Termination of Tenancy (& Grant) on FORFEITURE (for Claiming Title)

Jojy George Koduvath

Abstract

If a tenant claims title on the land leased,
               • owner can recover the land ‘on the strength of his Title’.
Forfeiture of Lease (Sec. 111(g), TP Act, 1882) arises when –
               • (1) lessee breaks a condition;
               • (2) lessee renounces lease & claim title; or
               • (3) lessee is adjudicated an insolvent.
In case of forfeiture,
               • Landlord who is the Owner can (i) file a recovery suit ‘on Title’
               • or, (ii) he can file a suit invoking Sec. 111(g), TP Act .
               • Landlord, who is not the Owner,
               • has only one remedy – to invoke Sec. 111(g), TP Act, for recovery.

Introduction

If a tenant claims title on the land leased, the landlord having ownership in the property has two options against the tenant-

  • 1. File a recovery suit ‘on Title’. (It is a common law right.)
  • 2. File a recovery suit ‘on Forfeiture’ of tenancy. (The principle and procedure thereof are contained in Section 111 Clause (g) of the Transfer of Property Act, 1882. Under this provision. notice in writing must have been issued to the tenant)

If the landlord is not the owner of the property (Eg. An agent who leased-out a property; or, a lessee who gave sub lease), he has no other option but to file the suit ‘on Forfeiture’ of tenancy, under Section 111 Clause (g) of the TP Act.

  • Note: ‘Agricultural leases’ are exempted from the provisions of Chapter V of the TP Act (that deals with ‘leases of immovable property’) as per Section 117 of the TP Act.

Nonetheless, it is established (Amrit Lal v. Mamleshwar, AIR 1973 Del. 75, Lokman Lodhi v. Narmadabai, AIR 1953 SC 228) that such landlords can recover such agricultural properties applying the ‘principles’ of forfeiture in Clause (g) of Section 111 of the TP Act; because the doctrine of forfeiture is a common law doctrine based on justice, equity, and good conscience.

Similarly, even though ‘grants’ are not referred to in Section 111, grantors can sue the grantees for recovery of the granted land if the grantees forfeit the grant claiming title.

Also Read: Recovery of Possession Based on Title and on Earlier Possession

Right on Forfeiture is a Right Arose in Common Law

Section 111, Transfer of Property Act, 1882 says as to forfeiture as to lease. It being based on the common law principles as to justice, equity and good conscience, the principles can be applied to ‘grants’ also; for, (i) the provisions of the Transfer of Property Act are not applicable to ‘grants’ and (ii) no provision of law (as regards grant) stands contrary these principles (Vasudeva Menon v. K.J. Plantation, 2012 (3) KerLT 730).

Section 111, Transfer of Property Act reads as under:

  • “111. Determination of lease – A lease of immoveable property determines—
  • (a) …  to … (f)
  • (g) by forfeiture; that is to say,
    • (1) in case the lessee breaks an express condition which provides that, on breach thereof, the lessor may re-enter; or
    • (2) in case the lessee renounces his character as such by setting up a title in a third person or by claiming title in himself; or
    • (3) the lessee is adjudicated an insolvent and the lease provides that the lessor may re-enter on the happening of such event;
  • and in any of these cases the lessor or his transferee gives notice in writing to the lessee of his intention to determine the lease;
  • (h) ….”

Sec. 117 of the Transfer of Proper Act provides as follows:

  • “117. Exemption of leases for agricultural purposes – None of the provisions of this Chapter apply to leases for agricultural purposes, except in so far as the State Government may by notification published in the Official Gazette declare all or any of such provisions to be so applicable in the case of all or any of such leases, together with, or subject to, those of the local law, if any, for the time being in force.
  • Such notification shall not take effect until the expiry of six months from the date of its publication.”

