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  • Writer's pictureBrain Booster Articles


Author: Nakul Mangal, V year of B.A.LLB(Hons.) from Institute of Law, Nirma University, Ahmedabad

Co-author: Sahil Jain, V year of B.A.LLB(Hons.) from Symbiosis Law School, Hyderabad

In India, Trusts can be formed in two ways: Public Trust and Private Trust. Private Trust is Governed by the Indian Trust Act, 1882 but this Act does not apply to Public Trust. Public Trust is regulated by several Legislation and it is established for Religious and Charitable purposes. If we look closely then the utmost important difference between the two is that Private Trust has a limited group of beneficiaries but Public Trust works for people at large. The term Trust is defined under section 3 of the Indian Trust Act, 1882 and it states that "A trust is an obligation annexed to the ownership of property, and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another, or of another and the owner"[i].In Plain Language, Trust is a transfer of ownership or title to a person who willingly accepts the obligation and duty to do the good and needful for the people at large, society and sometimes for the owner himself.

If we talk about a Public Trust then its main function is to work for the welfare of society and it is established for either charitable purpose or Religious Purpose. A Trust which is created for charitable purpose can rent out the property and collect the rent which is required for its governance but the problem arises when it develops the intention to increase the rent unreasonably and to fulfill its intention, it is common practice that Trust started to evict the old tenant so it can rent out the property to new tenants in a much higher price. To safeguard the rights of tenants, almost every State has their rent legislation.

In Madhya Pradesh, Rent related disputes are governed by M. P. Accommodation Control Act,1961 but according to Section 3(2) of this Act, all Religious and Charitable Trusts can be exempted by the Govt. from the application of this Act and around 30 years ago Govt. had provided the immunity to all the Charitable Trust situated in Madhya Pradesh and the language of notification was so general that it provided the blindfolded immunity to all the properties of Charitable and Religious Trusts. In this situation, If a Charitable Trust wants to evict the tenant then it prefers to go by Section 106 of Transfer of Property Act, 1882 instead of M. P. Accommodation Control Act, 1961 because under Section 106, the landlord does not have to prove the grounds due to which the suit for eviction has been initiated. Section 106 is one such harsh provision against the tenants which leaves no scope for a remedy after a notice has been served to the tenants for vacating the premises. However, this modus operandi adopted by the trust is nowhere charitable and is aimed to forcefully evict their tenants off the premises in quest of better rent from new tenants.

In the light of the above-mentioned circumstances, the tenant has left with no other option except to contend the ownership of the Trust but the Rule of Estoppel which is inserted by Section 116 of the Indian Evidence Act stands as a barrier in the way of the Tenant. Section 116 of Indian Evidence Act states that "Estoppel of tenant and licensee of the person in possession- No tenant of immovable property, or the 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; and no person who came upon any immovable property by the license of the person in possession thereof, shall be permitted to deny that such person had a title to such possession at the time when such license was given"[ii]. The meaning of this section is very clear that if a tenant has not contended the title or ownership of the landlord during the period of the tenancy then he can't contend it on a later stage and if he wants to do it then he has to firstly vacate the premise then he can contend the ownership which fulfills the purpose of litigation started by owner because once the tenant has vacated the premise, the issue is resolved. The only exception of this rule is very profoundly described in Venkata Chetty vs. Aiyanna Goundan case by the Madras High Court, which clearly says that when a tenancy contract has been hit by fraud, misrepresentation or coercion, then the rule of estoppel under section 116 of Indian Evidence Act would not operate against the tenant and that the ownership of the landlord can be challenged on this ground.




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