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NATIONAL LAW INSTITUTE UNIVERSITY

PROPERTY LAW - I

Case Analysis:

St. Mary's Educational Society

Vs

Dr. Qutubuddin Ahmed & Ors.

SUBMITTED TO: SUBMITTED BY:

AKSHEY JOSE DR. SANJAY KUMAR YADAV

2013 B.A.LLB 39 ASSOCIATE PROFESSOR

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Contents

MATERIAL FACTS ................................................................................................................... 3

LEGAL ISSUES .......................................................................................................................... 5

ARGUMENTS ADVANCED ..................................................................................................... 6

Defendants .................................................................................................................................6

Plaintiffs......................................................................................................................................6

LEGAL PROVISIONS................................................................................................................ 7

JUDGEMENT ............................................................................................................................. 9

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MATERIAL FACTS

The material facts of the case are as follows:

1.

The plaintiffs are the owners of premises bearing Door No. 3-6-137, Himayatnagar,

Hyderabad, admeasuring 1,612 sq. yards, with an old building, thereon.

The 1st defendant is an Educational Society and Defendants 2 and 3 are its members.

2.

With a view to establish and run a Junior College in the said premises, Defendants 1 to3 (for short "the defendants") approached the plaintiffs. Both of them agreed on certain

terms, such as, that the suit schedule property shall be leased for a period of 15 years,

with effect from 2-10-1987 to the defendants, that a building shall be constructed by the

defendants, with their own funds, in accordance with the plan to be sanctioned in the

name of the plaintiffs by the Municipal Corporation of Hyderabad, that the defendants

shall deposit a sum of Rs. 50,000/-, and that the monthly rent shall be Rs. 7,000/-.

Initially, an agreement was entered into on 11-8-1986. Thereafter, a lease deed was

executed on 2-10-1987, but it was not registered.

3. The defendants were inducted into possession and construction was undertaken. Few

years thereafter, notices were exchanged between the parties, in the matter of payment

of certain additional amounts, as advance to the plaintiffs. Alleging that the defendants

constructed large halls in the 5th floor of the building, without permission from the

Municipal Corporation of Hyderabad, failed to demolish an old structure, which too

was a condition imposed by the Municipal Corporation, for undertaking new

construction, and that they have subleased part of the premises in favour of Defendants

4 and 5, the plaintiffs got issued legal notice dated 20-2-1997. The defendants, in turn,

issued a reply dated 3-3-1997, denying the allegations contained in the notice. Not

being satisfied with the reply issued by the defendants, the plaintiffs filed the suit for

the reliefs referred to above.

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4.

On behalf of the defendants, a common written statement was filed. It was alleged that

on their own accord, the plaintiffs have agreed to extend the period of lease till the year

2017, beyond the initial period of 15 years, and received a sum of Rs. 6,00,000 as

advance. As regards the alleged deviation from the plan, they pleaded that the plaintiffs

themselves filed a suit in the Court of X Assistant Judge, City Civil Court, Hyderabad,

and obtained a decree for regularization of a minor deviation. It is stated that while

extending the period of lease, several conditions, such as, increase of the rent by 15%

for every span of 5 years, was agreed to. They flatly denied the sublease of the premises

in favour of the Defendants 4 and 5. They contended that the plaintiffs are in the habit

of making unreasonable and unjust demands for payment of huge amounts, without any

basis, and that the suit is not maintainable, since it is filed before the expiry of agreed

period. The rate at which the mesne profits were claimed is stated to be excessive and

unreasonable.

5. Through its judgment dated 20-1-2003, the trial Court decreed the suit, directing that

the plaintiffs shall pay a sum of Rs. 30,00,000/- towards cost of construction, within

three months, from the date of decree, and refund within three months, all the amounts

received by the plaintiffs as advance, and thereupon, the defendants shall deliver vacant

possession of the premises. It awarded mesne profits at the rate of Rs. 8/- per sq. feet,

per month, over an area of 15,000 sq. feet from the date of filing of the suit, till the date

of delivery of possession. A direction was issued as to adjustment of Rs. 6,00,000/-, at

the rate of Rs. 4,000/- per month, with effect from 2-10-1992 till 1-4-1997.

6.

The defendants filed an appeal aggrieved by the decree passed by the trial Court. The

plaintiffs, on the other hand, filed in the same Court, aggrieved by the decree passed bythe trial Court, insofar as it awarded mesne profits at the rate of Rs. 8/- per sq. feet, as

against their claim of Rs. 35/- per sq. feet, over a larger extent.

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LEGAL ISSUES

1. Whether the plaintiffs are entitled for the ejectment of the defendants and delivery of

vacant possession of the suit schedule property?

