord or they the tenants in respect
of the property. They claimed to be the owner of the superstructure and
admitted tenancy only in respect of the site. The Kent Controller and, ~
on appeal, the Court of Small·Causes were therefore, called upbn to
give their decision on this question which was completely within their
statutory jurisdiction and this decision certainly constitutes res judicata
between the parties: see also, Explanation VIII to S. 11 of the Code of
Civil Procedure. At any rate, it is not open to one of the parties to
contend that the decsion given by the Court of Small Causes, which has
become final between the parties, is a total nullity which can be comp-~ ~
letely ignored. It was, therefore, not open to the High Court to entertain a collateral attack on the validity of binding nature or correctness
of the order of the Court of Small Causes and to consider and determine
afresh the issue as to whether the L.l.C. is the owner af the premises as
claimed or not.
In support of his contention, counsel referred to Krishnamurthy
v. Parthasarathy, AIR 1949 Madras 780 reversing the decision in the A.
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same case reported in AIR 1949 Madras 387. The appellant landlord
had filed an evicton petition under the Rent Control Act without
giving notice under s. lll(h) of the Transferof Property Act (which, in
those days, was considered to be a condition precedent even to the
filing of an eviction petition under the Rent Control Act) and obtained
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an order of eviction. In these proceedings no contention had been
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raised by the tenant on the non-issue of the notice under the Transfer
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of Property Act. An appeal by the tenant also failed but here again the
above point was not taken. Thereafter the tenant filed a suit for a
declaration that the order of the Rent Controller was ultra vires in that
no notice to quit had been given as required by law. This plea was
upheld by the learned Single Judge but was rejected in appeal. The
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Division Bench observed:-
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" ..... We agree with the learned Judge that this Court can
entertain a suit to set aside an order of the Rent Controller
if the Rent Controller exceeded the powers conferred on
him. A Court or tribunal can, however, be said to have no
jurisdiction to entertain a suit or application only if it has
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L.I.C. v. INDIA AUTOMOBILES IRANGANATHAN, J.]
555
no jurisdiction with regard to the subject-matter of the suit
or application ..... But even these rules are subject to the
qualification that, if the jurisdiction of the Court depends
upon the ascertainment of facts and the Court, upon the
facts found, holds that it has jurisdiction, then the decree of
that Court cannot be ignored or set aside in collateral
proceedings."
After reference to certain other decisions of the Court, it was
observed:-
"If a lessor brings a suit for eviction, he is to prove the
existence of a lease, the relationship of lessor and lessee
between himself and the defendant and the determination
of the lease. If he fails to prove this, the plaint is not
returned because the suit is one which the Court has no
jurisdiction to entertain; but the suit is dismissed as revealing no cause of action ..... In a suit by a landlord against
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his .tenant for eviction, the determination of the tenancy is o
merely one of the constituents of the cause of action that
the landlord has to prove against his tenant in order to
succeed in the suit. We are of opinion that a tenant can
waive notice to quit; but even if he cannot, notice has not
to be proved as a condition precedent to the institution of
the suit ..... Mr. Srinivasa Ayyangar concedes that if a
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landlord filed a suit in ejectment and failed to say that the
tenancy had been determined, the Court would dismiss the
suit and not return the plaint. In the same way, the Rent
Controller would have to dismiss the application if it were
not alleged in the affidavit that notice had been given or if
it found, upon hearing the parties and considering the
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evidence, that notice had not been given. It would follow
from this, therefore, that if notice to quit was necessary it
would be merely one of the issues to be decided by the
Rent Controller and would not in any way affect his jurisdiction to entertain the application. That being so, if the
Rent Controller did not decide that question properly, the
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matter would have to be raised in appeal to the Court of
Small Causes and would give this Court no jurisdiction to
entertain a suit by the defeated party; for such a suit would
be barred by S. 12( 4) of the Act.
Again, in Manibhai Hathibhai v. Arbuthnot, AIR 1947 Bom. 413
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SUPREME COURT REPORTS
ll99o] 3 S.C.R.
a writ petition was filed to challenge the validity of an order pa;sed by
the Rent Controller on the ground that the circumstances for the invocation of S. 13(b) of the Bombay Rent, Hotel Rates and Lodging
House Rates (Control) Act, 1944 had not been fulfilled. It is sufficient
for our present purposes to extract the observations in paragraph 16 <•f
the judgment:-
"16. It was sought to be argued on behalf of the petitioners
that the respondent had no jurisdiction to determine the
question as to whether the premises were at one time let
.. out as a whole and then let out in parts as was sought to be
contended by the applicants ....• Tue jurisdiction. of the
Rent Controller, (xxx) is a statutory jurisdiction which is
. vested in the Rent Controller by the terms of the Act itself.
