# NAND RAM (D) THROUGH LRS. & ORS v. JAGDISH PRASAD (D) THROUGH LRS

- **Citation:** [2020] 4 S.C.R. 1009
- **Court:** Supreme Court of India
- **Decided:** 2020-03-19
- **Case number:** Civil Appeal No. 9918 of 2011
- **Bench:** L. Nageswara Rao, Hemant Gupta
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/nand-ram-d-through-lrs-ors-v-jagdish-prasad-d-through-lrs-34400
- **Pages:** 32

## Headnote

Land Acquisition Act, 1894 - Land given on lease for 20
years to the defendant with a clause that plaintiff-lessor could seek
ejectment of the defendant-lessee from the leased premises, only
in case the rent for one year remained in arrear - After six years,
entire leased land acquired under s.4 of the Land Acquisition Act
- Land Acquisition Collector determined market value of the
acquired land - Dispute with regard to apportionment of
compensation referred to the Reference Court - Lessee claimed
share in the compensation on the ground that they were deprived
of the right to retain possession of leased land for the unexpired
period of 14 years of the lease in their favour - Reference court
held that the lessee had not paid rent for more than 12 months and,
thus, in accordance with clause 9 of the lease deed, the lease had
come to an end and therefore, the lessee had no right to claim a
share in the compensation payable for the land leased to them -
After about two years, a part of the land acquired stood de-notified
and the said land continued to be in possession of the lessee -
Thereafter, the lessor filed suit for possession of the said land i.e.
the land leased that continued in possession with the lessee post
the de-notification - Trial court decreed the suit - In appeal
against the said judgment, the lessee sought amendment of his
written statement asserting that the suit was barred by limitation
under Art. 66 of the Schedule to the Limitation Act - First Appellate
Court did not permit the lessee to amend the written statement but
the question of limitation was allowed to be raised on the basis of
material available on record - First Appellate Court did not find
any merit in the argument raised by the lessee that the award
passed by the Reference Court operated as res judicata - First
Appellate Court found that the plea of forfeiture was totally
inconsistent and contradictory to the averments made in the
original statement - High Court allowed the second appeal filed
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1009
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by lessee holding that the finding recorded in the award that upon
non-payment of rent for 12 months, the lease had come to an end,
had attained finality - Therefore, such finding would operate as
res judicata - High Court further held that period of limitation
under Art.67 of the Limitation Act is 12 years, the period for which
commences from the date when the tenancy is determined and since
the tenancy was determined in 1960, the suit filed in 1981 was
beyond the period of limitation - Hence instant appeal - Held:
The issue in the proceedings under s.30 of the Act, before the
Reference Court was restricted to the apportionment of
compensation, consequent to the acquisition of the leased land -
The issue was restricted to the payment of compensation on account
of the unexpired period of lease and issue was not the title of the
lessor or the eviction of the lessee - Before the award was
announced by the Reference Court, part of the land acquired was
de-notified - After denotification of the land, the lessee continued
to be in possession and the title of the lessor as owners stood
restored - De-notification under s.48 of the Act is possible only
when possession has not been taken and the land has not been
vested in the State - Once the land was de-notified, the status of
the parties as they existed prior to s.4 notification stood revived -
Finding returned in the award of the Reference Court that the lease
stood determined on account of non-payment of rent was a finding
made by the Reference Court for a limited purpose i.e. not to accept
the lessee's claim for compensation - Such finding cannot be
binding on the parties in a suit for possession based on title or as
a lessor against a lessee - Limitation Act, 1963 - Art.67.
Limitation Act, 1963: Art.67 - Suit filed within 12 years of
the determination of the tenancy by efflux of time - The defendant
has not proved forfeitu

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1009
NAND RAM (D) THROUGH LRS. & ORS.
v.
JAGDISH PRASAD (D) THROUGH LRS.
(Civil Appeal No. 9918 of 2011)
MARCH 19, 2020
[L. NAGESWARA RAO AND HEMANT GUPTA, JJ.]
Land Acquisition Act, 1894 - Land given on lease for 20
years to the defendant with a clause that plaintiff-lessor could seek
ejectment of the defendant-lessee from the leased premises, only
in case the rent for one year remained in arrear - After six years,
entire leased land acquired under s.4 of the Land Acquisition Act
- Land Acquisition Collector determined market value of the
acquired land - Dispute with regard to apportionment of
compensation referred to the Reference Court - Lessee claimed
share in the compensation on the ground that they were deprived
of the right to retain possession of leased land for the unexpired
period of 14 years of the lease in their favour - Reference court
held that the lessee had not paid rent for more than 12 months and,
thus, in accordance with clause 9 of the lease deed, the lease had
come to an end and therefore, the lessee had no right to claim a
share in the compensation payable for the land leased to them -
After about two years, a part of the land acquired stood de-notified
and the said land continued to be in possession of the lessee -
Thereafter, the lessor filed suit for possession of the said land i.e.
