Medisetty Venkata Subba Rao, vs M/S. Associated Auto Services,
2023 Latest Caselaw 5158 AP

      THE HON'BLE JUSTICE Dr. V.R.K.KRUPA SAGAR

              SECOND APPEAL No.1203 of 2013


JUDGMENT:

Plaintiffs before the trial Court filed this Appeal under

Section 100 C.P.C. questioning the correctness and validity of

judgment dated 12.09.2013 of the learned Judge, Family Court-

cum-VIII Additional District Judge, Ongole in A.S.No.53 of 2013.

2. Two plaintiffs filed O.S.No.29 of 2010 as against 10

defendants before learned Principal Senior Civil Judge, Ongole.

The prayer in the plaint reads as mentioned below:

"1) Direct the defendants 1 to 9 to vacate the suit schedule property and handover the same to the plaintiffs failing which it will be done through the Hon'ble Court.

2) For recovery of the rent from March 2008 to July 2009, (i.e.) 17 Months at the rate of Rs.7,500/- per month, for an amount of Rs.1,27,500/-

3) For costs of the suit

4) For such other and further reliefs as the Hon'ble Court deems fit and proper in the circumstances of the case."

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Thereafter on 28.07.2010 plaintiffs filed a memo before the trial

Court endorsing that they are not pressing the suit as against

defendant Nos.3 to 9. Acting upon that the trial Court

dismissed the suit as against defendant Nos.3 to 9 as not

pressed. Thus, before the learned trial Court there were

defendant Nos.1 and 2 and defendant No.10. Defendant No.10

was Assistant Commercial Tax Officer. No relief was claimed

against defendant No.10 at any stage of the suit or first appeal.

Before the trial Court defendant No.2 filed a written statement

on 31.08.2010. Thereafter for defendant No.1, a memo dated

01.03.2012 was filed acknowledging that defendant No.2 filed a

written statement on behalf of defendant No.1 and therefore,

defendant No.1 is adopting that written statement. Some time

thereafter defendant No.1 filed an additional written statement

before the trial Court on 29.10.2012. Defendant No.10 also

filed a written statement. Thus, before the trial Court defendant

Nos.1, 2 and 10 alone were available. After due trial, the

learned trial Court agreed with the case of the plaintiffs and

decreed the suit in the following terms:

"In the result, the suit is decreed directing the defendants 1 and 2 to vacate the schedule premises and

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hand over the same to the plaintiffs within three months from the date of judgment and also to pay a sum of Rs.1,27,500/- being the rent from March, 2008 to July 2009 @ Rs.7,500/- per month together with interest at 6% per annum thereon from the date of filing of the suit, till the date of realization. In the circumstances, each party shall bear their own costs."

3. Aggrieved by it, defendant Nos.1 and 2 filed A.S.No.53 of

2013 before the learned Additional District Judge. After due

hearing, the learned first appellate Court agreed with the case of

appellants/defendants and allowed the appeal and set aside the

judgment of the trial Court and dismissed the suit by a

judgment dated 12.09.2013. It is that judgment which is

challenged in this second appeal by the plaintiffs.

4. On 07.02.2014 a learned Judge of this Court admitted

this appeal on formulating the following substantial questions of

law:

(1) Whether the lower appellate Court could have thrown out the suit on the ground of pecuniary jurisdiction, in the absence of any objection having been taken by the defendants before the trial Court? and

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(2) Even assuming that the lower appellate Court was entitled to examine such issue, whether any finding could be rendered and suit dismissed without framing additional issue and giving the appellants/plaintiffs an opportunity of putting forth their case?

5. Learned counsel on both sides submitted arguments.

6. To appreciate the questions raised here, the following

facts are required to be noticed:

(a) A property situate in D.No.5-421 (1) near North Bypass

Road, Ongole Municipality Limits is the property shown in the

plaint schedule and the plaintiffs are joint title holders over the

said property. Shorn of other details in the plaint it is alleged

that M/s. Associated Auto Services is a partnership firm and it

obtained lease of this property originally from the predecessor in

interest of the plaintiffs and certain disputes arose and

thereafter on the death of the predecessor in interest of the

plaintiffs peace was struck between the plaintiffs and

M/s. Associated Auto Services and as a result an unregistered

lease agreement was entered into between parties. The lease

was for a period of five years commencing from 01.04.2003 and

expired by 31.03.2008. The tenant paid rent up to February,

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2008 and failed to pay rents from thereafter. It is also alleged

that as per the agreed terms, on expiry of the lease, the tenant

should vacate the premises. In violation of the said term,

tenant failed to vacate the premises. M/s. Associated Auto

Services/defendant No.1 which is a tenant was not permitted to

sub-lease the property, but it unauthorizedly sublet it in favour

of defendant No.2. Defendant Nos.4 to 9 were playing mischief

with the plaintiffs and one or the other would give a cheque

towards rent stating that they are representing either defendant

No.1 or defendant No.2. That defendant Nos.3 to 9 were

manipulating records. All the defendants are squatting on

property without vacating the property and therefore, the suit.

