18th March, 2011

Petitioner Counsel: Mr. R.M. PETHE
Respondent Counsel: Mr. S.R. RAJGURU with Mr. ASHOK VERMA, Mr. D.P. ADSULE, Ms. VAIDEHI MHAISPURKAR, Dr. A.K. BARTHAKUR with Mr. P.T. THAKUR

Cases Cited:
Sir Fazalbhoy Currimbhoy and others Vs. Official Trustee of Maharashtra and Others, (1979) 3 SCC 189 [Para 5,10,11]
Shreeram Yeshwant Patil and others Vs. Regional Settlement Commissioner, and Custodian Evacuee Properties, Bombay and others, 1977 MH.L.J. 438 [Para 11,12]
Tar Mohammad and others Vs. Union of India and others, (1997) 4 SCC 382 [Para 13]
Eradley Dudley Baxter Vs. T.L. Bhagtiani and others, AIR 1961 Bombay 69 [Para 17]

JUDGMENT

JUDGMENT :- SA NO. 435 OF 1989 :

Appellant in Second Appeal No.435 of 1989 is the original Plaintiff. He filed Suit No.1236 of 1984 against Union of India and five others seeking the following reliefs:-

(i) For a declaration that he is a tenant of the suit property.

(ii)For permanent injunction restraining the Defendants from disturbing peaceful possession over the suit property.

(iii) For restoration of possession of property noted in para 1-A to 1-M of the Plaint.

2. The Trial Court by its judgment and order dated 25/08/1986 partly decreed the suit. However, it refused to restore possession of the portion described in para 1-A to 1-M of the plaint. The appeal which was filed against the said judgment and order was dismissed by order dated 16/08/1989.

3.Brief facts are as under:-

4. The suit property was originally owned by Sir Currimbhoy Ebrahim Baronetcy. Thereafter, by virtue of the Sir Currimbhoy Ebrahim Baronetcy Act, 1913 as amended by Bombay Act No.14 of 1953, his property was settled upon the Trust. Trustees of the said Trust leased out the property to the Plaintiff on monthly rent of Rs 613.30 for five years. Thereafter, the suit property, according to the Plaintiff, vested in Defendant No.4 - the Official Trustee, Maharashtra State and the lease was renewed for five years. Thereafter, on 11/5/1976, supplementary agreement was executed between the parties increasing rent and by fresh lease dated 8/5/1978 which was executed for another five years, the property excluded the open space surrounding the said building 'Mobos Hotel' together with outhouses, servants' quarters and garages.

5. In the meantime, the Apex Court by its judgment in Sir Fazalbhoy Currimbhoy and others vs. Official Trustee of Maharashtra and Others (1979) 3 SCC 189 held that the said entire property was declared to be evacuee property and, as such, it vested in the Custodian of Evacuee Property.

6. By Notification published under section 12 of the Displaced Persons (Compensation and Rehabilitation) Act, 1954 the said property was vested in the Central Government free from all encumbrances including any leases.

7. The second appeal was admitted by this Court on 10/8/1989 on the substantial questions of law i.e ground Nos. 2, 3 and 4 which read as under:-

"2.Whether both the lower Courts insofar as refusing to restore possession of the portion of the suit property taken over illegally by the Respondents original Defendants have mis-construed the judgment and order dated 20th February, 1986 passed by this Hon'ble Court in Writ Petition No.4958 of 1985?"

"3.Whether both the lower Courts insofar as refusing to restore possession of the portion of he suit property taken over illegally by the Respondents original Defendants have failed to appreciate that Writ Petition No.4958 of 1985 decided by this Hon'ble Court on 20th February 1986 was restricted only to interim injunction proceedings in Regular Civil Suit No.1236 of 1984 filed by the Appellant?"

