Sunday, 7 February 2016

What is concept of ownership in Rent control laws?

It is also now a settled principle of law that the
concept of ownership in a landlord-tenant litigation
governed by Rent control laws has to be distinguished
from the one in a title suit. Indeed, ownership is a
relative term, the import whereof depends on the
context in which it is used. In rent control legislation,
the landlord can be said to be the owner if he is
entitled in his own legal right, as distinguished from
for and on behalf of someone else to evict the tenant
and then to retain control, hold and use the premises
for himself. What may suffice and hold good as proof

of ownership in landlord-tenant litigation probably
may or may not be enough to successfully sustain a
claim for ownership in a title suit. (vide Sheela & Ors.
vs. Firm Prahlad Rai Prem Prakash, (2002) 3 SCC
375).
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No.167 OF 2007
M/s Boorugu Mahadev & Sons & Anr. ……Appellant(s)
VERSUS
Sirigiri Narasing Rao & Ors. ……Respondent(s)
Citation;AIR 2016 SC433
Abhay Manohar Sapre, J.

1) This appeal is filed against the final judgment
and order dated 06.09.2005 of the High Court of
Judicature, Andhra Pradesh at Hyderabad in Civil
Revision Petition No. 5228 of 2002 whereby the High
Court allowed the revision petition filed by the
respondents herein and set aside the judgment dated
17.09.2002 passed by the Additional Chief Judge, City
Small Causes Court, Hyderabad in R.A. No. 93 of 1998
1Page 2
and restored the judgment dated 31.12.1997 passed
by the Principal Rent Controller Secunderabad in R.C.
No. 165 of 1993.
2) In order to appreciate the issue involved in this
appeal, which lies in a narrow compass, it is necessary
to set out the relevant facts in brief infra.
3) The premises bearing No. 9-3-692 to 694,
Regimental Bazar, Secunderabad (hereinafter referred
to as “suit premises” was purchased jointly by the
predecessors of the appellants herein under a
registered sale deed dated 28.07.1904 from Sirigiri
Yellaiah, and others, which they sold in discharge of
pre-existing mortgage debt to avoid court attachment
in O.S. No. 178 of 1900 on the file of the District
Court. Since the date of sale, the respondents’
predecessors continued to occupy the suit premises
and thus became the tenants of the appellants’
predecessors-in-title on a monthly rent of Rs.10/- in
2Page 3
addition to payment of property taxes, conservancy
and electricity charges etc. under an agreement dated
01.08.1904. The said agreement was incorporated in
a book maintained by the appellants’ predecessors in
the regular course of business and was duly signed by
the respondents’ predecessors by way of rent every
month. After the death of Sirigiri Vishwanadham, i.e.,
respondents’ predecessor, his four sons became the
tenants and continued to pay monthly rent at the rate
of Rs.75/- besides other charges. The respondents are
the grand children of late Sirigiri Vishwanadham, who
continued to occupy the suit premises as the tenants
of the appellants. However, the respondents stopped
paying rent w.e.f. 01.06.1987 to the appellants. Since
the rent was not being paid in spite of repeated
requests and demands, a legal notice was sent by the
appellants to the respondents on 22.07.1992, to which
interim reply was sent on 03.08.1992 followed by a
3Page 4
detailed reply on 30.08.1992 and thereafter there were
exchange of legal notices ensued between the parties.
4) Since despite service of the legal notice sent by
the appellants to the respondents demanding arrears
of rent, the respondents failed to comply with the
demand, the appellants filed Eviction Petition being
R.C. No. 165 of 1993 before the Principal Rent
Controller, Secunderabad against the respondents
under Section 10 of the A.P. Buildings (Lease, Rent
and Eviction) Control Act, 1960 (hereinafter referred to
as “the Act”). The eviction was sought essentially on
the grounds, viz., default in payment of monthly rent
from 01.06.1987 till the time of eviction petition and
secondly denial of the appellants’ title to the suit
premises.
5) Denying the allegations made in the eviction
petition, the respondents stated that the sale deed
dated 20.07.1904 under which the ancestors of the
4Page 5
appellants had purchased the suit premises was a
mortgage with a right of re-conveyance whereas the
respondents’ predecessors continued to be the owners
