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Issues Involved:
1. Validity of the Kabuliat dated May 26, 1936. 2. Binding nature of the Kabuliat on the appellants. 3. Status of the respondents as hereditary tenants under the U.P. Tenancy Act, 1939. Issue-wise Detailed Analysis: 1. Validity of the Kabuliat dated May 26, 1936: The primary contention of the appellants was that the Kabuliat dated May 26, 1936, was not referred to in the written statement and had not been exhibited at the trial. The court remanded the case to the Board of Revenue to determine whether the lease deed dated May 26, 1936, was true and legally valid. Upon re-hearing, the Board found that no lease deed had been executed by the mortgagees in favor of the lessees, but the lessees had executed a Kabuliat in favor of the mortgagees on May 26, 1936, and its truth had not been questioned. The appellants' objection that the respondents could not claim the status of tenants solely on the strength of the Kabuliat was overruled since the mortgagees had accepted the Kabuliat and received rent as provided therein. 2. Binding nature of the Kabuliat on the appellants: The main controversy was whether the Kabuliat was binding on the appellants. The Board of Revenue concluded that the Kabuliat was binding on the mortgagors since the mortgagees acted prudently by settling the land on an economic rent. However, the Supreme Court found this conclusion incorrect. The court emphasized that under Section 76(a) of the Transfer of Property Act, a mortgagee must manage the property as a person of ordinary prudence. The respondents failed to prove that the lease was one which a prudent owner would create in managing his properties. The rent fixed in the Kabuliat was unduly low compared to the potential income from the land, as evidenced by a decree for mesne profits at the rate of Rs. 1,000 per annum. The court concluded that the transaction was neither prudent nor bona fide, and the lease evidenced by the Kabuliat was not binding on the mortgagors. 3. Status of the respondents as hereditary tenants under the U.P. Tenancy Act, 1939: The respondents contended that they were hereditary tenants under Section 29(a) of the U.P. Tenancy Act, 1939, and could not be ejected. The court clarified that Section 29(a) applies only if the person was lawfully a tenant admitted by someone with the right to do so. Since the Kabuliat was not binding on the mortgagors, the respondents did not acquire the status of tenants under Section 29(a). The court referred to the principle that a lease not binding under Section 76(a) of the Transfer of Property Act cannot confer tenancy rights. Consequently, the respondents did not acquire hereditary tenancy rights, and the appellants were entitled to eject them. Conclusion: The Supreme Court allowed the appeal, set aside the decree passed by the Board of Revenue, and restored the decree of the Revenue Officer, Meerut, confirmed by the Commissioner. The respondents were ordered to pay the costs of the appellants throughout, including the costs of the remand. The appeal was allowed.
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