M.P. THAKKAR

(1.) Will a tenant who takes in a partner in a business run by him in rented premises incur the liability of being evicted on the ground that he has sublet or assigned his interest in the tenancy in favour of the partnership It is this question which requires to be resolved in the present second appeal under sec. 28 of the Saurashtra Rent Control Act 1951 by the plaintiff landlord who has failed in both the lower Courts. The Saurashtra Rent Control Act 1951 will be referred to as the Rent Act in the course of this judgment.

(2.) The appellant-plaintiff instituted Civil Suit No. 68 of 1958 in the Court of the Civil Judge (S.D.) Morvi claiming a decree for eviction under sec 13 (1)(e) of Rent Act which is in the following terms against the respondents-defendants :-

13 (1) Notwithstanding anything contained in this Act a landlord shall be entitled to recover possession of any premises if the Court is satisfied (e) that the tenant has since the coming into operation of this Act sub-let the whole or part of the premises or assigned or transferred in any other manner his interest therein; or . ... .. ... ... .. ... .. .. The trial Court came to the conclusion that merely because the tenant entered into a partnership and took in a partner it cannot be said that he had transferred or assigned his interest in the tenancy in favour of the partnership firm The lower appellate Court endorsed this view. Thereupon the landlord has approached this Court by way of the present second appeal.

(3.) The facts are not in dispute. The tenant was carrying on business in the demised premises (hereafter referred to as the suit shop) on his own as a sole proportion of the business. In October 1957 the tenant took in defendant No. 2 and defendant No. 3 as his partners. From then onwards the tenant along with his aforesaid two partners carried on business in the suit shop for the benefit of the partnership. The partnership deed executed between the tenant and his two partners (defendants Nos. 2 and 3) in terms made it clear that the tenancy rights continued to vest unto the tenant (defendant No. 1) and that the defendants Nos. 2 and 3 who were joining him as partners were not to acquire any interest in the tenancy rights belonging to him. On these facts the question has been debated whether or not a subletting or assignment of the suit shop in contravention of sec. 13 (1)(e) of the Rent Act has taken place in October 1957.

(4.) The learned counsel for the landlord poses two key questions and answers them. Who was doing business in the suit shop and who was in possession till 1957 (the tenant-defendant No. 1) Who is doing business in the suit shop and who is in possession since 1957 (the partnership formed by the tenant with the two defendants). It is argued that the answers to the aforesaid two questions impel one to the conclusion that there has been either sub-letting or assignment notwithstanding the stipulation in the partnership deed that the tenancy interest will continue to remain vested unto the defendant No. 1-tenant. The argument in my judgment is misconceived and fallacious. It is a well-recognised proposition that a partnership is not a legal person or a corporation sole or corporation aggregate having a distinct legal personality of its own. That a partnership is a compendious mode of describing the partners collectively is equally well-known. The submission that a partnership firm is a distinct legal entity and that the firm is now in possession of the suit shop and is doing business thereat whereas the defendant No. 1 was doing so hither to cannot therefore be countenanced The two and actual possession of the shop No. 4 and godown No. 4 which are in my possession by taking execution proceedings. And in that case 1 the defendant am to hand over the actual vacant possession of the shop No. 4 and godown No. 4 which are in my possession. 13 The questions which naturally arise from the decree of this type are as follows. (1) Whether the decree contains a penal clause (2) Whether the judgment-debtor is entitled to relief against forfeiture. (3) Whether the decree embodies an independent agreement as to the delivery of possession so as to secure payment of arrears of rent and compensation contemplated by the agreement or whether it is a decree for possession out-right in execution of which possession of the suit premises can be recovered. These questions which arise have not been decided by the learned District Judge on account of the decision in the case of Tribhuvandas Lallubhai Shah (supra). 