Supreme Court of India

THIRUNAVUKARASU MUDALIAR (DEAD) BY LRS.versusGOPAL NAIDU (DEAD) BY LRS.

Citation: 2006 INSC 716
Decided: 19 October 2006
Disposal: Appeal(s) allowed
Bench: B P SINGH

Holding

The tenant’s failure to deposit the price within the period fixed by the appellate court constitutes default, so his application under Section 9(1)(a) is dismissed.

Summary

The landlord filed an eviction suit and the tenant invoked Section 9 of the Madras City Tenants' Protection Act, 1921 seeking a court‑ordered sale of the suit‑land. The trial court fixed a price and a six‑month payment schedule; the tenant made only partial payments. On appeal the appellate court enhanced the price and again fixed a six‑month payment period, and the High Court further enhanced the price and directed the trial court to give the tenant time to pay. The tenant did not obtain any stay or extension but deposited the full amount within three years of the High Court’s order. The landlord moved to dismiss the tenant’s Section 9 application for default, while the High Court had held the tenant complied because the three‑year period ran from its final order. The Supreme Court held that the operative order fixing the price and payment period was the appellate court’s order, which the tenant failed to obey; therefore he was in default and his application under Section 9(1)(a) must be dismissed. The High Court’s interpretation of the “date of the order” provision was rejected.

Issues considered

The correct interpretation of ‘date of the order’ in Section 9(1)(b) of the Madras City Tenants' Protection Act, 1921 for determining the three‑year period for payment.
Whether the principle of merger of decrees displaces the payment period fixed by the appellate court with that of the final High Court order.
Whether a tenant’s failure to obtain a stay or extension renders his deposit within three years of the final order insufficient, amounting to default under Section 9(2).
Whether the tenant’s application under Section 9(1)(a) should be dismissed for default in payment.

Legislation cited

Madras City Tenants' Protection Act, 1921s. 9(1)(a), s. 9(1)(b), s. 9(2), s. 9(3)

Subjects

evictiontenant protection actSection 9sale of landdefaultmerger of decreestime limitappellate orderhigh courtsupreme court

Judgment

THIRUNA VUKARASU MUDALIAR (DEAD) BY LRS. A
v.
GOPAL NAIDU (DEAD) BY LRS.

OCTOBER 19, 2006

[B.P. SINGH AND AL TAMAS KABIR, JJ.] B

Madras City Tenants' Protection Act, 1921-Section 9-Suit by
landlord for eviction of tenant-Application by tenant under the Act for
directing landlord to sell suit-land was allowed by trial court-Appellate C
court partly allowed the appeal of the landlord by enhancing the price of
the suit-land-High Court partly allowed the Revision Petition of the
landlord by ji1rther enhancing the price and directing the tenant to approach
;
trial court for seeking time to deposit enhanced amount-Tenant depositing
entire price of suit-land before expiry of maximum statutory period from the
date of the judgment of the High Court without seeking extension of time from D
trial court-Application by landlord before trial court for dismissing the
application of the tenant for default in payment within prescribed period was
allowed-Revision Petition by the tenant was allowed by the High Court-
Correctness of-Held, under the Act, the application of the tenant is liable
to be dismissed if the tenant defaults in payment of price fixed by the Court E
within prescribed period unless the order is stayed by a superior court-On
facts, the tenant defaulted in payment within prescribed period and since no
extension of time was sought from the Court, the application of the tenant
under the Act stands dismissed.

Appellant-plaintiff filed a suit for eviction of respondent-tenant from suit F
land before trial court. The respondent filed an application before the trial
court under section 9 of the Madras City Tenant's Protection Act, 1921 for
directing the landlord to sell the suit-land. The trial court allowed the
application of the respondent fixing the price of the suit-land at a rate and
disposed of the suit of the appellant. The appellant and the respondent filed
separate appeals before appellate court. The appellate court passed an interim G
order of stay. The appellate court finally dismissed the appeal of the respondent
and partly allowed the appeal of the appellant with costs by enhancing the rate
of the land to be paid by the respondent. The appellant preferred a Civil
Revision Petition before High Court. The respondent deposited costs and made
469 H
470 SUPREME COURT REPORTS (2006] ~UPP. 7 S.C.R.