"4.Whether both the lower Courts insofar as refusing to restore possession of the portion of the suit property taken over illegally by the Respondents-original Defendants have failed to appreciate that by order dated 20th February 1986 in Writ Petition No.4958 of 1985 this Hon'ble Court was concerned only with the interim injunction proceeding pending Regular Civil Suit No.1236 of 1984 and, therefore, in that context had observed that the Appellant had no right for injunction in respect of portion of the property which was taken over by the Respondents original Defendants and further the substantive suit No. R.C.S. 1236 of 1984 wherein the Appellant has specifically prayed for restoration of the possession of the portion of the suit property illegally taken over by the Respondents original Defendants?"

8. The learned Counsel appearing on behalf of the appellant/plaintiff submitted that during the pendency of the suit, interim order was granted by the Trial Court in respect of rest of the property. However, so far as property in respect of present appeal is concerned which is descried in para 1-A to 1-M of the plaint since the Plaintiff was dispossessed in 23rd June, 1984 and the suit was filed on 10th July, 1984, the Trial Court did not grant any interim order. This order was challenged by the Plaintiff by filing an appeal. However, his appeal was dismissed. Against the said order, Plaintiff filed Writ Petition in this Court vide Writ Petition No. 4958 of 1985 and the learned Single Judge of this Court in para 6(c) of his judgment observed that since the Settlement Commissioner on 23rd June, 1984 obtained possession of sixteen premises enlisted in the letter dated 26th June, 1984, possession of part of the original property has been already taken over and the plaintiff had no right therein or thereto.

9. The grievance of the appellant/plaintiff is that the Trial Court relied on the observations made by the High Court in interlocutory proceedings and without going into merits dismissed the suit of the Plaintiff in respect of the claim over the suit property as mentioned in para 1-A to 1-M of the Plaint. Counsel for the appellant/plaintiff submitted that the Trial Court ought to have taken into consideration the evidence on record and, thereafter, ought to have appreciated the said evidence and arrived at an independent finding. He submitted that the observation made by the High Court in the the Writ Petition was prima facie in nature and it did not confer any right on the respondents or deprive the plaintiff of his rights. He submitted that the lower appellate court also committed the same error and relied on the observation made by the High Court. Counsel for the appellant/plaintiff invited my attention to the said observation made by both the lower Courts on the said issue.

10. Mr. Adsule, the learned AGP appearing on behalf of the Government, on the other hand, relied on the judgment of the Apex Court in Sir Fazalbhoy Currimbhoy and others vs. Official Trustee of Maharashtra and Others (1979) 3 SCC 189 and submitted that the ratio of the said judgment squarely applies to the facts of the present case and by virtue of the said judgment the issue stood concluded. He submitted that the Apex Court has taken into consideration the historical background starting from formation of the Trust and the Act which was passed whereby the entire property of the original owner vested in the Trustees of the said Trust and after the last heir of Sir Currimbhoy Ebrahim migrated to Pakistan, the said property was declared as evacuee property and, therefore, vested in the Central Government. He submitted that, therefore, even otherwise, since the Settlement Commissioner-cum-Custodian had taken possession of the said property on 23/06/1984, the said property had vested in the Commissioner and, therefore, even leasehold rights were extinguished and the Plaintiff, therefore, had no right whatsoever in respect of the said property.

11. There is much substance in the submissions made by the learned AGP appearing on behalf of the Government. The Apex Court in Sir Fazalbhoy Currimbhoy and others vs. Official Trustee of Maharashtra and Others (1979) 3 SCC 189 has observed in para 6 of its judgment as under:-

"6.Meanwhile, the Fourth Baronet having migrated to Pakistan along with his son Zoolfikar Ali, the Bombay Legislature passed an Act titled the Sir Currimbhoy Ebrahim Baronetcy (Repealing and Distribution of Trust Properties) Act, 1959 (which we shall refer to as "the Repealing Act"). The Act, as its name shows, repealed the Baronetcy Act and, inter alia, revoked and extinguished "the trusts, powers, provisions, declarations and purposes" declared and expressed in that Act. It provided for the vesting of the properties and funds in the Official Trustee Bombay, for the purpose of distributing them "amongst the persons rightfully entitled thereto according to law". Acting under the Repealing Act, the Official Trustee called upon persons claiming interest in the "trust properties", an expression which includes the properties and funds settled and created under the Bombay Act, to submit their claims. As he found that the claims were contested and was unable to say which of them were justified, he applied to the Bombay High Court under sub-section (2) of Section 7 of the Repealing Act for orders and directions as regards the distribution of the trust properties amongst the several claimants. The properties were valued at Rs 30 lakhs for the purposes of court fees."