14 In support of his submissions Mr. K. C. Shah has invited our attention to B few decisions. The first one of them is in the case of Ahmedabad Municipal Corporation v. Joitaram Ganesh and another reported in X G.L.R. 431. A Division Bench of this High Court consisting of Mr. Justice J. B. Mehta and Mr. Justice B. G. Thakore was considering in that case the question relating to a compromise decree. Mr. Shah has placed particular reliance on the observations made by the learned Judges in paragraph 6 of the report. The Division Bench firstly considered the distinction between nullity and invalidity and recorded the finding that whereas nullity of a decree can be pleaded in execution proceedings its invalidity cannot be pleaded. While defining the bases of nullity and invalidity after having reviewed a number of decisions on the subject it held that whereas inherent lack of jurisdiction would give rise to nullity irregular or erroneous exercise of jurisdiction which a Court has would give rise to invalidity. In the instant case this question does not arise. It was then con tended before the Division Bench that the question whether a decree creates a fresh lease or not cannot be agitated in execution proceedings. The Division Bench in fact construed the decree (vide paragraph 6 of the report) and recorded the finding that it never created any lease whatsoever and then referred to the decision of Mr. Justice Datar in the case of Bai Manuben Chimanrao v. Bhimbhai Nagarji reported in 60 Bombay Law Reporter 122 [LQ/BomHC/1957/271] in order to derive support for their decision. Mr. Justice Datar in Bai Manubens case (supra) has expressed an opinion that the question whether the compromise decree creates a fresh lease cannot be agitated in execution proceedings for the simple reason that once the Trial Court passed a decree under Order 23 Rule 3 if it committed any error in incorporating this direction in so far as It did not relate to the suit it only committed a jurisdictional error. The Division Bench has then proceeded to observe as follows:- The Court having complete jurisdiction over the suit and on matter relating to suit the consent decree could be made. The Court therefore did not lack inherent jurisdiction and the decree in such a case would not be a nullity Mr. Shah has also rightly not pressed this ground before us and even the ultimate conclusion of our learned brother Raju J. is not founded on this ground. The corporation is only affected by the conclusion that the decree created a lease and we hold that this conclusion was wholly unjustified on the plain reading of the present consent decree. We are unable to find in this decision any support for the proposition which Mr. Shah canvasses before us. Firstly the Division Bench construed the lease and recorded the finding on merits that it did not create any lease whatsoever. Having taken that view on merits it was unnecessary for them to make any observations on the point whether such a question could be agitated in execution proceedings. Secondly Mr. Justice Datar in Bai Manubens case (supra) made certain observations on the question but as we shall be presently showing did not lay down any principle. He left the question open for future consideration. No reliance could have therefore been placed upon those mere observations which did not lay down any principle. Thirdly Mr. Justice Datars observations were contrary to two Full Bench decisions of the Bombay High Court to which we are referring in course of this judgment. Lastly the excerpt reproduced above from the aforesaid decision of our Division Bench clearly shows that the question was not pressed before the learned Judges for their decision and also did not otherwise arise for their decision because the decision of Mr. Justice Raju against which they were hearing that appeal was not founded upon that proposition. We are therefore of the opinion that the observations of the Division Bench relied upon by Mr. Shah are mere passing and casual observations and with great respect to the learned Judges who constituted the Division Bench they do not in our opinion lay down any rule or principle of law so far as the proposition canvassed by Mr. Shah before us is concerned. The question which is canvassed before us is well-settled by the two decisions of the Full Bench of the Bombay High Court to which we are presently referring. In the case of Bai Manuben Chimanrao v. Bhimbhai Nagarji reported in 60 Bombay Law Reporter 122 [LQ/BomHC/1957/271] Mr. Justice Datar was dealing with a compromise decree. A similar question was raised before him. Instead of summarizing what Mr. Justice Datar has laid down in that decision it would be more appropriate to reproduce his views in his own language. Before I deal with this contention of Mr. Shah on merits it seems to me there is an initial difficulty in the way of the judgment-debtors raising such contention in. execution proceedings. I have already stated that the suit out of which the present - darkhast proceedings have arisen had been instituted by plaintiffs Nos. 1 and 2 as owners and by plaintiff No. 3 as their tenant for possession of the suit premises on the ground that the defendants were