A no deposit of the price of the suit-land determined by the appellate court The
High Court partly allowed the Civil Revision Petition by enhancing the rate
of the land further and directed the respondent to approach the trial court for
taking time to deposit the balance amount in the court. The respondent did
not approach the trial court for taking time, but instead, deposited the amount
before the trial court just within 3 years from the date of the judgment and
B order of the High Court and filed an application for execution of sa~e deed
under the Act. The appellant filed an application before the trial court to
dismiss section 9 application of the respondent under the Act on the ground
of non-payment of the price of the lane! within the prescribed period fixed by
the court. The trial court allowed the application of the appellant. The
C respondent filed Civil Revision Petition before High Court. The High Court
allowed the Civil Revision Petition holding that the effective decree is the
decree passed by the final court by applying the principle of merger of decrees;
and that since the final decree fixes no time for payment of the amount, the
maximum period of 3 years under the Act must be allowed to the tenant to
deposit the price of the land determined by the final court.
D
Allowing the appeal, the Court

HELD: 1.1. Under the Madras City Tenants' Protection Act, 1921, once
an order is passed by the court determining the amount to be paid by way of
sale price and the period within which the payment is to be made is also
E determined, the law takes over and provides that if the tenant defaults in
making the payment as directed, the application filed by him under section
9(1)(a) of the Act shall stand dismissed under section 9(2) of the Act. The
tenant having not complied with the order of the appellate court inasmuch as
he did not make any deposit pursuant to the express direction of the court,
F and of the order of the High Court inasmuch as he never moved the trial court
for granting him time to make the deposit, it must be held that the tenant was
in default and his application under section 9(1)(a) of the Act ought to be
dismissed. [483-G-H; 484-A]

1.2. The statute itselfattaches some importance to the prompt payment
G of the sale price to the landlord. Though the section empowers the court to
condone the delay in making the deposit, it imposes a restriction on the power
of the court inasmuch as no extension can be granted which exceeds the period
of three years from the date of the order fixing the sale price. The legislative
scheme has a purpose. The tenant is in occupation of the land in question and
H therefore is not in any manner affected by the proceedings. On the other hand,
THIRUNAVUKARASU MUDALIAR (DEAD) BY LRS. "· GOPAL NAIDU (DEAD) BY LRS. [BP. SINGH, J.] 47J

the title of the landlord is extinguished if the application under section 9 of A
the Act made by the tenant is allowed. If the price determined by the Court is
promptly paid, the landlord may acquire any other property of that value.
However, ifthe amount determined at the initial stage of the proceedings is to
be paid to the landlord after the appeal and revision have been decided,
obviously it will cause great hardship and injustice to the landlord who shall B
be paid the price of the land many years later, which the price paid may not
truly represent the value of the land transferred to the tenant. The interest
awarded by the Court hardly compensates the increase in the value of the
land. Therefore, a tenant cannot ignore the obligation cast upon him to deposit
the sale price in accordance with the order of the court, even if an appeal or
revision is preferred. He can be absolved of such liability only if the superior C
court passes an interim order absolving him of his obligation to make the
deposit in accordance with the order of the Court Ifhe fails to make the deposit
that should be considered to be a default and the consequences under section
9(2) of the Act must follow. (484-A-Fl

1.3. Unless the order is stayed or the tenant absolved of his obligation D
to make the deposit by an order passed by the appellate or revision court, the
order determining the price remains operative and all necessary
consequences contemplated by section 9(2) of the Act must follow. If the tenant
fails to make the deposit within the time fixed by the Court, his application
under section 9 of the Act for sale of the land to him must stand rejected and E
the amount paid by him, if any, shall be refunded to him in accordance with
the provisions of the Act. (484-H; 485-AI

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4705of1999.

From the final Judgment and Order dated 26.2.1998 of the High Court F
of Judicature at Madras in C.R.P. No. 729/1992.

M.N. Padmanabhan, K.B. Sandeep and K.K. Mani for the Appellants.

T. Raja, R. Nedumaran and T.S. Chaudhary for the Respondents.

The Judgment of the Court was delivered by G

B.P. SINGH, J. The appellants herein are the legal representatives of
the original plaintiff while the respondents are the legal representatives of the
original tenant. In this appeal the appellants have impugned the judgment and
order of the High Court of Judicature at Madras dated 26th February, 1998 H
472 SUPREME COURT REPORTS [2006] SUPP. 7 S.C.R.

A in Civil Revision Petition No. 729 of 1992. By its impugned judgment and order
the High Court allowed the civil revision petition preferred by the respondents
and set aside the order passed by the Principal District Munsif, Vellore in I.A.
No. 656 of 1986 in O.S. No. 947 of 1975 dated February 4, 1992 which had the
effect of dismissing the application filed by the respondents-tenant under
B Section 9 of the Chennai City Tenants' Protection Act, 1921 (hereinafter
referred to as 'the Act'). The High Court found that the respondents had
complied with their obligations under Section 9(1 )(b) of the Act having deposited
the amount within time and, therefore, the application under Section 9 of the
Act ought to be allowed and the appellants be directed to sell the land in
question to the respondents.
c The factual background in which the dispute arises is as follows :-