the land leased that continued in possession with the lessee post
the de-notification - Trial court decreed the suit - In appeal
against the said judgment, the lessee sought amendment of his
written statement asserting that the suit was barred by limitation
under Art. 66 of the Schedule to the Limitation Act - First Appellate
Court did not permit the lessee to amend the written statement but
the question of limitation was allowed to be raised on the basis of
material available on record - First Appellate Court did not find
any merit in the argument raised by the lessee that the award
passed by the Reference Court operated as res judicata - First
Appellate Court found that the plea of forfeiture was totally
inconsistent and contradictory to the averments made in the
original statement - High Court allowed the second appeal filed
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by lessee holding that the finding recorded in the award that upon
non-payment of rent for 12 months, the lease had come to an end,
had attained finality - Therefore, such finding would operate as
res judicata - High Court further held that period of limitation
under Art.67 of the Limitation Act is 12 years, the period for which
commences from the date when the tenancy is determined and since
the tenancy was determined in 1960, the suit filed in 1981 was
beyond the period of limitation - Hence instant appeal - Held:
The issue in the proceedings under s.30 of the Act, before the
Reference Court was restricted to the apportionment of
compensation, consequent to the acquisition of the leased land -
The issue was restricted to the payment of compensation on account
of the unexpired period of lease and issue was not the title of the
lessor or the eviction of the lessee - Before the award was
announced by the Reference Court, part of the land acquired was
de-notified - After denotification of the land, the lessee continued
to be in possession and the title of the lessor as owners stood
restored - De-notification under s.48 of the Act is possible only
when possession has not been taken and the land has not been
vested in the State - Once the land was de-notified, the status of
the parties as they existed prior to s.4 notification stood revived -
Finding returned in the award of the Reference Court that the lease
stood determined on account of non-payment of rent was a finding
made by the Reference Court for a limited purpose i.e. not to accept
the lessee's claim for compensation - Such finding cannot be
binding on the parties in a suit for possession based on title or as
a lessor against a lessee - Limitation Act, 1963 - Art.67.
Limitation Act, 1963: Art.67 - Suit filed within 12 years of
the determination of the tenancy by efflux of time - The defendant
has not proved forfeiture of tenancy prior to the expiry of lease
period - Mere non-payment of rent does not amount to forfeiture
of tenancy - It only confers a right on the landlord to seek
possession - The plaintiffs filed a suit for possession against the
defendant on the basis of determination of tenancy, such suit is
governed by Art.67 alone - In view of this, the suit for possession
would not be covered by Art.65 since there is a specific article i.e.
Art.67 dealing with right of the lessor to claim possession after
determination of tenancy - The appellants-plaintiffs claimed
possession from the defendant alleging him to be the tenant and
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that he had not handed over the leased property after
determination of the lease - Therefore, such suit would fall within
Art.67 of the Limitation Act - Such suit having been filed within
12 years of the determination of lease by efflux of time, the same
is within the period of limitation.
Res Judicata: s.11 of the Code bars the subsequent Court
to try any suit or issue which has been directly and substantially
issue in a former suit - The issue before the Reference Court was
apportionment of compensation and such issue having been decided
against the defendant, the reference to notice for termination of
tenancy does not operate as res judicata - Therefore, the finding
recorded by the High Court that the order of the Reference Court
operated as res judicata was clearly not sustainable - Code of Civil
Procedure, 1908 - s.11.
Lease: Status of tenant - Tenant at sufferance or tenant
holding over - The defendant was inducted as a lessee for a period
of 20 years - The lessor had a right to seek possession in terms
of clause 9 of the lease deed - The mere fact that the lessor had
not chosen to exercise that right will not foreclose the rights of
the lessor as owner of the property leased - After the expiry of
lease period, and in the absence of payment of rent by the lessee,
the status of the lessee will be that of tenant at sufferance and not
a tenant holding over - s.116 of the TP Act confers the status of
a tenant holding over on a yearly or monthly basis keeping in view
the purpose of the lease, only if the lessor accepts the payment of
lease money - If the lessor does not accept the lease money, the
status of the lessee would be that of tenant at sufferance.
Estoppel: When lessee continued to be in possession of the
land leased by way of registered lease deed and admitted the
ownership of the lessor before the Reference Court, it operates as
estoppel against the lessee in respect of the title of the lessor.
Adverse Possession: Respondent claimed adverse possession
and claimed possession as owner against a person, who has
inducted him as tenant - The respondent was to prove his
continuous, open and hostile possession to the knowledge of true
owner for a continuous period of 12 years - The respondent has
not led any evidence of hostile possession to the knowledge of true
owner at any time before or after the award of the reference Court
NAND RAM (D) THR. LRS. v.
JAGDISH PRASAD (D) THR. LRS.
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nor he has surrendered possession before asserting hostile,
continuous and open title to the knowledge of the true owner -
The question of adverse possession without admitting the title of
the real owner is not tenable.