In para 16 of the said judgment, after taking into consideration, the expression "evacuee property" and the further development which had taken place, the Apex Court has observed as under:-

"16............. Therefore, it is beyond dispute that the official Trustee must, by virtue of sub-section (4), transfer and vest in the Custodian the trust properties. Sub-section (4) of Section 7 further declares that the law relating to evacuee property shall apply to "such right, title and interest in the trust properties" as they apply to any other evacuee property under the law. The words "such right, title and interest in the trust properties" mean the right, title and interest in the trust properties which we have found the evacuee entitled to in this proceeding under Section 7, and which now vest in the Custodian. That is distinct from the right, title and interest of the Fourth Baronet in the trust properties which were declared to be evacuee property under the Administration of Evacuee Property Act, 1950."

In view of the judgment of the Apex Court in the said case, it is clear that the property of the Trust, therefore, vested in the respondents after it was declared as evacuee property and the Plaintiff's right stood extinguished. Division Bench of this Court has clarified this aspect in Shreeram Yeshwant Patil and others vs. Regional Settlement Commissioner, and Custodian Evacuee Properties, Bombay and others 19977 MH.L.J 438 Apart from that, the Government of India acquired the properties on 10/04/1980 by exercising powers vested in it under section 12 of the Displaced Persons (Compensation and Rehabilitation) Act, 1954.

12. So far as leasehold rights of the persons in such evacuee properties are concerned, those rights also stand extinguished and the Division Bench of this Court in Shreeram Yeshwant Patil and others vs. Regional Settlement Commissioner, and Custodian Evacuee Properties, Bombay and others 1977 MH.L.J 438 after taking into consideration the provisions of the said Act and the observations made by the Apex Court in various judgments, has observed in para 15 of its judgment as under:-

"15. The question for consideration is whether the possession of the petitioners in view of all these provisions of law would be an encumbrance within the meaning of that expression in section 12 of the Displaced Persons Act and whether the property would vest in the Central Government free from that encumbrance. The word "encumbrance" has been defined in Chamber's 20th Century Dictionary as "that which encumbers or hinders; a legal claim on an estate," "to burden" etc. We have already referred to the various provisions of the Administration Act and we have tried to emphasize the anxiety of the Legislature to preserve the evacuee property for its eventual utilization for certain purposes including a public purpose of rehabilitation of the Displaced Persons. Section 12(1) of the Displaced Persons Act also refers to the purpose connected with the relief and rehabilitation of Displaced Persons as the public purpose. In view of this position, we are of the view that the word "encumbrance" occurring in section 12(2) of the Displaced Persons Act should be given a wide connotation, and if it is so interpreted, in our view, it would include even a lease which has controlled by the Custodian in respect of the properties which vested in him under section 8 of the Administration Act and section 11 of the Separation of the Interest Act."

13. In this view of the matter, though it is true that, both, the trial court and the lower appellate court have not taken into consideration the evidence on record and have only relied on the judgment of the learned Single Judge of this Court, in view of the judgment of the Apex Court and Division Bench of this court, in my view, the appellant/plaintiff does not have any right, title or interest and their leasehold rights stood extinguished after the land vested in the Custodian and then in Union of India under section 12 of the Displaced Persons (Compensation and Rehabilitation) Act, 1954. Apart from that, the Apex Court in Tar Mohammad and others vs. Union of India and others(1997) 4 SCC 382 has held that after the land is declared to be an evacuee property, the Tenancy Law applicable to it cannot be enforced by virtue of non obstante clause and the Administration of Evacuee Property Act, 1950 overrides the provisions of Tenancy Law. The Apex Court in the said judgment has observed in para 3 as under:-

