Case BriefsHigh Courts

Kerala High Court: P. Somarajan, J. allowed the second appeal in a matter related to the redemption of mortgage, against the order of dismissal by the trial court and the first appellate court.

In the present case, the dispute centred around the nature of an ‘Ottikuzhikanam Deed’ (deed) that was executed by the original owner of the property in favour of his nephew and niece. But according to the appellants, it was a mortgage whereas respondents asserted it as a lease arrangement. The trial court referred the matter to the Land Tribunal under Section 125 of the Kerala Land Reforms Act, 1963 (the Act). The Land Tribunal held that the deed was a lease arrangement and passed an order, granting fixity of tenure in favour of respondents. Both the trial court and the first appellate court accepted this finding of the Tribunal and held that ‘Ottikuzhikanam Deed’ was a lease deed and the relief of redemption of the mortgage was rejected concurrently. As a result, a second appeal was filed.

The Court noted that definition given to the expression ‘Ottikuzhikanam’ under Section 2 (39A) of the Act excluded a mortgage within the meaning of Transfer of Property Act. It observed that “A mere clause enabling the beneficiary under a deed to enjoy the property and to make improvements therein included as part of normal terms and conditions, would not bring the matter within the sweep of ‘Ottikuzhikanam’ as defined under Section 2(39A) of the Act, but it must be the essential term of the contract and for that essential term and purpose, the contract must be entered into, otherwise, it cannot be brought under the purview of ‘Ottikuzhikanam’, a lease as defined under Section 2(39A) of the Act.” Reliance was placed on the decision in Velayudhan Vivekanandan v. Ayyappan Sadasivan, 1975 KLT 1, where a document which is styled as ‘Ottikuzhikanam’ appended to the judgment found to be a mortgage and not a lease. 

The Court found, “The mortgage amount involved in the instant case comes to Rs 5,000 in the year 1962 and the property mortgaged comes to only 1 Acre 2 cents which is another indication of nature of Ext.A4 as a mortgage rather than a lease.” Thus, the decree and judgment of the trial court and the first appellate court was set aside, and order was passed for a decree of redemption of mortgage on payment of amount of Rs 5000 with interest at 12 per cent per annum from the date of suit till the date of judgment and thereafter at 6 per cent per annum to the principal sum of Rs 5000 and also the cost of defendants in the first appeal and in the second appeal, together with the improvements over the property which could be ascertained at the time of passing of the final decree.[C. Vijaya Thulasi v. D. Sudarsanan, 2019 SCC OnLine Ker 1411, decided on 02-04-2019]

Case BriefsHigh Courts

Karnataka High Court: Alok Aradhe, J. disposed of the present writ petition directing the competent authority of the State Government to decide upon the application of the petitioner.

The facts of the case are that the petitioner, Mysore Race Club Ltd., was incorporated under the provisions of the Indian Companies Act, 1956. In 1970, 139 acres of land was granted a lease to the petitioner for the purpose of the race course. This was renewed from time to time before it expired on 30-06-2016. On 11-11-2016, respondent issued show cause notice to the petitioner with regard to some irregularities and was required to file its reply within 10 days. By this, the petitioner was asked to stop all the racing activities.

Counsel for the petitioner, Shiv Shankar L. submitted that an application seeking renewal had been filed. But, no decision has been taken by the competent authority of the State Government.

Counsel for the respondent, Vijay Kumar A. Patil, AGA, submitted that the lease has expired and therefore the petitioner has no right over the land.

The Court directed the competent authority of the State Government to decide on the application submitted by the petitioner within three months from the date of receipt of a certified copy of the order. Till then the petitioner is not to be dispossessed from the land.[Mysore Race Club Ltd. v. Govt. of Karnataka, 2019 SCC OnLine Kar 680, decided on 12-06-2019]

Case BriefsHigh Courts

Allahabad High Court: This petition was filed before the Division Bench of Pankaj Kumar Jaiswal and Dr Yogendra Kumar Srivastava, JJ. challenging the order passed by District Magistrate, Banda where the claim of petitioner and other leaseholders with regard to grant of extension of mining lease for the ‘obstructed period’ was rejected.

Facts of the case were such that petitioner’s work was obstructed in absence of requisite environment clearance certificate and later the obstruction was removed on submission of the same but by then the time period of lease for three years was over. In exercise of powers under Rule 23(1) of the U.P. Minor Minerals (Concession) Rules, 1963 notification was issued by which lease was given by auction cum tender. Petitioner prayed the Court to extend the lease for the period when the mining act was obstructed but the same was rejected by District Magistrate. Hence, this writ petition was filed. Respondent had referred to a catena of cases where a petition for extension of the period of the lease were rejected. Court mentioned that no such permission to continue with mining activity can be given where lease has outlived its life. Rule 68 of the Rules mentioned above was referred to by which the State Government had the discretion to grant relaxation.

High Court was of the view that power to grant relaxation under Rule 68 could not be granted in the present case as the same can only be invoked where State Government is of the opinion that in the interest of mineral development it is necessary to do so, and passes an order in writing with reasons. Therefore, due to lack of any specific provision to extend the lease, this petition was dismissed. [Arti Dwivedi v. State of U.P., 2019 SCC OnLine All 1811, Order dated 18-02-2019]

Case BriefsForeign Courts

Supreme Court of Democratic Republic of Sri Lanka: A Bench comprising of S. Eva Wanasundera PCJ, H.N.J. Perera and Murdu Fernando, JJ., set aside the judgment of the lower courts, and granted the relief sought by the plaintiffs in the present case.

The pertinent facts of the case are that the defendant had come into the ownership of two small allotments of land by means of a title deed, which was duly attested by the notary public. She had transferred the same to a third party named Premlatha for a purchase price of Rs. 500,000, as stated by the notary public. Premlatha, by means of another deed, transferred the said property to the plaintiff. On the very same day on which this transfer took place, the plaintiff entered into a lease agreement in favour of the defendant, which was for a period of two years and the lease amount was Rs. 12000 per year, which the defendant agreed to pay in installments of Rs. 500 every month. After the expiry of the lease period, the defendant had refused to move out, as a result of which the plaintiffs filed an action for ejection against the defendant. In the trial, the defendant had presented evidence, but had not been present for cross examination. In spite of the same, the district court had reserved the case for judgment, and further dismissed the plaint but did not grant the relief prayed for by the defendant. The High Court had upheld the decision of the District Judge. The contention of the defendant was that the transfer of the property to Premlatha was in the nature of a transaction of security, for which the defendant was paying interest, and as she had failed to ‘pay the loan’, she was unable to get the property retransferred to herself. The transaction between the defendant and Premlatha was in the nature of a trust, as the defendant never intended to pass the title of the property. The defendant was a witness to the deed which was signed between Premlatha and the plaintiff, and thus it is evident that there was no intention on the part of the defendant to retain her status as owner of the property, as the deed was for the sale of the property, for a consideration of Rs. 6 lakhs. The contention that the plaintiff was holding the property in trust for the defendant was also rejected by the court, which stated that ‘holding in trust’ is a concept which cannot pass or be transferred from one person to another.

The court placed reliance on the case of Dr. Rasiah Jeyarajah v. Yogambihai Thambirajahnee-Renganathan Pillei, 2015 SCC OnLine SL SC 8, to state that the plaintiff was entitled to evict the defendants from the property upon the conclusion of the lease agreement, and that there was no need to prove title over the premises. The plaintiff was not obligated under law to provide notice of termination of lease and license, contrary to what was held by the High Court.

Accordingly the appeal was allowed with costs and the judgment of the District Court and the Civil Appellate High Court set aside. [Hallewa Mangalika Jayasinghe v. Udeni Bandara Jayasinghe, SC Appeal 183/2016, order dated 28.09.2018]

Case BriefsSupreme Court

Supreme Court: The bench of V. Gopala Gowda and A.K. Goel, JJ, while deciding the question as to whether the consent of the owner of the premises is necessary for renewal of tenant’s licence under the Section 492(3) of the Kerala Municipality Act, 1994, held that the requirement of consent of landlord is applicable only when a person intends to obtain a licence for the first time. It was held that renewal or subsequent application for obtaining licence on expiry of the period of the existing licence, during the currency of the tenancy, is not applicable for obtaining licence. However, the Court clarified that even in the case of application for obtaining licence for the first time, the tenant cannot be deprived of running lawful business merely because the landlord withheld the consent as valid tenancy itself has implied authority of the landlord for legitimate use of the premises by the tenant.

While interpreting the Section 492 (3) of the Kerala Municipality Act, 1994, the Tribunal and the single bench of Kerala High Court had said that Under Section 492(3) of the Kerala Municipality Act, a consent of the owner is needed only for obtaining licence for the first time. Since the petitioner has not applied for licence for the first time the Corporation cannot impose a condition for obtaining a consent from the landlord. It was further held that The Corporation cannot insist upon such a tenant for production of a written consent from the landlord for the purpose of issuing of the licence. A statutory tenant can be evicted from the leased premises only in accordance with the various provisions contained in the Kerala Buildings (Lease and Rent Control) Act, 1965.

The Court, noting that since the possession of the tenant is lawful, the landlord is not entitled to withhold his consent for the conduct of the business for which the premises were given on rent, agreed with the abovementioned view and hence, set aside the order of the division bench of the High Court, thereby, restoring the order of the Tribunal as affirmed by the Single Bench of the High Court. [Sudhakaran v. Corp. of Trivandrum, 2016 SCC OnLine SC 666, decided on 05.07.2016]