Principles of S. 111 TP Act Apply To Agricultural Leases

Though Agricultural leases are exempted (from the whole Chapter) under Sec.117 of the Transfer of Proper Act, the right of forfeiture (for claiming title as owner, by tenant) being a right that arises in common law (that is, on the principles of justice, equity and good conscience (Maharaja of Jaipore  v. Rukmini Pattamahadevi, 46 Ind App 109; AIR 1919 PC 1; Ratan Lal v. Vardesh Chander AIR 1976 SC 588), it can be applied in “agricultural leases” also, if no express prohibition.

Analogy with Sec. 116 TP Act (‘Effect of holding over’)

Sec. 116 of the Transfer of Property Act speaks about ‘effect of holding over’. The principles thereof apply fully to agricultural leases also; despite the fact that agricultural leases are entirely exempted from the provisions of the Chapter V of the TP Act (that deals with ‘leases of immoveable property’), as laid down in Section 117 of the TP Act. The same analogy can be profitably extended to ‘forfeiture’ in Sec. 111.

Sec. 116 of the Transfer of Property Act reads as under:

  • 116. Effect of holding over: If a lessee or under-lessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or under-lessee, or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased, as specified in section 106.

KM Joseph, J. held in  Vasudeva Menon v. K.J. Plantation, 2012 (3) KerLT 730, as under:

  • “Whether the principle of Sec. 116 of the Transfer of Property Act will apply in regard to agricultural lease in view of Sec.117 Act ? …
  • … But there we may notice that the principle of Sec. 116 would apply even to agricultural leases on the basis of it embodying principles of equity, justice and good conscience. In this connection we may refer to a Bench decision of the Delhi High Court in Amrit Lal v. Mamleshwar (AIR 1973 Del. 75).”

The relevant passage in Amrit Lal v. Mamleshwar (AIR 1973 Del. 75) reads as under:

  • “16. Shri Bindra placed reliance on Section 117 of the Transfer of Property Act which exempts leases for agricultural purposes from the provisions of Chapter V of the Transfer of Property Act. In Anantmal v. Lala, AIR 1964 Raj 88, it was held that the principle underlying Section 116 of the Transfer of Property Act is based upon considerations of equity, justice and good conscience and in the absence of anything to the contrary the provisions are applicable to cases not governed by the Transfer of Property Act. The principles of Section 116 are applicable to leases of agriculture lands. Similarly in Alphanso Pinto v. Thukru Hengsu, AIR 1955 Mad 206, it was held if there is no agreement fixing the terms of a new lease, the terms of the old lease must be deemed to be applicable. Where the tenant holds over after the expiration of the term, he holds subject to all the covenants in the lease which are applicable to the new situation. Therefore, clause 9 must be held to be one of the terms of the tenancy by holding over. The tenancy must be held to be one subject to the covenants in respect of Sardarkhti rights contained in the original lease deed. The rule that principles of equity, justice and good conscience apply to agricultural leases and that the principle contained in Section 116 of the Transfer of Property Act is a principle of equity, justice and good conscience has been enunciated in a number of rulings, for example in
    • Krishna Shetti v. Gilbert Pinto, 2nd 42 Mad 654 (AIR 1919 Mad 12),
    • Gangamma v. Phommakka, (1910) 33 Mad 253,
    • Mt. Kesarbai v. Rajabhau Sadasheo Rao, AIR 1944 Nag 94, 
    • Nanjappa Goundan v. Rangaswami Gounda, AIR 1940 Mad 410, 
    • Moore v. Makhan Singh, Air 1919 Pat 254,
    • Eayo George v. Kacki Muthaliyar, AIR 1953 Trav-Co 299, 
    • Bainani Properties Private Ltd. v. M. Gulamali Abdul Hossain and Co., and
    • Namdeo Lokman Lodhi v. Narmadabai, AIR 1953 SC 228.)”

Forfeiture on Claim of Ownership By ‘Grantee’

There is no specific provision for forfeiture of grant for claiming ‘title as owner’, by Grantee (similar to the forfeiture of tenancy for claiming ‘ownership’ by a tenant under Sec. 111(g) of the TP Act).

Will claim of ownership (over the granted-property) by Grantee amount to forfeiture?

