Case Summary
| Citation | Supreme General Films Exchange Ltd. v.H.H. Maharaja Sir Brijnath Singhji DeoAIR 1975 SC 1810 : (1975) 2 SCC 530 |
| Keywords | section 52 tpa, theatre, mortgage, lis pendens |
| Facts | Bhatia, the owners of an immovable property had borrowed a sum of Rs. 2,50,000 from plaintiff, Maharaja, by mortgaging the immovable property (theatre) in favour of plaintiff. Bhatia was unable to repay the loan and plaintiff filed a suit in 1954 that ended in a compromise in 1960, as per which the theatre was to be sold and the loan amount was to be realised from the sale proceeds. This theatre was in occupation of a tenant who had its possession since 1940. However, this possession since 1940, was under an unregistered lease deed for the purposes of running a cinema and had expired in 1946. Since then, no further lease deed had been executed in their favour till 1956. It was only in 1956 that Bhatia executed a registered lease deed in the tenant’s favour for a period of eight years with an option for renewal till 1970. It should be remembered that this property, with respect to which the lease was executed, was the subject matter of a dispute in a court of law from 1954 till 1960. Plaintiff asked the tenant to vacate the theater after the settlements. |
| Issues | Whether lease deed had been executed in 1956 would be hit by lis pendens? |
| Contentions | |
| Law Points | The Supreme Court held that since the earlier right created in favour of the tenant was with the help of a document that was incapable of taking effect in law, the lease of 1956, for the first time created an interest in the property in their favour. If he had an antecedent right created in his favour prior to the commencement of the suit, then he would have been able to retain the possession of the premises as per the terms of the lease. But in the present situation, since the lease was executed in their favour, while the suit was pending in a court of law awaiting decision, the rights of the tenant were subject to the decision of the court. Since this creation was pendente lite, this transfer of a right would be hit by the rule of lis pendens. Consequently, the tenant was to take the lease in his favour subject to the outcome of the decision of the court. The result would be that he would have to vacate the premises. |
| Judgement | It was concluded that the lease deed was void from the outset due to doctrine of lis pendens. |
| Ratio Decidendi & Case Authority |
Full Case Details
Supreme General Films Exchange Ltd. v.
H.H. Maharaja Sir Brijnath Singhji Deo
AIR 1975 SC 1810 : (1975) 2 SCC 530
Y.V. CHANDRACHUD, J. – 1. The plaintiff-respondent had filed a suit in the District Judge’s
Court at Jabalpur claiming a declaration that a lease executed in favour of the defendant-appellant,
M/s Supreme General Films Exchange Ltd., (‘the Company’), in respect of Sunder Vilas Theatre
(now known as Plaza Talkies) by its former owners, Jiwan Das Bhatia and his sons (hereinafter
referred to as ‘the Bhatias’), is void and ineffective against the plaintiff’s rights under decrees
obtained in Civil Suit No. 15A of 1954 dated May 7, 1960 and in Civil Suit No. 3B of 1952 dated
April 20, 1954 in execution of which the theatre had been attached. The plaintiff wanted the
declaration also to make it clear that an auction purchaser, purchasing the theatre in execution of
either of the two decrees, gets rights free from any obligation towards the defendant-appellant under
the void lease.
2. The former owners of the theatre, the Bhatias, had borrowed Rs 2,50,000 from the plaintiffrespondent, a maharaja, against the security of bales of cotton. On December 29, 1951, they executed
a registered mortgage deed in respect of the Plaza Theatre in favour of the plaintiff as the price of
pledged goods was insufficient to satisfy the dues. The plaintiff, unable to recover the amount due,
had brought Civil Suit No. 15A of 1954 in which a compromise decree was passed on May 7, 1960, in
terms of an agreement between the parties that amounts due will be realised by the sale of Plaza
Theatre.
