1
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 8400-8401 OF 2011
[Arising out of SLP (C) Nos. 6095-6096/2009]
Dnyaneshwar Ranganath Bhandare & Anr. ... Appellants
Vs.
Sadhu Dadu Shettigar (Shetty) & Anr. ... Respondents
J U D G M E N T
R.V.RAVEENDRAN, J.
Leave granted. Parties will be referred by their ranks in the first matter
arising from the suit for possession in RCS No.278/1993.
2. The case of appellants is as under : The appellants are brothers and are
the owners of premises No.289 (New No.424) Gandhi Chowk, Vita
(described in schedule `A’ to the plaint and referred to as the `said
property’). Two rooms in the said property, one measuring 10′ 6″ x 22′ and
the other measuring 10′ x 10′ (described the schedules B and C to the plaint
2
and together referred to as the “suit portions”) are the subject matter of the
dispute. The said property originally belonged to Ranganath Bhandare, who
was living in the said property with his wife Laxmibai (mother of the
appellants), two sons (appellants 1 and 2) and a daughter. After the death of
Ranganath Bhandare, the daughter got married in 1984 and started living
separately. Appellant No.2 got married in 1985 and shifted to Sangli in
connection with his employment in the beginning of 1986. Appellant No.1
was away at Pune in connection with his employment. Thus appellants’
mother Laxmibai who was aged and suffering from several complaints was
staying alone in the said property from the middle of 1986. The second
respondent (Chhaya) was engaged in or about the year 1985 as a servant to
look after Laxmibai and was allowed to reside in one room as a licencee
without any rent. In November 1986, Laxmibai died. The second respondent
requested the appellant for some time to vacate the room stating that she
would leave as soon as she got some alternative accommodation. As second
respondent had looked after their mother and their property, the appellants
agreed for her continuing as licencee for some time. She did not however
vacate. Taking advantage of the fact that the owners were not around, she
and the first respondent (Sadhu) with whom she had a `living-in-
relationship’, broke open the door of another room (10′ x 10′) and occupied
3
it. Further, first respondent started asserting that he is the tenant of the suit
portions (two rooms) and filed RCS 114/1993 on the file of the Civil Judge,
Junior Division, Vita, against the first appellant, seeking a permanent
injunction. In these circumstances, the appellants filed RCS No.278/1993 for
possession of the suit portions, contending that respondents were gratuitous
licencees regarding one room and unauthorized encroachers in respect of
second room. They also sought damages/mesne profits for wrongful
occupation.
3. The suit was resisted by the respondents on the ground that the first
respondent (second defendant) was the husband of second respondent (first
defendant); that they were in occupation of the suit premises as tenants on a
monthly rent of `25 from February 1982; that the rent was increased to `60/-
per month from 1988; that the appellants illegally disconnected the
electricity supply to the suit portions on 25.8.1991 and tried to forcibly evict
the respondents; that the first respondent had therefore lodged a complaint
under section 24(4) of the Bombay Rents Hotel, and Lodging House Rates
Control Act, 1947 (`Rent Act’ for short) and filed an application for fixation
of standard rent under section 11 of the Rent Act. They also alleged that the
appellants prevented them from carrying out repairs to the premises which
4
was in a dilapidated condition and were threatening to evict them from the
premises. Therefore, the first respondent filed a suit for permanent
injunction in RCS No.114/1993 to restrain the first appellant from
dispossessing him from the premises without due process of law.
4. The suit for permanent injunction (RCS No.114/1993) filed by first
respondent was resisted by the first appellant. The averments in the plaint
and written statement in the suit for injunction were the same as the
averments in the written statement and plaint respectively in the suit for
possession filed by appellants.