Allowing the appeal, the Court
HELD: 1. The issue in the proceedings under Section 30
of the Act, before the Reference Court was restricted to the
apportionment of compensation, consequent to the acquisition
of the leased land. The argument was raised that the lessee had
another 14 years of the lease period, therefore, the lessee
claimed compensation in lieu of the unexpired lease period. The
issue was restricted to the payment of compensation on account
of the unexpired period of lease. The issue in question was not
the title of the appellants or the eviction of the respondent. Still
further, the finding of the Reference Court is that the respondent
had no right to claim a share in the compensation. The
entitlement of the appellants to claim possession from the tenant
was not an issue in the previous proceedings. Before the award
was announced by the Reference Court, part of the land acquired
was de-notified. Once the land was de-notified, the status of the
parties as they existed prior to notification under Section 4 of
the Act stood revived. [Paras 23, 24] [1026-F-H; 1027-A-B]
Sajjadanashin Sayed Md. B.E. Edr. v. Musa Dadabhai
Ummer [2000] 1 SCR 1095 ; Ishwer Singh v. Sarwan
Singh AIR 1965 SC 948 ; Syed Mohd. Salie Labbai
v. Mohd. Hanifa (1976) 4 SCC 780 : [1976] 3 SCR
721 ; Run Bahadur Singh v. Lucho Koer ILR (1885)
11 Cal 301 ; Asgar & Ors. v. Mohan Varma and
Others [2019] 2 SCR 664 - referred to.
2. The High Court has relied upon the findings recorded
by the Reference Court that the tenancy stood terminated so
as to deny the apportionment of the compensation in respect of
acquisition of land. The issue examined by the Reference Court
was whether the defendant was entitled to any share of
compensation awarded for the land acquired. Such issue was
decided against the defendant. It is this finding that the defendant
is not entitled to any share of the compensation awarded which
operates as res judicata in a subsequent suit and not the
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reasonings recorded by the Court for arriving at such a finding.
[Para 25] [1027-C-D]
Union of India v. Nanak Singh AIR 1968 SC 1370:
[1968] 2 SCR 887 ; Mathura Prasad Bajoo Jaiswal
& Ors. v. Dossibai N.B. Jeejeebhoy (1970) 1 SCC 613
: [1970] 3 SCR 830 - relied on.
3. The finding returned in the award of the Reference
Court that the lease stood determined on account of nonpayment of rent was a finding made by the reference Court for
a limited purpose i.e. not to accept the defendant's claim for
compensation. Such finding cannot be binding on the parties in
a suit for possession based on title or as a lessor against a
lessee. Section 11 of the Code bars the subsequent Court to try
any suit or issue which has been directly and substantially issue
in a former suit. The issue before the Reference Court was
apportionment of compensation and such issue having been
decided against the defendant, the reference to notice for
termination of tenancy does not operate as res judicata. [Para
27] [1028-E-G]
4. In respect of second question of law examined by the
High Court that the plaintiff's suit was barred by limitation is
based upon the notice produced in proceedings before the
Reference Court as Ex.A-3. The reference to such notice was
made in an application for amendment of the written statement
under Order VI Rule 17 of the Code filed before the First
Appellate Court. The First Appellate Court allowed the
defendant to raise a plea of limitation without amending the
written statement. Thus, the notice in proceedings before the
Reference Court was never produced in evidence in the suit for
possession and such primary evidence was not before the Court.
In terms of Section 62 of the Evidence Act, primary evidence
means a document itself produced for inspection by the Court.
Section 64 of the Evidence Act stipulates that documents must
be proved by primary evidence except in certain cases when
secondary evidence can be led. The defendant has not led any
evidence, including secondary evidence of the alleged notice said
to be served by the plaintiffs. In the absence of primary or
secondary evidence available in the suit for possession, the
NAND RAM (D) THR. LRS. v.
JAGDISH PRASAD (D) THR. LRS.
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reference to such notice as the starting point of limitation is
clearly erroneous and not sustainable. [Para 28] [1028-H; 1029A-C]
5. The defendant was inducted as a lessee for a period of
20 years. Even if the lessee had not paid rent, the status of the
lessee would not change during the continuation of the period
of lease. The lessor had a right to seek possession in terms of
clause 9 of the lease deed. The mere fact that the lessor had
not chosen to exercise that right will not foreclose the rights of
the lessor as owner of the property leased. After the expiry of
lease period, and in the absence of payment of rent by the lessee,
the status of the lessee will be that of tenant at sufferance and
not a tenant holding over. Section 116 of the TP Act confers the
status of a tenant holding over on a yearly or monthly basis
keeping in view the purpose of the lease, only if the lessor
accepts the payment of lease money. If the lessor does not
accept the lease money, the status of the lessee would be that
of tenant at sufferance. [Para 29] [1029-D-F]
Bhawanji Lakhamshi and Others v. Himatlal Jamnadas
Dani and Others (1972) 2 SCC 388 : [1972] 2 SCR
890 ; Badrilal v. Municipal Corpn. of Indore (1973) 2
SCC 388 : [1973] 3 SCR 15 ; R.V. Bhupal Prasad v.