The plaintiff-landlord filed OS No. 947of1975 claiming eviction of the
tenant from the vacant site on which the tenant claimed to have raised a super-
structure. In the said suit for eviction, the tenant filed his written statement
D and claimed benefit of the provisions of Section 9 of the Act. He also filed
I.A. No. I 80 of 1976 under Section 9 of the Act for an order of the Court
directing the landlord to sell the site to him for such price as may be fixed by
the Court. The trial court by its order of March 31.1978 held the tenant entitled
to purchase the suit site excluding 992 sq. ft. 3 sq. inches surrendered to the
plaintiff, under Section 9 of the Act and fixed the price for 3801 sq. ft. 9 sq.
E inches at Rs. 26, 187.25 ps. at the rate of Rs. 7- per sq. feet. Application under
Section 9 of the Act as well as the suit was disposed of by the said order,
the relevant part whereof reads as under :-

"For the foregoing reasons, I hold that the defendant shall pay into
Court a sum of Rs.26, 187 .25 within a period of 6 months in 3 instalments
F of 2 months interval from the date of this Judgment with interest and
in default of payment by the defendant of anyone of the instalments,
the application in I.A. 180 of 1976 shall stand dismissed and the suit
will stand decreed with costs."

Aggrieved by the judgment and order of the trial court, the landlord as
G
well as the tenant preferred separate appeals. The tenant preferred C.M.A. No.
31 of 1979 while the landlord preferred C.M.A. No. 32 of 1979. It appears that
the District Court had passed an order of stay whereby the tenant was obliged
to deposit only an amount calculated at the rate of Rs.3.70 per sq. feet.
Ultimately the appeals came up for disposal before the Sub Court, Vellore. By
H
THIRUNAVUKARASU MUDALIAR (DEAD) BY LRS •·. GOPAL NAIDU (DEAD) BY LRS [B.P SINGH, J] 473

its judgment and order of November 2, 1981 the appellate court dismissed A
C.M.A, No. 31 of 1979 preferred by the tenant and partly allowed the appeal
preferred by the landlord and enhanced the price of the site by determining
its price @ Rs. 101- per sq. feet. The operative part of the order, so far as it
is relevant, reads as follows:-

"In the result, the appeal is allowed with costs, modifying the B
judgment and decree of the Trial Court to the effect that the petitioner-
defendant in I.A. No. 180/76 in O.S. No. 947/75 is liable to deposit a
sum of Rs. 40,020/- into Court below within a period of six months,
in two instalments of three months' interval from this date with interest
thereon at 6% per annum and in default to payment by the petitioner- C
defendant of any of the instalments, the application in I.A. No. I 80
of 1976 shall stand dismissed and the suit will stand decreed with
costs."

It appears from the record that the tenant deposited a sum of Rs.4,968/
on 18. 1.1982 by way of costs and made no deposit of the price determined D
in accordance with the direction of the appellate court which had granted him
6 months time to pay the amount in two instalments.

The landlord in the mean time preferred a civil revision petition being
C.R.P. No. 34 of 1982. By its order of July 21, 1983 the High Court further
enhanced the price of the site by determining the price at the enhanced rate E
ofRs.12/- per sq. feet.The civil revision petition was allowed in the following
terms:-

"In the result, therefore, the civil revision petition is allowed in part
and the order of the lower appellate court will stand modified by
increasing the value of the site from Rs. 10/- to Rs. 12/- per sq. ft. The F
parties are directed to bear their respective costs. Consequently the
trial court will give sufficient opportunity to the tenant for depositing
the balance amount now fixed for the value of the suit site and pass
suitable orders on the above lines".

After the order of the High Court in the civil revision petition, the tenant G
never approached the trial court praying for time to deposit the balance
amount payable in terms of the order passed by the High Court. However, on
April 11, 1986 the tenant deposited in court a sum of Rs. 27,463.95 ps. It is
the case of the tenant that since the entire amount stood deposited by
deposit of the aforesaid amount on April 11, 1986 i.e. within 3 years from the H
474 SUPREME COURT REPORTS [2006] SUPP. 7 S.C.R.

A date of the judgment and order of the High Court in the civil revision petition,
Section 9 of the Act stood complied with and consequently further steps had
to be taken in accordance with the provisions of Section 9 of the Act for
execution of the sale deed in his favour etc. On the other hand the landlord
contends that neither the orders of the trial court nor that of the appellate
court nor that of the High Court was complied with by the tenant and,
B therefore, the tenant defaulted in complying with the terms of the orders
passed by the courts under Section 9 of the Act. His application. therefore,
deserves to be rejected.