The answer is – Yes. Following are the reasons:

  • 1. Applying the Principles of ‘Forfeiture of Tenancy’ it being on principles on justice, equity and good conscience. The right of forfeiture (for claiming title as owner, by tenant, under Sec. 111(g), TP Act) is a right that arises in common law (that is, on the principles of justice, equity and good conscience (Maharaja of Jaipore  v. Rukmini Pattamahadevi, 46 Ind App 109; AIR 1919 PC 1; Rattan Lal v. Vardesh Chander AIR 1976 SC 588).
  • 2. Analogy to Holding-over in agricultural lease. The right of ‘holding over’ on termination of lease (if lessor accept rent even after termination of the lease period) is provided under Sec. 116 of the TP Act. Though Sec. 117 of the TP Act exempts ‘leases for agricultural purposes’ (from the whole Chapter), it is pointed out in a good number of decisions that the principles thereof (holding over) would apply to agricultural leases also, if no express prohibition, for it contains the principles of justice, equity and good conscience. (See: Amrit Lal v. Mamleshwar, AIR 1973 Del. 75.)
  • 3. Analogy to Forfeiture (itself) in agricultural lease. agricultural leases, being specifically exempted in Sec. 117 (it may be argued), the principles on justice, equity and good conscience may not apply to them as regards forfeiture (under Sec. 111).
    • But, the principles thereon (forfeiture) definitely apply to grants, for it is not governed by the TP Act (See: Namdeo Lokman Lodhi v. Narmadabai, AIR 1953 SC 228.)

Grants Act, 1895 and Eviction of tenants from Govt. Lands

By the advent of the Grants Act, 1895, provisions of the TP Act were not applicable to govt. lands. Therefore, (i) no statutory notice – under Sec. 106 TP Act – was necessary for evicting tenants from Govt. lands; (ii) no bar to apply the provisions in Sec. 111 (g) of the TP Act to invoke forfeiture provision (for claiming title or violating any provision in the agreement) with respect to agricultural tenancy lands owned by Govt.; for, the right of forfeiture is a right that arises in common law (that is, on the principles of justice, equity and good conscience (Maharaja of Jaipore  v. Rukmini Pattamahadevi, 46 Ind App 109; AIR 1919 PC 1; Rattan Lal v. Vardesh Chander AIR 1976 SC 588).

  • Note: Grants Act, 1895 apply to all States except to the “Part B States”. Under States Reorganisation Act, 1956, Part B states were Patiala and East Punjab States Union (PEPSU), Hyderabad, Jammu and Kashmir, Travancore-Cochin. Madhya Bharat, Mysore, Rajasthan, and Saurashtra.

Read Blog: Grant in Property Law

Does the ‘Forfeiture Clause’ Apply to Agricultural Tenants and Grantees

Agricultural leases are exempted (from the whole Chapter) under Sec.117 of the TP Act. And, ‘Grants’ are not mentioned in Sec. 111.

Does it mean –

  • 1. There will be no forfeiture of tenancy even if the agricultural tenant or Grantee ‘forfeit’ tenancy or grant by claiming ownership or adverse possession?
  • 2. “Notice in writing to the lessee of his intention to determine the lease” is essential under Sec. 111(g) (on his claiming title). Whether it is required to be issued to (i) agricultural tenants and (ii) Grantees on forfeiture of tenancy/grant (on his claiming title) – on principle of justice, equity and good conscience?

As shown above, though Sec. 117 of the TP Act exempts ‘leases for agricultural purposes’ (from the whole Chapter), it is pointed out in the following decisions that the principles as to ‘forfeiture’ would apply to agricultural leases also, for it contains the principles of justice, equity and good conscience. The decisions are::

  • Maharaja of Jaipore  v. Rukmini Pattamahadevi, 46 Ind App 109; AIR 1919 PC 1;
  • Ratan Lal v. Vardesh Chander AIR 1976 SC 588.

The potential argument in favour of issuance of Notice –

  • The notice in writing under Sec. 111(g) of the TP Act embodies a principle of justice, equity and good conscience and therefore there can be no forfeiture unless notice in writing is given to (i) agricultural tenants (Though agricultural leases are exempted, from the whole chapter, under Sec.117 TP Act) and (ii) Grantees.