of the suit premises. According to them, the suit
premises was offered only as a security for borrowed
amount and subsequently their forefathers discharged
the liability of borrowed amount. However, due to
some reasons, the respondents’ forefathers could not
obtain the re-conveyance of the suit premises in their
name, though ownership of suit premises remained
with the respondents’ forefathers. It was also averred
that for the last fifty years, there was no payment of
rent either by them or their forefathers in respect of
the suit premises whereas their forefathers paid the
property tax etc. as the owners. It was also averred
that the appellants fabricated the records to file an
eviction petition against the respondents.
5Page 6
6) Vide order dated 31.12.1997, the Rent Controller
dismissed the petition filed by the appellants.
7) Challenging the said order, the appellants filed
first appeal being R.A. No. 93 of 1998 before the
Additional Chief Judge, City Small Causes Court at
Hyderabad.
8) By order dated 17.09.2002, the Additional Chief
Judge, Small Causes Court allowed the appeal and
while setting aside the order of the Rent Controller
directed the respondents to vacate and handover the
vacant possession of the suit premises to the
appellants within two months from the date of the
judgment. It was held by the appellate Court that the
appellants’ predecessors were the owners of the suit
premises on the strength of sale deed-Ex.P.7. It was
also held that the sale in question in relation to the
suit premises between the parties was not a
transaction of mortgage as alleged by the respondents
6Page 7
but it was an outright sale in favour of the appellants’
predecessors-in-title. It was also held that the
respondents failed to adduce any evidence to prove
that the transaction of sale of suit premises was a
mortgage and the borrowed amount having been paid,
the mortgage was redeemed. It was also held that the
respondents’ predecessors were, therefore, in
possession of the suit premises as tenants and later
became the appellants’ tenants by operation of law. It
was also held that the respondents failed to pay the
arrears of rent from 01.06.1987 and hence they
committed willful default in payment of rent rendering
themselves liable to be evicted from the suit premises
under the provisions of the Act.
9) Against the said judgment, the respondents
herein filed revision petition being C.R.P. No. 5228 of
2002 before the High Court.
7Page 8
10) Learned Single Judge of the High Court, by
impugned judgment dated 06.09.2005, allowed the
revision petition filed by the respondents herein and
set aside the judgment of the Additional Chief Judge,
Small Causes Court and restored the order of the Rent
Controller.
11) Aggrieved by the said judgment, the appellants
have preferred this appeal by way of special leave.
12) Heard Mr. B. Adinarayan Rao, learned senior
counsel for the appellants and Mr. A.T.M. Ranga
Ramanujam, learned senior counsel for the
respondents.
13) Mr. B. Adinarayana Rao, learned senior counsel
appearing for the appellants, while assailing the
legality and correctness of the impugned order urged
two submissions. In the first place, he submitted that
the High Court erred in allowing the respondents’
revision petition and thereby erred in interfering in its
8Page 9
revisionary jurisdiction by upsetting a well reasoned
findings of facts recorded by the first appellate Court
in favour of the appellants. He further submitted that
the first appellate Court while hearing the appellants’
appeal was within its jurisdiction to probe into all
issues of facts and the evidence and record its finding
de hors the findings of the Rent Controller and once
any finding of fact was recorded by the first appellate
Court then such finding is binding on the High Court
while hearing the revision against such judgment of
the first appellate Court. Learned counsel pointed out
from the impugned judgment that the High Court in
this case decided the revision like the first appeal
without keeping in mind the subtle distinction
between the revisionary and the first appellate
jurisdiction thereby committed a jurisdictional error in
rendering the impugned judgment.
9Page 10
14) In the second place, learned senior counsel for
the appellants submitted that even otherwise, there
was no justification on the part of the High Court on
