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

The Judgment of the Court was delivered by A

On 20.7.65, the LIC moved two applications (being HRC Nos. 3310 and 3311 of 1965) in the court of the Rent Controller (Sri A. Varadarajan who later became a Judge of t!Je this Court) for fu'a- tion of a "fair rent" for each of the premises. The fair rent claimed was computed at Rs.2,399.03 per month in respect of item No. 1 as against the rent of Rs.150 p.m. fixed under the lease deed. In respect of item 2 G the fair rent claimed was Rs.3266.50 as against Rs.200 p.m. payable under the lease deed. The defendants (G.G. and his sons) filed their objections to the above applications. They claimed that, under both the lease deeds, what had been leased ·out to them was only a vacant land and that the superstructure had been built by them. They claimed, therefore, that they were entitled to relief under the Madras H

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City Tenants' Protection Act and that the Rent Controller Court had A no jurisdiction to fix a fair rent.

The Rent Controller accepted the above argument so far as item I was concerned. So far as item 2 was concerned, it appears that, at the time of the hearing, it was conceded before the Rent Controller that R the respondents were tenants of the entire properties covered by the lease deed and that they had not constructed any of the premises thereupon. In view of this the Rent Controller dismissed H.R.C. 3310/ ~. 65 relating to item No. I and, in H.R.C. 3311/65, fixed the fair rent in )- respect of item no. 2 at Rs.1451 p.m. The order of the Rent Controller was dated 9.3.1966. c There were appeals to the Court of Small Causes. In respect of item No. I, in H.R.A. 534/66, the Court, on a perusal of the sale deed dated 30.7.53 filed by the UC before it, came to the conclusion that '"· the buildings on the land leased under Ex. P-1 had also been conveyed to the UC and that the LIC was entitled to seek fixation of fair rent in o respect of this premises also. The fair rent fixed by the Rent Controller at Rs.994 p.m. was upheld. The order of the Rent Controller in respect of item 2 was also upheld. It may be mentioned here that, even in certain earlier proceedings for fixation of fair rent and eviction (H.R.C. 867n3 and H.R.C. 2557/64), it had been held by the Rent Controller that item No. I (door No. 2) belonged to the LIC but his ~. E order of eviction had been set aside by the appellate court on some other ground. In the circumstances, the Court of Small Causes, in the appeals now being referred to (H.R.A. 534/66), did not treat the earlier decision as res judicata but came independently to the same conclusion that item No. I belonged to the LIC. This was on 19th April, 1967. The tenants filed revision petitions against the order of the Court of Small Causes but these were dismissed on 20.11.1968.

After the Civil Revision Petitions by the tenant were dismissed, the UC filed C.S. 64/1969 on the original side of the Madras High Court against the tenants for recovery of arrears of rent on the basis of the fair rents fixed, which were computed at Rs.98,250.97 in respect of the two items of property. Further interest at the rate of 12% thereon from date of plaint to the date of decree and at 6% thereafter till the date of realisation was also claimed.

It may be mentioned here that the tenant filed C.S. 87 of 1972 claiming protection under the Madras City Tenants' Protection Act H but this suit and further appeals therefrom have been dismissed. Turn-

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ing now to C.S. No. 54 of 1969 (which was disposed of along with C.S. A If No. 87 of 72 by a common judgment dated 23.10.1972), the contention urged on behalf of the tenants was that, since the subject matter of the lease under Ex. P-1 was only a vacant site, the Rent Controller had no jurisdiction to fix the fair rent in respect thereof and that, therefore, the claim in the suit for arrears of rent, based on the Rent Controller's B order in respect of the premises covered bv Ex. P-1 had to fail. The Court addressed itself to this question. It came to the conclusion that -'{ Ex. P-1 did not, in law, create a valid lease between the co-owners and the tenants. After referring to the terms of the sale deed (Ex. P-3), the superstructure constructed on the land was held to have been con- veyed to the vendee under the sale deed dated 30.7 .1953 and to have thus vested in the LIC. The Rent Controller was, therefore, held to c have had jurisdiction to fix the fair rent in respect of the premises. It .....- ;was, therefore, held that the plantiff's claim in the suit should succeed . ' The suit was decreed accordingly.

The tenants filed an appeal being O.S.A. No. 62 of 1973. The D Appellate Bench confirmed the decree in respect of item No. 2 subject to cerfain modifications which are not here relevant. However, so far as item No. 1 was concerned, the Appellate Bench vacated the decree passed by the trial court. It held that there was a valid lease between the quondam owners and the tenants under Exts. P-1 & P-2. Having -~ regard to the express recitals in Ex. P-3, the Appellate Bench held that it was impossible to hold that the bui!dings, which admittedly belonged E to the defendants and had been constructed by them on the vacant land taken on lease under Ex. P-1, ever were or could be the subject matter

... of the sale under Ex. P-3. In view of this finding, it was held that the Rent Controller had no jurisdiction to entertain the apphcation for fixation of fair rent in respect of the property which was only a vacant F ~ piece of land. In consequence, it was held, the LIC could not maintain the suit for recovery of rent based on the order made by the statutory tribunal under the Rent Control Act and claim the difference between the so called fair rent and the contract rent. The claim of tile LIC for recovery of Rs.39,224.71, as arrears of rent, in respect of item 1 was thus held to be not maintainable. O.S.A. 62 of 1973 was, therefore, allowed to that extent. The present appeal, by Spedal Leave granted G on 3.7.1979, is from the order of the Division Bench rejecting the __,....,_ appellant's claim for arrears of rent in respect of item No. 1 of the property set out in Schedule A to the plaint based on the difference between the fair rent fixed by the Rent Controller and the rent payable therefor under Ex. P-1. H