But, the following are shown in support of the view that no written notice is needed in cases of (i) agricultural tenants and (ii) Grantees–

  • This provision was introduced by 1929 Amendment only.
  • This provision for Notice was not in force in English law. (Hence doctrine of justice, equity and good conscience ‘is not ‘applied by English Courts’ do not apply).
  • Institution of suit itself is a notice to (i) agricultural tenants (Besides, agricultural leases are exempted (from the whole Chapter) under Sec.117 of the TP Act) , (ii) Grantees, etc.
  • It is not equitable to argue that a tenant or Grantee, who wilfully forfeited the transaction, is entitled for a notice, on principles of equity.
  • Notice is required only because it is stipulated in law – Sec. 111(g) of the TP Act. When common law principles are invoked (in agricultural tenancy or grant) the statutory requirement need not be complied with.

Clause (g) of Sec. 111 of the TP Act and Notice Provided under Clause (g)

Section 111 Clause (g) of the TP Act (which requires a notice in writing) applies to cases where the Owner of a property had to sue the defendant as a tenant. If the position of the defendant is that of a trespasser (or agricultural leasee or grantee), there would be no question of invoking Clause (g) of Section 111. It is observed in Sheela v. Firm Prahlad Rai Prem Prakash, AIR 2002 SC 1264; 2002-3 SCC 375 – Clause (g) of Section 111 of the Transfer of Property Act, insofar as relevant for our purpose, provides that a lease of immovable property determines by forfeiture in case the lessee renounces his character as such by setting up a title in a third person or by claiming title in himself.

Section 116 of the Evidence Act

Section 116 of the Indian Evidence Act reads as under:

  • “Estoppel of tenant; and of licensee of person in possession. No tenant of immovable property, or person claiming through such tenant, shall, during the continuance of the tenancy, be heard to deny that the landlord of such tenant had, at the beginning of the tenancy, a title to such immovable property.”

In Sri Ram Pasricha v. Jagannath, AIR 1976 SC 2335: 1976 4 SCC 838, it is held as under:

  • “The tenant in such a suit is estopped from questioning the title of the landlord under section 116 of the Evidence Act. The tenant cannot deny that the landlord had title to the premises at the commencement of the tenancy. Under the general law, in a suit between landlord and tenant, the question of title to the leased property is irrelevant”.

The principle behind the proposition, which asserts that the owner/landlord has the right to recover the property based on his title if the defendant-tenant raises claim of title, is founded upon the notion that a tenant is precluded from disputing the title of the landlord or owner, as laid down in Section 116 of the Evidence Act.

Forfeiture of tenancy under Clause (g) of Section 111 of the TP Act

In Sheela v. Firm Prahlad Rai Prem Prakash (Ruma Pal, R.C. Lahoti, JJ.), AIR 2002 SC 1264; 2002-3 SCC 375, it is held as under:

