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East India Hotels Ltd Vs Syndicate Bank (1991): A Tenant Holding Over Cannot Be Dispossessed Without Following Due Course Of Law

Basant Khyati ,
  28 July 2021       Share Bookmark

Court :
Supreme Court of India
Brief :
Unilateral dispossession of a tenant holding over for nonpayment of rent by the landlord was held unlawful and upheld the decree for possession.
Citation :
45 (1991) DLT 476 SC


Date of judgement
12 September 1991

Judge
Justice N Kasliwal
Justice K Ramaswamy

Parties
East India Hotels Ltd. (appellant)
Syndicate Bank (respondant)

Subject

  • Whether the suit filed by the plaintiffs under Section 6 of the Specific Relief Act, is not maintainable?
  • Whether the respondent is entitled to recover possession under Section 6 of the Act?

Overview facts

  • The Syndicate Bank granted East India Hotels Ltd. a loan of Rs. 30 lacs. The amount of Rs. 30 lacs was advanced to the corporation under an agreement dated December 27, 1974, with interest at a rate of 12.5% per year and a ten-year repayment period.
  • The Syndicate Bank signed a leave and license agreement in the company's favour for 15,000 square feet on the mezzanine to the ground floor of the hotel Oberoi Towers in Nariman Point, Bombay, on a monthly remuneration of Rs. 60,0007- each month, for a period of 12 years.
  • The corporation notified the bank in a letter dated September 17, 1984, that the arrangement would end on December 31, 1986. The corporation also claimed that the bank should quit the premises at the conclusion of the term due to a lack of space.
  • The corporation requested the bank to remove the premises by the end of December 1986 in another letter dated April 18, 1986. By letter dated July 8, 1986, the bank requested that the company's license be renewed for another 12 years.
  • A fire broke out in Oberoi Towers on April 12, 1990, forcing not only the bank, but also all of the other business owners to vacate the premises. Following then, there was some correspondence between the parties, but the only incident worth mentioning is that the bank moved its operations to a new location, while its paperwork, furniture, and fixtures remained on the premises.
  • Initially, the corporation allowed bank employees to visit the premises three times per week, but starting in July 1990, the company no longer allows them to enter the facilities at all.
  • In the foregoing conditions, the bank filed a suit on the original site of the Bombay High Court on August 29, 1990, under Section 6 of the Act.
  • The High Court, after considering the various authorities, held that the plaintiff bank was no doubt a licensee, but even after the expiry of the license period, it cannot be dispossessed otherwise than in due course of law, and the plaintiff being in settled possession for a long time, was entitled to file a suit under Section 6 of the Act.
  • As a result, the High Court issued an order directing the appellant to give the respondent possession of the suit premises. Its implementation, however, was postponed for ten weeks from that date. Following that, in December 1990, the appellant filed suit No.4000 of 1990, as well as a Special Leave Petition.

Legal provision

  • Section 6 of the Specific Relief Act, 1963 - Suit by person dispossessed of immovable property.

Judgement analysis

  • The rule that stray or intermittent acts of possession do not constitute settled possession was thus firmly established by this Court. A person in settled possession has the right to resist attempts to evict the trespasser by the owner or others claiming under him.
  • The only exception was that a trespasser could not justify his possession if it was recent or hidden. Only attempted or intermittent acts or efforts to seize possession give the landlord the right to employ reasonable force. In the process of the law, the trespasser in settled possession will be evicted.
  • The case of Lallu Yeshwant Singh v. Rao Jagdish Singh and Ors. establishes that a tenant holding over cannot be evicted without following the proper legal procedures. This Court concluded that the question of title under Section 9 of the old Act is irrelevant in a claim brought under the revenue law. Forcible entry would be included in the definition of trespass.
  • The ratio in Chandu Lal's case, without a doubt, favours the appellant. However, it is tough to endorse it. The remedy under Section 6 is available to the licensee in settled possession. However, each case must be examined in light of its unique facts.
  • The appeal is accordingly dismissed but without costs.

Conclusion

The Bombay High Court in Maganlal Radia's case concluded that a licensee whose license has been revoked, even though he has real control of the property, is not entitled to use Section 6's remedy. In such a situation, he was evicted through a summary procedure, which means he was evicted in accordance with the law. As a result, the Section 6 remedy was unavailable.

Click here to download the original copy of the judgement

 
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