Holding

Section 116 of the Evidence Act places emphasis on the possession of the person in possession at the time of the agreement, not on the licensor's title, rendering the Division Bench's focus on title erroneous.

Summary

The appellant filed a suit for possession and compensation of premises, alleging a leave‑and‑license agreement with the defendant. The defendant amended his pleadings, first claiming to be a sub‑tenant and later asserting that he had been in possession before the alleged agreement. The trial court dismissed the suit, the Bombay High Court Single Judge decreed in favour of the appellant, but the Division Bench reversed that decision. The Supreme Court examined whether Section 116 of the Indian Evidence Act requires focus on the licensor's title or on the possession of the person in possession at the time of the agreement. It held that the statute emphasizes possession, not title, and that the Division Bench erred by stressing title. Consequently, the appeal was allowed and the matter remanded to the High Court for fresh disposal.

Issues considered

Whether Section 116 of the Indian Evidence Act requires the focus to be on the title of the licensor/landlord at the time of the agreement or on the possession of the person in possession for the purpose of estoppel.
Whether constructive possession of the licensor is relevant under Section 116.

Legislation cited

Indian Evidence Act, 1872s. 116

Subjects

estoppelSection 116possessiontitleleave and licenselandlord-tenantconstructive possessioncivil appeal

Judgment

...,..
A BANSRAJ LALTAPRASAD MISHRA
V.

STANLEY PARKER JONES

FEBRUARY 16, 2006

B [ARIJIT PASA YAT <\ND TARUN CHATTERJEE, JJ.]

Evidence Act, 1872 : •
•

Section 116---Estoppel-Licensee questioning title of licensor-Held,
c High Court erroneously laid stress on title-The stress is on the possession of
the person who is in possession of the property at the time of agreement-
Matter remanded to High Court for disposal afresh-Leave and licence.

Appellant filed suit for possession and for compensation against the
D defendant-respondent. It wa:i stated in the plaint that the suit premises ·
were given to the defendant under an agreement for leave and licence.
The defendant filed written :statement. Later by way of amendment, the
defendant pleaded that he was not a licencee but a sub-tenant. Yet by
another amendment, the defondant pleaded that he was inducted into the
E premises not by the plaintiff but by another person and he was in
possession of the suit premisf:S much before the alleged agreement between
him and the plaintiff. On this, the plaintiff was allowed to amend the plaint
and raise a plea of forfeiture incurred by defendant-respondent by reason
of denial of plaintifrs title. The suit was dismissed by the trial court, but
decreed by Single Judge of the High Court. However, the Division Bench
F
dismissed the suit. Aggrievfd, the plaintiff filed the present appeal.

It was contended for the appellant that the Division Bench of the
High Court erred in laying 1:mphasis on the question of title of the plaintiff
at the time of agreement. J[t was submitted that what was relevant was
G the possession of the licensor and not the title.

Allowing the appeal and remanding the matter to the High Court,
r
the Court

HELD: The Division Bench of the High Court erroneously laid stress
H 334

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BANS RAJ LALTAPRASAD MISHRA v. STANLEY PARKER JONES [PASA YAT,J.] 335
on title which has no relevance in the background of what is stated in A
-"'\" Section 116 of the Evidence Act. Obviously, the stress is on the possession
of the person who is in possession of the immovable property at the time
of the agreement. The principle of estoppel arising from the contract of
tenancy is based upon a healthy and salutary principle of law and justice
that a tenant who could not have got possession but for his contract of B
tenancy admitting the right of the landlord should not be allowed to launch
his landlord in some inequitable situation taking undue advantage of the
possession that he got and any probable defect in the title of his landlord.
(340-H, DJ

Krishna Prasad Lal v. Barabani Coal Concern Ltd., AIR (1937) P.C. C
251, referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6396 of2001.

From the Final Order & Judgment and Order dated 15.2.2001 of Bombay D
High Court in LP.A. No. 161 of 1993 in F.A. No. I 109/1987.

Bhimrao N. Naik, Vinesh C. Solshe and C.G. Solshe for the Appellant.

A.S. Bhasme for the Respondents.
E
The Judgment of the Court was delivered by

ARIJIT PASAYAT, J. This is directed against the judgment of a
Division Bench of the Bombay High Court in a Letters Patent Appeal. Brief
reference to the factual aspects would be necessary:
F
The appellant filed Suit No. 6954/72 in the Bomba)'. City Civil Court
against the respondent inter a/ia with the following prayers:

(a) for possession of suit premises of Plots Nos. 81, 82 with shed at
Gandhinagar, Bharat Bazar, Worli, Bombay. G
(b) for recovery of an amount of Rs. 6, 175/- on account of
compensation, and

(c) for mesne profits.

Certain interim reliefs were also claimed in this suit. The broad
H
336 SUPREME COURT REPORTS [2006] 2 S.C.R.

