KUMAR DHIRENDRA MULLICK AND ORS. versus TIVOLI PARK APARTMENTS (P) LTD.

Citation: [2004] SUPP. 5 S.C.R. 800 · Decided: 01-11-2004 · Supreme Court of India · Bench: ASHOK BHAN · Disposal: Dismissed

Judgment (excerpt)

A 
KUMAR DHIRENDRA MULLICK AND ORS. 
v. 
TIVOLI PARK APARTMENTS (P) LTD. 
NOVEMBER 1, 2004 
B 
[ASHOK BHAN AND S.H. KAPADIA, JJ.] 
Specific Relief Act, 1963; Section 28: 
Trust Estate-Transfer to lessee for a certain period and transfer by 
C lessee to assignee for remaining period in terms of lease deed-Oral agreement 
for renewal of the deed between Trustee and assignee on payment of increased 
rent and premiu~-Part payment-Trustee failed to execute the transjer 
deed, instead e_ntered into an agreement to transfer the property with another 
party-Title Suit-Decreed by Trial Court on ground of default -Application 
D for Specific Reliefjiled by Trustees on ground that the assignee not ready and 
willing to pay.the balance consideration-Trial Court rescinded the agreement 
and recalled the decree-Correctness of-Held: Increase in the value of· 
immovable property- is no ground to rescind the lease agreement-Trustees 
coulq not enter info an agreement with another party to lease out the· same . 
property-In the absence of default clause in the order of the trial Court, the 
E agreement cannot be rescinded·on account of non~payment of bala_nce · 
premium before the specific date__;_Trial _Court erred in directing· rescission 
of the agreement since decree holder/assignee was ready and_ willing to · 
perform his part of obligation-Trustees also prevented him from filing 
execution application in the guise of settlement-Hence, Trustees directed to 
F execute the lease· in favour of the respondent/assignee-Directions issued-'-
Civil Procedure Code, 1908-0. IX R.13-Section 15 I-Constitution of India, 
1950; Article 142, 
Appellants-Trustees transferred certain premises of a Trust Estate in 
·favour of lessee for a period of21 years in terms ofa lease deed executed by 
G them. Subsequently, the Lessee assigned the suit premises in favour of 
respondent-assignee by executing an assignment deed for the remaining 
period ~f the lease subject to the same terms and. conditions.as contained in 
the lease deed. Trustees had entered into an oral-agree~ent with the assignee 
before expiry of the lease to renew/extend the period of lease in his favour on 
H 
800 
KUMAR DHIRENDRA MULLICK v. TIVOLI PARK APARTMENTS (P) LTD. 
80} 
payment of increased rent and premium. Assignee made part payment of A 
premium and agreed to pay the balance at the time of execution of the transfer 
· deed. Since Trustees failed to execute the dee~, assignee filed a title suit which 
was decreed by the Trial Court. In the meantime, Suit was filed by the trustee 
which was dismissed by the Court for non-prosecution. Trustees filed an 
application under Section 28(1) of the Specific Relief Act r/w Section 151 
CPC. Tria! Court rescinded the agreement and recalled the decree on the B 
ground that the respondent had failed to pay the .balance amount within the 
stipulated period, thus he was not ready and willing to perform his part of the 
obligation under the decree. As such he was not entitled to renewal of the 
lease. Appeal preferred by the aggrieved assignee was allowed by the High 
Court by setting aside the order of the Trial Court. Hence the present appeal. C 
It was cont~nded by the appellants that if the suit premises was allowed 
to be leased out to the respondent on the agreed monthly rent and premium in 
terms of the agreement, they would lose substantially as market value of the 
property would fetch them higher premium and rent; that the agreement for 
renewal of lease stood vitiated on account of collusion between the constituted D 
attorney appointed by the Trustees and the respondent; and that the respondent 
was not witting fo perform his part of the obligation under the decree. 
Dismissing th.e appeal, the Court 
.· 
HELD: 1.1. In ~he cir~umstances of the case, increase in the value of E 
the immovable property, on account _of inflation, is no ground to rescind the 
lease agreement. (808-A-G] 
1.2. The Trustees had consented to the Assignment in favour of the 
. respondent by the lessee. Pursuant to the said Assignment, the respondent/ F 
assignee was put in possession of the suit property. The assignment was 
followed by an oral agreement to renew the lease. In the circumstances, one 
fails to appreciate the authority of the Trustees to enter into an agreeoient to 
lease out the said property in favour of another party. When title suit came 
for hearing, no evidence was led on behalf of the Trustees explaining the 
circumstances under whic

Excerpt shown. Read the full judgment & AI analysis in Lexace.