State of A.P and Others (1995) 5 SCC 698 : [1995] 2
Suppl. SCR 658 ; Sevoke Properties Ltd. v. West
Bengal State Electricity Distribution Company Ltd. AIR
2019 SC 2664 ; Bisheshar Nath v. Kundan & Ors.
ILR (1922) 44 All 583 ; Sheo Dulare Lal Sah v. Anant
Ram & Anr. AIR 1954 All. 475 - referred to.
6. The suit of the plaintiffs filed within 12 years of the
determination of the tenancy by efflux of time is within the period
of limitation. The defendant has not proved forfeiture of tenancy
prior to the expiry of lease period. Mere non-payment of rent
does not amount to forfeiture of tenancy. It only confers a right
on the landlord to seek possession. The appellants-plaintiffs have
claimed possession from the defendant alleging him to be the
tenant and that he had not handed over the leased property after
determination of the lease. Therefore, such suit would fall within
Article 67 of the Limitation Act. Such suit having been filed on
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13th March, 1981 within 12 years of the determination of lease
by efflux of time on 23rd September, 1974, the same is within
the period of limitation. Thus, the findings recorded by the High
Court are clearly erroneous in law and are, thus, set aside. [Paras
38, 39] [1038-G-H; 1039-A-C]
MEC India Pvt. Ltd. v. Lt. Col. Inder Maira & Ors. 80
(1999) Delhi Law Times 67 ; Sidram Lachmaya, heir
and legal representative of deceased Lachmaya
Shivram Madur, heir of Original Plaintiff v. Mallaya
Lingaya Chilaka ILR 1949 Bom 135 (FB) : (1948)
SCC OnLine Bom - referred to.
7. The respondent continued to be in possession of the
land leased vide registered lease deed dated 22nd September,
1954. The respondent has admitted the ownership of the
appellants before the Reference Court. Such plea operates as
estoppel against the respondent in respect of the title of the
appellants. However, the claim of compensation put forward by
the respondent was declined for the reason that non-payment
of rent disentitles the respondent from compensation. In the
present proceedings, the respondent has denied his status as
that of a tenant but claimed title in himself. The respondent
claimed adverse possession and claimed possession as owner
against a person, who has inducted him as tenant. The
respondent was to prove his continuous, open and hostile
possession to the knowledge of true owner for a continuous
period of 12 years. The respondent has not led any evidence of
hostile possession to the knowledge of true owner at any time
before or after the award of the reference Court nor he has
surrendered possession before asserting hostile, continuous and
open title to the knowledge of the true owner. The question of
adverse possession without admitting the title of the real owner
is not tenable. [Para 41] [1039-D-G]
Uttam Chand (D) through LRs. v. Nathu Ram (D)
through LRs & Ors. Civil Appeal No. 190 of 2020
decided on 15th January, 2020 : (2020) SCC OnLine
SC 37 - relied on.
NAND RAM (D) THR. LRS. v.
JAGDISH PRASAD (D) THR. LRS.
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Case Law Reference
[2000] 1 SCR 1095
referred to
Para 20
AIR 1965 SC 948
referred to
Para 20
[1976] 3 SCR 721
referred to
Para 20
[2019] 2 SCR 664
referred to
Para 22
[1968] 2 SCR 887
relied on
Para 25
[1970] 3 SCR 830
relied on
Para 26
[1972] 2 SCR 890
referred to
Para 29
[1973] 3 SCR 15
referred to
Para 29
[1995] 2 Suppl. SCR 658
referred to
Para 29
AIR 2019 SC 2664
referred to
Para 29
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 9918
of 2011
From the Judgment and Order dated 12.11.2010 of the High
Court of Delhi at New Delhi in RSA No.96 of 2001
K.V. Vishwanathan, Sr. Adv., Siddhartha Tanwar, Sanjay Jain,
Apoorv Singhal, Adv. for the Appellants.
Harish Pandey, V.V. Gautam, Sahil Patel, Sawan Prasad, Shree
Pal Singh, Vijay K. Gupta, Mehul Gupta, Advs. for the Respondent.
The Judgment of the Court was delivered by
HEMANT GUPTA, J.
1. The challenge in the present appeal is to an order passed by
the High Court of Delhi on 12th November, 2010 whereby the appeal
filed by the defendant was allowed and the suit for possession of land
comprising in Khasra No. 9/19 measuring 3 Bighas 11 Biswas was
dismissed.