The landlord preferred an application before the Principal District Munsif,
C Vellore for an order that the application under Section 9 of the Act be
dismissed for default of the tenant in making the deposit within the prescribed
period. The tenant contested the application but the same was allowed by
order of February 4, 1992. The said order of the District Munsif has been
reversed by the High Court in revision by its impugned judgment and order,
the correctness whereof is challenged before us.
D
Before considering the merit of the rival contentions, it is useful to
notice the relevant provisions of Section 9 of the Act. The Act makes a
special provision in favour of a tenant within the contemplation of Section
9 whereby the tenant is entitled to apply to the court for an order that the
landlord be directed to sell to him the land under his tenancy for a price to
E be fixed by the court either in whole or in part, or to the extent of land
specified in the application. It is not disputed before us that the tenant in the
instant case is entitled to maintain an application under Section 9 of the Act.
Section 9(1 )(b) and sub-sections (2) and (3) of Section 9 provide as follows:-

"((b) On such application, the Court shall first decide the minimum
F extent of the land which may be necessary for the convenient
enjoyment by the tenant. The Court shall, then, fix the price of the
minimum extent of the land decided as aforesaid, or of the extent of
the land specified in the application under clause (a), whichever is
less. The price aforesaid shall be the average market value of the three
G years immediately preceding the date of the order. The Court shall
order that within a period to be determined by the Court, not being
less than three months and not more than three years from the date
of the order, the tenant shall pay into Court or otherwise as directed
the price so fixed in one or more instalments with or without interest.]

H (2) In default of payment by the tenant of any one instalment, the
THIRUNAVUKARASU MUDALIAR (DEAD) BY LRS "· GOPAL NAIDU IDEA DJ BY LRS [B.P SINGH. J J 475

application [under clause (a) of sub-section (I)] shall stand dismissed, A
provided that on sufficient cause being shown, the Court may excuse
the delay and pass such orders as it may think fit, but not so as to
extend the time for payment beyond the three years above-mentioned.
On the application being dismissed, the Court shall order the amount
of the instalment or instalments, if any, paid by the tenant to be repaid B
to him without any interest.

[(3) (a) On payment of the price fixed under clause (b) of sub-section
(I), the Court shall pass an order directing the conveyance by the
• landlord to the tenant of the extent of land for which the said price
was fixed. The Court shall by the same order direct the tenant to put C
the landlord into possession of the remaining extent of the land, if
any. The stamp duty and registration fee in respect of such conveyance
shall be borne by the tenant.

(b) On the order referred to in clause (a) being made, the suit or
proceeding shall stand dismissed, and any decree or order in ejectment D
that may have been passed therein but which has not been executed
shall be vacated."

On a plain reading of the aforesaid provisions it is clear that on an
application being made to the court by a tenant entitled to the benefit of the
said provision, the court shall first decide the minimum extent of the land E
which may be necessary for convenient enjoyment by the tenant. Having
done so, the court is then required to fix the price of the minimum extent of
the land decided as aforesaid, or of the extent of the land specified in the
application under clause (a), whichever is less. The manner in which the price
shall be determined is also indicated in the said provision. Thereafter the
court is required to make a direction that the price so fixed by the court shall F
be paid by the tenant to the landlord within the period determined by the
court. Such period shall not be less than 3 months and not more than 3 years
from the date of the order. The court may direct the tenant to pay the amount
in one or more instalments. In case the tenant defaults in payment of any one
of the instalments, application under clause (a) of sub-section (I) shall stand G
dismissed though the court has been empowered to excuse the delay for
sufficient cause, but not so as to extend the time for payment beyond 3 years.
In case the application under Section 9 of the Act filed by the tenant is
ultimately dismissed, for any reason, the amount of instalment/ instalments,
if any, paid by the tenant shall be repaid to him without any interest. If the
tenant pays the price fixed by the court under clause (b) of sub-section(!), H
476 SUPREME COURT REPORTS [2006] SUPP. 7 S.C.R.

A the court is required to pass an order directing the conveyance by the
landlord to the tenant of the extent of land of which the price was fixed. If
there is any excess land, the tenant shall be directed to put the landlord in
possession of the remaining extent of land. On such an order being made, the
suit or proceeding shall stand dismissed, and any decree or order of ejectment
B that may have been passed therein, but which had not been executed, shall
be vacated.

The section confers a special right on the tenant but the same is subject
to certain conditions. If a tenant seeks to derive any benefit under Section
9 of the Act, he must strictly comply with the conditions laid down therein.
C So far as the period for the payment of the price is concerned, the section
places a limitation on the powers of the court, namely that the time granted
to a tenant for the payment of the price, whether in one or more instalments,
shall not exceed 3 years. Even in a case where the court is empowered to
condone the delay in making the deposit and extend time for deposit, it
cannot extend the time so as to exceed the limit of 3 years stipulated by sub-
D clause (b) of Section 9( 1) of the Act. Default in payment of any one of the
instalments shall result in the dismissal of the application, subject to the
powers of the court to condone the default for sufficient cause, but not so
as to exceed the period of 3 years prescribed for making the deposit.

It is not in dispute that after the order of the trial court was passed
E directing the tenant to deposit the price in 3 instalments within a period of
6 months, only a sum of Rs. 15, 191.49 ps. was deposited by the tenant on
three dates i.e. on 26.6.1978 ; 27.9.1978 and 4.1.1979. The justification for
deposit of a lesser amount was that the appellate court had granted stay in
favour of the tenant and in terms of the order passed by the District Court
F he was required to deposit the price of the site calculated at the rate of Rs.3. 70
per sq. feet only.