A allegations made by the plaintiff in the plaint were as follows:

(a) on request of t'le- Defendant, the Plaintiff allowed the Defendant
to use the suit premises on the terms recorded in the Agreement
dated 01.05. I 091, which was an Agreement for leave and license
for 11 months from the date;
B
(b) ·the compensation agreed between the parties was Rs. 475/- per
month;

(c) the Defendant was to carry on the business of motors repairing

c in the suit premises and was not to change the user of the
premises;

( d) thai 2 months' arrears of compensation would entitle the Plaintiff
to terminate the Agreement by giving one month's notice in
writing and to enter upon the suit premises;
D
(e) the license could be renewed at the option of the Defendant by
one month's prior notice to the Plaintiff;

(f) that though the Agreement provided that the Defendant would
deposit Rs. 6,000/- by way of security, the Defendant in fact
E paid only Rs. 5, 000/-;

(g) that, the De:fendant had issued 2 cheques respectively for Rs.
950/- and Rs. 793/- towards compensation, which were
dishonoured;

F (h) the Plaintiff by his Advocate's letter dated 02.10.19781 informed
the Defendant that, from May, 1971 to September, 1971 the
Defendant had not paid compensation amount of Rs. 2,375/- and
that, he had committed several breaches of the said license, that
the license granted to the Defendant was revoked and that, the
G Defendant should pay the arrears and hand-over the vacant
possession of the suit premises;

(i) the Plaintiff by his Advocate's letter dated 13.04.1972 demanded
the arrears of compensation of Rs. 5,225/- upto April, 1972, but
r
the Defendant issued a cheque of Rs, 2,850/- towards
H compensation, which was also dishonoured.
I

-4

BANSRAJ LALTAPRASADMISHRA v. STANLEY PARKER JONES IPASAYAT.J] 337

----r The defendant-respondent filed Written Statement in which originally A
the following stands were taken:

(a) That the Civil Court had no jurisdiction to try the suit as the
Defendant was the tenant or the sub-tenant of the suit premises
and not a licensee as alleged, and that, "the landlord had agreed
B

,
_;
\
to this arrangement arrived at between the Plaintiff and the
Defendant."

(b) That the Defendant had constructed a shed on a portion of the
suit premises by spending Rs. 4,000/-
c
(c) That the Defendant had not committed any breached of the
Agreement and gave explanations for the same in para 9 of his
written statement.

(d) That, there was no cause of action for the suit.
D
Subsequently, both appellant and respondent took out Notice of Motion
in the Civil Suit in respect of interim orders passed in the suit, and orders
were passed on said Notice by the Civil Court.

On 10.01.1976, the defendant took out Chamber Summons for E
amendment of the Written Statement in the following terms:

(a) · to amend the Written Statement to contend that the Agreement
dated 01.05.1971 was void on account of fraud and
misrepresentation made by the Plaintiff that, he was the legal
tenant of the suit premises; F
(b) to delete from the original Written Statement the averment that
the· Agreement of sub-tenancy between the Plaintiff and the
Defendant was consented to by the landlord.

The trial court allowed the said amendment. Subsequently, in 1976 the G
defendant took out another Chamber Summons praying for amendments in
his Written Statement in the following terms:

(a) that, the Defendant was not inducted in the suit premises on
1.5.1971 but that, he was already in possession of the plots with a H
338 SUPREME COURT REPORTS [20061 2 S.C.R.

A shed on it and was carrying on his bu;iness in the same of Famous 'I" .
Engineering Works on an undertaking arrived at with one Shamsher
Khan on 27.12.199C;

(b) that, the said Sh asher Khan vanished away and the Plaintiff
B approached the Defendant representing him that Plaintiff was the legal tenant
of the suit premises and believing the same the Defendant executed the
Agreeement dated 01.05.1971 in favour of the Plaintiff;

(c) that, the said Mansoor Hussein was the tenant in respect of the
suit property and the Defendant was in lawful occupation of the
c suit property;

(d) that, the Agreement dated 01.05 .1971 was void on account of
fraud and misrepresenation practised by the plaintiff.

This second amendment was also allowed.
D
The Civil Court allowed the plaintiff-appellant to plead cause of action
occasioned by the alternate plea of sub-tenancy raised in the Written Statement
by amendment. The plaintiff was allowed to amend the plaint for raising the
plea of forfeiture incurred by the defendant-respondent by reason of denial
E of the plaintiff-appellant's title to the suit premises.

Supplementary Written Statement was filed. Issues were framed and by
judgment and decree dated 30.10.1987 the Shor Cause Suit No. 6954/72 was
dismissed. Being aggriev<:d by the judgment and decree passed by the trial
F Court, First Appeal No. 1109/1987 was filed in the Bombay High Court and
the learned Single Judge set aside the judgment and decree of the trial Court
and the plaintiff-appellant's suit for possession was decreed. Aggrieved by
the said judgment and decree dated 29.4.1988 and 15.09.1990 respectively
passed by learned Singk Judge defendant-respondent filed Letters Patent
Appeal which was numb1:red as LPA No. 161/1993. The Division Bench set
G aside the judgment and d<:cree passed by the learned Single Judge and restored
those passed by the trial Court.

In support of the appeal, learned counsel for the appellant submitted
that the approach of the Division Bench was clearly erroneous and based on
H a misreading of Section 116 of the Indian Evidence Act, 1982 (in short "the
BANSRAJ LALTAPRASAD MISHRA r. STANLEY PARKERJONES(PASAYAT. J.] 339

Evidence Act"). Great emphasis was laid by the Division Bench on the question A
·-r of title of the plaintiff at the time when the alleged agreement between the
plaintiff and the defendant was entered into. According to learned counsel for
the appellant this is really irrelevant and is contrary to the specific language
used in Section 116 of the Evidence Act. It was pointed out that the learned
Single Judge has elaborately dealt with the scope and ambit of Section 116 B
of the Evidence Act. It was pointed out that what is relevant is the possession
of the the licensor but not the title. The Division Bench lost sight of this
distinction and went on to decide the appeal in favour of the defendant-
respondent as if title was sine qua non for the application of Section 116 of
the Evidence Act.
c
Per contra, learned counsel' f~r the respondent submitted that if the
entire factual scenario is taken note of, one things clear that the appellant was
not in possession when the alleged agreeemnt on 1.5.1971 was executed.

It is not in dispute that on 1.5.1871 an agreement was entered into. D
What the defendant tried to establish was that prior to the date of agreement
one Shamsher Khan had put the defendant in possession and therefore the
--. subsequent agreement with the plaintiff-appellant was really of no
°" consequence. This aspect was dealt by the learned Single Judge in detail. It
was held that the concept of constructive possession was clearly applicable
even ifthe defendant's case of Shamsher Khan having put him in possession E
is accepted. Illustrations were given to buttress the interpretation given. The
learend Single Judge was of the view that the word "possession" in Section
I 16 also includes constructive possession. Unfortunately the Division Bench
has not dealt with this aspect. It would be relevant at this point of time to take
note of what is stated in Section 116 of the Evidence Act. The same reads F
as follows:

"Estoppel of tenant; and of licensee of person in possession-No
tenant of immoveable property, or person claiming through such tenant,
shall, during the continuance of the tenancy, be permitted to deny G
that the landlord of such tenant had, at the beginning of the tenancy
a title to such immoveable property and no person who came upon
any immovable property by the licence of the person in possession
\ thereof, shall be permitted to deny that such person had a title to such
)
possession at the time when such licence was given."
H
t
340 SUPREME COURT R r:PORTS 120061 2 S.C.R.

A The ''possession" in 1he instant case relate to second limb of the Section.
It is couched in negative terms and mandates that a person who comes upon
any immoveable property JY the license of the person in possession thereof,
shall not be permitted to deny that such person had title to such possession
at the time when such license was given.
B The underlying policy of Section 116 is that where a person has been
brought into possession as a tenant by the landlord and if that tenant is
permitted to question the title of the landlord at the time of the settelement
then that will give rise to extreme confusion in the matter of relationship of
the landlord and tenant and so the equitable principle of estoppel has been
C incorporated by the legislature in the said section.

The principle of estoppel arising from the Contract of tenancy is based
upon a healthy and salutory principle of law and justice that a tenant who
could not have got possession but for his in some inequitable situation taking
D undue advantage of the pom·.ssion that he got and any probable defect in the
title of his landlord. It is on account of such a contract of tenancy and as a
result of the tenant's entry inlo possession on the admission of the landlord's
title that the principle of estoppel is attracted.

Section 116 enumerates the principle of estoppel which is merely an
I
E extension of the principle that no person is allowed to approbate and reporbate
at the same time.

As laid down by the Privy Couiltil in Krishna Prasad Lal v. Barabani
Coal Concern Ltd., AIR (1937) P.C. 251 "It (Sec. 116) deals with one cardinal
F and simple estoppel and states it first as applicable between landlord and
tenant and then as between licensor and licensee, a distinction which
corresponds to that between the parties to an action for rent and the parties
to an action for use and occupation".

Obviously, the strees is on the possession of the person who is in
G possession of the immovable property. Unfortunately, The Division Bench
had not addressed itslef to this question which according to us was the core
question.
I
The Division Bench erroneously laid stress on title as indicated above {

H which has no relevance in the background of what is stated in Section 116
BANSRAJ LALTAPRASADMISHRA 1·. STANLEYPARKERJONES[PASAYAT,J.] 34 J

of the Evidence Act. The Division Bench disposted of the matter without A
even discussing as to why the learned Single Judge was not justified in the
conlcusions arrived at. Therefore, we remand the matter to the Division Bench
for fresh hearing and disposal. However, we make it clear that we have not
expressed any final opinion on the merits of the case. As the matter is pending
since long, we request the High Court to dispose of the matter within three B
months. The interim order passed in this appeal shall continue till the disposal
of the matter by the High Court.

The appeal is disposed of accordingly.
'
R.P . Appeal allowed. C

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