(b) The written statement filed by defendant No.2 which was

adopted by defendant No.1 denied the plaint mentioned

allegations. At para No.7 it is mentioned that plaintiffs let out

the suit schedule property to defendant No.2 for five years

commencing from 01.04.2003. That lease was reduced into

writing. The property was taken on lease to establish a

showroom. Huge structures were constructed by the lessee.

Plaintiffs assured defendant No.2 that they would not demand

defendant No.2 to vacate the property for at least 20 years.

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After expiry of lease on 31.03.2008 plaintiffs and second

defendant sat together and orally it was agreed between them

that the lease would be extended for another five years

commencing from 01.04.2008 expiring on 31.03.2013.

Plaintiffs agreed to get a written lease deed prepared, but they

never got it prepared despite demands made by defendant No.2.

It is further mentioned in the written statement, other than

tenant several people are impleaded in the suit and since

recovery of possession of the property is sought from all of them

also, the plaintiffs should have paid the court fees at 3/4th of the

market value but instead plaintiffs paid court fees on annual

rent amount and therefore, the suit is not maintainable.

Plaintiffs got issued a notice dated 13.11.2008 to the defendants

but that cannot be called as a quit notice. Suit filed without

quit notice is invalid. It is for those reasons they sought

dismissal of the suit.

(c) In the additional written statement filed by defendant

No.1 the contentions raised are almost like the contentions

mentioned in the earlier paragraphs. However, this additional

written statement at para No.8 it is stated that the suit schedule

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property was taken on lease by defendant No.1 from the

plaintiffs.

(d) On a keen reading of the written statements filed by

defendant Nos.1 and 2 including the additional written

statement filed by defendant No.1 one would gain a clear

impression that defendant Nos.1 and 2 are not different and

they are one and the same. Be it noted, that is the observation

made by the trial Court as well as the first appellate Court.

However, one could see from the description of these defendants

in the cause title of the plaint, defendant No.1 is a partnership

firm whereas defendant No.2 is a private limited company and

both bear the same name. It could be seen from the first

appellate Court's judgment that initially it was a partnership

firm and later it was converted into a company. In any event

ownership of plaintiffs over the plaint schedule property is not

disputed. Taking possession of the plaint schedule property by

the defendants as lessees is not disputed. Since defendant

Nos.3 to 9 were no more parties to the suit, nothing concerning

them need be discussed.

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(e) In the backdrop of the above facts, the learned trial Court

settled the following issues for trial:

1. Whether 1st defendant is the tenant of the plaintiffs?

If so, whether he sub-let the suit schedule premises to the 2nd defendant?

2. Whether there was any existing lease between the plaintiffs and 2nd defendant?

3. Whether there was understanding between the plaintiffs and 2nd defendant to extend the lease from 1.4.2008 to 31.3.2013 with an agreed rent of Rs.8,000/- for 1st three years and Rs.8,500/- for the remaining 2 years? If so, whether plaintiffs agreed to execute a fresh lease agreement with the above terms, which include plaintiffs will not accept the rent of March, 2008 also?

4. Whether the 2nd defendant obtained registration certificate for running business on a different premises and has no right to do business in the schedule, by playing fraud and obtained licence from the 10th defendant?

5. Whether the plaintiffs are entitled for recovery of rent from March, 2008 to July 2009 at the rate of Rs.7,500/- per month?

6. Whether the defendants committed default in payment of rents?

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7. Whether the plaintiffs are entitled for a direction to defendants 1 and 2 to vacate the suit schedule premises?

8. To what relief?

(f) During trial, first plaintiff testified as PW.1. On behalf of

defendant No.1, one M.Murali Mohan testified as DW.1. For

plaintiffs, Exs.A.1 to A.27 were marked. For defendants, no

documents were exhibited.

(g) Learned trial Court considered the entire oral and

documentary evidence on record and recorded the following

findings:

Plaintiffs are the landlords. Contesting defendants are

lessees and lease between them expired by afflux of time and

despite Ex.A.3-notice they failed to vacate the premises and

failed to pay rents. A detailed examination of evidence of DW.1

was taken up by the trial Court. It stated that the affairs of

defendants were very clumsy and suspicious. That DW.1

though claims to have got a general power of attorney, he never

exhibited it and the signatures on written statement, signatures

on the chief examination affidavit and signature on the cross-

examination do not tally with each other. It further observed

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that cross-examination of DW.1 resulted in admission of him

showing that he had no knowledge of affairs of the partnership

firm and in his own evidence he stated that after the initial five

years lease expired on 31.03.2008, there was no further lease

agreement between the parties. Finally, it held all the issues in

favour of the plaintiffs and decreed the suit.