"3. Firstly, we are unable to appreciate the stand taken by the appellants for the reason that there should be a specific finding by the authorities that the appellants had tenancy granted by Mohd. Hasham Abdulla prior to 14-8-1947 in their favour and that they remained in occupation under that title as tenants. Then only sub-section (2) of Section 12 of the Act stands attracted. There is no such finding recorded by the High Court in that behalf nor any such contention was raised. Their only premise is that they were tenants and, therefore, the property was not covered under the AEP Act as free from encumbrances. That contention, though raised in the High Court, was negatived. The High Court reasoned that by operation of Section 4(1) of the AEP Act, the pre-existing law stands excluded by virtue of the non obstante clause. Thereby, tenancy rights also stand extinguished by operation of the non obstante clause. Once Section 4(1) of the AEP Act stands attracted, the alleged right to tenancy also is set at naught; nor does it amount to encumbrance. In consequence, the alleged right to tenancy has no foundation for resisting taking possession of the land. Even the order passed by the Tehsildar and Assistant Custodian has not been made part of the record which was impugned in the High Court. Under these circumstances, there is no case warranting interference."

14. The Second Appeal No.435 of 1989 is dismissed. Consequently, all Civil Applications taken out in Second Appeal No.435 of 1989 do not survive and they are disposed of accordingly.

SA NO. 448 OF 1989 :

15. In view of the judgments of the Apex Court in the aforesaid cases, the Second Appeal No.448 of 1989 also will have to be allowed since the property is now vested in the Custodian and has acquired by the Central Government under section 12 of the Displaced Persons (Compensation and Rehabilitation) Act, 1954.

16. Accordingly, the first substantial question of law viz. "(i) whether a person in possession of an evacuee property or acquired evacuee property, like the respondent-plaintiff, can claim any tenancy right under the Transfer of Property Act?" is answered in the negative and the second substantial question of law viz "(ii) whether rights of the lessee in respect of demised premises which has been acquired under the provisions of the Displaced Persons (Compensation and Rehabilitation ) Act, 1954 and which has been declared as evacuee property stand extinguished in view of the land being vested in Central Government?" is answered in the affirmative.

17. In view of the judgments of the Apex Court in the aforesaid cases, a finding recorded in the judgments of lower Courts that the notice issued under section 19(1) and (2) of the of the Displaced Persons (Compensation and Rehabilitation) Act, 1954 is mandatory, is set aside. Moreover, the Division Bench of this Court in Eradley Dudley Baxter vs. T.L. Bhagtiani and others AIR 1961 Bombay 69 has observed that notice under section 19(1) and (2) is directory and not mandatory. Division Bench in its judgment in para 15 has observed as under:-

"(15)............ I do not find any provision in the Displaced Persons (Compensation and Rehabilitation) Act 1954 which makes it incumbent upon the 1st Respondent to issue a show cause notice. The mere fact however that such a notice was given does not and cannot render an order passed under the Act as either illegal or bad in law merely because the notice so served was not proper notice. Even assuming that Rule 117 were to apply, the rule is clearly of a directory or procedural nature. It is no doubt true that this rule does contain mandatory language, for it provides that every order or notice made or issued under the Act or these rules shall be served by registered post acknowledgment due and furthermore that "ordinarily a notice of at least fifteen days shall be given". But merely because a provision of law or rule contains mandatory language, it doesnot necessarily mean that such a rule or condition therein contained becomes a condition precedent to the acquisition of jurisdiction in taking action............"

18. The Second Appeal No.448 of 1989 is accordingly allowed. All Civil Applications taken out in Second Appeal No.448 of 1989 and which are pending do not survive and they are also disposed of.

19. Both the second appeals including the civil applications pending therein are disposed of in the aforesaid terms.

Ordered accordingly.