A regular tribun..i is established by the Act which functions
in those cases where the standard rent of the premises as
laid down in S. 3 of the Act exceeds Rs.80 per month. Tue
tribunal owes its existence to the Act and not to any act of
( ~ · the parties, and it has, therefore, jurisdiction to determine
what are the cases which fall within its jurisdiction. If there
is any dispute which. arises between the parties as to
whether the particular application falls within the jurisdiction of the tribunal, it is the tribunal which is competent to
decide that dispute and determine whether the particular
matter falls within its jurisdiction. If the tribunal decided it
wrongly, there is an appeal provided against its decision. It .
cannot, therefore, be contended, as the petitioners have
done, that the respondent has no jurisdiction to determine
the question as to whether the premises were at one time
let out as a whole and then let out in parts as contended by
· the applicants.".
Shri Iyer submits that the appellants' case here is on a stronger footing
than in the two decisions cited above because here, in the earlier
proceedings before the Rent controller and the Court of Small Causes,
a specific point had been taken that the tenant was only a tenant of the
land and not of the premises (which belonged to him) and that this
contention had been specifically over-ruled by the appellate court after
----.. a consideration of the relevant material. Sri Krishnamoorthy Iyer also
.·contended that even if it may· be an arguable question as to whether
the decision in the earlier petitions constitutes res judicata or not and l:
may plausibly be argued that it does not constitute res judicct~, tb
question for our consideration really is whether the order pa"ed in tll'!
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-...
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L.l.C. v. INDIA AUTOMOBILES [RANGANATI-!AN, J.]
557
earlier eviction petition can be treated as a nullity being passed by a
court totally without jurisdicticin. He submitted that if the tenants had
filed a suit for declaration that the order passed in the earlier proceed··
ings as a nullity that would have been bound to fail. Shri Iyer also
relied on certain observations of this Court in the decisions reported as
Rai Brij Rajv. Shaw, ]1951] SCR 145 @147, 150; Official Tru~teev.
Sachindranath, [19691 3 SCR 92 @pp. 99, 100; Antulay v. Nayak,
_ [ 1988] 2 SCC 602 at pp. 649, 677 and 700; Trideshwar Dayal v.
Maheshwar Dayal, [1989] 2 SCALE 1436 at p. 1437 and Shiv Chander
Kapoorv.AmarBose, [1990] 1SCC234,paras22and23.
Shri K. Parasaran, appearing for the respondents, sought to support the High Court's judgment on various grounds. He contended
that, even if the arguments on behalf of the appellant were to be
accepted, the appellants were not entitled to succeed, for the following
reason. He drew our attention to the reference in the 1967 order of the
Court of Small Causes to H.R.C. 867 /63, an earlier petition filed by
the L.I.C. The Court had said:
"7. The Corporation had formerly filed a petition H.R.C.
867 /1963 in respect of these t":o buildings for fixation of
fair rent. In that petition the tel/ant disputed the title of the
Corporation in respect of the buildings. So, the CorporaA
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tion immediately filed an application H.R.C. 2557 /64 for
eviction on the ground of wilful denial of title. The petition
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for fixation of fair rent was dismissed by the learned First
Additional Rent Controller on the ground that the lease
has been taken under two separate deeds and that a single
petition was not maintainable. In the other petition he
ordered eviction on the ground that the denial was not
bona fide. He gave an express finding that the building No.
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2. Mount Road belongs to the Corporation. In the appeal
the appellate court set aside the order of eviction on the
ground that there was no denial of title prior to the institution of the petition. Of course, the finding in that case that
the building belongs to the Corporation cannot operate as
res judicata because the tenant had no opportunity to file an
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appeal against that finding since the application for eviction
had ultimately been dismissed. On this point I find that the
building belongs to the petitioner."