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The questions to be decided in this appeal. on the above facts, boil down to these: (1) Was the LIC the vendee only of a vacant piece of land with no title to the buildings standing on the site in item 1? (2) It is open for the tenants to contend that the order of-the Court of Small Causes in the earlier rent control proceedings deciding to the contrary and fixing the fair rent of item 1 at Rs.994 p.m. should be completely ignored as an order passed totally without jurisdiction, although it has L·~comc iim:l as berw •. o:!l the pa. ties? Two interesting aspects may be pointed out in regard to these two questions. The first is that if either question is answered in the negative, the other will not arise for consideration and the appeal will have to be allowed. But an affirmative answer to either question will necessitate an answer to the other. The second is that, though the claim in issue before us is only a C money claim for arrears of rent, any decision given by us, based, as it will have to be, on the issue whether the LIC owns the superstructure or not and whether the tenants are the lessees only of vacant land or of both land and buildings, will have repurcussions not only on the claim in this suit (which by now has accummulated to more than Rs.3 lakhs) o but also on any other proceedings by way of ejectment or otherwise which the LIC may have in contemplation against the tenants. The decision in this appeal will, therefore, be of great moment for the L.l.C.

So far as the first question is concerned, we have no doubt that the Division Bench of the High Court has come to the correct conclu- sion. In our view, the conclusion of the learned Single Judge that the lease Ex. P-1, executed by the co-owners of the property in favour of one of them, was invalid, was erroneous. S.5 of the Tmasfer of Pro- perty Act, 1882, clearly envisages transfers of property by a person to "one or more living persons or to himself, or to himself and one or more other living persons". Whatever may be the position, in spite of this provision, in respect of a purported transfer by a person to himself alone (which is very often the position in the case of trusts)-which was considered by the House of Lords in Rye v. Rye, [1962] A.C. 496, there is no reason to hold that a contract between a person with him- self and others is invalid. The Division Bench, we think, has rightly distinguished the decisions in Girish Chanara v. Srinath, (3 C.L.J. 141) and Rye v.Rye, [1962] A.C. 496. The observations of Lord Denning, extracted by the learned Judges, are quite apposite to the situation in the present case.

Once this objection is out of the way, the question is whether the construction put upon the leased Jana by the lessees formed part of the

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,._ property conveyed to the L.I.C. Sri Parasaran pointed out that they did not and drew our attention to subsequent correspondence between the parties to show that even the L.I.C. had not claimed at any stage any rent in respect of the superstructures (apart from the contractual rent, which was in respect of the land) and that both parties have all along been proceeding on the footing that the superstructure on item 1 belonged to the lessees. This apppears to _be correct but it cannot be conlusive of the rights of the parties. We have therefore gone carefully ~--into the terms of Ex. P. 1 and Ex. P-3. They clearly make out that the superstructures put up by the lessee under Ex. P-1 were not included in the property conveyed under the terms of Ex. P-3 and that, whatever may be the rights of the LIC to evict the tenant with liberty to demolish the superstructure on the termination of the lease, it had no property in the superstructure so long as the lease subsisted. We, therefore, c answer the first question posed by us in the affirmative. ;.--- This brings us, then, to the second, the really crucial, question posed earlier viz. whether, despite the above conclusion, we are pre- cluded, by principles of, or analogous to, res judicata, from going behind fhe findings to the contrary given in the earlier rent control proceedings by the Court of Small Causes which have become final on the dismissal of the C.R.P. filed th.ereagains.t

Sri T.S. Krishnamurthy Iyer, learned counsel for the appellant, submitted that the Courts now are precluded from going behind the findings of the Court of Small Causes in the earlier proceedings. He conceded that no legal consequenes can flow from a totally void order (see, Kiran Singh v. Chaman Paswan, [1955] S.C.R. 117@ 121). He also conceded that there may be a difference in principle betWeen a civil court and a court of limited jurisdiction. While the former has an inherent jurisdiction to decide a question raised about its own jurisdic- F. tion and such a decision cannot be challenged in another court after it has become final: (See: Bhatia Cooperative Society Ltd. v. Patel, [1953] S.C.R. 185 and Nageswara v. Canesa, AIR 1942 Mad. 675), the latter is strictly confined to the terms of the statute creating it. But, he submitted, even the decision of a Tribunal or a Court of limited juris- diction cannot be called in question so long as it acts within the scope G of the jurisdiction conferred on it by the relevant statutes. He, there- fore, invited us to peruse the provisions of the Tainil Nadu Buildings {Lease and Rent Control) Act, 1960 {hereinafter referred to as the Rent Control Act). Under the said Act, he pointed out, a petition for fixation of fair rent under S. 4 could be filed by either a landlord ora tenant: (Raval & Co. v. Ramachandran, [1974] 1 SCC 424). This is H

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what the LIC purported to do when it filed H.R.C. Nos. 3310 and ~ A 3311/64. When a petition under S. 4 is filed, the Rent Controller, on the language of S. 4 has to decide: ( 1) whether the applicant is a tenant in, or landlord of, the building and (2) what the fair rent of the pre- mises should be in accordance with the provisions of the Act. In the present case both the points had been put in issue. The respondents B denied that the L.I.C. was the landlord or they the tenants in respect of the property. They claimed to be the owner of the superstructure and admitted tenancy only in respect of the site. The Kent Controller and, ~ on appeal, the Court of Small·Causes were therefore, called upbn to give their decision on this question which was completely within their statutory jurisdiction and this decision certainly constitutes res judicata between the parties: see also, Explanation VIII to S. 11 of the Code of c Civil Procedure. At any rate, it is not open to one of the parties to contend that the decsion given by the Court of Small Causes, which has become final between the parties, is a total nullity which can be comp-~ ~ letely ignored. It was, therefore, not open to the High Court to enter- tain a collateral attack on the validity of binding nature or correctness D of the order of the Court of Small Causes and to consider and determine afresh the issue as to whether the L.l.C. is the owner af the premises as claimed or not.