The appeal of the landlord was allowed by order dated November 2,
1981 and in tenns the appellate court directed the tenant to deposit a sum of
Rs.40,020/- in court within a period of 6 months in two instalments at three
G months interval from the date of the judgment with interest thereon. It further
directed that in case of default in payment of any of the instalments, the
application of the tenant shall stand dismissed and the suit of the landlord
shall stand decreed with costs. It is not disputed that within 3 years of the
date of the order of the appellate court i.e. November 2, 1981, the tenant did
H not deposit any further amount as directed by the appellate court except that
THIRUNAVUKARASU MUDALIAR (DEAD) BY LRS. "· GOP AL NAIDU (DEAD) BY LRS. [B.P SINGH, J] 477

he deposited a sum of Rs. 4, 968/- on January, 18, 1982 which represented the A·
amount decreed by way of costs. The tenant made certain deposits later in
the years 1985 and 1986 and it is the case of the respondents-tenant that by
deposit of Rs.27,463.95 ps. on 11.4.1986 i.e. within 3 years of the revisional
order of the High Court, the entire amount payable to the landlord under the
orders of the court stood deposited, and there was no default on the part of B
the tenant. This is contested by the appellants-landlord.

The reasoning adopted by the High Court in reaching its conclusion
that the tenant had deposited the amount he was required to deposit in
accordance with Section 9 of the Act and, therefore there was no default on
his part is as follows:- C
The High Court proceeded on the premise that the trial court is required
to pass an order fixing the amount to be paid by the ' tenant by way of sale
price for purchase of the land belonging to the landlord The maximum period
within which the full price as determined by the court should be deposited
is 3 years unless the court prescribes a shorter period in accordance with the D
statutory provision. The price fixed by the trial court may be varied by the
appellate court or the revisional court. Thus there is a merger of the decree
passed by the trial court with the decree passed by the final court. Applying
the principle of merger of decrees, the effective decree, according to the High
Court, is the decree passed by the final court. If the final decree fixes no time
for payment of the amount, having regard to the provisions of the Section, E
the maximum period of 3 years must be allowed to the tenant to deposit the
price of the land determined by the final court, and the period of 3 years m.ust
run from the date of the order passed by the final court. In the instant case,
therefore, even if the tenant did not deposit the sale price in accordance with
the orders of the trial court and the appellate court, that made no difference p
since he deposited the amount within 3 years from the date of the order
passed by the High Court in revision which attained finality. The "date of the
order" mentioned in Section 9( I )(b) of the Act should be construed as the
date of order in revision. The High Court was of the view that if a different
meaning is given and the period of 3 years mentioned under Section 9(1)(b)
of the Act is to be extended to the date of the order passed by the respective G
courts, namely the court of first instance, the appellate court and the High
Court, there will be different periods in view of different orders for discharging
the obligation cast upon the tenant to deposit the price. The statute has
provided 3 years period as the outer limit for payment of the amount from the
date of the order. Thus in the absence of any time limit fixed by the High Court H
478 SUPREME COURT REPORTS [2006] SUPP. 7 S.C.R.

A in revision, the tenant shall 'be held to have complied with his statutory
obi igation if he deposits the price within 3 years from the date of the order
of the High Court. Since the orders of the courts below merged with the order
in revision passed by the High Court, the order in appeal or revision could
not be enforced to oblige the tenant to deposit the increased amount in
accordance with those orders over and above the amount fixed by the court
B of first instance. For coming to this conclusion the High Court relied on a
Division Bench judgment of the High Court of Madras reported in 1980 (2)
Madras Law Journal 303: M. Arasan Chettiar v. Sri SP, Narasimha/u Naidu's
Estate Trust. According to the High Court the ratio laid down in the aforesaid
judgment was applicable to this case and, therefore, the revision deserved to
C be allowed.
We have very carefully examined the aforesaid decision of the Madras
High Court. In our view the question that arose for consideration in that
decision was entirely different and the ratio laid down therein has no application
to the facts and circumstances of this case. The question as formulated by
D the learned Chief Justice, who delivered the judgment, itself clarifies that the
question that arose for consideration in that case was as to the meaning to
be attributed to the expression "the date of the order" occurring in the third
sentence in Section 9( I)(b) of the Act. The third sentence which is reproduced
in the judgment is as follows :-
·E "The price aforesaid shall be the average market value of the three
years immediately preceding the date of the order".

The learned Chief Justice very carefully examined the provisions of Section
9 of the Act and noticed that in Section 9(1 )(b) the words "the date of the
order" occur twice. What has been referred to in the third sentence in Section
F 9( I)(b) of the Act relates to the manner in which the market value of the land
has to be determined by the court and the provision mandates that the price
aforesaid shall be the average market value of the three years immediately
preceding "the date of the order".