2. The appellants-plaintiff No. 1 and plaintiff Nos. 2 to 8, as legal
heirs of one Bhagwana, filed a suit for possession asserting that they
were owners in possession of land measuring 3 Bighas 11 Biswas
comprising in Khasra No.9/19 and land measuring 1 Bigha 16 Biswas
comprising in Khasra No. 9/20/2, total measuring 5 Bighas 7 Biswas
in the revenue estate of Village Tatarpur, Delhi.
3. The land measuring 1 Bigha 19 Biswas out of Khasra
No. 9/19 and 16 Biswas out of Khasra No. 9/20/2, in total measuring
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2 Bighas 15 Biswas was taken on lease for 20 years commencing from
23rd September, 1954 till 22nd September, 1974 on payment of Rs.235/
- per year by Jagdish Prasad, the defendant. It was agreed between
the parties that it will not be open to the plaintiff-lessor to seek ejectment
of the defendant-lessee from the leased premises, however, if the rent
for one year remained in arrear, then the lessor would have the right
to eject the lessee. The relevant conditions read as under:
"7. Before the expiry of said lease it shall not be within the rights
of the lessor i.e., party of the First Part to seek ejectment of
party of the second part from the leased premises.
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9. If rent for one year remains in arrears, then in that eventuality
the lessor i.e., party of the First Part will have the right to eject
the lessee i.e., party of the Second Part from the property leased
and the party of the Second Part will remove all his malba from
the land leased and deliver vacant possession to the party of the
First Part."
4. The entire leased land was acquired pursuant to the notification
dated 24th August 1959 under Section 4 of the Land Acquisition Act,
18941. The Land Acquisition Collector determined a sum of
Rs. 28,284.85 as the market value of the land acquired including the
super structure upon it. A dispute arose with regard to apportionment
of compensation and the same was referred to the Reference Court.
In such proceedings, three sets of claims were raised, one by the
appellants as owners of the land, another by Ram Chand and Jagdish
Prasad, as lessee of the land and certain other persons in occupation
of the hutments on the land acquired. The defendant-respondent
claimed apportionment of compensation in lieu of his lease-hold rights
by raising a claim under Section 30 of the Act. The relevant paras from
such claim petition filed by the defendant read as under:
"1. That Shri Nand Ram and Shri Bhagwana sons of Lakhi
Ram were the owners of land comprised in Khasra
Nos. 9/19 and 9/20/2 situated at Mauza Tatarpur, Delhi
State.
2. That the said Shri Nand Ram and Shri Bhagwana leased
out land measuring 1 bigha 19 biswa out of Khasra No.
1 for short, 'Act'
NAND RAM (D) THR. LRS. v.
JAGDISH PRASAD (D) THR. LRS. [HEMANT GUPTA, J.]
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9/19 and 16 biswa out of Khasra No.9/20/2 to Shri
Jagdish Prasad s/o Shri Daurilal, resident of Tatarpur
the claimant herein for a period of twenty years by lease
deed dated 22.9.54 and registered on 11.10.54."
5. The respondent-defendant claimed share in the compensation
for 2 Bighas 15 Biswas of land on the ground that they were deprived
of the right to retain possession of that land for the unexpired period of
14 years of the lease in their favour, which was for 20 years in total.
The Reference Court framed the following issues to determine the claim
of rival claimants:
"1. Whether Jagdish and Ram Chand mentioned at Items
No.27 and 28 are entitled to any share of the
compensation awarded for land measuring 2 Bighas and
15 Biswas which was on lease with them and if so, to
how much?
2. Whether Nand Ram and Bhagwana have any lien on
Rs.2263.20 for the structure belonging to Jagdish and
Ram Chand. If so, in what manner and to what extent?
3. Whether the Jhugis on the land measuring 2 Bighas and
15 Biswas leased out in favour of Jagdish were built by
Dharam Chand etc. at their own expenses and they are
entitled to receive the compensation in respect of their
Jhuggis?
4. Relief."
6. The learned Additional District Judge, in such reference, in
its award dated 21st October, 1961 (Ex.PW1/12), held that the
respondent had not paid rent for more than 12 months and, thus, in
accordance with clause 9 of the lease deed, the lease had come to an
end. Therefore, the defendant had no right to claim a share in the
compensation payable for the land leased to them. The Reference Court
held as under:
"8. Jagdish Chand as R.W.4 has admitted that he did not pay
any rent to Nand Ram and Bhagwan after the receipt of the
notice for acquisition of the land. Nand Ram as A.W.2 has state
rent has not been paid to him for two years and that he served
a notice also on the lessee. Under clause 9 of the lease deed
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Ex.A/15, the lease is to come to an end in case rent is not paid
for 12 months. From the evidence on the record it is proved
that Ram Chand and Jagdish have not paid rent for more than
12 months and thus in accordance with clause 9 of the lease deed
their lease had come to an end and therefore they have no right
to claim a share in the compensation payable for the land leased
out to them. I decide this issue against Jagdish Prasad and Ram
Chand."