trespassers and had wrongfully occupied the suit premises. It is to be noted that it was never the case of the plaintiffs that defendants were their tenants at any time before the institution of the suit and that the suit had been instituted after the termination of their tenancy. When there was a compromise in such a suit that compromise was recorded by the Court which under the provisions of O. XXIII r. 3 of the Civil Procedure Code passed a decree in accordance therewith so far as it related to the suit. The subject matter of the suit in the present case was as I have already stated a claim for possession of the suit property from the defendants on the ground that they were trespassers. The Court could therefore pass an operative decree though in accordance with the compromise that was subsequently arrived at but only in so far as that compromise related to the subject-matter or the claim in the suit. If the executing Court finds that there is a valid operative decree regard being had to the subject matter or claim in the suit it must execute that decree and is not concerned to find whether the terms of the compromise are capable of being construed as giving rise to a new relationship of landlord and tenant between the parties. Even assuming that the terms of the compromise are capable of such a construction no operative decree in that event could have been passed in accordance with such a compromises as the creation of a new lease was a matter entirely extraneous to the suit. It is undisputed that the creation of a new lease such as is now contended for by the judgment-debtors was not a matter which related to the suit. In fact it is urged by them that the terms of the compromise for the first time gave rise to a new tenancy in their favour. If therefore there has been an operative decree passed as in the present case it must necessarily and exclusively relate to the subject-matter or claim in the suit. When the Court is called upon to record a compromise and pass a decree in terms thereof the Court can pass a decree in terms of the compromise only in so far as those terms relate to the suit and not in relation to those terms which are extraneous to the suit. The function of the executing Court would then be to execute such a decree and I do not think that it would be open to the judgment-debtors to contend in the execution proceedings that the terms of the compromise upon which the decree was based created a new lease in their favour. If the terms of the compromise evidenced only a transaction of lease in favour of the defendants no decree could have been passed in accordance with such terms as such terms obviously did not relate to the suit. Besides it may be noted when the Court applied its mind and passed a decree in terms of the compromise it must also mean that the Court impliedly negatived the plea that is now raised in the execution proceedings namely that the terms of the compromise created a new lease; for otherwise if the Court had come to the conclusion or if the defendants had raised the contention that the terms of the compromise created a new lease it would never have proceeded to pass a decree as it did in the present case. The Court would have stated in that event that the compromise terms had given rise to a case of new lease and as the case of a new lease was not a matter relating to the suit no opera - decree embodying such terms could be passed under the provisions of O. XXIII Rule 3 of the Civil Procedure Code. I should therefore think that it is not open to the judgment-debtors now to agitate the point which must be deemed to have been considered and overruled by the Court when it passed the decree in accordance with the compromise. Mr. Shah has however relied upon the decisions reported in Sumatibai Kirtikar v. Anant Balkrishna Gurupadappa Shivlingappa v. Akbar and Narayan Ramchandra V. Gangadhar in which some consent decrees were construed in execution proceedings to operate as leases in favour of the judgment-debtors. He has also drawn my attention to the case of Ramjibhai Virpal v. Gordhandas in which again some consent decrees were construed in execution proceedings and were held not to create leases. However the point which I am now considering does not seem to have been raised in any of those cases. Even so I must respectfully state that I am bound by those decisions. If however I had rested my judgement on the view which I have ventured to express on the point I have dealt with so far I would have referred this appeal to a Division Bench but as I agree with the view which has been taken by the lower appellate Court on the construction of the consent decree. I do not think it necessary to do so in the present case. (emphasis ours). It is clear from these observations made by Mr. Justice Datar that he did not decide the case on that point but decided it on merits. By not referring the matter to a larger Bench he in terms left the question open. In that context we feel that the reference made by the Division Bench of this High Court in X G. L. R. 481 to that decision is only a passing reference because there is no ratio decidendi which can be discovered from 60 Bombay Law Reporter 122 [LQ/BomHC/1957/271] . 15 In the case of Waman Vishwanath Bapat v. Yeshwant Tukaram reported in 50 Bombay Law Reporter 688 [LQ/BomHC/1947/96] a Full Bench of the Bombay High Court was considering a similar question. The principle which has been laid down by the Full Bench after reviewing a number of decisions on the subject is that where a decree passed either by consent or in invitum permits payment of the decretal amount in installments and provides that on failure in payment of one or more installments the whole amount of the decree would become payable at once Courts are bound in the event of such failure to execute the decree in accordance with its terms and are not at liberty to relieve against the consequences of failure on equitable considerations except against penalties or against forfeitures. In each case the Court has to determine whether a certain obligation undertaken by a judgment-debtor is in the nature of a penalty or whether it is the result of a concession conferred upon him by the decree-holder. A Court of equity can grant relief against a condition which is in the nature of penalty but if the decree-holder has conferred concession upon the judgment-debtor in case the latter fulfils the obligation undertaken by him within a specified time and if the judgment-debtor does not duly fulfill his obligation he loses the concession and the Court has no jurisdiction to grant any relief to him in such a case. 16 In the case of Shirekulitimpa Hegda v. Mahablya and others reported in (1886) I.L.R. 10 Bombay 435 the principle which has been laid down is that the doctrine of penalties is not applicable to consent decrees and that those who with their eyes open have made alternative engagements and invited alternative orders of the Court must if they fail to perform the one perform the other however greatly severe its terms may be. This decision was overruled in the Full Bench case of Krishna Bai v. Hira Govind Kulkarni reported in a Bombay Law Reporter 813. In that case it has been laid down that the Court can grant relief against forfeiture if under the consent decree the status of landlord and tenant between the parties has arisen from contract or custom. 17 These two decisions of the Full Bench of the High Court of Bombay came up for consideration of a Division Bench of that Court consisting of Mr. Justice Gajendragadkar and Mr.Justice Dixit in the case of Gajanan Govind Pathak v. Pandurang Keshav Puntambekar reported in 53 Bombay Law Reporter 100 [LQ/BomHC/1950/88] . It was contended in that case that those two Full Bench decisions in Waman Vishwanath Bapats case (supra) and Krishna Bais case (supra) had laid down inconsistent principles on the same subject. Having considered both those decisions the Division Bench held that in cases where the relationship of landlord and tenant was created or continued between the parties by a compromise decree the judgment-debtor (tenant) would be entitled to relief against forfeiture resulting from his failure to pay the rent at the stipulated time. While laying down this proposition it followed the Full Bench decision in Krishna Bais case (supra) because on the facts of that case relationship of landlord and tenant had been created by contract incorporated in the compromise decree. While defining the area to which the Full Bench decision in Waman Vishwanaths case applies the Division Bench has observed as under:- Shortly stated the view accepted by the Full Bench was that if it appears that the decree in question directs a certain sum of money to be paid by a particular date and adds a condition that if the said money is not paid on the said date a larger sum shall be paid that condition is in the nature of a penalty against which a Court of equity can grant relief and award to the party seeking payment only such damages as he may have suffered by the non-performance of the term as to the payment of the money. on the other hand if the decree makes a particular sum payable on a certain date and it follows the said direction by condition allowing to the debtor a concession as for example the liberty to pay the lesser sum or to pay the said sum by installments then the party who seeks to take advantage of that concession must carry out strictly the conditions on which the concession was granted. If the terms on which the concession was thus given are not carried out there is no power in the Court to relieve the defaulting party from the obligation of so doing. The terms of the mortgage decree with which the Full Bench was concerned in Wamans case were construed as