The next sentence which has been described as the fourth sentence in
G
the aforesaid provision reads as follows:-

"The court shall order that within a period to be determined by the
Court, not being less than three months and not more than three years
from the date of the order, the tenant shall pay into Court or otherwise
H as directed the price so fixed in one or more instalments with or
THIRUNAVUKARASU MUDALIAR (DEAD) BY LRS. "· GOPAL NAIDU (DEAD) BY LRS. [BP. SINGH, JJ 479

without interest''. A
It will thus appear that in the fourth sentence of the aforesaid provision
the Court is required to fix the time within which the sale price has to be paid,
and fix the instalments for payment, if any.

We may observe at this stage that the core issue which arose for their B
Lordships' consideration in that case was as to which is the order contemplated
in the third sentence in Section 9(1 )(b) of the Act, whether it is the order
determining the eligibility of the tenant to apply under Section 9, or whether
it is the order determining the extent of land to be sold to the tenant; or
whether it is the order fixing the price for the land .to be sold to the tenant.
c
A question may well arise whether the tenant is at all entitled to the
benefit of Section 9 of the Act. Till the date such issue is decided, it is not
possible to give effect to the remaining provisions of the Section because an
affirmative decision in favour of tenant alone would enable the Court to
proceed further with the application made under Section 9(1 )(a) of the Act, D
and a negative decision against the tenant will render any application filed
by the tenant under Section 9(l)(a) as not maintainable. Such an order is not
an order, under Section 9, and the date of that order has no relevancy to the
fixation of the price of the land to be sold by the landlord to the tenant. The
High Court observed in sub-paragraph 3 of paragraph 12 of the judgment as
follows:- E
12.3. For the purpose of disposing of this application, the Court, must
first decide upon the minimum extent of the land which may be
necessary for the convenient enjoyment by the tenant. Any such
decision of the Court, from the very nature of the cage; can only be
by means of an order and the date of that order will be the relevant F
date for the purpose of fixing the price mentioned in the third sentence
in Section 9(I)(b). If the decision of the Court on the minimum extent
is, taken up further by way of appeal or revision and that decision is
either affirmed or modified and if there has been a stay of further
proceedings during the pendency of such appeal or revision, naturally, G
the date of the order contemplated in the third sentence in Section
9(1)(b) will be the date of the order of the appellate or revisional
Court;

The Division Bench of the Madras High Court did not at all deal with
the question which arises for consideration in this appeal. The question in H
480 SUPREME COURT REPORTS [2006] SUPP. 7 S.C.R.

A this appeal is whether the order passed by the trial court determining the price
payable for the land in question or by the appellate court enhancing the
amount, must be complied with and the amount deposited within the period
allowed by the original or the appellate order, or whether a tenant can wait
for the disposal of the revision preferred by the landlord before the High
Court for enhancing the price, even-without obtaining an order of stay or any
B other interim direction from the appellate court absolving him of the obligation
to make the deposit as directed. We may also observe that the Madras High
Court in the judgment aforesaid held that "the date of the order" referred to
in the third sentence and the fourth sentence in Section 9(1)(b) cannot mean
the same date. It must mean two different dates. If the expression "the date
C of the order" occurring in the third and fourth sentences mean the same date,
namely, the date when the Court fixes the price to be paid by the tenant to
the landlord, the third sentence will not be workable for the reason that at the
time when the parties are called upon to adduce evidence regarding the
average market value of the land for a period of three years, the parties would
not know, and from the nature of the case nobody can know, with reference
D to what date the three year period should be calculated because the passing
of the order will be in future. Their Lordships thereafter observed :-

"Therefore, we have to give a meaning to the expression "the date of
the order" occurring in the third sentence in Section 9(1)(b) different.
from the meaning which we have given to the expression "date of the
E order" occurring in the fourth sentence in Section 9( I)(b ). Having
given our careful consideration, we are of the opinion that the
expression "date of the order" occurring in the third sentence in
Section 9(1 )(b) must mean the date on which the Court decided the
minimum extent of the land which may be necessary for the convenient
F enjoyment by the tenant. Once that decision has been arrived at,
whatever might have been the interval between the date and the date
on which the price was ultimately fixed, the period of three years
backwards from that date is definitely known and there will be no
difficulty for any particular party adducing evidence in that behalf."

G In sum and substance the High Court held that the period of three years
by reference to which the price of the land has to be determined is the three
years immediately preceding the date on which the court decides the minimum
extent of the land which may be necessary for the convenient enjoyment by
the tenant. It was in this context that it held that that date must necessarily
H be the date of the order of the appellate or Revisional Court, if the dispute
THIRUNAVUKARASU MUDALIAR (DEAD) BY LRS. "· GOPAL NAIDU (DEAD) BY I.RS. [B.P. SINGH, J.) 48 J

was not set at rest by the trial court and the matter was taken in appeal and A
thereafter in revision to the High Court.