7. It may be stated that a part of the land acquired, comprising
in Khasra No.9/19 was de-notified vide notification dated 18th June,
1961 under Section 48(1) of the Act. Such land, measuring 1 Bigha 19
Biswas continued to be in possession of the defendant-lessee i.e.
respondent herein.
8. Thereafter, the plaintiffs served a notice dated 12th February,
1981 claiming possession of the land comprising the aforementioned
Khasra No. 9/19, measuring 1 Bigha 19 Biswas, i.e. the land leased
that continued in possession with the defendant post the de-notification.
The suit was filed by the plaintiffs on 13th March, 1981. In the written
statement filed by the defendant, it was asserted that the land which
was in possession of the defendant did not form a part of the alleged
lease deed and that the defendant was in possession of this land in his
own legal right. The defendant contended that if the plaintiffs had any
right in the land in possession of the defendant, then the defendant had
become the owner of the land in question by adverse possession. It
was pleaded as under:
"10. That the land in possession of defendant does not lie in the
alleged khasra no. and is not covered by any alleged lease deed.
Without prejudice to this plea in alternative it is submitted that
the lease, if any, has already come to an end, about more than
22 years back, and defendant is owner in possession in his own
rights."
9. The learned trial court decreed the suit after evidence was
led by the parties. The certified copy of the original lease deed
was produced as PW1/1 in respect of Khasra No. 9/19 and Khasra
No.9/20. The notice regarding termination of lease as well as the
revenue record was produced to prove the ownership of the plaintiffsappellants. The trial court also referred to the award passed by the
Reference Court (Ex.PW1/12) wherein the defendant-respondent had
NAND RAM (D) THR. LRS. v.
JAGDISH PRASAD (D) THR. LRS. [HEMANT GUPTA, J.]
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claimed himself to be a tenant. The learned trial court returned the
following findings:
"Thus, the entire available record proves, conclusively that the
plaintiffs are the owners of the suit land and that the suit land
falls in Khasra No.9/19 Village Tatarpur, Delhi as the land in suit
is no longer under acquisition, and neither is the land in possession
of the D.D.A. as is indicated by Ex.PW1/13. DW2 has been
unable to deny that there has been a notification for issuance of
denotification of acquisition of Khasra No.9/19 Village Tatarpur,
Delhi Ex.PW1/12, Ex.PW5/1, Ex.PW1/13, are all indications of
admissions by the defendant that the plaintiffs are owners of the
suit land and that the defendant was a lessee of the same under
a registered lease deed dt.22.9.54 under Nand Ram and
Bhagwana.
Thus, issue No. 3 is decided in favour of the plaintiff and it is
hereby held that the land in suit falls in Khasra No.9/19 Village
Tatarpur, Delhi and that the plaintiffs are the owners of the same,
as mere receipt of compensation for acquisition of land which
has been denotified from acquisition does not in any manner make
the plaintiff any less the owners of the land in suit. In any event
the plaintiffs are certainly the landlords of the land in suit in terms
of Ex.PW1/14 the lease deed, executed between Bhagwana and
Nand Ram, and the defendant, and execution thereof having been
admitted in the claim of the defendant in Ex.PW5/1."
10. In appeal against the said judgment and decree, the defendant
moved an application under Order VI Rule 17 of the Civil Procedure
Code, 19082 to amend his written statement and asserted that the suit
was barred by limitation under Article 66 of the Schedule to the
Limitation Act, 19633. The defendant asserted that the lease had come
to an end when a notice for forfeiture of termination of the lease dated
23rd September, 1954 was issued by the plaintiffs which is Ex.A-3 in
the proceedings before the Reference Court. In reply to such
application, the stand of the plaintiffs was that the termination of tenancy
is not possible vide the said notice in view of Sections 111 and 106 of
the Transfer of Property Act, 18824 as the lease is said to be terminated
2 for short, 'Code'
3 for short, 'Limitation Act'
4 for short, 'TP Act'
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w.e.f. 23rd September, 1959 whereas the notice is required to be served
for at least 15 days' time expiring on the last date of tenancy month.
The learned First Appellate Court did not permit the defendant to amend
the written statement but the question of limitation was allowed to be
raised on the basis of material available on record.
11. The learned First Appellate Court affirmed the findings
recorded by the trial court. It did not find any merit in the argument
raised by the defendant that the award passed by the Reference Court
(Ex.PW1/12) produced by the appellants operated as res judicata. The
First Appellate Court found that the plea of forfeiture was totally
inconsistent and contradictory to the averments made in the original
statement. Further, that the plea of limitation was nothing but an
ingenuity of the counsel for the defendant.
12. Thereafter, the defendant preferred a second appeal. The
High Court framed the following two substantial questions of law:
"1. Whether the judgment rendered by the Land Acquisition
Court on 21st August, 1961 (Ex.PW-1/12) operates as
res judicata between the parties as regards the title of
the suit property?
2. If the first question is answered in the negative, whether
the suit filed by the Respondent for possession is barred
by time?"