2. Whether the plaintiff is entitled for mesne profits at the rate of Rs. 8,400/- p.m., for the

period from 2-4-1997 to 8-4-1997 amounting to Rs. 1960/-?

3. Whether the plaintiff is entitled for future mesne profits pendente lite until delivery of

possession?

4. Whether the plaintiffs had received Rs. 6 lakhs with regard to extension of lease from

2002 to 2017 from the defendants, as pleaded by D-1 to D-4 in their written statement?

5.

Whether the notice dated 20-2-1997 issued by the plaintiffs is not proper and valid?

6.

Whether the plaintiffs are entitled for future mesne profits at Rs. 35/- per SFT from the

date of the suit till delivery of possession of the suit schedule property?

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ARGUMENTS ADVANCED

Defendants

Learned Advocate-General, appearing for the defendants, submits that the suit itself was not

maintainable, since there existed an agreement between the parties that the lease shall be in

force, till the year 2017. He contends that the defendants were ready and willing to perform

their part of the contract, for execution of lease deed, and that they were not liable to be

evicted from the premises. He contends that the findings recorded by the Courts below, on

the allegations as to making of unauthorized constructions, or failure to demolish the oldstructure, are without any basis. He submits that the plaintiffs got the deviations regularized,

through process of compounding, by filing a suit. About the plea as to subleasing of the

premises, the learned Advocate-General submits that there was absolutely no truth in it, and

the Courts below have proceeded on assumptions.

Plaintiffs

Learned Counsel for the plaintiffs, on the other hand, submits that admittedly there did not

exist any registered lease deeds, and the defendants cannot rely upon any condition,

incorporated in an unregistered document. He contends that the plea of part performance

was not at all raised in the written statement, and even otherwise, the defendants are not

entitled for protection, thereunder. Learned Counsel further submits that, even if the benefit

under Section 53-A of the Transfer of Property Act (for short "the Act") is to be extended,

the fact remains that the very document, on which reliance is placed, provided for eviction

on payment of cost of construction, and thereby, it became permissible for the plaintiffs to

seek eviction.

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LEGAL PROVISIONS

Transfer of Property Act, 1882 - Section 53A

Part performance

Where any person contracts to transfer for consideration any immovable property by writing

signed by him or on his behalf from which the terms necessary to constitute the transfer can

be ascertained with reasonable certainty, and the transferee has, in part performance of the

contract, taken possession of the property or any part thereof, or the transferee, being

already in possession, continues in possession in part performance of the contract and has

done some act in furtherance of the contract, and the transferee has performed or is willing

to perform his part of the contract, then, notwithstanding that the contract, though required

to be registered, has not been registered, or, where there is an instrument of transfer, that the

transfer has not been completed in the manner prescribed therefor by the law for the time

being in force, the transferor or any person claiming under him shall be debarred from

enforcing against the transferee and persons claiming under him any right in respect of the

property of which the transferee has taken or continued in possession, other than a rightexpressly provided by the terms of the contract.

Transfer of Property Act, 1882 - Section 106

Duration of certain leases in absence of w ri tten contract or local usage

In the absence of a contract or local law or usage to the contrary, a lease of immovable

property for agricultural or manufacturing purposes shall be deemed to be a lease from year

to year, terminable, on the part of either lessor or lessee, by six months' notice expiring with

the end of a year of the tenancy; and a lease of immovable property for any other purpose

shall be deemed to be a lease from month to month, terminable, on the part of either lessor

or lessee, by fifteen days' notice expiring with the end of a month of the tenancy.

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Transfer of Property Act, 1882 - Section 107

Leases how made

A lease of immovable property from year to year, or for any term exceeding one

year or reserving a yearly rent, can be made only by a registered instrument.

All other leases of immovable property may be made either by a registered

instrument or by oral agreement accompanied by delivery of possession.

Where a lease of immovable property is made by a registered instrument, such

instrument or, where there are more instruments than one, each such instrument shall

be executed by both the lessor and the lessee.

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JUDGEMENT

The trial Court shall appoint a Commissioner, who shall be a Civil Engineer, or

Contractor, for the purpose of ascertaining the value of the building, constructed by

the Defendants 1 and 2, on the plaint schedule property.

The defendants shall vacate the suit schedule premises, on deposit of cost of the

building by the plaintiffs as assessed under Clause (a), or by the end of May 2007,

whichever is later.

There shall be a decree for a sum of Rs. 1,960/- representing mesne profits, up to the

date of filing of the suit.

It shall be open to the plaintiffs to file an application for ascertainment of mesne profits

for the suit schedule property, for the period, from the date of filing of the suit, till the

date of recovery of possession. On such ascertainment, a decree for the said amount

shall ensue.

The parties shall bear their own costs.