In support of his contention, counsel referred to Krishnamurthy v. Parthasarathy, AIR 1949 Madras 780 reversing the decision in the A. E same case reported in AIR 1949 Madras 387. The appellant landlord had filed an evicton petition under the Rent Control Act without giving notice under s. lll(h) of the Transferof Property Act (which, in those days, was considered to be a condition precedent even to the filing of an eviction petition under the Rent Control Act) and obtained .ii an order of eviction. In these proceedings no contention had been t F raised by the tenant on the non-issue of the notice under the Transfer A of Property Act. An appeal by the tenant also failed but here again the above point was not taken. Thereafter the tenant filed a suit for a declaration that the order of the Rent Controller was ultra vires in that no notice to quit had been given as required by law. This plea was upheld by the learned Single Judge but was rejected in appeal. The G Division Bench observed:-

" ..... We agree with the learned Judge that this Court can entertain a suit to set aside an order of the Rent Controller if the Rent Controller exceeded the powers conferred on him. A Court or tribunal can, however, be said to have no jurisdiction to entertain a suit or application only if it has

• L.I.C. v. INDIA AUTOMOBILES IRANGANATHAN, J.] 555

no jurisdiction with regard to the subject-matter of the suit or application ..... But even these rules are subject to the qualification that, if the jurisdiction of the Court depends upon the ascertainment of facts and the Court, upon the facts found, holds that it has jurisdiction, then the decree of that Court cannot be ignored or set aside in collateral proceedings." B

After reference to certain other decisions of the Court, it was observed:-

"If a lessor brings a suit for eviction, he is to prove the existence of a lease, the relationship of lessor and lessee between himself and the defendant and the determination c of the lease. If he fails to prove this, the plaint is not returned because the suit is one which the Court has no jurisdiction to entertain; but the suit is dismissed as reveal- ing no cause of action ..... In a suit by a landlord against his .tenant for eviction, the determination of the tenancy is o merely one of the constituents of the cause of action that the landlord has to prove against his tenant in order to succeed in the suit. We are of opinion that a tenant can waive notice to quit; but even if he cannot, notice has not to be proved as a condition precedent to the institution of the suit ..... Mr. Srinivasa Ayyangar concedes that if a E landlord filed a suit in ejectment and failed to say that the tenancy had been determined, the Court would dismiss the suit and not return the plaint. In the same way, the Rent Controller would have to dismiss the application if it were not alleged in the affidavit that notice had been given or if it found, upon hearing the parties and considering the evidence, that notice had not been given. It would follow from this, therefore, that if notice to quit was necessary it would be merely one of the issues to be decided by the Rent Controller and would not in any way affect his juris- diction to entertain the application. That being so, if the Rent Controller did not decide that question properly, the matter would have to be raised in appeal to the Court of Small Causes and would give this Court no jurisdiction to entertain a suit by the defeated party; for such a suit would be barred by S. 12( 4) of the Act.

Again, in Manibhai Hathibhai v. Arbuthnot, AIR 1947 Bom. 413 H

556 SUPREME COURT REPORTS ll99o] 3 S.C.R.

a writ petition was filed to challenge the validity of an order pa;sed by A the Rent Controller on the ground that the circumstances for the invo- cation of S. 13(b) of the Bombay Rent, Hotel Rates and Lodging House Rates (Control) Act, 1944 had not been fulfilled. It is sufficient for our present purposes to extract the observations in paragraph 16 <•f

B the judgment:- ... - "16. It was sought to be argued on behalf of the petitioners that the respondent had no jurisdiction to determine the question as to whether the premises were at one time let .. out as a whole and then let out in parts as was sought to be contended by the applicants ....• Tue jurisdiction. of the Rent Controller, (xxx) is a statutory jurisdiction which is c . vested in the Rent Controller by the terms of the Act itself. A regular tribun..i is established by the Act which functions in those cases where the standard rent of the premises as . laid down in S. 3 of the Act exceeds Rs.80 per month. Tue tribunal owes its existence to the Act and not to any act of D ( ~ · the parties, and it has, therefore, jurisdiction to determine what are the cases which fall within its jurisdiction. If there is any dispute which. arises between the parties as to whether the particular application falls within the jurisdic- tion of the tribunal, it is the tribunal which is competent to decide that dispute and determine whether the particular E matter falls within its jurisdiction. If the tribunal decided it wrongly, there is an appeal provided against its decision. It . cannot, therefore, be contended, as the petitioners have done, that the respondent has no jurisdiction to determine the question as to whether the premises were at one time let out as a whole and then let out in parts as contended by · the applicants.".

Shri Iyer submits that the appellants' case here is on a stronger footing than in the two decisions cited above because here, in the earlier proceedings before the Rent controller and the Court of Small Causes, a specific point had been taken that the tenant was only a tenant of the land and not of the premises (which belonged to him) and that this contention had been specifically over-ruled by the appellate court after ----.. a consideration of the relevant material. Sri Krishnamoorthy Iyer also .·contended that even if it may· be an arguable question as to whether the decision in the earlier petitions constitutes res judicata or not and l: may plausibly be argued that it does not constitute res judicct~, tb question for our consideration really is whether the order pa"ed in tll'!

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earlier eviction petition can be treated as a nullity being passed by a court totally without jurisdicticin. He submitted that if the tenants had A filed a suit for declaration that the order passed in the earlier proceed·· ings as a nullity that would have been bound to fail. Shri Iyer also relied on certain observations of this Court in the decisions reported as Rai Brij Rajv. Shaw, ]1951] SCR 145 @147, 150; Official Tru~teev. Sachindranath, [19691 3 SCR 92 @pp. 99, 100; Antulay v. Nayak, B _ [ 1988] 2 SCC 602 at pp. 649, 677 and 700; Trideshwar Dayal v. Maheshwar Dayal, [1989] 2 SCALE 1436 at p. 1437 and Shiv Chander Kapoorv.AmarBose, [1990] 1SCC234,paras22and23.