5. Both suits were tried together. The trial court decreed both the suits by
a common judgment dated 17.7.2002. The trial court held that the appellants
are the owners and they have established that second respondent (first
defendant) was their licencee. The trial court after exhaustive consideration
of the evidence held that the respondents had failed to prove that they were
residing in the suit premises as tenants from February, 1982 on a monthly
rent of `25 or that they were paying the rent at the rate of `60/- per month
from the year 1988. The trial court also held that the second respondent was
in possession of the two rooms as a licencee with the permission of
5
Lakshmibai and had continued in occupation as gratuitous licencee and was
not a tenant; and that the first respondent had not trespassed or forcibly
occupied the second room but was residing in the suit portions with the
licensee (second respondent) as her husband. As the respondents were
licensees and the licence had been revoked, the trial court held that the
appellants were entitled to possession of the suit portions. Consequently,
RCS No.278/1993 for possession filed by the appellants was decreed and the
respondents were directed to deliver vacant possession of the suit portions
within sixty days. The trail court also directed a separate enquiry regarding
damages and mesne profits. As the claim for tenancy was rejected, but as
respondents were in occupation of two rooms, the trial court decreed RCS
No.114/1993 filed by first respondent in part, and directed that the appellants
shall not evict the first respondent otherwise than in accordance with law.
As the trial court has granted a decree for possession simultaneously, the
decree in RCS No.114/1993 was academic.
6. Feeling aggrieved respondents 1 and 2 filed Regular Civil Appeal
No.180/2002 against the decree for possession. Respondent No.1 filed a
Regular Civil Appeal No.198/2002 against the dismissal of his suit for
injunction. The first appellate court (District Court, Sangli) allowed both
6
appeals by its common judgment dated 13.12.2007. The first appellate court
formulated the following five questions for consideration : (i) Whether
defendants in RCS No.278/93 are in unauthorized and illegal possession by
making an encroachment in suit property? (ii) Whether the suit property-B
& C portions was given to Chhaya as a gratuitous licensee in since 1986?
(iii) Whether the possession of schedules B & C properties by Sadhu is
referable to any legal right? (iv) Whether the possession of Sadhu was
illegally obstructed by the owners? (v) What relief?
7. The first appellate court answered the first two points in the negative
and the third and fourth in the affirmative. The first appellate court held that
appellants failed to prove that the respondents were gratuitous licensees or
that they had encroached upon one room. Consequently, it dismissed the suit
for possession by appellants and decreed the suit for injunction by the first
respondent. It did not address itself or decide whether respondents were
tenants. It held that they had paid some amounts and appellants had failed to
explain the said payments.
8. The second appeals filed by the appellants challenging the judgment
and decree of the first appellate court were dismissed by the High Court by a
7
short common order dated 7.10.2008 holding that the finding of fact by the
lower appellate court that the respondents were not gratuitous licensees did
not call for interference and no substantial question of law arose for
consideration. The said common judgment is under challenge in these
appeals by special leave.
9. Normally this Court will not, in exercise of jurisdiction under Article
136 of the Constitution of India, interfere with finding of facts recorded by
the first appellate court, which were not disturbed by the High Court in
second appeal. But what should happen if the first appellate court reverses
the findings of fact recorded by the trial court by placing the burden of proof
wrongly on the plaintiffs and then holding that the plaintiffs did not
discharge such burden; or if its decision is based on evidence which is
irrelevant or inadmissible; or if its decision discards material and relevant
evidence, or is based on surmises and conjectures; or if it bases its decision
on wrong inferences drawn about the legal effect of the documents
exhibited; and if grave injustice occurs in such a case on account of High
Court missing the real substantial question of law arising in the appeal and
erroneously proceeds on the basis that the matter does not involve any
question of law and summarily dismisses the second appeal filed by the
8
appellant? In this context we may remember that the legal effect of proved
facts and documents is a question of law. (See Dhanna Mal vs. Rai
Bahadur Lala Moti Sagar [AIR 1927 P.C. 102] and Gujarat Ginning &
Manufacturing Co. Ltd. vs. Motilal Hirabhai Spinning & Manuacturing Co.
Ltd. [AIR 1936 PC 77]. In such cases, if the circumstances so warranted, this
court may interfere in an appeal by special leave under Article 136. Let us
therefore consider whether circumstances in this case warrant such
interference.
