SHANKER LAL Vs. NARENDRA BAHADUR TANDON

JUDGEMENT

(1.) THIS special appeal by leave granted by Bishambhar Dayal, J. is directed against his judgment dated 31-12-1959 dismissing with costs Second Appeal No. 485 of 1952, filed by the appellants, Shanker Lal and Pyare Lal, sons of one Lala Kundan Lal Agarwal. The facts giving rise to this special appeal in short are: In the City of Saharanpur lies the disputed plot (plot bearing Khasra No. 766 of Khewat No. 171). This plot belonged to Hulas Chand and Bilas Chand. In May 1930 these persons granted a permanent lease of this plot to the Patel Mills Ltd., who were to pay Rs. 75.00 per year as rent. In the terms of the lease it was provided that the lease could use it for any purpose including the construction of building and that it would not be liable for ejectment, except that in the case of non-payment of rent for three consecutive years, the lease could be forfeited. On 1st November 1932 Hulas Chand and Bilas Chand sold their rights in the plot in dispute to Budh Sen and Jia Lal. Jia Lal died on 27th April 1943 and his heirs on 11th May 1943 transferred their rights in favour of Jugal Kishore. Before this Budh Sen had already transferred his rights in favour of Jugal Kishore with the result that he became the owner and lessor of the whole plot in dispute. Shanker Lal and Pyare Lal, the appellante, filed a suit for pre-emption in 1944 which was decreed. On 30th August 1945 they obtained possession over the plot in dispute through the court.

(2.) PATEL Mills Limited went into voluntary liquidation and Sri Ram Gopal Mehra, an Advocate of Saharanpur, was appointed as the Liquidator. Banaras Bank Limited being the largest creditor of the Patel Mills Limited, Sri Mehra entered into negotiations for the sale of the entire assets of the Patel Mills Ltd. to the Banaras Bank Ltd. and on 23rd February 1933 executed an agreement for sale of the entire assets of the Patel Mills Ltd., including the leasehold rights over the plot in dispute, in favour of the Banaras Bank Limited. On 4th of May 1939 a meeting of the creditors of the Pate] Mills Ltd. was held to consider the final report of the Liquidator, stating inter alia that the entire assets of the Patel Mills Ltd. including the lease-hold rights in the plot in dispute had been transferred to the Banaras Bank Ltd. for a sum of Rs. 70,000 which sum had been received by the Liquidator from the Banaras Bank Ltd. The report of the Liquidator was accepted in the meeting and was sent to the Registrar, Joint Stock Companies for registration. It was registered on 9th September 1939. On 1st March 1940, the Banaras Bank Ltd. went into Liquidation. The Official Receiver, who took charge of the assets of the Banaras Bank Ltd., not finding a properly stamped and registered deed of transfer of the lease-hold rights of the plot in dispute, called upon Sri Mehra, the Ex-Liquidator of the Patel Mills Ltd. to execute a proper document of sale. Sri Mehra did so on 28th January 1941 by executing a properly stamped registered sale deed in favour of the Banaras Bank Ltd. (under liquidation). On 9th March 1943 the Official Liquidator Banaras Bank Ltd., transferred the leasehold rights over this plot to Sri Narendra Bahadur Tandon, respondent. Suit No. 54 of 1946 which has given rise to this special appeal, was filed by Shanker Lal and Pyare Lal, the appellants, against Narendra Bahadur Tandon, the respondent, for possession over the plot in dispute, on the allegation that the lease hold rights in favour of the Patel Mills Ltd had come to an end and the land had reverted to the proprietor that is the lessor. The suit was contested on several pleas including that of the bar of estoppel, the non-impleadment of necessary parties, the bar of limitation and the plea that the suit was barred by Sections 171 and 183 of the Indian Companies Act. The learned Munsif of Saharanpur, who tried the suit, dismissed it with costs on 7-10-1948. The plaintiff-appellants appealed to the District Judge of Saharanpur. That appeal was heard by the First Civil Judge of Saharanpur, who dismissed it on 27-10-1951, whereupon second appeal No. 485 of 1952 was filed in this Court but was dismissed by Bishambhar Dayal, J. as already stated earlier.

(3.) WE would first like to consider the question whether in the case of a permanent lease, on the death of the lessee, without leaving any heirs or successors, the lease-hold rights would revert to the lessor or would escheat to the Government. Following the decision in Collector of Masulipatam v. Cavaly Vencata Narrainapah, (1859-61) 8 Moo Ind App 500 (PC), Bishambhar Dayal J. has held that a right of escheat in favour of the Crown (Govt.) exists in India in respect of property of which no other owner remain under the personal law. This point is well settled and need not detain us. Bishambhar Dayal J. placed reliance on Sonet Kooer v. Himmut Bahadur (1875-76) ILR 1 Cal 391 (PC), Mt. Raman Bibi v. Mathra Prasad 75 Ind Cas 621: (AIR 1923 All 374) and Tulshi Ram Sahu v. Gur Dayal Singh, (1911) ILR 33 All 111 to hold that when the lessee of a permanent lease dies without heirs or successors in interest, the Crown to the exclusion of the lessor succeeds to the lease-hold rights. We have carefully examined these cases and are of opinion that all of them are distinguishable. In (1875-76) ILR 1 Cal 391 (PC) (supra) the Zamindar had granted a permanent and hereditary muqarrari tenure and the question which the Judicial Committee had to consider was whether on the death of the muqarrari tenure holder her right reverted to the Zamindar or went by escheat to the Crown. The Subordinate Judge held that it had reverted to the Zamindar and the Calcutta High Court on appeal reversing the decree of the trial Judge, held to the contrary. The decision of the Calcutta High Court was founded on several grounds, one of them being that after the death of the original muqarrari tenure- holder, the Zamindar had received rent from her successors and for that reason some kind of tenancy had come into existence, Sir J.W. Colvile speaking for the Judicial Committee observed.: