NATIONAL LAW INSTITUTE UNIVERSITY

PROPERTY LAW - I

Case Analysis:

St. Mary's Educational Society

Vs
Dr. Qutubuddin Ahmed & Ors.

SUBMITTED TO:

SUBMITTED BY:

AKSHEY JOSE

DR. SANJAY KUMAR YADAV

2013 B.A.LLB 39

ASSOCIATE PROFESSOR

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Contents

MATERIAL FACTS ................................................................................................................... 3

LEGAL ISSUES .......................................................................................................................... 5
ARGUMENTS ADVANCED ..................................................................................................... 6
Defendants .................................................................................................................................6
Plaintiffs......................................................................................................................................6

LEGAL PROVISIONS................................................................................................................ 7
JUDGEMENT ............................................................................................................................. 9

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MATERIAL FACTS

The material facts of the case are as follows:

1. The plaintiffs are the owners of premises bearing Door No. 3-6-137, Himayatnagar,
Hyderabad, admeasuring 1,612 sq. yards, with an old building, thereon.
The 1st defendant is an Educational Society and Defendants 2 and 3 are its members.

2. With a view to establish and run a Junior College in the said premises, Defendants 1 to
3 (for short "the defendants") approached the plaintiffs. Both of them agreed on certain
terms, such as, that the suit schedule property shall be leased for a period of 15 years,
with effect from 2-10-1987 to the defendants, that a building shall be constructed by the
defendants, with their own funds, in accordance with the plan to be sanctioned in the
name of the plaintiffs by the Municipal Corporation of Hyderabad, that the defendants
shall deposit a sum of Rs. 50,000/-, and that the monthly rent shall be Rs. 7,000/-.
Initially, an agreement was entered into on 11-8-1986. Thereafter, a lease deed was
executed on 2-10-1987, but it was not registered.

3. The defendants were inducted into possession and construction was undertaken. Few
years thereafter, notices were exchanged between the parties, in the matter of payment
of certain additional amounts, as advance to the plaintiffs. Alleging that the defendants
constructed large halls in the 5th floor of the building, without permission from the
Municipal Corporation of Hyderabad, failed to demolish an old structure, which too
was a condition imposed by the Municipal Corporation, for undertaking new
construction, and that they have subleased part of the premises in favour of Defendants
4 and 5, the plaintiffs got issued legal notice dated 20-2-1997. The defendants, in turn,
issued a reply dated 3-3-1997, denying the allegations contained in the notice. Not
being satisfied with the reply issued by the defendants, the plaintiffs filed the suit for
the reliefs referred to above.

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4. On behalf of the defendants, a common written statement was filed. It was alleged that
on their own accord, the plaintiffs have agreed to extend the period of lease till the year
2017, beyond the initial period of 15 years, and received a sum of Rs. 6,00,000 as
advance. As regards the alleged deviation from the plan, they pleaded that the plaintiffs
themselves filed a suit in the Court of X Assistant Judge, City Civil Court, Hyderabad,
and obtained a decree for regularization of a minor deviation. It is stated that while
extending the period of lease, several conditions, such as, increase of the rent by 15%
for every span of 5 years, was agreed to. They flatly denied the sublease of the premises
in favour of the Defendants 4 and 5. They contended that the plaintiffs are in the habit
of making unreasonable and unjust demands for payment of huge amounts, without any
basis, and that the suit is not maintainable, since it is filed before the expiry of agreed
period. The rate at which the mesne profits were claimed is stated to be excessive and
unreasonable.

5. Through its judgment dated 20-1-2003, the trial Court decreed the suit, directing that
the plaintiffs shall pay a sum of Rs. 30,00,000/- towards cost of construction, within
three months, from the date of decree, and refund within three months, all the amounts
received by the plaintiffs as advance, and thereupon, the defendants shall deliver vacant
possession of the premises. It awarded mesne profits at the rate of Rs. 8/- per sq. feet,
per month, over an area of 15,000 sq. feet from the date of filing of the suit, till the date
of delivery of possession. A direction was issued as to adjustment of Rs. 6,00,000/-, at
the rate of Rs. 4,000/- per month, with effect from 2-10-1992 till 1-4-1997.

6. The defendants filed an appeal aggrieved by the decree passed by the trial Court. The
plaintiffs, on the other hand, filed in the same Court, aggrieved by the decree passed by
the trial Court, insofar as it awarded mesne profits at the rate of Rs. 8/- per sq. feet, as
against their claim of Rs. 35/- per sq. feet, over a larger extent.

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LEGAL ISSUES

1. Whether the plaintiffs are entitled for the ejectment of the defendants and delivery of
vacant possession of the suit schedule property?
2. Whether the plaintiff is entitled for mesne profits at the rate of Rs. 8,400/- p.m., for the
period from 2-4-1997 to 8-4-1997 amounting to Rs. 1960/-?
3. Whether the plaintiff is entitled for future mesne profits pendente lite until delivery of
possession?
4. Whether the plaintiffs had received Rs. 6 lakhs with regard to extension of lease from
2002 to 2017 from the defendants, as pleaded by D-1 to D-4 in their written statement?
5. Whether the notice dated 20-2-1997 issued by the plaintiffs is not proper and valid?
6. Whether the plaintiffs are entitled for future mesne profits at Rs. 35/- per SFT from the
date of the suit till delivery of possession of the suit schedule property?

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ARGUMENTS ADVANCED

Defendants
Learned Advocate-General, appearing for the defendants, submits that the suit itself was not
maintainable, since there existed an agreement between the parties that the lease shall be in
force, till the year 2017. He contends that the defendants were ready and willing to perform
their part of the contract, for execution of lease deed, and that they were not liable to be
evicted from the premises. He contends that the findings recorded by the Courts below, on
the allegations as to making of unauthorized constructions, or failure to demolish the old
structure, are without any basis. He submits that the plaintiffs got the deviations regularized,
through process of compounding, by filing a suit. About the plea as to subleasing of the
premises, the learned Advocate-General submits that there was absolutely no truth in it, and
the Courts below have proceeded on assumptions.

Plaintiffs
Learned Counsel for the plaintiffs, on the other hand, submits that admittedly there did not
exist any registered lease deeds, and the defendants cannot rely upon any condition,
incorporated in an unregistered document. He contends that the plea of part performance
was not at all raised in the written statement, and even otherwise, the defendants are not
entitled for protection, thereunder. Learned Counsel further submits that, even if the benefit
under Section 53-A of the Transfer of Property Act (for short "the Act") is to be extended,
the fact remains that the very document, on which reliance is placed, provided for eviction
on payment of cost of construction, and thereby, it became permissible for the plaintiffs to
seek eviction.

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LEGAL PROVISIONS

Transfer of Property Act, 1882 - Section 53A

Part performance
Where any person contracts to transfer for consideration any immovable property by writing
signed by him or on his behalf from which the terms necessary to constitute the transfer can
be ascertained with reasonable certainty, and the transferee has, in part performance of the
contract, taken possession of the property or any part thereof, or the transferee, being
already in possession, continues in possession in part performance of the contract and has
done some act in furtherance of the contract, and the transferee has performed or is willing
to perform his part of the contract, then, notwithstanding that the contract, though required
to be registered, has not been registered, or, where there is an instrument of transfer, that the
transfer has not been completed in the manner prescribed therefor by the law for the time
being in force, the transferor or any person claiming under him shall be debarred from
enforcing against the transferee and persons claiming under him any right in respect of the
property of which the transferee has taken or continued in possession, other than a right
expressly provided by the terms of the contract.

Transfer of Property Act, 1882 - Section 106

Duration of certain leases in absence of written contract or local usage
In the absence of a contract or local law or usage to the contrary, a lease of immovable
property for agricultural or manufacturing purposes shall be deemed to be a lease from year
to year, terminable, on the part of either lessor or lessee, by six months' notice expiring with
the end of a year of the tenancy; and a lease of immovable property for any other purpose
shall be deemed to be a lease from month to month, terminable, on the part of either lessor
or lessee, by fifteen days' notice expiring with the end of a month of the tenancy.

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Transfer of Property Act, 1882 - Section 107

Leases how made

A lease of immovable property from year to year, or for any term exceeding one
year or reserving a yearly rent, can be made only by a registered instrument.

All other leases of immovable property may be made either by a registered

instrument or by oral agreement accompanied by delivery of possession.

Where a lease of immovable property is made by a registered instrument, such

instrument or, where there are more instruments than one, each such instrument shall
be executed by both the lessor and the lessee.

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JUDGEMENT

The trial Court shall appoint a Commissioner, who shall be a Civil Engineer, or
Contractor, for the purpose of ascertaining the value of the building, constructed by
the Defendants 1 and 2, on the plaint schedule property.

The defendants shall vacate the suit schedule premises, on deposit of cost of the
building by the plaintiffs as assessed under Clause (a), or by the end of May 2007,
whichever is later.

There shall be a decree for a sum of Rs. 1,960/- representing mesne profits, up to the
date of filing of the suit.

It shall be open to the plaintiffs to file an application for ascertainment of mesne profits
for the suit schedule property, for the period, from the date of filing of the suit, till the
date of recovery of possession. On such ascertainment, a decree for the said amount
shall ensue.

The parties shall bear their own costs.

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