  • “In our opinion, the denial or disclaimer to be relevant for the purpose of Section 12(1)(c) should take colour from Section 116 of the Evidence Act and Section 111(g) of the Transfer of Property Act. Section 116 of the Evidence Act embodies therein a rule of estoppel. No tenant of immovable property, or person claiming through such tenant, shall, during the continuance of the tenancy, be permitted to deny that the landlord of such tenant had, at the beginning of the tenancy, a title to such immovable property. This estoppel, so long as it binds the tenant, excludes the tenant from raising a plea disputing the title of his landlord at the commencement of the tenancy. It flows as a corollary therefrom that the proof of landlord-tenant relationship tantamounts during the continuance of tenancy to proof of ownership of landlord over the tenancy premises at the beginning of the tenancy so far as the tenant is concerned. It is significant to note that on the phraseology of Section 116 of the Evidence Act the rule of estoppel applies so long as the tenancy is not terminated and the rule estops the tenant from laying challenge to the ownership of the landlord at the commencement of the tenancy. But the rule of estoppel as incorporated in Section 116 is not exhaustive and it may be extended or suitably modified in its application to other situations as well, retaining the basic feature of the rule.
  • “Clause (g) of Section 111 of the Transfer of Property Act, insofar as relevant for our purpose, provides that a lease of immovable property determines by forfeiture in case the lessee renounces his character as such by setting up a title in a third person or by claiming title in himself. This provision contemplates two fact – situations which entail the lessee having renounced his character as such and they are: (i) when the lessee sets up a title in a third person, or (ii) when he claims title in himself. “In either case, the tenant has disputed and denied the title of his landlord because a title in third person or title in himself cannot co-exist with the title in the landlord.
  • 13. The law as to tenancy being determined by forfeiture by denial of the lessor s title or disclaimer of the tenancy has been adopted in India from the Law of England where it originated as a principle in consonance with Justice, equity and good conscience. On enactment of the Transfer of Property Act, 1882, the same was incorporated into clause (g) of Section 111. So just is the rule that it has been held applicable even in the areas where the Transfer of Property Act does not apply (See – Raja Mohammad Amir Ahmad Khan vs. Municipal Board of Sitapur and Anr. – AIR 1965 SC 1923). The principle of determination of tenancy by forfeiture consequent upon denial of the lessor s title may not be applicable where rent control legislation intervenes and such legislation while extending protection to tenants from eviction does not recognize such denial or disclaimer as a ground for termination of tenancy and eviction of tenant. However, in various rent control legislations such a ground is recognized and incorporated as a ground for eviction of tenant either expressly or impliedly by bringing it within the net of an act injurious to the interest of the landlord on account of its mischievous content to prejudice adversely and substantially the interest of the landlord.
  • “14. Denial of landlord’s title or disclaimer of tenancy, is it an act injurious to interest of landlord? How does this rule operate and what makes it offensive Evans & Smith state in the Law of Landlord and Tenant (Fourth Edition, 1993, at p.89) that it is an implied condition of every lease, fixed-term or periodic and formal or informal, that the tenant is not expressly or deny the landlord s title or prejudice it by any acts which are inconsistent with the existence of a tenancy. Disclaimer of the landlord’s title is analogous to repudiation of a contract. The rule is of feudal origin; the courts are not anxious to extend it, and so any breach of this condition must be clear and unambiguous. Hill & Redman in Law of Landlord and Tenant (Seventeenth Edition, para 382, at page 445-446) dealing with “Acts which prejudice lessor s title” state that there is implied in every lease a condition that the lessee shall not do anything that may prejudice the title of the lessor; and that if this is done the lessor may re-enter for breach of this implied condition. Thus, it is a cause of forfeiture if the lessee denies the title of the lessor by alleging that the title of the landlord is in himself or another; or if he assists a stranger to set up an adverse title or delivers the premises to him in order to enable him to set up a title. It is a question of fact, however, what intention underlies the words or the actions of a tenant, whether in fact he is definitely asserting a title adverse to the landlord or, as the case may be, intending to enable someone else to set up such a title. Thus, it is not sufficient that the lessee does not at once acknowledge the title of the landlord and a general traverse in the defence to an action for possession does no more than put the landlord to proof and does not assert that the title is in another. The essential characteristic of disclaimer by tenant as stated in Foa s General Law of Landlord and Tenant (Eight Edition, para 934, at p.589) is that it must amount to a renunciation by the tenant of his character of tenant, either by setting up a title in another, or by claiming title in himself. A mere renunciation of tenancy without more, though it may operate as a surrender, cannot amount to a disclaimer. The denial, though it need not be express and can be implied, must nevertheless be a clear denial and it must be clearly proved.”

Tenant sets up title cannot claim benefits u/S. 111 TP Act

Two instances – Plaintiff has to sue Tenant/Mortgagor “On Title”-

  • Oral mortgage (cannot be proved for want of registration)
  • Tenant sets up title in himself.