facts to have reversed the well reasoned findings of
fact recorded by the first appellate Court because,
according to the learned counsel, the appellants were
able to prove with adequate evidence adduced by them
that firstly, they were the owners of the suit premises
and secondly, there was a relationship of landlord and
tenant between the predecessor-in-title of the
appellants and the respondents’ predecessor-in-title in
relation to the suit premises. It was also urged that in
the eviction petition filed before the Rent Controller
under the Act, the issue of title to the suit premises
could not be gone into like a regular title suit yet the
appellants adduced adequate evidence to prove their
title over the suit premises and the relationship of
landlord and tenant between the parties whereas the
10Page 11
respondents failed to prove that the sale of suit
premises in favour of the appellants’ predecessors was
not a sale but was a transaction of mortgage and that
their predecessor-in-title redeemed the alleged
mortgage by repaying the debt.
15) In support of his submissions, learned counsel
relied upon the decision of the Constitution Bench of
this Court in Hindustan Petroleum Corporation
Limited vs. Dilbahar Singh, (2014) 9 SCC 78.
16) In contra, Mr. A.T.M. Ranga Ramanujam, learned
senior counsel for the respondents, supported the
impugned judgment and prayed for its upholding
calling no interference therein.
17) Having heard learned counsel for the parties and
on perusal of the record of the case, we find force in
the submissions of the learned counsel for the
appellants.
11Page 12
18) The Constitution Bench of this Court settled the
law relating to exercise of jurisdiction of the High
Court while deciding revision in rent matters under
the Rent Control Act in the case of Hindustan
Petroleum Corporation Limited (supra). Justice
R.M. Lodha the learned Chief Justice speaking for the
Bench held in para 43 thus:
“43. We hold, as we must, that none of the
above Rent Control Acts entitles the High
Court to interfere with the findings of fact
recorded by the first appellate court/first
appellate authority because on reappreciation
of the evidence, its view is different from the
court/authority below. The consideration or
examination of the evidence by the High
Court in revisional jurisdiction under these
Acts is confined to find out that finding of
facts recorded by the court/authority below
is according to law and does not suffer from
any error of law. A finding of fact recorded by
court/authority below, if perverse or has
been arrived at without consideration of the
material evidence or such finding is based on
no evidence or misreading of the evidence or
is grossly erroneous that, if allowed to stand,
it would result in gross miscarriage of justice,
is open to correction because it is not treated
as a finding according to law. In that event,
the High Court in exercise of its revisional
jurisdiction under the above Rent Control
Acts shall be entitled to set aside the
impugned order as being not legal or proper.
The High Court is entitled to satisfy itself as
12Page 13
to the correctness or legality or propriety of
any decision or order impugned before it as
indicated above. However, to satisfy itself to
the regularity, correctness, legality or
propriety of the impugned decision or the
order, the High Court shall not exercise its
power as an appellate power to reappreciate
or reassess the evidence for coming to a
different finding on facts. Revisional power is
not and cannot be equated with the power of
reconsideration of all questions of fact as a
court of first appeal. Where the High Court is
required to be satisfied that the decision is
according to law, it may examine whether the
order impugned before it suffers from
procedural illegality or irregularity.”
19) It is also now a settled principle of law that the
concept of ownership in a landlord-tenant litigation
governed by Rent control laws has to be distinguished
from the one in a title suit. Indeed, ownership is a
relative term, the import whereof depends on the
context in which it is used. In rent control legislation,
the landlord can be said to be the owner if he is
entitled in his own legal right, as distinguished from
for and on behalf of someone else to evict the tenant
and then to retain control, hold and use the premises
for himself. What may suffice and hold good as proof