Shri K. Parasaran, appearing for the respondents, sought to sup- port the High Court's judgment on various grounds. He contended that, even if the arguments on behalf of the appellant were to be c accepted, the appellants were not entitled to succeed, for the following reason. He drew our attention to the reference in the 1967 order of the Court of Small Causes to H.R.C. 867 /63, an earlier petition filed by the L.I.C. The Court had said: D "7. The Corporation had formerly filed a petition H.R.C. 867 /1963 in respect of these t":o buildings for fixation of fair rent. In that petition the tel/ant disputed the title of the Corporation in respect of the buildings. So, the Corpora- tion immediately filed an application H.R.C. 2557 /64 for eviction on the ground of wilful denial of title. The petition E for fixation of fair rent was dismissed by the learned First Additional Rent Controller on the ground that the lease has been taken under two separate deeds and that a single petition was not maintainable. In the other petition he ordered eviction on the ground that the denial was not bona fide. He gave an express finding that the building No. F

2. Mount Road belongs to the Corporation. In the appeal the appellate court set aside the order of eviction on the ground that there was no denial of title prior to the institu- tion of the petition. Of course, the finding in that case that the building belongs to the Corporation cannot operate as res judicata because the tenant had no opportunity to file an G appeal against that finding since the application for eviction had ultimately been dismissed. On this point I find that the _._.,. building belongs to the petitioner." (Emphasis added)

He submitted that the Court erred in thinking that no further proceed- H

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ings had been taken in the earlier matter. The fact was that a Civil A Revision Petition (C.R.P. 1839/66) had been filed against the order of the appellate court (ll.R.A. 1162/64). The C.R.P. had been allowed and the matter remitted back for fresh disposal. When the matter came back to the Court of Small Causes, the learned Judge, in his order dated 9.4.69, went into the issue at length and came to the concusion B that the superstructure belonged to Indian Automobiles and had not been conveyed to the L.I.C He held, therefore, that the claim by India Automobiles in the eviction petition of title to the superstructure would amount to a denial of title but that the denial was bona fide. He, therefore, allowed the appeal and set aside the order of eviction passed against the tenants. Sri Parasaran, therefore, submitted that the ques- tion of title had already been decided in these earlier proceedings c which we shall briefly refer to as the 'first set of proceedings'. If at all, he says, it was this decision that constituted res judicata and the Court of Small Causes, in H.R.A. 534/66 arising out of H.R.A. 3310/64 (which we shall refer to as the 'second set of proceedings') could not have considered the issue again or taken a different view. D Sri Parasaran also sought to explain the reasons why the respon- dents did not prefer any appeal or revision from the order of the Court of Small Causes in H.R.A. 534/66 He submitted that the law then prevalent in Tamil N adu as laid down in the decisions of the Madras High Court in Palaniappa Chettiar and Others v. Vairavan Chettiar, E [ 1963) 76 L. W. 21 and Palaniappa Chettiar v. Babu Sahib alias Sheik Mytheen Sahib and Others, [1964] 77 L.W. 551, was that the Rent Control Act would apply even in cases where the landlord had leased out only a vacant site and the tenant had put up his own construction thereon. It was only in Salay Mohamed Sait etc. v. !after Mohamed Sail's Memorial Dispensary Charity and Others, [ 1969] 1 Andhra F Weekely Reporter (S.C.) 16, that this view was disapproved. At that stage, therefore, the respondents could not have hoped to succeed even if their stand that they were the owners of the superstructure had been accepted.

We do not think that these contentions have any force. So far as the first contention is concerned, it may be pointed out, hrstly, that an answer to it is furnished by the terms of S. 19 of the Act (set out a little later) which does not contain a reference to S. 4. The application under S. 4 could not, therefore, have been summarily rejected even assuming that the question of title could be said to have been substan- tially in issue and decided in the previous proceedings. Secondly, the order now relied upon was passed in April 1969 and was not in exist-

L.l.C. v. INDIA AUTOMOBILES IRANGANATIIAN, J.] 559

ence when the Court of Small Cm1ses passed its order in the second set of proceedings. Thirdly, even assumine the argument of learned counsel to be correct, all that can be said is that, in the second set of proceedings, the tenants could have contended that it was not open to the Court of Small Causes to go into the question of title in view of the decision in the first set of proceedings. But no such plea was taken before it with the result that the court discussed the matter and arrived B· at a decision. In deciding whether the decision constitutes res judicata or not, we are not entitled to go into the correctness of that decision. Right or wrong, the second decision has become final and the same issue, says the appellant, cannot be gone into again. Lastly, the 1969 decision of the Court of Small Causes was only concerned with the question whether there was denial of the L.I.C.'s title by the tenants and, if so, whether it was bona fide. It was only this limited aspect- c eviction on the ground of non-bona fide denial of title-that was under consideration of the Court under S. 10(2)(vii) of the Act read with the proviso to S. JO( I) and the Court's observations on the question of title were one on a collateral issue. We do not, therefore, think that the 1969 decision can be an effective answer to the appellant's conten- D tion based on the 1967 decision. The second argument, explaining why the respondents did not challenge the 1967 order in further appeal or revision, is also of no avail in considering the issue raised by the counsel for the appellant.

But we think Sri •Parasaran is right in the third contention urged by him before us which goes to the root of the matter. His argument is that a Rent Controller and, on appeal from him, the Court of Small Causes, is not competent to go into a question of title to immovable property and that a civil court cannot be barred from examining a claim of title merely because the question may have had to be con- sidered by the Rent tribunals as a collateral issue in deciding certain applications before them. He contended that it is a basic proposition, well-settled by authority, that a tribunal of limited jurisdiction like the Rent Controller (this expression will, hereinafter, also include a Court of Small Causes disposing of an appeal from him) cannot be clothed with jurisdiction to decide far-reaching questions of title to immovable property. This, he said, is a proposition that is borne out on general principles as well as on the provisions of the Rent Control Act. Taking

• up the provisions of the Act, he referred us to the provisions of Ss.10 and 19 which read thus:

S. 10(1)-Eviction of tenants. A tenant shall not be evicted whether in execution of a decree or otherwise except in H

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accordance with the provisions of this section or sections 14 A ~ffi: ~

Provided that nothing contained in the said sections shall apply to a tenant whose landlord is the Government:

B Provided further that where the tenant denies the title of the landlord or claims right of permanent tenancy, the Controller shall decide whether the denial or claim is bona fide and if he records a finding to that effect, the -........ landlord shall be entitled to sue for eviction of the tenant in a Civil Court and the Court may pass a decree for evic- tion on any of the grounds.mentioned in the said sections, c notwithstanding that the Court finds that such denial does not involve forfeiture of the lease or that the claim is unfounded.