13. The High Court allowed the second appeal holding that the
finding recorded in the award (Ex.PW1/12) that upon non-payment of
rent for 12 months, the lease had come to an end, had attained finality.
Therefore, such finding would operate as res judicata. The High Court
held as under:
"17. Ex.PW1/12 having been rendered by a court of competent
jurisdiction had returned a finding that the lease between the
parties stood determined as rent since the last 12 months had
not been paid by the appellant/defendant. Reference to the notice
dated 13.9.1960 terminating the lease had also been made. There
is no dispute to this factual submission which is even otherwise
a part of the record. In these circumstances, it cannot be said
that this finding Ex.PW1/12 was only an incidental or obiter
observation made by the Land Acquisition Court/ADJ which is
not binding on the parties. Ex.PW1/12 had while adverting to the
NAND RAM (D) THR. LRS. v.
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notice dated 13.9.1960 categorically held that lease between the
parties stood determined in terms of clause 9."
14. The High Court further held that period of limitation under
Article 67 of the Limitation Act is 12 years, the period for which
commences from the date when the tenancy is determined. Since the
tenancy was determined on 23th September, 1960, the suit filed on
13th March, 1981 was beyond the period of limitation.
15. Mr. Vishwanathan, learned senior counsel for the appellants
raised two-fold arguments. First, that Harpal Singh, one of the plaintiffs,
died on 4th December, 1997 during the pendency of the appeal before
the First Appellate Court. Since his legal representatives were not
brought on record, the appeal stood abated. Consequently, the High
Court could not have entertained the second appeal and reversed the
judgment and decree passed by the First Appellate Court. Second, that
clause 9 of the lease did not mean that if the rent for one year was not
paid, the lease will stand terminated but only that the lessor would get
a right to eject the lessee. It was further argued that the defendant
had not placed on record the pleadings of the previous litigation which
alone would determine whether the subsequent proceedings were barred
by the principles of res judicata. It was argued that the issue before
the Reference Court was restricted to the entitlement of payment of
compensation on acquisition of lease hold rights. The right of the
landlord to claim possession was not a subject matter of reference nor
could it be a subject matter of such reference. Therefore, the decision
of the Reference Court was neither res judicata nor constructive res
judicata within the meaning of Explanation IV to Section 11 of the
Code.
16. It was also argued that the suit was within the period of
limitation as neither Article 67 nor Article 66 would be applicable but
that the plaintiffs had a right to seek possession under Article 65 of the
Limitation Act, which confers a right on the plaintiffs to seek possession
from a person who is in possession, by virtue of his title. It is for the
defendant to prove that his possession is open, continuous and
uninterrupted so as to ripen the adverse possession into ownership. It
was argued that the defendant had not denied the tenancy prior to the
filing of the present suit for possession. Since the defendant continued
to be in possession after the expiry of lease without any payment of
rent, the possession of the defendant was not that of a tenant holding
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over but that of a tenant at sufferance. In terms of Section 116 of the
TP Act, the acceptance of rent by the appellants will alone create a
new tenancy or the status of the tenant as tenant holding over. It was
open to the appellants to seek eviction on account of the non-payment
of rent, but the possession of the respondent could not ripen into title
as his possession was that of a tenant at sufferance. It was, thus, argued
that the possession of the defendant was merely permissive possession
under a lease deed, therefore, the plea of adverse possession was not
available to the defendant.
17. The defendant-respondent contended that in the award of
the Reference Court (Ex.PW1/12), there was a finding to the effect
that the lease stood determined. The reliance is placed upon the findings
recorded by the High Court that the tenancy stood terminated vide notice
dated 13th September, 1960 (sic 23rd September, 1960). Therefore, the
period of limitation commenced from the date of the notice terminating
the lease or in any case from the date of the award of the Reference
Court, thus, the suit filed by the plaintiffs was barred by limitation.
18. We have heard the learned counsel for the parties. The
question that is required to be examined is as to which Article of the
Limitation Act would be applicable in the present case i.e. Article 65,
as asserted by the appellants or Articles 66 or 67, as asserted by the
respondent and that from which date the period of limitation would
commence. For convenience, the Articles are reproduced hereunder:
Description of Suit
Period of
Time from which
limitation
period begins to run
65.
For possession of immovable
Twelve
When the possession of
property or any interest
years
the defendant becomes
therein based on title.
adverse to the plaintiff.
66.
For possession of immovable
Twelve
When the forfeiture is
property when the plaintiff
years
incurred or the condition
has become entitled to
is broken.
possession by reason of any
forfeiture or breach of
condition.
67.
By a landlord to recover
Twelve
When the tenancy is
possession from a tenant.
years
 determined.
19. Section 111 of the TP Act provides for determination of lease
in the eventualities mentioned therein. Section 111 of the TP Act reads
thus:
NAND RAM (D) THR. LRS. v.