(Emphasis added)
He submitted that the Court erred in thinking that no further proceedH
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[1990] 3 S.C.R.
ings had been taken in the earlier matter. The fact was that a Civil
Revision Petition (C.R.P. 1839/66) had been filed against the order of
the appellate court (ll.R.A. 1162/64). The C.R.P. had been allowed
and the matter remitted back for fresh disposal. When the matter came
back to the Court of Small Causes, the learned Judge, in his order
dated 9.4.69, went into the issue at length and came to the concusion
that the superstructure belonged to Indian Automobiles and had not
been conveyed to the L.I.C He held, therefore, that the claim by India
Automobiles in the eviction petition of title to the superstructure
would amount to a denial of title but that the denial was bona fide. He,
therefore, allowed the appeal and set aside the order of eviction passed
against the tenants. Sri Parasaran, therefore, submitted that the question of title had already been decided in these earlier proceedings
which we shall briefly refer to as the 'first set of proceedings'. If at all,
he says, it was this decision that constituted res judicata and the Court
of Small Causes, in H.R.A. 534/66 arising out of H.R.A. 3310/64
(which we shall refer to as the 'second set of proceedings') could not
have considered the issue again or taken a different view.
Sri Parasaran also sought to explain the reasons why the respondents did not prefer any appeal or revision from the order of the Court
of Small Causes in H.R.A. 534/66 He submitted that the law then
prevalent in Tamil N adu as laid down in the decisions of the Madras
High Court in Palaniappa Chettiar and Others v. Vairavan Chettiar,
[ 1963) 76 L. W. 21 and Palaniappa Chettiar v. Babu Sahib alias Sheik
Mytheen Sahib and Others, [1964] 77 L.W. 551, was that the Rent
Control Act would apply even in cases where the landlord had leased
out only a vacant site and the tenant had put up his own construction
thereon. It was only in Salay Mohamed Sait etc. v. !after Mohamed
Sail's Memorial Dispensary Charity and Others, [ 1969] 1 Andhra
Weekely Reporter (S.C.) 16, that this view was disapproved. At that
stage, therefore, the respondents could not have hoped to succeed
even if their stand that they were the owners of the superstructure had
been accepted.
We do not think that these contentions have any force. So far as
the first contention is concerned, it may be pointed out, hrstly, that an
answer to it is furnished by the terms of S. 19 of the Act (set out a little
later) which does not contain a reference to S. 4. The application
under S. 4 could not, therefore, have been summarily rejected even
assuming that the question of title could be said to have been substantially in issue and decided in the previous proceedings. Secondly, the
order now relied upon was passed in April 1969 and was not in exist-
•
L.l.C. v. INDIA AUTOMOBILES IRANGANATIIAN, J.]
559
ence when the Court of Small Cm1ses passed its order in the second set
of proceedings. Thirdly, even assumine the argument of learned
counsel to be correct, all that can be said is that, in the second set of
proceedings, the tenants could have contended that it was not open to
the Court of Small Causes to go into the question of title in view of the
decision in the first set of proceedings. But no such plea was taken
before it with the result that the court discussed the matter and arrived
at a decision. In deciding whether the decision constitutes res judicata
or not, we are not entitled to go into the correctness of that decision.
Right or wrong, the second decision has become final and the same
issue, says the appellant, cannot be gone into again. Lastly, the 1969
decision of the Court of Small Causes was only concerned with the
question whether there was denial of the L.I.C.'s title by the tenants
and, if so, whether it was bona fide. It was only this limited aspecteviction on the ground of non-bona fide denial of title-that was under
consideration of the Court under S. 10(2)(vii) of the Act read with the
proviso to S. JO( I) and the Court's observations on the question of
title were one on a collateral issue. We do not, therefore, think that
the 1969 decision can be an effective answer to the appellant's contention based on the 1967 decision. The second argument, explaining why
the respondents did not challenge the 1967 order in further appeal or
revision, is also of no avail in considering the issue raised by the
counsel for the appellant.
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But we think Sri •Parasaran is right in the third contention urged
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by him before us which goes to the root of the matter. His argument is
that a Rent Controller and, on appeal from him, the Court of Small
Causes, is not competent to go into a question of title to immovable
property and that a civil court cannot be barred from examining a
claim of title merely because the question may have had to be considered by the Rent tribunals as a collateral issue in deciding certain
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applications before them. He contended that it is a basic proposition,
well-settled by authority, that a tribunal of limited jurisdiction like the
Rent Controller (this expression will, hereinafter, also include a Court
of Small Causes disposing of an appeal from him) cannot be clothed
with jurisdiction to decide far-reaching questions of title to immovable
property. This, he said, is a proposition that is borne out on general
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principles as well as on the provisions of the Rent Control Act. Taking
up the provisions of the Act, he referred us to the provisions of Ss.10
and 19 which read thus:
S. 10(1)-Eviction of tenants.