of ownership in landlord-tenant litigation probably
may or may not be enough to successfully sustain a
claim for ownership in a title suit. (vide Sheela & Ors.
vs. Firm Prahlad Rai Prem Prakash, (2002) 3 SCC
375).
20) Coming now to the facts of this case, keeping in
view the principle of law laid down in the
aforementioned two cases and on perusal of the order
of the first appellate Court, we find that the first
appellate Court properly appreciated the facts and
evidence adduced by the parties and on that basis
recorded all necessary findings (detailed above) in
favour of the appellants. This the appellate Court
could do and, in our opinion, rightly did in the facts of
this case.
21) Likewise, when we peruse the impugned order,
we find, as rightly urged by the learned counsel for the
appellants, that the High Court did not keep in mind
14Page 15
the aforesaid principle of law laid down by the
Constitution Bench in the case of Hindustan
Petroleum Corporation Ltd. (supra) while deciding
the revision petition and proceeded to decide the
revision petition like the first appellate Court. The
High Court as is clear from the judgment probed in all
the factual aspects of the case, undertook the
appreciation of whole evidence and then reversed all
the factual findings of the appellate Court and restored
the order of the Rent Controller. This, in our view, was
a jurisdictional error, which the High Court committed
while deciding the revision petition and hence it
deserves to be corrected in this appeal. In other
words, the High Court should have confined its inquiry
to examine as to whether any jurisdictional error was
committed by the first appellate Court while deciding
the first appeal. It was, however, not done and hence
interference in this appeal is called for.
15Page 16
22) That apart, we find that the appellants were able
to prove their ownership through their predecessor-intitle
on the strength of sale deed (Ex-P.6/7) of the suit
premises whereas the respondents failed to prove their
defence. Indeed, the burden being on them, it was
necessary for the respondents to prove that the sale in
favour of the appellants’ predecessor-in-title of suit
premises was a transaction of mortgage and not an
outright sale. Since the respondents did not adduce
any documentary or oral evidence to prove their
defence, the first appellate Court was justified in
allowing the eviction petition. In our view, the
evidence adduced by the appellants to prove their title
over the suit premises was sufficient to maintain
eviction petition against the respondents and it was,
therefore, rightly accepted by the first appellate Court.
23) As observed supra, the first appellate Court
having recorded categorical findings that the
16Page 17
relationship of landlord-tenant was proved and
secondly, the respondents had committed a willful
default in payment of monthly rent and its arrears
from 01.06.1987, these findings were binding on the
High Court while deciding the revision petition. It was
more so when these findings did not suffer with any
jurisdictional error which alone would have entitled
the High Court to interfere.
24) Learned counsel for the respondents lastly
argued that there was an encroachment made by the
appellants on the suit premises and document (Ex-P-
6) was inadmissible in evidence, hence the eviction
petition was liable to be dismissed on these two
grounds also. These submissions, in our considered
view, deserve to be rejected at their threshold because
the same were not raised in the written statement filed
by the respondents before the Rent Controller and nor
were urged at any stage of the proceedings. We cannot,

therefore, allow such factual submissions to be raised
for the first time in this appeal.
25) In the light of foregoing discussion, the appeal
succeeds and is hereby allowed. The impugned
judgment is set aside and that of the judgment of the
first appellate Court dated 17.09.2002 in R.A. No. 93
of 1998 is restored. As a consequence thereof, the
eviction petition filed by the appellants against the
respondents in relation to the suit premises is allowed.
The respondents are, however, granted three months’
time to vacate the suit premises from the date of this
order subject to furnishing of the usual undertaking in
this Court to vacate the suit premises within 3 months
and further the respondents would deposit all arrears
of rent till date at the same rate at which they had
been paying monthly rent to the appellants (if there
are arrears) and would also deposit three months’ rent
in advance by way of damages for use and occupation
18Page 19
as permitted by this Court. Let the undertaking,
arrears of rent, damages for three months and cost
awarded by this Court be deposited within 15 days
from the date of this order.
26) The appeal is accordingly allowed with cost which
quantify at Rs.5000/- to be paid by the respondents to
the appellants.
 .……...................................J.
 [J. CHELAMESWAR]

 ………..................................J.
 [ABHAY MANOHAR SAPRE]
New Delhi,
January 18, 2016.

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