10. Two suits were tried together. In both the suits (suit for possession
filed by the appellants, and suit for permanent injunction filed by the first
respondent), the trial court framed issues placing the burden on both the
plaintiff and defendants. The appellants were required to prove whether the
suit portions were given to second respondent as a gratuitous licensee. The
respondents were required to prove that they were in occupation from 1982
as tenants, initially by paying ` 25/- per month as rent up to 1988 and
thereafter at the rate of ` 60/- per month. These issues were proper as it was
evident from the pleadings that respondents were in possession of suit
rooms, and appellants claimed that the respondents were licencees and
respondents claimed that they were tenants, but admitted that there was no
9
document evidencing tenancy/lease or payment of rent. The entire evidence
was analysed in detail by the trial court, leading to the findings that the
respondents were in occupation of the suit portions as gratuitous licensees
and the respondents failed to prove that they were tenants paying rent. In
appeals filed by the respondents, the court wrongly shifted the entire burden
of proof on the appellants and held that the appellants had failed to prove
that respondents were gratuitous licensees and consequently dismissed the
suit for possession filed by the appellants. As noticed above, admittedly
there was no lease deed or tenancy agreement to evidence the tenancy; nor
were there any receipts for payment of any rent. The first appellant had
given evidence on oath that respondents were gratuitous licensees and they
had never paid any rent or other charges and his evidence was corroborated
by a neighbour (PW2). In the circumstances, the burden was on the
occupants (respondents) to establish that they were tenants and not licensees.
But the first appellate court chose to wrongly place the burden upon the
appellants. The first appellate court failed to record any finding that the
respondents were the tenants. The documents produced by the respondents
which merely showed their possession were wrongly interpreted to hold that
the appellants failed to prove that respondents were gratuitous tenants.
10
11. The undisputed facts noted by the first appellate court are : The
appellants are the owners of the Premises No.289 (Schedule A property),
Gandhi Chowk, Vita. The suit property earlier belonged to Ranganath
Bhandare (father of appellants) who died in the year 1979. Dnyaneshwar
(the first appellant) was employed in Pune and was away from Vita for
several years. Lata, the sister of appellants got married and left the premises
in the year 1984. Mukund, the second appellant got married in 1985 and left
Vita and shifted to Sangli in the first half of 1986. Appellants’ mother
Laxmibai who was staying alone, died in November, 1986. Property bearing
No.289 consists of a ground floor and first floor. Two rooms described in
Schedules B & C to the plaint were in the possession of the second
respondent Chhaya and the first respondent Sadhu. There was no lease deed
or tenancy agreement evidencing tenancy, nor were any receipts to show
payment of any rent. It is in this background, that the evidence was required
to be examined.
12. Laxmibai was an old lady. The second appellant who was staying with
his aged mother in 1985, was obviously not able to look after her. In the
beginning of 1986, he left Vita in connection with his employment.
Laxmibai was all alone from then till her death in November, 1986. Seen in
11
this background, the evidence of first appellant (PW1) that the second
respondent was appointed as a servant to look after his mother in the year
1985 and was permitted to stay in a portion of the premises free of rent,
corroborated by the evidence of the neighbour (PW2) and the fact that there
is absolutely no evidence of tenancy, that when his mother Laxmibai died,
second respondent sought permission to continue living in a portion of the
property till she got some alternative accommodation, and that the appellant
agreeing for the same, particularly as that also solved the problem of
someone looking after the property as care taker, becomes very probable.
His evidence is not shaken in cross-examination. There is nothing to
disbelieve the evidence of PW1 and PW2.
13. According to the appellants, the first respondent was not legally
married to second respondent and was a live-in-partner. According to the
respondents they were a married couple. Whether they were a married
couple or whether they were merely living together, is not very relevant for
the decision in this case, as the fact that both were living in the schedule
portion was not disputed. Further one of the witnesses of respondents —
G.S.Thakale (DW3) gave evidence that second respondent and first
respondent were his tenants in the year 1980 and that they got married some
12
time in the year 1981 and that thereafter they shifted to the premises of
appellants, demonstrates that at some point of time, second respondent and
first respondent were living together without marriage. DW3 also admitted
that he did not have any personal knowledge about the solemnization of
marriage of second respondent with first respondent. However all the courts
proceeded on the basis that they were married in the absence of any evidence
to rebut the claim of Respondents 1 and 2 that they were a married couple.