It is pointed out in Vaghela Raghuvirsinh v Pratapba, 2013 AIR(CC) 2745; 2013-4 CivCC 659 (Guj)  as under:

  • “Where a plaintiff cannot regain possession on the basis of an oral mortgage as it cannot be proved in a court of law for want of registration, it is open to him to recover possession on the strength of his title. (See Ma Kyi v. Maung Thon, AIR 1935 Rang 230 at p. 232 (FB) and Hansia v. Bakhtawarmal, AIR 1958 Raj 102 at p. 106) Luckily for them, the appellants did not base their suit solely on the oral mortgage. They also founded their claim on their title.”

The Division Bench of Madras High Court, in Bhargavakula Nainargal Sangam, Thiruvannamalai v. Arunachala Udayar, (1990)1 L.W. 46, held – by virtue of denial of title of the landlord by forfeiture, the tenancy is determined. But they seem to say following the reasoning given in the earlier Division Bench decision in Veeraswami Naicker v. Alamelu Animal, (1965)2 MLJ 188, that once a tenant sets up title in himself or third persons there is no scope for him to claim benefits under the provisions of the Act (Sec. 111 TP Act). (Referred to in: Pandian Automobiles Private Ltd. v. Tirunelveli Sivakasi Hindu Nadar Pothu Abhiviruthi Sangam, 1992-2 MLJ 185.)

No man can Approbate and Reprobate

In Majati Subbarao v. P.V.K. Krishna Rao, AIR 1989 SC 2187, referring Sec. 111(g) of the TP Act, it is observed as under:

  • “The principle of forfeiture on disclaimer is grounded on the rule that a man cannot approbate and reprobate at the same time. Since the consequence of applying the rule is very serious, it must be held that the denial of title to has to be clear and in unequivocal terms.”

In Pandian Automobiles Private Ltd. v. Tirunelveli Sivakasi Hindu Nadar Pothu Abhiviruthi Sangam, 1992-2 MLJ 185, it is observed as under:

  • “17. Sec. 18 of the City Tenants’ Protection Act provides that the Transfer of Property Act, 1882 shall to the extent necessary to give effect to the provisions of this Act be deemed to have been repealed or modified. Since Sec.111 of the Transfer of Property Act provides various modes of determination of tenancy, and the definition of tenant in Sec. 2(4) includes a person who continues in possession of the land after the determination of the tenancy agreement, and when there is no provision whatsoever in the City Tenants’ Protection Act itself as to how a tenancy is to be determined, it can be held that Sec. 111 of the Transfer of Property Act shall not be deemed to have been repealed or modified. But the Division Bench in Bhargavakula Nainargal Sangam, Thiruvannamalai v. Arunachala Udayar, (1990)1 L.W. 46, appears to say that in view of Sec.13 of the present Act it is not necessary to discuss about the provisions contained in Sec.111(g) of the Transfer of Property Act. This means they do not seem to hold that by virtue of denial of title of the landlord by forfeiture the tenancy is determined. But they seem to say following the reasoning given in the earlier Division Bench decision in Veeraswami Naicker and another v. Alamelu Animal and others, (1965)2 M.L.J. 188, that once a tenant sets up title in himself or third persons there is no scope for him to claim benefits under the provisions of the Act.”

Read similar Blogs:

How to Subscribe ‘IndianLawLive’? Click here – “How to Subscribe free “

Read in this cluster (Click on the topic):

Civil Suits: Procedure & Principles

Book No, 1 – Civil Procedure Code

Power of attorney

Title, ownership and Possession

Adverse Possession

Principles and Procedure

Admission, Relevancy and Proof

Land Laws/ Transfer of Property Act

Evidence Act – General

Sec. 65B

Law on Documents

Interpretation

Contract Act

Law on Damages

Easement

Stamp Act & Registration

Will

Arbitration

Divorce/Marriage

Negotiable Instruments Act

Book No. 2: A Handbook on Constitutional Issues

Religious issues

Book No. 3: Common Law of CLUBS and SOCIETIES in India

Book No. 4: Common Law of TRUSTS in India

Unknown's avatar

Published by sajikoduvath

Leave a Comment