The Delhi High Court’s ruling emphasizes that a tenant cannot deny a new landlord’s title, especially when ownership transfers by law. Here’s a breakdown:
Tenant Estoppel: According to Section 116 of the Indian Evidence Act, 1872, a tenant is estopped from denying their landlord’s title during the continuance of the tenancy. This principle ensures that tenants acknowledge and respect the landlord’s rights.
No Attornment Required: When ownership transfers by law, such as through a registered sale deed, the new owner becomes the landlord without requiring attornment from the tenant. Attornment is the acknowledgment by a tenant of a new landlord.
Derivative Title: However, if the tenant challenges the derivative title of the new landlord, the new landlord must establish their title in some form. This is particularly relevant when the original landlord transfers ownership, and the tenant questions the new owner’s rights.
Exceptions: There are exceptions to this rule. For instance, if the tenant has not attorned to the new landlord or has not acknowledged their title, the tenant may challenge the new landlord’s derivative title.
The Bench comprising Justices Anil Kshetrapal and Harish Vaidyanathan Shankar held that the tenant’s resistance based on non-attornment and alleged low rent was “legally flawed and factually unreliable”. The Court stated, “Attornment by the lessee is not necessary for the transfer of the property leased out to him. The transferee becomes the landlord ipso jure.”
The case involved a commercial tenancy of a shop in Shastri Nagar, New Delhi, where the defendant, Charanjit Singh Makkar, had been occupying the property since 1994. The property was sold by the previous owner, Shiv Shankar Gupta, to Phalvinder Arora by a registered sale deed dated 14.10.2019. The sale deed clearly mentioned the presence of the tenant. Upon purchase, the new owner issued a notice to the tenant on 10.12.2019 informing him of the transfer. The tenant, however, replied denying any tenancy under the new owner and claimed continued tenancy under the former landlord.
The Court found this to be a deliberate obstruction. “The Appellant cannot challenge the title of the Respondent as the owner of the subject property,” observed the Bench. Citing Section 109 of the Transfer of Property Act,1882 the Court explained that the rights of the lessor automatically vest in the transferee unless a contract to the contrary exists. “The Respondent has stepped into the shoes of the previous owner, and the Appellant became a tenant under the Respondent by operation of law.”
The Supreme Court’s decision in this case reaffirms the principle that a tenant cannot dispute the landlord’s title during the continuation of the tenancy, especially after being put in possession by the landlord. The Court emphasized the importance of specific denials in written statements and the application of Section 116 of the Indian Evidence Act, 1872. The Court’s decision ensures that tenants cannot take undue advantage of their possession by challenging the landlord’s title at a later stage.