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"111. Determination of lease. - A lease of immoveable property
determines-
(a) by efflux of the time limited thereby:
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(g) by forfeiture; that is to say, (1) in case the lessee breaks
an express condition which provides that, on breach
thereof, the lessor may re-enter; or (2) in case the lessee
renounces his character as such by setting up a title in
a third person or by claiming title in himself; or (3) the
lessee is adjudicated an insolvent and the lease provides
that the lessor may re-enter on the happening of such
event; and in any of these cases the lessor or his
transferee gives notice in writing to the lessee of his
intention to determine the lease;
(h) on the expiration of a notice to determine the lease, or
to quit, or of intention to quit, the property leased, duly
given by one party to the other."
20. In a judgment reported as Sajjadanashin Sayed Md. B.E.
Edr. v. Musa Dadabhai Ummer5 this Court held that if a matter was
only "collaterally or incidentally" in issue and decided in an earlier
proceeding, the finding therein would not ordinarily be res judicata in
a latter proceeding where the matter is directly and substantially in issue.
This Court found that the statement of law delineated by Mulla6 is the
correct one, that if the issue was "necessary" to be decided for
adjudicating on the principal issue and was decided, it would have to
be treated as "directly and substantially" in issue and if it is clear that
the judgment was in fact based upon that decision, then it would be
res judicata in a latter case. Such is the test for deciding into which
category a case falls. One has to examine the plaint, the written
statement, the issues and the judgment to find out if the matter was
directly and substantially in issue (Ishwer Singh v. Sarwan Singh7
and Syed Mohd. Salie Labbai v. Mohd. Hanifa8 ). Which matters are
directly in issue and which are only collaterally or incidentally in issue,
5 (2000) 3 SCC 350
6 15 Edn., P. 104
7 AIR 1965 SC 948
8 (1976) 4 SCC 780
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must be determined on the facts of each case. A material test to be
applied is whether the court considers the adjudication of the
issue material and essential for its decision.
21. This Court in Sajjadanashin Sayed approved a decision by
the Privy Council reported as Run Bahadur Singh v. Lucho
Koer9 wherein claim of rent from a tenant on the basis survivorship of
Joint Hindu Family property was raised by "c" brother of the deceased.
Two issues were framed in such suit (1) whether the deceased alone
received the whole rent of the property in his lifetime, or whether the
rent was received by him jointly with his brother C; (2) whether any
rent was due and if so, how much was due from B. The finding on the
first issue was that the deceased alone received the whole rent in his
lifetime. Subsequently, C sued the widow for declaration that he and
his brother were joint, and he claimed the property by right of
survivorship. The question arose whether the deceased and C were joint
or separate. The earlier finding was held not res judicata inasmuch
as the matter was not "directly and substantially" in issue in the earlier
suit. It was in issue in the earlier suit only "collaterally or incidentally",
as it did not cover the entire question of C's title but related merely to
the joint or separate receipt of rent.
22. In Asgar & Ors. v. Mohan Varma and Others10, the
predecessors-in-interest of the appellant relied upon the sale of land
by M/S K. J. Plantations. The predecessor-in-interest of M/s. K. J.
Plantation was the lessee for a period of 75 years vide lease deed dated
25th November, 1897. The lease expired by efflux of time in 1972. In
the meantime, the land was transferred by the lessee to different
persons. The High Court held the assignees were tenants at sufferance
and were not entitled to any estate or property. Before this Court, the
argument was raised that they were entitled to remain in possession
until the compensation was paid for the improvements made in terms
of provisions of Kerala Land Conservancy Act, 1957. Such claim was
resisted by the land owners inter alia on the ground that the lease had
come to an end, therefore, the assignees from the lease were tenant
at sufferance and the finding in proceedings under Order XXI Rule 97
of the Code would operate as res judicata. This Court held as under:
9 ILR (1885) 11 Cal 301 : 12 IA 23 (PC)
10 Civil Appeal No. 1500 of 2019 decided on 05.2.2019
NAND RAM (D) THR. LRS. v.
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"40. We are not inclined to decide this question on a
priori consideration, for the simple reason that under the CPC,
both res judicata (in the substantive part of Section 11) and
constructive res judicata (in Explanation IV) are embodied as
statutory principles of the law governing civil procedure. The
fundamental policy of the law is that there must be finality to
litigation. Multiplicity of litigation ensures to the benefit,
unfortunately for the decree holder, of those who seek to delay
the fruits of a decree reaching those to whom the decree is
meant. Constructive res judicata, in the same manner as the
principles underlying res judicata, is intended to ensure that
grounds of attack or defence in litigation must be taken in one
of the same proceeding. A party which avoids doing so does it
at its own peril. In deciding as to whether a matter might have
been urged in the earlier proceedings, the court must ask
itself as to whether it could have been urged. In deciding
whether the matter ought to have been urged in the earlier
proceedings, the court will have due regard to the ambit of
the earlier proceedings and the nexus which the matter bears
to the nature of the controversy.