S. 19-Decisions which have become final not to be D reopened-Any application under section 3-A or section 12, and any application under sub-section (2) or sub- section (3) or sub-section (3-A) of section JO or under sections 14, 15 or 16, shall be summarily rejected by the authorized officer or the Controller, as the case may be. if such application raises between the same parties or bet- E ween parties under whom they or any of them claim. sub- stantially the same issues as have been finally decided or as purport to have been finally decided in a former proceeding-

(i) under this Act, or F (ii) under any other law from time to time in force before the date of the commencement of this Act and relat- ing to matters dealt with in this Act.

Counsel contended that S. JO makes it clear beyond doubt that the G Rent Controller is precluded from deciding any issue regarding title to the property and that, if any such question arises, he should leave it to be decided by ordinary civil courts in appropriate proceedings. The procedure to be adopted by him in disposing of the applications before ... him is a summary one hardly conducive to a satisfactory disposal of such complicated questions. Under Rule 12(2) he is required to decide applications by recording a brief note of the evidence of parties and

L.l.C. v. INDIA AUTOMOBILES IRANGANATHAN, J.] 561

witnesses and decide matters after giving the parties an opportunity to state their case: more or less, in the manner in which a Court of Small Causes decides cases before it. Indeed, in the Presidency Town, he is subordinate to the Court of Small Causes which has been notified as the authority to hear appeals from his o;ders and it is a well settled proposition that the Court of Small Cause~ is not competent to adjudi- cate on questions of title. For these reasons, learned counsel submits, the decision of the Court of Small. Cause~ in the earlier proceedings cannot fetter a civil court from adjudicating upon all the issues arising before it in a civil suit.

We think that this contention is well founded. There are clear indications in the Act and rules that the Rent Controller does not have the jurisdiction to decide questions of title. In a proceedings under the c Act, whether it be for fixation of fair rent or eviction, the tenant may raise several objections. He may, inter alia, take up the point that the opposite party is not the "landlord". The definition of "landlord'" under the Act is very wide and encompasses not only an owner but also persons "receiving or entitled to receive the rent of the building which has been let out or would be entitled to receive the rent of the building if it were let out to a tenant" in one of several capacities. Denial of title of the landlord is itself one of the grounds on which eviction can be sought [S. 10(2)(vii) ].,Sri Krishnamurthy Iyer is, therefore, certainly right in contending that the Act requires the Rent Controller to con- sider this issue, among others, while disposing the applications before him. But, we think, Sri Parasaran is right in saying that, since the Rent Controller has no jurisdiction to entertain an application except by a landlord or a tenant, the question of title to the property is one on which his very jurisdiction depends. It cannot be described as a matter that is squarely and directly in issue in these proceedings to which any finality can be attached, as the Rent Controller, by deciding the issue wrongly, cannot clothe himself with jurisdiction where none exists. All that the Rent Controller has to do is to satisfy himself that the person seeking eviction or fixation of fair rent is a "landlord" who has, prima facie,' the right to receive the rents of the property in question. That the Rent Controller's jurisdiction on this issue is limited is clear from the proviso to S. 10(1) of the Act. In order to decide whether the denial of the landlord's title by the tenant is bona fide, the Rent Con- troller may have to go into the tenant's contentions on the issue but he is not to decide the question finally. He has only to see whether the tenant's denial of the landlord's title is bona fide in the circumstances of the case. He may reach a conclusion, on the merits, that the land- lord has title; yet he cannot order eviction if the tenant's action in H

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denying the title was bona fide. Per contra, he may reaoh the conclu- A sion on the materials before him that the landlord has no title; yet, it seems, if he finds that the applicant is otherwise a landlord and that the grounds on which the tenant's denial was based were not bona fide, he will have to order eviction. So also, in an application under S. 4, the jurisdiction of the Rent Controller is to determine a fair or standard B rent for the premises. He has no doubt to ensure that the person applying for the fair rent is the tenant or the landlo1d. He has also no doubt to satisfy himself as to the extent of the premises qua which the re_lationship of landlord and tenant exists and in respect of which rent is receivable or payable. For deeiding these issues, he may have no doubt also to consider the oral and documentary evidence adduced by the parties. Yet, having regard to the manner in which he is required to c come to this conclusion and having regard to the fact that at least in the Presidency Town an appeal from his order goes to the Court of Small Causes, it is difficult to escape the conclusion that the jurisdic- tion to be exercised by him is a limited and a prima facie one. It will be anomalous to hold that where an owner of property seeks to evict his tenant under s. 10(2)(vii) but the Rent Controller refuses to pass the order of eviction-though satisfied about his title-because the tenant had acted bona fide, it would be open to the owner to seek eviction by having his title adjudicated upon in a civil court but that the owner cannot have a similar right in the matter of recovery of rent which is basically a relief for which he has to approach~ civil court. A question of title may be a complex one involving difficult issues. For instance, the "owner" may claim title under an adoption or a will or a trust deed or a gift deed and there may be contentious claims among several persons which it will not be possible for the Rent Controller to decide. It is important to remember that when an owner files a suit for arrears of rent, it is open to the tenant, under the general law, to plead that no rent is payable in respect of the premises as, indeed, it belongs to him. The right to raise this issue cannot be taken away without a specific statutory provision. The terms of s. 11 C.P.C., including Explanation VIII, are not comprehensive enough to cover the case.