3. The Central Bank of India, another creditor of Bhatias, had brought Civil Suit No. 3B of 1952
and obtained a decree for Rs 1,24,000 on April 29, 1952. Rights under this decree were assigned in
favour of the plaintiff-respondent. The Plaza Theatre, together with other properties of Bhatias, was
attached on May 4, 1955 in the course of execution of that decree.
4. The appellant company claimed to be a lessee in occupation of the theatre where it had carried
on the business of running a cinema under an unregistered lease obtained on February 27, 1940. The
lease of 1940 had expired on April 10, 1946. The company continued as a tenant holding over until
the impugned lease deed of March 30, 1956 was executed. If this was a valid lease, it would have
conferred upon the company the right to be a tenant of the property under the lease for eight years,
from February 10, 1956 to February 10, 1964, with an option for a renewal until February 10, 1970.
This lease was executed after the company had filed a suit (No. 16A of 1954) on November 20, 1954
for the specific performance of an agreement to lease contained in a letter dated July 19, 1948. A
compromise decree was passed on March 24, 1956 in this suit also. The lease deed of March 30, 1956
purported to carry out the terms of that compromise decree passed in a suit in which the plaintiff was
not impleaded at all.
5. The plaintiff’s case was that the lease of March 30, 1956 was void as it was struck by three
statutory provisions, namely. Section 52 of the Transfer of Property Act, Section 65A of the Transfer
of Property Act, and Section 64 of the Civil Procedure Code. The defendant-appellant company, in
addition to denying the alleged rights of the plaintiff to the benefits of these provisions, pleaded that a
suit of the nature filed by the plaintiff did not lie at all as it fell outside the purview of Section 42 of
the Specific Relief Act, 1877, altogether.
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6. The trial Court and the High Court, after having overruled the pleas of the defendantappellant, had decreed the plaintiff’s suit. The defendant company obtained special leave to appeal to
this Court under Article 136 of the Constitution.
18. The contention that the case fell outside the purview of Section 52 of the Transfer of Property
Act as the lease was executed in purported satisfaction of an antecedent claim rests upon the terms of
an agreement of 1948, embodied in a letter, on the strength of which the defendant-appellant had filed
his suit for specific performance. We find that the terms of the compromise decree in that suit and
lease-deed of 1956 purported to confer upon the defendant-appellant new rights. Indeed, there are
good grounds for suspecting that the compromise in the suit for specific performance was adopted as
a device to get round legal difficulties in the execution of the lease of 1956 in favour of the defendant
company. We are unable to accept the argument, sought to be supported by the citation of Bishan
Singh v. Khazan Singh [AIR 1958 SC 838] that the lease was merely an enforcement of an
antecedent or pre-existing right. We think that it purported to create entirely new rights pendente lite.
It was, therefore, struck by the doctrine of lis pendens, as explained by this Court in Jayaram
Mudaliar v. lyyaswami [AIR 1973 SC 569], embodied in Section 52 of the Transfer of Property Act.
19. An alternative argument of the appellant was that a case falling within Section 65A(2)(e) of
the Transfer of Property Act, confining the duration of a lease by a mortgagor to three years, being a
special provision, displaces the provisions of Section 52 of the Transfer of Property Act. This
argument overlooks the special objects of the doctrine of lis pendens which applies to a case in which
litigation, relating to property in which rights are sought to be created pendente lite by acts of parties,
is pending. Moreover, for the purposes of this argument, the defendant-appellant assumes that the
provisions of Section 65A(2)(e), Transfer of Property Act are applicable. If that was so, it would make
no substantial difference to the rights of the defendant-appellant, which would vanish before the suit
was filed if Section 65A applies. We, however, think that, as the special doctrine of lis pendens is
applicable here, the purported lease of 1956 was invalid from the outset. In this view of the matter, it
is not necessary to consider the applicability of Section 65A(2)(e), which the defendant-appellant
denies, to the facts of this case.
21. For the reasons given above, we dismiss this appeal with costs.