The view of the Division Bench of the High Court is unexceptional. In
that case the High Court was considering the question as to which are the
relevant three years which have to be reckoned for determining the price of
the land to be sold to the tenant. As found by the High Court the relevant B
period was the period of three years preceding the date of the order of the
Court determining the extent of land to be sold to the tenant.

Having regard to the scheme of the provisions only after the relevant
period of three years is determined, the Court can proceed to determine the C
price to be paid by the tenant. Thereafter, the court is required to pass an
order directing the tenant to deposit the amount within the period fixed by
it. Thus, the order which determines which three years are relevant for fixing
the price of the land, is an order passed at an intermediate stage of the
proceeding, and upon that depends the determination of the price of the land
to be paid by the tenant. Only thereafter the court can pass an effective final D
order in the proceeding directing the tenant to deposit the amount so
determined within the period prescribed by the order. Obviously, therefore,
unless the relevant period of three years is determined no final order can be
passed in the proceeding under Section 9 of the Act. If the order passed by
the trial court was challenged in appeal or revision, and the order in appeal
or revision modified the order passed by the Court below, it was the modified E
order passed in appeal or revision which had to be given effect, meaning
thereby that the cost of the land had to be determined by reference to the
relevant period determined by the appellate or revisional authority. Since no
final order had been passed determining the price and calling upon the tenant
to deposit the amount, there was no question of default being committed by F
the tenant in making the deposit. Section 9(2) of the Act therefore, did not
fall for consideration.

On the other hand, in the instant case the application under Section 9
was finally disposed of by an order of the Court determining the price to be
paid and the period within which it was to be paid by the tenant. There was, G
therefore, an effective order passed by the Court casting an obligation on the
tenant to make the payment. If the tenant failed to make the payment Section
9(2) came into operation which mandates as a consequence of such default
the rejection of the application under Section 9. A final order having been
passed in the proceeding the tenant was bound to obey that order. If that H
482 SUPREME COURT REPORTS [2006] SUPP. 7 S.C.R.

A order was modified in appeal or revision, the tenant could seek adjustment
by restitution.

Having carefully examined the Division Bench judgment of the High
Court of Madras aforesaid, we have no doubt that the principles laid down
therein are not at all applicable to the facts of the instant case.
B
The question which arises in the instant case is whether pursuant to
the order of the trial court or the appellate court the tenant is obliged, in view
of the express language of the provisions, to deposit the price of the land
fixed by the courts within the period granted. If he fails to do so, will it amount
C to default on his part which may entail dismissal of his application in view
of the express provisions of Section 9(2) of the Act? Such a question did not
arise for consideration in the aforesaid decision.

The High Court has emphasized the principle of merger of decrees in
coming to the conclusion that since the decree of the trial court merged with
D the decree of the superior court which attained finality, the decree to be
executed is the one finally passed and, therefore, the tenant can wait till such
time as the final decree is passed, meaning thereby till such time any final
order is passed by the superior court on appeal or revision. We cannot
approve the reasoning of the High Court. It cannot be disputed that the
decree which is finally to be executed is the decree of the final court, and that
E is the effect of merger of decrees. On principle, however, we are of the view
that a decree passed by a court of competent jurisdiction is binding upon the
parties, and even if the said decree is challenged in appeal or revision it does
not cease to operate to bind the parties unless it is stayed by the superior
court or any interim direction is made by the superior court rendering the
F decree ineffective or inoperative for the time being, subject to the final
decision. A judgment debtor under ordinary civil law is not permitted to
ignore the decree passed by the court. He must obtain an interim direction
from the superior court absolving him of his obligations under the decree, or
otherwise suffer the consequences which follow the decree. He cannot be
heard to say that merely because an appeal or revision is pending, the decree
G is rendered ineffective. The parties are bound by the decree, and in case the
appellate court modifies or sets aside the decree the judgment debtor may
claim restitution.

In the instant case though the tenant had obtained an interim order after
the passing of the order under Section 9 of the Act by the trial court and he
H was required to pay only a lesser amount, he did not obtain any interim order
THIRUNA\'UKARASU MUDALIAR (DEAD) B\' LRS. '" GOPAL NAIDU (DEAD) BY LRS [B.P, SINGH, J] 483

after the price was enhanced by the appellate court. This is despite the fact A
that the amount to be deposited was quantified by the court and the period
during which the same had to be paid was also fixed as also the instalments.
In fact the tenant had not even preferred a revision against the appellate order
and it was only the landlord who claimed a higher price in the revision filed
by him before the High Court. So far as the tenant is concerned, he had not
even challenged the order passed by the appellate court. Without challenging B
that order and without obtaining any interim order from the superior court,
the tenant could not be permitted to ignore the decree passed by the appellate
court.