The limited nature of the jurisdiction of a Tribunal like the Rent G C.ontroller and the Court of Small Causes has been considered in a number of cases by this Court as well as other courts:

(1) We may start with an early Full Bench decision of the • Madras High Court: Venkatarama Rao & Ors. v. Musunuru lfenkayya and Ors., AIR 1954 Madras 788. It arose under the Madras Estate . H Land Act (I of 1908). In that case, the Revenue Divisional Officer, in

p. 563 Copy page pinpoint

certain earlier proceedings, had held that a particular village was not an "estate" and this had been confirmed by the District Collector and the High Court. Later on, the plaintiffs filed suits against the tenants in possession of holdings in the village for an injunction restraining them from removing the paddy heaps standing on the suit lands until a due division was made of the crop and until the rent in kind payable to the plaintiffs was paid by the tcnarts. The tenants wanted to contend in reply that the village in question was an "estate" within the meaning of the Act and they had occupancy rights therein. The plaintiffs, how- ever, objected that this plea was not open to the tenant in view of the earlier decision of Revenue Divisional Officer. Negativing the plea of the plaintiffs, the Court pointed out: c (8) xxx xxx xxx If a particular matter is one which does not fall within the exclusive jurisdiction of the revenue court, then a deci- sion of a revenue court on such a matter, which might be incidentally given by the revenue court, cannot be binding on the parties in a civil court. One practical test would be to determine if that particular matter would not be a matter in respect of which the civil court would have jurisdiction. To give an obvious instance, suppose in a suit under S. 55 for the grant of a patta instituted by a person claiming to be the adopted son of the ryot who was a pattadar, the landlord raises a plea that he is not entitled to the patta because his adoption is not valid, it may be that the revenue court would have to summarily go into the question whether the person suing is or is not the validly adopted son of the previous ryot. Can it possibly be said that the finding of the revenue court on the issue of adoption is bindng on the parties in a subsequent suit in a civil court in which the validity of the adoption might fall to be decided? There can be no doubt about the answer.

That is because the dispute as to the validity of the adoption is not a dispute in respect of which a revenue court has exclusive jurisdiction. Such a dispute is a matter well within the jurisdiction of a civil court. Thereafter, it cannot be within the exclusive jurisdiction of the Revenue court, 1nd the decision of such a dispute by~ revenue court cannot be binding in a civil court. H

p. 564 Copy page pinpoint

Incidentally it may be pointed out, this decision has been cited with A approval by this Court in Bhagwan Dayal v. Reoti Devi, [1962) 3 SCR440. ""' (2) Desika Charyulu v.State of Andhra Pradesh and another, AIR 1964 S.C. 807 was a decision under the Madras Estates (Abolition B and Conversion into Ryotwari) Act, 1948. In that case it was held, on a construction of section 9( 1) of the Act, that the property in question being an "inam village" is assumed as a fact on the existence of which the competence of the Settlement Officer to determine the matters ,,. within his jurisdiction rests and that, as there are no words in the statute empowering him to decide finally the former, he cannot confer jurisdiction on himself by a wrong decision on this preliminary condi- c tion to his jurisdiction. Any determination by him of this question, therefore, is (subject to the result of an appeal to the tribunal) binding on the parties only for the purpose of the proceedings under the Act, ~ ' but no further. The correctness of that finding may be questioned in any subsequent legal proceeding in the ordinary courts of the land where the question might arise for decision. However, if the property is an inam village, whether the "inam village" is an "inam estate" is, within his exclusive jurisdiction and in regard to it the jurisdiction of the Civil Courts is clearly barred.

(3) Dhulabhai v. State, [1968] 3 SCR 662 was concerned with the interpretation of the provision in the Madhya Bharat Sales Tax Act '> .. barring the jurisdiction of civil courts in matters entrusted to the jurisdiction of the special tribunals created under the Act. It is un- necessary to refer in detail to this case except to set out a passage from pages 682-3 where Hidayatullah, C.J., speaking for the Constitution Bench, reviewed all earlier cases on the subject and enunciated the principles emerging therefrom, of which the following are relevant here: ..I.

"The result of this inquiry into the diverse views expressed in this Court may be stated as follows·:-

G ( 1) Where the statute gives a finality to the orders of the special tribunals, the Civil Courts' jurisdiction must be held to be excluded if there is adequate remedy to do what the Civil Courts would normally do in a suit. Such provision, however, does not exclude those cases where the provisions of the particular Act have not been complied H with or the statutory tribunal has not acted in conformity

L.I.C. v. INDIA AUTOMOBILES [RANGANATIIAN, J.! 565

with the fundamental principles of judicial procedure. A

(2) Where there is an express bar of the jurisdiction of the court, an examination of the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of t~e civil court. B

Where there is no express exclusion the examination of the remedies and the scheme of the particular Act to find OJ)t the intendment becomes necessary and the result of the inquiry may be decisive. In the latter case it is necessary to see if the statute creates a special right or a liability and c provides for the determination of the right or liability and further lays down thai all questiqns about the said right and I ~- liability shall be determined by the tribunals so constituted, 'and whether remedies normally associated with actions in Civil Courts are prescribed by the said statute or not. D xxx xxx xxx