14. None of the owners was staying at Vita and according to appellants
second respondent continued to stay in a portion of Premises No.289 as a
gratuitous licencee even after November 1986 and the first respondent was
also living with her. Admittedly, there was no lease deed or tenancy
agreement between the parties. No rent receipts are produced by the
defendants. No document was produced by respondents which showed that
they were tenants of the suit portions (B & C schedule properties) or that
they were paying any rent to the owners of the property. As it was an
admitted position that there was no document evidencing the tenancy or
evidencing payment of any rent, the trial court also placed the burden upon
the defendants to prove that they were residing in the premises as tenants.
The trial court believed the evidence of PW1 supported by the evidence of
the neighbour (S.B.Bhandare) (PW2), that Laxmibai was ailing and to look
13
after her and to look after the house, Laxmibai had engaged the second
respondent as a maid servant and given her a place to stay free of cost as
licencee and that the first respondent was also staying with her and neither of
them had ever paid any rent to appellants or Laxmibai.
15. The trial court considered the following documentary evidence
produced by the respondents to establish that they were the tenants : (a)
Assessment Register extracts (Ex. 61 and Ex. 62); (b) Tax paid receipts (Ex.
63, Exs. 67 to 72); (c) Bank cash deposit challan counter foils (Ex. 64 to Ex.
66); (d) Electoral roll for 1991 (Ex. 74); (e) Notices through counsel dated
9.10.1992 and 15.6.1993 (Ex. 75 & Ex.77) with acknowledgments (Ex. 76 &
Ex.78). The trial court held that none of the above documents established
the claim of tenancy by the respondents and consequently, held that
respondents failed to prove that they were in occupation of the premises
from February 1982 as tenants on a rent of `25 per month from 1982 and
`60 per month from 1988. The court however held that there was no
evidence to show that Sadhu broke open the lock of 10′ x 10′ room and
occupied it illegally. The court held that as the evidence showed that
respondents were living as husband and wife and rejected the claim of the
appellants that first respondent had forcibly occupied the premises,
14
particularly as the appellants had not lodged any complaint in regard to such
illegal occupation. The fact that the respondents were in possession of the B
& C schedule properties was not in dispute and therefore the evidence that
was required was evidence to show tenancy and not possession. The trial
court found that the tax receipts were issued in the name of the owners and
the fact that first respondent had produced some tax receipts merely showed
that the owner had sent the tax through respondents for payment as they
were not staying in Vita. In regard to remittances to the Bank, he found that
stray remittances of `300, `60 and `300 did not prove that they were paid
towards the rent, or that the said payments were made with the knowledge
and consent of the appellants. In regard to the other documents, the trial
court held that all documents showed that the respondents were in
possession but did not establish any tenancy.
16. On the very same material (that is Assessment Register extracts, tax
paid receipts, bank cash deposit challans, Electoral Roll and notices), the
first appellate court came to the conclusion that the case of appellants (in
the pleadings and evidence), that second respondent was inducted as a
licencee was not believable. Though the first appellate court does not
anywhere record a finding that the respondents had established that they
were the tenants, but concluded that the appellants failed to give a proper
15
explanation in regard to the documents produced by the respondents and
therefore their suit should be dismissed. We may examine each of the
conclusions purportedly recorded by the first appellate court with reference
to documents.
Re : Tax paid Receipts (Exs. 63, 67 to 72)
17. Ex. 63, 67 to 72 are the tax receipts issued by the Vita Municipality
produced by first respondent which showed that the taxes for the period
1989-90 upto 1992-1993 were paid in the name of the registered owner
Ranganath Bhandare. The first appellate court held that the appellant has not
explained these receipts. But if the respondents were licencees in the
premises, looking after Laxmibai and the premises, there is nothing strange
in the appellants who were not living at Vita, to send the tax amount through
respondents, for payment to the Municipal authorities. It is possible that first
respondent was planning from 1988-89 onwards to create some kind of
evidence to claim tenancy and had therefore retained the tax receipts. What
is significant is that these receipts do not show that the amounts paid as taxes
were paid by the first respondent were from his personal funds. Further the
case of the first respondent is that he was a tenant from 1982 to 1988 paying
`25/- p.m. and thereafter `60/- per month. It is not the case of the respondents
16
that in addition to rent, they were required to pay the municipal taxes and
that they were therefore paying the municipal taxes. If payment of taxes was
part of the consideration for the tenancy, there is no explanation by
respondents as to why they did not pay the taxes for earlier years.