After the revision was partly allowed by the High Court and a higher C
price was fixed, the High Court directed the trial court to give to the tenant
reasonable time to deposit the sale price in court. No doubt the High Court
was in error in doing so because the statute casts an obligation on the court
deciding the matter to pass such an order. However, since a litigant cannot
be made to suffer for the mistake of the court, we do not hold this against
the tenant. But for his failure to move the trial court for fixing the period within D
which the deposit had to be made, the tenant has furnished no explanation
whatsoever. In fact the tenant never moved the trial court for such direction
and on his own chose to deposit the amount within a period of three years
from the date of the order of the High Court. In a sense the tenant himself
decided within what period the balance of the sale price should be deposited, E
which jurisdiction the law vested only in the court. It may be that the Court
may have granted a lesser period for deposit of the balance amount. We also
notice that the High Court in the operative part of its order had directed the
trial court to give sufficient opportunity to the tenant for depositing the
"balance amount now fixed" for the value of the suit site. The High Court
therefore, also proceeded on the basis that only the amount as enhanced by F
it was required to be deposited.

Under the Act once an order is passed by the court determining the
amount to be paid by way of sale price, and the period within which the
payment is to be made is also determined, the law takes over and provides
that if the tenant defaults in making the payment as directed, the application G
filed by him under Section 9(l)(a) of the Act shall stands dismissed under
Section 9(2) of the Act. The tenant having not complied with the order of the
appellate court inasmuch as he did not make any deposit pursuant to the
express direction of the court, and of the order of the High Court inasmuch
as he never moved the trial court for granting him time to make the deposit, H
484 SUPREME COURT REPORTS ['.:006] SUPP . .7 S.C.R.

A it must be held that the tenant was in default and his application under
Section 9(1 )(a) ought to be dismissed. We say so because the statute itself
attaches some importance to the prompt payment of the sale price to the
landlord. The statute fixes the maximum period of three years, but the period
may be shorter depending on the order the court may pass which in no case
shall be less than three months and more than three years. Though the
B section empowers the court to condone delay in making the deposit, it
imposes a restriction on the power of the court inasmuch as no extension can
be granted which exceeds the period of three years from the date of the order
fixing the sale price. The legislative scheme has a purpose. The tenant is in
occupation of the land in question and, therefore, is not in any manner
C affected by the proceedings. On the other hand the title of the landlord is
extinguished ifthe application under Section 9 made by the tenant is allowed.
Section 9 also fixes the period which is relevant for the purpose of determining
the sale price of the land in question. The three years which are relevant are
the three years immediately preceding the date of the order whereby the court
determines the minimum extent of the land which may be necessary for
D convenient enjoyment by the tenant. If the price determined by the court is
promptly paid, the landlord may acquire any other property of that value.
However, if the amount determined at the initial stage of the proceeding is to
be paid to the landlord after the appeal and revision have been decided,
obviously it will cause great hardship and injustice to the landlord who shall
E be paid the price of the land many years later, when the price paid may not
truly represent the value of the land transferred to the tenant. The interest
awarded by the court hardly compensates the increase in the value of the
land. Therefore, a tenant cannot ignore the obligation cast upon him to
deposit the sale price in accordance with the order of the court, even if an
appeal or revision is preferred. He can be absolved of such liability only if
F the superior court passes an interim order absolving him of his obligation to
make the deposit in accordance with the order of the Court. If he fails to make
the deposit, that should be considered to be a default and the consequences
under Section 9(2) must follow.

G We must, therefore, hold that the High Court was in error in holding that
if the sale price is deposited within three years of the date of the final order
passed by the High Court, which order attained finality, the tenant should be
held to have discharged the obligation cast upon him by Section 9(l)(b) of
the Act. We hold that unless the order is stayed or the tenant absolved of
his obligation to make the deposit by an order passed by the appellate or
H revisional court, the order determi"ing the price remains operative and all
THIRUNAVUKARASU MUDALIAR (DEAD) BY LRS. "· GOPAL NAIDU (DEAD) BY LRS. [B P. SINGH. 1] 485

necessary consequences contemplated by Section 9(2) of the Act must follow. A
If the tenant fails to make the deposit within the time fixed by the court, his
application under Section 9 of the Act for sale of the land to him must stand
rejected and the amount paid by him, if any, shall be refunded to him m
accordance with the provisions of the Act.

We, therefore, allow this appeal, set aside the order of the High Court B
dated 26th February, 1998 passed in Civil Revision Petition No. 729 of 1992
and restore that of the Principal District Munsif, Vellore dated February 4,

-
1992 in I.A. No. 656 of 1986 in O.S. No. 947 of 1975. The trial court shall now
pass necessary orders for refund of the sale price to the tenant in accordance
with the provisions of the Act. Parties are, however, directed to bear their own C
costs.

- B.S. Appeal allowed.

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