(h) When the matter went to first appellate Court, on

considering the arguments raised before it and the

memorandum of grounds of appeal, the learned first appellate

Court framed the following points for its consideration:

1) Whether the plaintiffs are entitled to seek eviction of the defendant Nos.1 and 2 from the suit schedule property and for delivery of possession of the same?

2) Whether the trial Court has got pecuniary jurisdiction to try the suit?

3) Whether the Judgment and Decree of the trial Court suffer from any irregularity or illegality?

(i) One should notice that the first appellate Court framed

the point for consideration about pecuniary jurisdiction of the

trial Court to adjudicate the suit. That was never an issue

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framed before the learned trial Court. A reading of the entire

judgment of the trial Court does not indicate any arguments

being advanced on the pecuniary jurisdiction of the trial Court.

Thus, for the first time pecuniary jurisdiction of the trial Court

became a point for determination at the hands of the first

appellate Court. Learned first appellate Court recorded its

findings that the plaintiffs are the landlords and defendant

Nos.1 and 2 are the tenants. However, it refused to sustain the

trial Court's decree in favour of the plaintiffs. For reaching to

such conclusions it offered the following reasons:

(j) At para No.35 of its judgment, it held that possession of

tenants on expiration of the lease period is unauthorized and to

seek recovery of possession from unauthorized persons

plaintiffs should have sued for recovery of possession by paying

court fees in terms of Section 29 read with Section 50(2) of

Andhra Pradesh Court Fees and Suits Valuation Act, 1956.

Market value of the property was Rs.50,00,000/- and on 3/4 th

of market value the suit had to be evaluated and if that is done

it stood beyond the pecuniary jurisdiction of the trial Court. It

is with that reasoning it held that the trial Court did not have

pecuniary jurisdiction and therefore, the suit was to be

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dismissed. It went on to record that since defendant Nos.1 and

2 are unauthorized occupants, question of giving quit notice

does not arise. Finally, it allowed the appeal and set aside the

trial Court judgment and dismissed the suit. That forced the

plaintiffs to prefer this second appeal.

Substantial Question Nos.1 and 2:

7. Even before the suit went for trial, the suit against

defendant Nos.3 to 9 was not pressed and was accordingly

dismissed. Defendant Nos.1 and 2 are not owners of the plaint

schedule property. Concurrent findings of the Courts below and

the submissions made before this Court are to the effect that

plaintiffs are the owners of the plaint schedule property. It is

not the case of defendant No.1 or defendant No.2 that they came

into possession of the plaint schedule property without

knowledge or consent of the plaintiffs. They never claimed that

they trespassed into the property. Defendant Nos.1 and 2 never

claimed any adverse title. A reading of their written statements

and a reading of the evidence of DW.1 and findings of the

Courts below do indicate that they admit their possession over

the suit schedule property only by virtue of their entry into it

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under a lease granted by the plaintiffs. In such circumstances,

a suit for ejectment could be filed as against tenants. Findings

of Courts below do indicate that the initial unregistered

agreement for lease expired by 31.03.2008. Suit was filed in the

year 2010. Though defendants contended that plaintiffs had

extended the lease by another five years which would expire by

31.03.2013 and though at para No.9 of the additional written

statement filed by defendant No.1 it is mentioned that a

memorandum of understanding was written and signed by both

parties, the defendants did not choose to exhibit such

document. The pleadings of defendant Nos.1 and 2 would show

that the plaintiffs promised them that they would get the lease

deed prepared, but they never prepared and never brought for

execution. Despite that defendants never sued plaintiffs

seeking for specific performance of promise to execute a lease

deed. All these facts and evidence available from record do

indicate that after 31.03.2008 no further lease existed between

the parties. What was the legal status of tenants in occupation

of leasehold property beyond the period of lease. Tenants in

occupation of property beyond expiration of the lease period are

called as tenants at sufferance. Since the tenancy stood expired

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by afflux of time a notice terminating the tenancy was not