Re : Assessment Register Extracts (Exs.61 and 62)
18. The respondents relied upon the assessment register extracts (Exs. 61
and 62) pertaining to the years 1988-89 to 1991-92 in regard to property
No.289. Appellants have relied upon assessment Register extract (Ex. 4) and
CTS extracts (Exs. 5 to 8). These documents show that premises No.289
originally stood in the name of Ranganath Bhandare as owner and thereafter
the property was mutated in the names of his legal representatives, namely,
the appellants, their mother and sister. They also showed that initially
Bhanudas Keshav Waghmode was a tenant in the said property. Ex. 62
pertaining to the years 1988-89 to 1991-92 showed that apart from Bhanudas
Keshav Waghmode, first respondent was also an occupant of a portion of the
premises.
19. The fact that Bhanudas Keshav Waghmode was a tenant of another
portion of premises No.289 is not in dispute. The fact that second respondent
17
and first respondent were also living in premises No.289, has never been in
dispute. The issue is whether they were in occupation as tenants or as
licensees. The assessment register extract would not help the respondents to
establish that they were tenants of a portion of the premises. It will at best
help them to show that they were occupying a portion of premises No.289.
The fact that the name of first respondent was introduced as an occupant
only during the year 1988-1989 belies his case that he was in occupation of
the suit portions as a tenant from 1982. It only shows that in the absence of
the owners, first respondent had managed to get his name inserted in the
municipal records as an occupant.
Re : Remittances to owner’s account (Exs. 64, 65 and 66)
20. Exs. 64 to 66 produced by first respondent show that he had deposited
`300, `60 and `360/- on 19.8.1988, 20.11.1991 and 14.3.1989 to the account
of first appellant with Bank of Karad. The case of the respondents was that
when Laxmibai inducted them as tenants of the suit portions on a monthly
rent of `25/-; that they used to pay rent to Laxmibai; that after her death, they
used to pay rent to the first appellant; that in 1988, the first appellant
compelled them to increase the rent to ` 60/-; that as both the appellants were
living outside Vita, the first respondent used to deposit rent in the bank
18
account of the first appellant with Bank of Karad. The first appellate court
held the fact that the amounts were deposited to first appellant’s account
showed that the appellants had given the account number to first respondent
and inferred that the said amounts might have been deposited towards rent.
21. Appellants have given satisfactory explanation. They submitted that
the bank account was a non-functional and non-operated account at Vita and
as no notice of deposit was given, they were unaware of the deposits. They
submitted that Bank of Karad went into liquidation and they therefore did
not even have any record of these payments. They argued that as the second
respondent was looking after Laxmibai and as respondents were also looking
after the premises, the respondents would have come to know about the bank
account of the first appellant and that first respondent, being aware that one
day or the other, the owners will take action to evict them, had deposited the
said amounts to create some kind of evidence. It should also be noted that
the respondents did not send any communication informing the appellants
about the deposits to the first appellant. Nor did the challans showed that the
deposits were being made towards rent. These factors when coupled with the
following three circumstances show that the deposits were not bonafide: (i)
There were no rent receipts from either Laxmibai or from the appellants; (ii)
the respondents did not choose to send the rents by postal money orders; and
19
(iii) there is no explanation as to non-deposit of the alleged rents for the
earlier period. These receipts cannot be relied upon to support the
uncorroborated oral testimony of DW-1 (Sadhu) that the same were
deposited towards rent.
Re : Electoral Roll (Ex. 74) :
22. The Electoral Roll (Ex. 74) showed the respondents as husband and
wife and they were staying in the premises No.289 in the year 1991. The
appellate court held that Ex. 74 showed the respondents as the residents of
premises No.289 in the year 1991 and if the second respondent was a mere
licensee and if there was no marriage solemnized between her and the first
respondent, the name of first respondent would not have been recorded as
husband in Ex. 74. From this the first appellate court inferred that the second
respondent was not a mere licensee and appellants had failed to prove that
the first respondent was not the husband of the second respondent.