amounting to a concession with the result that the Full Bench held that the judgment-debtor was not entitled to any relief as claimed by him. Proceeding further the Division Bench has observed as under:- It would thus be clear that the two Full Bench decisions do not cover the same or similar ground and were in fact dealing with entirely different situations. The earlier Full Bench was dealing with a compromise decree creating the relationship of landlord and tenant and it was held that the equitable jurisdiction to give relief to the tenant against the landlords claim for forfeiture and re-entry can be exercised by Courts even though the said relationship of landlord and tenant is the result of the terms of a compromise decree. In a sense therefore this decision recognises an exception to the rule that consent decrees can be varied only by consent. on the other hand the subsequent Pull Bench decision in Wamans case was not concerned with compromise decrees of this kind. In this latter Full Bench case the question was as to the powers of the executing Court to grant relief to the judgment-debtors where consent decrees direct such judgment-debtors to pay certain amounts on specified dates or within a specified period and in dealing with this question the Full Bench held that there is jurisdiction to grant such relief if on a construction of the decree in question it appears that the clause sought to be enforced amounts to a penalty. This again can well be regarded as another exception to the rule that consent decrees can be varied only by consent. If it is borne in mind that the question of granting relief which the two Full Bench decisions deal with arose under dissimilar circumstances and involved the consideration of different principles it would be difficult to hold that there is any conflict between them. on the other hand there is one feature which is common to both the decisions and that consists in the fact that both the decisions do not accept unreservedly or without exception the broad principle that consent decrees can be varied only by consent. We are therefore unable to accept the argument of the appellant that there is any conflict between the two full Bench decisions at all. We think that whenever Courts are dealing with the question of granting relief to judgment-debtors they must decide in which class of cases the decree in question falls. If the decree falls in the class of cases which was dealt with by the judgment in Krishna Bais case the principle therein laid down must be applied. If on the other hand the decree falls in the other class of cases which was the subject matter of the decision in Wamans case it is the principle laid down in that case that must be applied. 18 In each case therefore on the facts and circumstances of the case it is for the executing Court to decide whether the case with which it is dealing attracts the ratio laid down in Krishna Bais case (supra) or in Waman Vishwanaths case (supra). In the case of Tribhuvandar Lallubhai Shah v. Chhitalal Chunilal Shah reported in IV G.L.R. 1096 Mr. Justice Raju has followed the decision in Shirekuli Timpa Hegde v. Mahahlya reported in I.L.R. 10 Bombay 435 which has been overruled in Krishnabais case (supra) our opinion therefore the decision of Mr. Justice Raju reported in IV G.L.R. 1096 does not lay down good law because it follows an overruled decision and is contrary to the decision of the Full Bench in Krishna Bai v. Hari (supra) We therefore overrule the decision of Mr. Justice Raju in the case of Tribhuvandas Lallubhai Shah v. Chhitalal Chunilal Shah reported in IV G.L.R. 1096. 19 So far as the learned District Judge is concerned he had no alternative but to follow the aforesaid decision of Mr. Justice Raju. He has therefore not considered on merits the questions and issues which arise in this case. We must therefore set aside his order and remand the case to him for decision of the appeal on merits. We may however observe that while bearing the appeal after remand the learned District Judge will decide whether the case falls within the ratio laid down in Krishnabais case (supra) or whether it falls within the ratio laid down in Waman Vishanaths case (supra). He shall also bear in mind the decision of the High Court of Bombay in the case of Gajanan Govind Pathak v. Pandurang Keshav Puntambekar reported in 53 Bombay Law Reporter 100 [LQ/BomHC/1950/88] . In light of the aforesaid decisions and in light of the observations which we have made in this judgment the learned District Judge shall decide on merits the questions which arise in this case. 20 The result therefore is that we allow the Civil Revision Application set aside the order passed by the learned District Judge and remand the appeal to him for decision on merits. In the circumstances of this case there shall be no order as to costs. Application allowed:- Appeal remanded.