ZARINA UMER CHAMDEWALA Vs. SATI LALCHAND VERUMAL LALWANI

JUDGEMENT

(1.) THIS is an appeal under Clause 15 of the Letters Patent against the judgment of Mr. Justice K. K. Desai, who did not permit the appellant -defendant before us to defend the suit against her filed by respondent No. 1 -plaintiff on the ground that her licence had terminated and that she was, therefore, not entitled to the possession, the reason being that during - the pendency of the suit she was adjudicated an insolvent. The short facts leading to this appeal are as follows: On November 1, 1962, an agreement was entered into between the - plaintiff and defendant No. 1 called an agreement of leave and licence by which she agreed to be in occupation of the premises in dispute on a monthly compensation of Rs. 400 split up into Rs. 250 for occupation and Rs. 150 for hire charges for furniture which apparently there was none and also certain outgoings. Initially it was said to be for eleven months with an option to defendant No. 1 to renew it. She had also to pay Rs. 1,200 as deposit for carrying out the terms of the agreement. For two months defendant No. 1 paid the compensation, and thereafter there was some dispute between the parties in the matter of supplying furniture, which was, according to defendant No. 1, not supplied. It resulted in correspondence and ultimately on April 5, 1963, the plaintiff gave twenty four hours' notice terminating the agreement and demanding the dues to that date. He then followed it up by a suit for eviction of defendant No. 1. The value of the property as mentioned in the plaint is Rs. 25,100. The plaintiff also claims a sum of Rs. 1,826.60 as arrears of compensation and Rs. 20 per day as future compensation until the date the property was vacated. It appears that a motion for receiver was taken out and in that proceeding the Court directed defendant No. 1 to make certain deposits every month, and thereafter the case was transferred to the list of long causes. On September 9, 1963, defendant No. 1 filed her written statement wherein she contended that though the agreement was in the form of leave and licence, it was in substance a tenancy and that she was entitled to continue in possession of the property as long as she was ready and willing to perform the terms of the tenancy. Thereafter, the plaintiff died and his widow has been brought on record. On December 6, 1966, defendant No. 1 was adjudicated an insolvent and a vesting order was made. Thereafter, the plaintiff inquired whether the Official Assignee was prepared to defend the suit. The Official Assignee wrote to the plaintiff to take such action as she deemed fit in the suit. Thereafter, the Official Assignee was brought on record as defendant No. 2. When the suit was placed for hearing a motion was taken out by the plaintiff for a direction that as the property had vested in defendant No. 2, defendant No. 1 had no right to defend the suit. On the contention that she made, the learned Judge acceded to this request and prevented defendant No. 1 from defending the suit. Thereafter, the substituted plaintiff gave evidence and on the basis of that evidence the learned Judge made a decree in eviction against defendant No. 1. Defendant No. 1 appeals.

(2.) MR . Engineer, on behalf of the appellant, contends that at the stage at which the suit was, there was no question of any right vesting in defendant No. 2 in respect of the suit property. The plaintiff called the agreement a licence and if it was a licence, no right under it vested in defendant No. 2 and it was defendant No. 1's right to defend the suit on grounds available to her. Ho then argues that even if the question as to whether there was vesting of the rights of defendant No. 1 in defendant No. 2 on the assumed fact that the allegations made by defendant No. 1 were true and that there was a tenancy, in the circumstances of the case such tenancy could not vest in defendant No. 2.

(3.) THE argument, however, of Mr. Bamchandani, for respondent No. 1, is that defendant No. 1 alleges that though the agreement was in the form of leave and licence, it was really in substance a tenancy. If it was a tenancy, says he, it being property it must vest in the Official Assignee under the provisions of the Presidency -towns Insolvency Act and she has, therefore, no status to defend the suit.