(4) In Mathura Prasad Bajoo Jaiswal & Ors. v. Dossibai N.B. Jeejeebhoy, [ 1970] 3 SCR 830, the appellant had obtained lease of an open land for construction of buildings. After putting up the buildings, he applied for determination of standard rent under the Bombay E Rents, Hotel and Lodging House Rates Control Act, 1947. The appli- cation was rejected holding that the provisions of the Act did not apply to open land let for construction. This viewwas confirmed by the High Court. Sometime thereafter in another case the High Court held that

l the question whether the provisions of the Act applied to any parti- cular lease must be determined on its terms and a building lease in respect of an open plot w.s not excluded. from the provisions of the Act solely because open land may be used for residence or educational purposes only after a structure is built thereon. Relying upon this F

judgment, the appellant filed a fresh application for determining the standard rent. The trial Judge rejected the application holding that question of the applicability of the Act was res judicata since it had G been finally decided by the High Court between the same parties in respect of the same land in the earlier proceeding for fixation of standard rent. The order was confirmed by the first appellate court and on fort1er appeal by the High Court. The Supreme Court, how- ever, reversed the judgment of the High Court. The Court observed: H

p. 566 Copy page pinpoint

A "A question relating to the jurisdiction of a Court cannot be deemed to have been finally determined by an erroneous decision of the Court. If by an erroneous interpretation of the statute the court holds that it has no jurisdiction, the decision will not, operate as res judicata. Similarly by an erroneous decision if the Court assumes B jurisdiction which it does not possess under the statute, the decision will not operate as res judicata between the same parties, whether the cause of action in the subsequent liti- gation is the same or otherwise."

(5) Gangabai v. Chhabubai, [1982) 1 SCR 1176, related to the c jurisdiction of the Court of Small Causes. In that case the respondent, being in need of money, entered into an agreement with the appellant for a loan of Rs.2,000 and it was simultaneously decided that she I

should execute a nominal document of sale and rent note of her house. •\ These documents were executed on January 7, 1953, but the respon- dent continued in the possession of the house property throughout. D The appellant was attempting to enforce the document as a sale deed by filing suit in the Court of Small Causes for recovery of rent and the said suits had resulted in decrees. pie respondent thereupon filed a suit for a declaration that she was and continued to be owner of the house property, alleging that the documents executed on 7th January, 1953, were never intended to be acted upon. The appellant in defence E maintained that the sale deed represented a genuine transaction and ownership of the house property had passed to her. It was pleaded that the decrees passed by the Court of Small Causes operated as res judicata barring the respondent from pleading that the sale deed was merely a nominal transaction. Reliance was also placed on section 92 of the Indian Evidence Act. The High Court held that the sale deed I F and rent note were sham documents, that the decrees of the Court of j Small Causes did not operate as res judicata and that section 92 of the Indian Evidence Act did not preclude the respondent from establish- ing the true nature of the transaction. The Supreme Court dismissed the appeal. In regard to this contention it was urged on behalf of the appellant that the High Court ecred in applying the statutory provi- G sions of section 11 of the Code of Civil Procedure and that it should have invoked the general principles of res judicata. It was submitted that it was necessary to find out whether the Court of Small Causes was competent to try the two earlier ·suits and docide the issues arising therein. After referring to various decisions cited on behalf of the parties, the Court observed: H

L.I.C: v. INDIA AUTOMOBILES [RANGANATHAN, J.J 567

"It seems to us that when a finding as to title to immovable property is rendered by a Court of Small Causes res judicata cannot be pleaded as a bar in a subsequent regular civil suit for the determination or enforcement of any right or interest in immovable property. In order to operate as res judicata the finding· must be one disposing of a matter di- rectly and substantially in issue in the former suit and the issue should hlive been heard and finally decided by the court trying sucb suit. A matter collaterally or incidentally in issue for the purposes of deciding the matter which is directly in issue in the case cannot be made the basis of a plea of res judicata. It has long been held that a question of title in a Small Cause suit can be regarded as incidental only to the substantial issue in the suit and cannot operate c as res judicata in a subsequent suit in which the question of title is directly raised ..... Our attention has been drawn to fa.!'Jlanation VIII to section J 1 in the Code of Civil Pro- cedure recently inserted by the Code of Civil Procedure (Amendment) Act, 1976. Section 97(3) of the Amendment D Act declares that the new provision applies to pending suits, proceeding, appeals and applications. In our opinion the Explanation can be of no assistance, because it operates only where an issue has been heard and finally decided in the earlier suit." E (6) We may next refer to Jeeth Kaur and Ors. v. Smt. P. Kondalamma and another, AIR 1983 AP 219. In that case, the tenant filed a petition under the relevant Rent Control Act for permision to deposit rents in court. The landlady denied any relationship of tenant and landlord between the applicant and herself. This contention was upheld by the appellate court and the High Court. In a subsequent suit F filed by the tenants in the civil court as tenants of the suit building, the landlady contended that the earlier decision operated as res judicata, but this contention was negatived. The Court observed: "The main relief sought for by the tenants was for deposit- ing the rents on the ground that the landlord refused to receive the same. In order to give that relief, the Rent G Control Court must first have jurisdiction as it can adjudi- cate disputes only between a landlord and a tenant. Since the relationship is denied by the landlord, the Rent Con- troller had decided that question incidentally. This is not the main relief for which the application is filed. In fact, it is not a dispute which is exclusively triable by the Tribunals H

p. 568 Copy page pinpoint

under the Act. The dispute has to be decided as incidental to the granting of the main reliefs. The necessary condition for exercise of jurisdiction by the Rent Controller is the existence of relationship of landlord and tenant. The rent authorities have no power to decide a dispute which is not between a landlord and tenant. Therefore. the decision on the question whether the relationship of landlord and tenant exists is a decision regarding jurisdictional facts and such a decision is neither conclusive nor final. In such circumstances, the jurisdiction of the Civil Court to enter- tain a suit in which the question of jural relationship of the landlord and tenant arises is not ousted. Since the said decision is not final it can never operate as res judicata c between the parties. In fact if we examine the provisions of the Act, there are only five reliefs that can be granted under the Rent Control Act. One is fixation of fair rent and increase thereof under sections 4, 5 and 6; the second is permission to deposit rents in the court under section 8 (5); D the third is to order eviction under section 10; the fourth is to direct recovery of prn;scssion by the landlord for repairs under section 12; and the fifth is to order restoration of amenities when they are unjustly withheld, under section 14 of the Act. The rent authorities cannot grant the reliefs of declaration of occupancy rights. E (7) We may lastly refer to the decision of this Court in State of Tamil Nadu v. Ramalinga Samigal Madam and Ors., [1985] 4 SCC '.O. In that case the plaintiff-respondent claimed title to the suit land on the basis of its long and uninterrupted possession since prior to 1938 as also under an order of assignment of 1938 issued in its favour by the F Zamindar whereby the right to cultivate in respect of that land was granted to it subject to the payment of certain amounts. In 1953 the plaintiff applied for a ryotwari patta in respect of this land after the abolition of the Estate but the Additional Settlement Officer, by an order dated 25th June, 1954, took a decision that land was not a ryoti land but had been registered as a poramboke (village communal land) G and, therefore, no one was entitled to ryotwari patta in respect of that land. The plaintiff thereupon filed a suit for a declaration of its title and right to continue in possesion and enjoyment of the suit land subject to payment of ryotwari or other cess to be imposed by Govern- ment without any interference from the Government. The State of Tamil Nadu resisted the suit on merits by contending that the suit land H was communal land and that the assignment or grant by the zamindar