required. This has been the law laid down by the Hon'ble

Supreme Court of India in Sevoke Properties Ltd. v. West

Bengal State Electricity Distribution Company Ltd.1. Thus,

the observations of the learned first appellate Court that the

contesting defendant Nos.1 and 2 were no more lessees and

therefore, they were unauthorized occupants and therefore, a

suit for ejectment could not be maintained and only a suit for

recovery of possession is maintainable is a clear error at law. It

is that error which made the learned first appellate Court to go

into the aspect of valuation of the suit. Based on the market

value of the immovable property and considering the suit as

claimed for eviction of these unauthorized occupants, the

learned first appellate Court stated that the suit was incorrectly

valued. It further held that going by the market value of the

property the learned Senior Civil Judge who tried the suit had

no pecuniary jurisdiction. Those findings are bad at law for two

reasons. One reason is that a tenant holding over beyond the

period of lease does not become an unauthorized occupant in

(2020) 11 SCC 782

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the sense of forcing a plaintiff to sue not for ejectment but for

recovery of possession from trespassers. The next thing to be

seen is, written statements of contesting defendants did not

raise the question of pecuniary jurisdiction. They raised only

one question and that was about defendant Nos.3 to 9. They

state that according to plaint averments defendant Nos.3 to 9

are unauthorized occupants and in which case they should sue

for recovery of possession but not a suit for ejectment. Be it

noted, since defendant Nos.3 to 9 were no more parties to the

litigation, that contention raised before the trial Court did not

survive any more. However, the first appellate Court

resurrected it. One must notice the law laid down by a

Constitutional Bench of the Hon'ble Supreme Court of India in

S. Rm. Ar. S. SP. Sathappa Chettiar v. S. Rm. Ar. Rm.

Ramanathan Chettiar2. With reference to valuations and

court fees, they must be considered in the light of the

allegations made in the plaint. The contentions raised in the

written statement or the final decision of the Court in the matter

cannot govern that. The purport of this judgment is that the

AIR 1958 SC 245

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Court has to see the plaint and the relief claimed and see

whether the suit is properly valued and court fees is paid in

accordance with law. On considering such plaint, a Court may

or may not grant requisite reliefs. It may decline to grant a

relief since prayer in the plaint is incorrect so far as some of the

defendants are concerned. However, that by itself cannot be a

ground to say that the plaint was not properly valued. First

appellate Court awfully failed in keeping in mind the necessary

principles of law. Moreover, without averments in the pleadings

deciding the question of pecuniary jurisdiction of the trial Court

and without an issue being framed by the trial Court about this

pecuniary jurisdiction and without there being a debate before

the trial Court about pecuniary jurisdiction, the first appellate

Court framing a point for its determination about pecuniary

jurisdiction deprived the parties a fair hearing of the matter.

This is another flaw in the judgment of the first appellate Court.

It is for these reasons this Court holds that first appellate Court

committed error in considering pecuniary jurisdiction of the trial

Court.

8. At para No.37 of its judgment, the learned first appellate

Court held that in the view it had taken about absence of

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jurisdiction for the trial Court, in its opinion issue Nos.1 to 4

and issue Nos.6 to 8 framed by the trial Court were erroneous

and were not relevant for the determination of the real dispute

involved between the parties. With that finding it set aside the

entire judgment of the trial Court. That is another clear error

on part of the appellate Court. The first appellate Court is

expected to consider all the contentions raised before it by the

parties to the litigation and then independently assess whether

the conclusions arrived at by the trial Court on each of the

issues was right or wrong. It did not do that. Final outcome of

the first appellate Court judgment did not on facts or law upset

the findings and conclusions reached by the trial Court on all

the issues. In that view of the matter, the judgment of the first

appellate Court cannot be sustained.

9. Sri P.Nagendra Reddy, the learned counsel for appellants

and Sri S.S.Prasad, the learned Senior Counsel for respondent

Nos.1 and 2 argued in unison that the matter may be remanded

to the first appellate Court for fresh hearing and disposal in

accordance with law.

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10. Since all the material issues on which trial Court

rendered its findings were not even touched by the learned first

appellate Court, it amounted to abdication of its jurisdiction

and therefore, a clear case is made out to remand the matter to

the first appellate Court. Accordingly, the points are answered.

11. In the result, this Second Appeal is allowed. Judgment

dated 12.09.2013 of learned Family Court-cum-VIII Additional

District Judge, Ongole in A.S.No.53 of 2013 is set aside. The

case is remitted to the first appellate Court. Hence, A.S.No.53

of 2013 stands restored and the learned first appellate Court

shall hear the appeal afresh after granting an opportunity to

both sides to adduce further evidence, if any and then dispose

of the case in accordance with law without being influenced by

any observations made by this Court in this judgment. There

shall be no order as to costs.

As a sequel, miscellaneous applications pending, if any,

shall stand closed.

_____________________________ Dr. V.R.K.KRUPA SAGAR, J Date: 20.10.2023 Ivd

Dr. VRKS, J S.A.No.1203 of 2013

THE HON'BLE JUSTICE Dr. V.R.K.KRUPA SAGAR

SECOND APPEAL No.1203 of 2013

Date: 20.10.2023

Ivd