23. The Electoral Roll will not show whether a person is occupying a
premises as a tenant or as a licencee. It may at best show that the person was
residing in the premises. The fact that both respondents were residing in the
premises had never been disputed. If they represented that they were
20
husband and wife, the electoral roll will reflect the same. The inference
drawn by the first appellate court from the electoral roll, that second
respondent was not a mere licencee, is totally illogical and unsustainable.
Re : Notices (Exs. 75 to 78)
24. The first appellate court found that notices dated 9.10.1992 and
15.6.1993 issued by the respondents were not replied by the appellants and
draws an inference therefrom that the averments therein should be true. But
by then the litigations were already pending. The petition for fixation of fair
rent had been filed on 3.1.1992 (Application No.1/1992). A criminal case
under section 24(4) of Rent Act had also been filed (Crl. Case No.6/1992).
Thereafter, in 1993, suits were filed by the second defendant in RCS
No.114/1993 and by the appellants in RCS No.278/1993. In view of the
pending litigation, non issue of the replies to the notices cannot be treated as
an admission of the averments in the notices.
Re : Application for fixation of standard rent
25. The first respondent filed a petition for fixation of standard rent in the
year 1992 wherein he had claimed to be the tenant. The first appellate court
held that as this was not controverted, the allegations therein should be true.
21
The fact that the first respondent filed an application for determination of the
standard rent is not disputed. But it is also not in dispute that the appellants
filed a counter in the said proceedings wherein they clearly stated that the
first respondent had no connection with the property and the premises was
not given to him on rent or on any other understanding and that the first
respondent was falsely claiming tenancy with the help of second respondent.
It may be mentioned that the said petition for fixation of standard rent was
not pursued by the first respondent and ultimately it was dismissed for non-
prosecution on the ground that the first respondent had failed to prosecute
the matter from 1998. Therefore, filing of the application for fixation of
standard rent does not assist the respondents in proving tenancy.
Conclusion
27. It is thus seen that none of the documents produced or relied upon by
respondents evidenced tenancy or payment of rent. The documents no doubt
established that respondents were in possession of a portion of the premises
No.289, but that fact was never in dispute. It should be noted that though
respondents submitted that they occupied the suit portions in 1982, they did
not prove occupation of the suit portions from 1982. The first appellate court
erroneously held that the appellants had failed to offer satisfactory
22
explanation regarding the documents relied upon by the respondents and
held that therefore the suit should be dismissed. The first appellate court has
not recorded any finding that these documents produced by respondents
established a tenancy. In fact as noticed above, there is no finding in the
entire judgment that the respondents had proved that they were the tenants.
The documents relied upon by respondents do not establish a tenancy. The
trial court found that none of these documents established tenancy. The
appellants had explained all documents relied upon by the respondents by
demonstrating that they only prove occupation (which was not disputed) but
not tenancy. When there was nothing more to explain, the first appellate
court held that appellants failed to explain those documents and
consequently failed to establish that respondents were licencees. The first
appellate court inferred from documents which disclosed mere occupation of
a portion of the house and documents which showed some payments which
cannot be linked to rent, that appellants failed to prove that the occupation
by respondents was as gratuitous licensees. It did not however infer from the
documents that there is a tenancy. The entire reasoning is therefore unsound.
In spite of this legal lacunae, the High Court did not interfere on the ground
that no question of law was involved. It failed to notice that the inferences
and legal effect from proved facts is a question of law and the inferences
23
drawn by the first appellate court were wholly unwarranted. The fact that
was proved was possession of suit portions which was not in dispute, but not
tenancy in regard to the suit portions, which was in dispute. In the absence
of any documentary evidence showing the tenancy or payment of rent, the
evidence of PWs.1 and 2 is more trustworthy and probable than the
uncorroborated interested evidence of DW1. (The evidence of DWs. 2 and 3
does not have any bearing on the issue of tenancy claimed by respondents).
We therefore find that the judgments of the first appellate court and the High
Court are unsustainable and the finding of the trial court that respondents are
gratuitous licencees was correct and justified.
28. Therefore, we allow this appeal, set aside the judgment of the High
Court and the first appellate court and restore the decree for possession of
the suit portions granted by the trial court. Parties to bear their respective
costs.
…………………………..J.
(R.V. Raveendran)
New Delhi; .............................J.
September 30, 2011. (A.K. Patnaik)