L.J.C. v. INDIA AUTOMOBILES IRANGANATHAN, J.] 569

.., in favour of plaintiff was invalid. It also took a technical plea that the A ~ decision of the Additional Settlement Officer that the suit land was poramboke and not 'ryoti' land was final and the Civil Court's jurisdic- tion to decide that question was barred under section 64-C of the Tamil Nadu Estates (Abolition and Conversion into Ryotwari) Act, 1948, which ran as follows: B "64-C. Finality of orders passed under this Act-(!) Any order passed by the Government or other authority under this Act in respect of matters. to be determined for the purposes of this Act shall, subject only to any appeal or revision provided by or under this Act, be final.

(2) No such order shall be liable to be questioned in any c court oflaw.

The State Government's plea was rejected by the High Court. Jn appeal, the State contended before this Court that every refusal of a ryotwari patta by a Settlement Officer in an inquiry under section 11 D involves a decision on his part that either the applicant is not a ryot or the land is not ryoti land; in the instant cases it was the latter and such decision on the nature or character of the land has been given a finality under section 64-C which cannot be questioned in a court of law. Therefore, it was urged that the civil court's jurisdiction to adjudicate upon the natre or character of the suit lands must be held to have been E excluded or ousted. After discussing several decisions in regard to the exclusion of a civil court's jurisdiction as well as the provisions of the Act, the Court pointed out that the terms of section 64-C alone will not be decisive on the point of ouster of the civil court's jurisdiction. The observations made by the Court in paras 13 and 14 have relevance to the present case and need not be set out here in extenso. F

We are of opinion, in the light of the decided cases referred to above, that the contention on behalf of the respondents has to be accepted. We are concerned with the jurisdiction of a civil court. The extensive jurisdiction conferred on civil courts under s. 9 of the Code of Civil. Procedure should not be curtailed without a specific statutory G warrant or except on some clear principle. There is nothing in the Tamil Nadu Rent Control Act which, in any way, takes away, or narrows down, the civil court's jurisdiction as, for example, there is in the Delhi Rent Control Act (s. 50). As to principle, whether we look at it on the analogy of res judicata or adopt the approach of Sri Iyer as to whether the order in the earlier proceedings is to be treated as an H

p. 570 Copy page pinpoint

order that is null and void or merely one that is valid until set aside, the answer has to turn on the true nature and scope of the jurisdiction conferred on the Rent Controller under the Act. It is possible, we have to ask ourselves, having regard to the context, scheme and terms of the legislation, that the statute could have envisaged the Rent Controller (and the authorities to whom appeal or revision could be preferred from his orders) to be final authorities to adjudicate on issues of title also? The answer, in our opinion, has to be in the negative. Section 4 .. of the Rent Control Act, as already pointed out, provides only a machinery for fixation of fair rent in respect of certain premises. It is the quantum of fair rent that arises for determination by the Rent Controller. There is no doubt that, since an application for this purpose cannot lie except at the instance of a landlord or a tenant, the c Rent Controller has to deal with this incidentally but this is not one of the direct issues before the Rent Controller. If, and only if, this relationship exists between the parties, the Rent Controller steps in for a limited purpose-to determine what the fair rent is-and then fades out of the picture. Where a fair rent is fixed by a Controller, the Rent D Control Act does not provide for a machinery for recovery of the amount. The amount has to be recovered by the landlord only by recourse to a civil court. This gives an inidcation that the determina- tion of the relationship that gives rise to the application is also not conclusive. This is indeed made clear by the provisions relating to eviction. We have already referred to the effect of the provisions of s. E JO (2)(vii) read with the proviso to S. 10(1) and pointed out how jurisdiction to decide questions of title is denied to the Rent Controi- ler. The position cannot be different under S. 4. Having regard to the much narrower scope of S. 4, it would be anomalous to read a wider jurisdiction to the Rent Controller thereunder than under S. 10. In our opinion, on a proper construction of the Rent Control Act, the ques- F tion on which the jurisdiction of the civil court is excluded is only the determination as to the fair rent of the premises. If the civil court in this case had come to the conclusion that there is a relationship of a landlord and a tenant and that the LIC was entitled to recover the rent from the tenants, it will have to pass a decree in favour d the LIC on the basis of the fair rent fixed by the Rent Controller. It will not be open to the civil court to re-determine the rent payable by the tenant to the landlord because that is a matter squarely and exclusively within the jurisdiction of the Rent Controller and, therefore, implietily ex- . _,,... cluded from the purview of the civil court. But his decision is not final on the issue that opens up his jurisdiction and cannot preclude an owner from contending, in a civil court, that he should not be asked to pay rent for his own property to some one else.

L.I.C. v. INDIA AUTOMOBILES (RANGANATIIAN, J.l 571

For the reasons mentioned above, we are of the opinion that the A High Court reached the correct conclusion and that this appeal has to fail. The appeal is therefore, dismissed. In the circumstances, how- ever, we make no order as to costs.

Y. Lal Appeal dismissed. B